TALLAHASSEE, Fla., April 20, 2009 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the first quarter of 2009 totaling $.7 million ($0.04 per diluted share) compared to a net loss of $1.7 million ($0.10 per diluted share) in the fourth quarter of 2008 and net income of $7.3 million ($0.42 per diluted share) for the first quarter of 2008. Earnings for the first quarter of 2008 included a $2.4 million pre-tax gain from the redemption of Visa shares related to their initial public offering and the reversal of $1.1 million (pre-tax) in litigation reserves related to certain Visa litigation.
"In a continuing tough operating environment, we grew our loan portfolio by $24 million or 1.2% and maintained our focus on prudently managing the net interest margin, despite historically low interest rates. Our margin at 5.16% was 43 basis points higher than a year ago, and better than the linked fourth quarter after adjusting for the recovery of interest income on the resolution of a problem loan late last year," said William G. Smith, Jr., Chairman, President and Chief Executive Officer of Capital City Bank Group.
"During the first quarter, the principal measures of our capital adequacy remained strong and better than a year ago. Even though we declined participation in TARP, our total capital ratio ranks in the top quartile of our peer group(1). At March 31, 2009, our risk based and tangible capital ratios were 14.40% and 7.63%, respectively.
"Nonperforming assets amounted to 6.39% of loans and other real estate at the end of the first quarter, compared to 5.48% at year-end 2008 and 2.14% at the end of the first quarter of 2008, which is indicative of the severity and persistence of economic weakness across our markets. Nonaccrual loans were up $13.3 million over year-end levels, mostly due to the addition of three large real estate loan relationships, including a student housing development and two single-family residential projects.
"We believe we are currently dedicating sufficient resources and talent to understand, monitor and eventually resolve our problem assets. Certainly we are in the grip of prolonged adverse economic conditions that have elevated credit quality and the resolution of problem loans to top-of-mind status among investors. But our execution of the fundamentals of profitable community banking -- basic lending, rational deposit gathering and good expense management -- continues to be both prudent and consistent," said Smith.
The Return on Average Assets was .11% and the Return on Average Equity was .94% for the first quarter of 2009. These metrics were 1.11% and 9.87% for the comparable quarter in 2008 and -.28% and -2.24% for the fourth quarter of 2008, respectively.
Discussion of Financial Condition
Average earning assets were $2.166 billion for the first quarter of 2009, an increase of $15.4 million, or 0.71% from the fourth quarter of 2008, and a decrease of $135.2 million, or 5.88% from the first quarter of 2008. The increase from the fourth quarter is primarily attributable to a $24.0 million increase in the loan portfolio, which was partially funded by a reduction of $6.4 million in short-term investments. Compared to the first quarter of 2008, the decrease in earning assets primarily reflects a reduction in short-term investments driven by the decline in client deposits (see discussion below), partially offset by a $54.5 million increase in average loans and a $6.5 million increase in investment securities. Our loan production began increasing during the second half of 2008 and this trend continues through the recent quarter due to the efforts of our bankers to reach clients who are interested in moving or expanding their banking relationships. Year over year, growth was primarily attributable to commercial real estate mortgages and home equity loans.
Nonperforming assets of $126.8 million increased from the linked fourth quarter by $18.9 million and from the first quarter of 2008 by $85.7 million. Nonaccrual loans increased $13.3 million and $74.8 million, respectively, from the same prior-year periods. A large portion of the increase in nonaccrual loans in the first quarter is due to the addition of three large real estate loan relationships, including a student housing development ($5.5 million) and two residential single-family developments ($5.8 million). Vacant residential land loans represented 48% of our nonaccrual balance at quarter end. In aggregate, a reserve equal to approximately 29% has been allocated to these land loans. Restructured loans totaled $5.2 million at the end of the first quarter reflecting an increase of $3.5 million over year-end and $3.2 million over first quarter 2008. Other real estate owned totaled $11.4 million at the end of the quarter compared to $9.2 million at year-end 2008 and $3.8 million at the end of the first quarter of 2008. Nonperforming assets represented 6.39% of loans and other real estate at the end of the first quarter compared to 5.48% at year-end 2008 and 2.14% at the end of the first quarter of 2008.
Average total deposits were $1.946 billion for the first quarter, an increase of $11.5 million, or 0.6%, from the fourth quarter and a decrease of $191.5 million, or 8.9%, from the first quarter of 2008. On a linked quarter basis, the increase in deposits reflects higher public funds accounts, primarily in negotiated accounts and certificates of deposit, which have been partially offset by declining money market balances. The decline from the first quarter of 2008 reflects a lower level of NOW account balances (primarily public funds and legal settlement accounts), money market account balances and certificates of deposit balances.
We believe the decline in the public funds is partially attributable to certain public entity clients seeking higher yield. Compared to the first quarter of 2008, a majority of the decrease in deposits has been realized in the money market and certificates of deposit categories. The decrease in the money market accounts is due to lower balances maintained by both businesses and individuals, which we believe is attributable to lower rates and distressed economic conditions. We believe the decline in the certificate of deposit category reflects a combination of proceeds migrating to other deposit categories, as well as transferring to higher rate paying competitors. Despite the disruption in the market, we continue to pursue prudent pricing discipline and have chosen not to compete with higher rate paying competitors for these deposits.
We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) purchased position of $33.9 million during the first quarter of 2009 compared to an average net overnight funds purchased position of $18.0 million in the fourth quarter of 2008 and an average overnight funds sold position of $186.8 million in the first quarter of 2008. The unfavorable variance in the funds position primarily reflects a decline in deposit balances as discussed above, coupled with growth in the loan portfolio. During the first quarter of 2009, we repurchased approximately 146,000 shares of our common stock at a weighted average stock price of $10.65.
Discussion of Operating Results
Tax equivalent net interest income for the first quarter of 2009 was $27.6 million compared to $28.4 million for the fourth quarter of 2008 and $27.1 million for the first quarter of 2008. The decrease in the net interest income on a linked quarter basis is partially due to two less calendar days in the first quarter. Additionally, the fourth quarter of 2008 was favorably impacted by a $784,000 interest recovery attributable to the resolution of a problem loan, which we acquired in one of our bank acquisitions several years ago. Lower foregone interest on nonaccrual loans and an increase in loan fees partially offset the decline in net interest income.
The increase in the net interest margin compared to the first quarter of 2008 primarily reflects aggressive deposit repricing in response to the rate reductions initiated by the Federal Reserve, partially offset by higher foregone interest on nonaccrual loans, a reduction in loan fees and one less calendar day in the first quarter of 2009.
The net interest margin of 5.16% declined by 10 basis points over the linked quarter and improved 43 basis points over the first quarter of 2008. The interest recovery recorded on the resolution of a problem loan added 15 basis points to the margin in the fourth quarter of 2008. The improvement in the margin over the linked quarter (after adjusting for the interest recovery in the fourth quarter) is attributable to the aggressive deposit repricing and, relative to the first quarter of 2008, the improvement is primarily attributable to both deposit repricing and a favorable shift in the mix of deposits.
The provision for loan losses for the current quarter was $8.4 million compared to $12.5 million in the fourth quarter of 2008 and $4.1 million for the first quarter of 2008. The provision for the current quarter reflects a higher level of required reserves for impaired loans, primarily related to newly identified nonaccrual loans. An increase in loan loss factors and a higher level of internally identified problem loans also impacted the level of loan loss provision for the quarter. Net charge-offs in the first quarter totaled $5.2 million, or 1.08%, of average loans compared to $6.0 million, or 1.24% in the fourth quarter and $1.9 million, or .41% in the first quarter of 2008. At quarter-end, the allowance for loan losses was 2.04% of outstanding loans (net of overdrafts) and provided coverage of 35% of nonperforming loans.
Noninterest income for the first quarter increased $731,000, or 5.5%, over the fourth quarter of 2008 and declined $3.8 million, or 21.1%, from the first quarter of 2008. Compared to the fourth quarter, the increase is primarily due to higher mortgage banking fees and bank card fees. The increase in mortgage banking fees reflects an 82% increase in secondary market loan production over the prior quarter, primarily driven by homeowner refinancings. The higher level of bank card fees is primarily due to fee adjustments implemented during the first quarter of 2009. Compared to the first quarter of 2008, the decline is due to a $2.4 million gain from the redemption of Visa shares, which was recognized in the first quarter of 2008, and a lower level of merchant fees attributable to the sale of a portion of the merchant services portfolio, which occurred in third quarter of 2008.
Noninterest expense increased $1.3 million, or 4.0%, from the fourth quarter of 2008 and $2.5 million, or 8.3%, from the first quarter of 2008. Compared to the fourth quarter, the increase was due to higher compensation expense of $1.7 million, primarily reflective of an increase in pension plan expense ($904,000) and associate salary expense ($649,000). The increase in pension cost is primarily due to a decline in the value of pension assets during 2008. The increase in associate salary expense reflects annual merit raises, but more significantly a higher accrual for performance incentives, which is typical in the first quarter as incentive plan expense is reset to its par level and then subsequently adjusted throughout the year based on actual performance. Compared to the first quarter of 2008, the impact of a one-time entry of $1.1 million to reverse a portion of our Visa litigation accrual, the reversal of $577,000 in accrued expense for our 2011 Incentive Plan (terminated in the first quarter of 2008), and higher FDIC insurance premiums of approximately $700,000 drove the increase. Higher pension plan expense of $1.0 million also contributed to the year over year variance.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.5 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 68 banking offices and 80 ATMs in Florida, Georgia and Alabama. Since 2005, the Company has been named as a Dividend Achiever by Mergent, Inc., a leading provider of information on publicly traded companies. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the frequency and magnitude of foreclosure of the Company's loans; the effects of the Company's lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company's financial statement estimates and assumptions, including the estimate for the Company's loan loss provision; the Company's ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; and the Company's ability to manage the risks involved in the foregoing. Additional factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and the Company's other filings with the SEC, which are available at the SEC's internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.
(1) Publicly traded $1-$5 billion Banks (Source: SNL-Southeastern Commercial Banks - 12/31/2008)
EARNINGS HIGHLIGHTS
---------------------------------------------------------------------
Three Months Ended
----------------------------
(Dollars in thousands, except per share Mar 31, Dec 31, Mar 31,
data) 2009 2008 2008
---------------------------------------------------------------------
EARNINGS
Net Income $ 650 $(1,703) 7,280
Diluted Earnings Per Common Share $ 0.04 $ (0.10) 0.42
---------------------------------------------------------------------
PERFORMANCE
Return on Average Equity 0.94% -2.24% 9.87%
Return on Average Assets 0.11% -0.28% 1.11%
Net Interest Margin 5.16% 5.26% 4.73%
Noninterest Income as % of Operating
Revenue 34.22% 32.42% 40.22%
Efficiency Ratio 75.07% 71.21% 63.15%
---------------------------------------------------------------------
CAPITAL ADEQUACY
Tier 1 Capital Ratio 13.09% 13.34% 12.94%
Total Capital Ratio 14.40% 14.69% 14.01%
Tangible Capital Ratio 7.63% 7.76% 7.73%
Leverage Ratio 11.25% 11.51% 10.50%
Equity to Assets 11.02% 11.20% 11.06%
---------------------------------------------------------------------
ASSET QUALITY
Allowance as % of Non-Performing Loans 34.82% 37.52% 54.32%
Allowance as a % of Loans 2.04% 1.89% 1.06%
Net Charge-Offs as % of Average Loans 1.08% 1.24% 0.41%
Nonperforming Assets as % of Loans and
ORE 6.39% 5.48% 2.14%
---------------------------------------------------------------------
STOCK PERFORMANCE
High $ 27.31 $ 33.32 $ 29.99
Low $ 9.50 $ 21.06 $ 24.76
Close $ 11.46 $ 27.24 $ 29.00
Average Daily Trading Volume 75,117 43,379 31,827
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CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Unaudited
---------------------------------------------------------------------
(Dollars in 2009 2008 2008 2008 2008
thousands, except First Fourth Third Second First
per share data) Quarter Quarter Quarter Quarter Quarter
---------------------------------------------------------------------
INTEREST INCOME
Interest and Fees on
Loans $ 29,537 $ 31,570 $ 32,435 $ 33,422 $ 35,255
Investment Securities 1,513 1,627 1,744 1,810 1,894
Funds Sold 3 32 475 1,028 1,574
---------------------------------------------------------------------
Total Interest
Income 31,053 33,229 34,654 36,260 38,723
---------------------------------------------------------------------
INTEREST EXPENSE
Deposits 2,495 3,848 5,815 7,162 10,481
Short-Term Borrowings 68 110 230 296 521
Subordinated Notes
Payable 927 937 936 931 931
Other Long-Term
Borrowings 568 587 488 396 331
---------------------------------------------------------------------
Total Interest
Expense 4,058 5,482 7,469 8,785 12,264
---------------------------------------------------------------------
Net Interest Income 26,995 27,747 27,185 27,475 26,459
Provision for Loan
Losses 8,410 12,497 10,425 5,432 4,142
---------------------------------------------------------------------
Net Interest Income
after Provision for
Loan Losses 18,585 15,250 16,760 22,043 22,317
---------------------------------------------------------------------
NONINTEREST INCOME
Service Charges on
Deposit Accounts 6,698 6,807 7,110 7,060 6,765
Data Processing Fees 870 937 873 812 813
Asset Management Fees 970 935 1,025 1,125 1,150
Retail Brokerage Fees 493 630 565 735 469
Gain on Sale of
Investment
Securities -- 3 27 30 65
Mortgage Banking
Revenues 584 292 331 506 494
Merchant Fees 958 650 616 2,074 2,208
Interchange Fees 1,056 1,007 1,073 1,076 1,009
Gain on Sale of
Portion of Merchant
Services Portfolio -- -- 6,250 -- --
ATM/Debit Card Fees 863 744 742 758 744
Other 1,550 1,306 1,600 1,542 4,082
---------------------------------------------------------------------
Total Noninterest
Income 14,042 13,311 20,212 15,718 17,799
---------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and
Associate Benefits 17,237 15,492 15,417 15,318 15,604
Occupancy, Net 2,345 2,503 2,373 2,491 2,362
Furniture and
Equipment 2,338 2,368 2,369 2,583 2,582
Intangible
Amortization 1,011 1,308 1,459 1,459 1,459
Other 9,326 9,331 8,298 8,905 7,791
---------------------------------------------------------------------
Total Noninterest
Expense 32,257 31,002 29,916 30,756 29,798
---------------------------------------------------------------------
OPERATING PROFIT 370 (2,441) 7,056 7,005 10,318
Provision for Income
Taxes (280) (738) 2,218 2,195 3,038
---------------------------------------------------------------------
NET INCOME $ 650 $ (1,703) $ 4,838 $ 4,810 $ 7,280
---------------------------------------------------------------------
PER SHARE DATA
Basic Earnings $ 0.04 $ (0.10) $ 0.29 $ 0.28 $ 0.42
Diluted Earnings $ 0.04 $ (0.10) $ 0.29 $ 0.28 $ 0.42
Cash Dividends 0.190 0.190 0.185 0.185 0.185
AVERAGE SHARES
Basic 17,109 17,126 17,124 17,146 17,170
Diluted 17,131 17,135 17,128 17,147 17,178
---------------------------------------------------------------------
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
----------------------------------------------------------------------
(Dollars in
thousands, 2009 2008 2008 2008 2008
except per First Fourth Third Second First
share data) Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
ASSETS
Cash and Due
From Banks $ 81,317 $ 88,143 $ 71,062 $ 108,672 $ 97,525
Funds Sold and
Interest
Bearing
Deposits 4,241 6,806 27,419 192,786 241,202
----------------------------------------------------------------------
Total Cash
and Cash
Equivalents 85,558 94,949 98,481 301,458 338,727
Investment
Securities,
Available-for-
Sale 195,767 191,569 193,978 185,971 186,944
Loans, Net of
Unearned
Interest
Commercial,
Financial, &
Agricultural 202,038 206,230 189,676 196,075 202,238
Real Estate -
Construction 154,102 141,973 148,160 150,907 152,060
Real Estate -
Commercial 673,066 656,959 639,443 622,282 624,826
Real Estate -
Residential 464,358 468,399 473,962 481,397 482,058
Real Estate -
Home Equity 223,505 218,500 212,118 205,536 197,093
Consumer 243,280 246,973 252,743 244,071 238,663
Other Loans 8,068 15,838 7,378 9,436 10,506
Overdrafts 3,195 2,925 3,749 7,111 7,014
----------------------------------------------------------------------
Total Loans,
Net of
Unearned
Interest 1,971,612 1,957,797 1,927,229 1,916,815 1,914,458
Allowance for
Loan Losses (40,172) (37,004) (30,544) (22,518) (20,277)
----------------------------------------------------------------------
Loans, Net 1,931,440 1,920,793 1,896,685 1,894,297 1,894,181
Premises and
Equipment, Net 107,259 106,433 104,806 102,559 100,145
Intangible
Assets 91,872 92,883 94,192 95,651 97,109
Other Assets 87,483 82,072 66,308 69,479 75,406
----------------------------------------------------------------------
Total Other
Assets 286,614 281,388 265,306 267,689 272,660
----------------------------------------------------------------------
Total Assets $2,499,379 $2,488,699 $2,454,450 $2,649,415 $2,692,512
----------------------------------------------------------------------
LIABILITIES
Deposits:
Noninterest
Bearing
Deposits $ 413,608 $ 419,696 $ 382,878 $ 416,992 $ 432,904
NOW Accounts 726,069 758,976 698,509 814,380 800,128
Money Market
Accounts 312,541 324,646 368,453 387,011 381,474
Regular
Savings
Accounts 121,245 115,261 116,858 118,307 116,018
Certificates
of Deposit 416,326 373,595 396,086 426,236 462,081
----------------------------------------------------------------------
Total
Deposits 1,989,789 1,992,174 1,962,784 2,162,926 2,192,605
Short-Term
Borrowings 68,193 62,044 47,069 51,783 61,781
Subordinated
Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term
Borrowings 53,448 51,470 53,074 36,857 29,843
Other
Liabilities 49,518 41,294 29,841 38,382 47,723
----------------------------------------------------------------------
Total
Liabilities 2,223,835 2,209,869 2,155,655 2,352,835 2,394,839
----------------------------------------------------------------------
SHAREOWNERS'
EQUITY
Common Stock 170 171 171 171 172
Additional
Paid-In
Capital 35,841 36,783 36,681 36,382 38,042
Retained
Earnings 260,287 262,890 267,853 266,171 264,538
Accumulated
Other
Comprehensive
Loss, Net of
Tax (20,754) (21,014) (5,910) (6,144) (5,079)
----------------------------------------------------------------------
Total
Shareowners'
Equity 275,544 278,830 298,795 296,580 297,673
----------------------------------------------------------------------
Total
Liabilities
and
Shareowners'
Equity $2,499,379 $2,488,699 $2,454,450 $2,649,415 $2,692,512
----------------------------------------------------------------------
OTHER BALANCE
SHEET DATA
Earning Assets $2,171,620 $2,156,172 $2,148,626 $2,295,572 $2,342,604
Intangible
Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Deposit Base 6,121 7,084 8,345 9,756 11,167
Other 940 988 1,036 1,084 1,131
Interest
Bearing
Liabilities 1,760,709 1,748,879 1,742,936 1,897,461 1,914,212
----------------------------------------------------------------------
Book Value Per
Diluted Share $ 16.18 $ 16.27 $ 17.45 $ 17.33 $ 17.33
Tangible Book
Value Per
Diluted Share 10.80 10.85 11.94 11.74 11.67
----------------------------------------------------------------------
Actual Basic
Shares
Outstanding 17,010 17,127 17,125 17,111 17,175
Actual Diluted
Shares
Outstanding 17,031 17,136 17,129 17,112 17,183
----------------------------------------------------------------------
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
----------------------------------------------------------------------
2009 2008 2008 2008 2008
(Dollars in First Fourth Third Second First
thousands) Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
ALLOWANCE FOR LOAN
LOSSES
Balance at Beginning
of Period $ 37,004 $ 30,544 $ 22,518 $ 20,277 $ 18,066
Provision for Loan
Losses 8,410 12,497 10,425 5,432 4,142
Net Charge-Offs 5,242 6,037 2,399 3,191 1,931
----------------------------------------------------------------------
Balance at End of
Period $ 40,172 $ 37,004 $ 30,544 $ 22,518 $ 20,277
----------------------------------------------------------------------
As a % of Loans 2.04% 1.89% 1.59% 1.18% 1.06%
As a % of
Nonperforming Loans 34.82% 37.52% 48.55% 51.80% 54.32%
As a % of
Nonperforming Assets 31.69% 34.31% 45.10% 47.12% 49.34%
----------------------------------------------------------------------
CHARGE-OFFS
Commercial, Financial
and Agricultural $ 857 $ 331 $ 275 $ 407 $ 636
Real Estate -
Construction 320 1,774 77 158 $ 572
Real Estate -
Commercial 1,002 293 (35) 1,115 126
Real Estate -
Residential 1,975 2,264 797 817 176
Consumer 2,117 1,993 1,797 1,232 1,170
----------------------------------------------------------------------
Total Charge-Offs $ 6,271 $ 6,655 $ 2,911 $ 3,729 $ 2,680
----------------------------------------------------------------------
RECOVERIES
Commercial, Financial
and Agricultural $ 74 $ 68 $ 68 $ 55 $ 139
Real Estate -
Construction 385 -- 4 -- --
Real Estate -
Commercial -- -- 1 13 1
Real Estate -
Residential 58 128 6 24 3
Consumer 512 422 433 446 606
----------------------------------------------------------------------
Total Recoveries $ 1,029 $ 618 $ 512 $ 538 $ 749
----------------------------------------------------------------------
NET CHARGE-OFFS $ 5,242 $ 6,037 $ 2,399 $ 3,191 $ 1,931
----------------------------------------------------------------------
Net Charge-Offs as a
% of Average
Loans(1) 1.08% 1.24% 0.50% 0.67% 0.41%
----------------------------------------------------------------------
RISK ELEMENT ASSETS
Nonaccruing Loans $110,200 $ 96,876 $ 61,509 $ 41,738 $ 35,352
Restructured Loans 5,157 1,744 1,403 1,733 1,980
----------------------------------------------------------------------
Total Nonperforming
Loans 115,357 98,620 62,912 43,471 37,332
Other Real Estate 11,425 9,222 4,813 4,322 3,768
----------------------------------------------------------------------
Total Nonperforming
Assets $126,782 $107,842 $ 67,725 $ 47,793 $ 41,100
----------------------------------------------------------------------
Past Due Loans 90
Days or More $ -- $ 88 $ 50 $ 896 $ 842
----------------------------------------------------------------------
Nonperforming Loans
as a % of Loans 5.85% 5.04% 3.26% 2.27% 1.95%
Nonperforming Assets
as a % of Loans and
Other Real Estate 6.39% 5.48% 3.51% 2.49% 2.14%
Nonperforming Assets
as a % of Capital(2) 40.16% 34.15% 20.56% 14.98% 12.93%
----------------------------------------------------------------------
(1) Annualized
(2) Capital includes allowance for loan losses
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
----------------------------------------------------------------------
First Quarter 2009 Fourth Quarter 2008
--------------------------- ---------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
----------------------------------------------------------------------
ASSETS:
Loans, Net of
Unearned
Interest $1,964,086 29,724 6.14% $1,940,083 31,772 6.52%
Investment
Securities
Taxable
Investment
Securities 90,927 776 3.43% 90,296 813 3.59%
Tax-Exempt
Investment
Securities 101,108 1,133 4.48% 103,817 1,252 4.82%
----------------------------------------------------------------------
Total
Investment
Securities 192,035 1,909 3.98% 194,113 2,065 4.25%
Funds Sold 10,116 3 0.13% 16,645 32 0.74%
----------------------------------------------------------------------
Total Earning
Assets 2,166,237 $31,636 5.92% 2,150,841 $33,869 6.27%
=============== ===============
Cash and Due
From Banks 76,826 76,027
Allowance for
Loan Losses (38,007) (30,347)
Other Assets 281,869 266,797
-------------------------- -----------
Total Assets $2,486,925 $2,463,318
========================== ===========
LIABILITIES:
Interest
Bearing
Deposits
NOW Accounts $ 719,265 $ 225 0.13% $ 684,246 $ 636 0.37%
Money Market
Accounts 321,562 190 0.24% 360,940 716 0.79%
Savings
Accounts 118,142 14 0.05% 117,311 28 0.09%
Time Deposits 392,006 2,066 2.14% 379,266 2,468 2.59%
----------------------------------------------------------------------
Total Interest
Bearing
Deposits 1,550,975 2,495 0.65% 1,541,763 3,848 0.99%
Short-Term
Borrowings 85,318 68 0.32% 69,079 110 0.62%
Subordinated
Notes Payable 62,887 927 5.89% 62,887 937 5.83%
Other Long-Term
Borrowings 53,221 568 4.33% 53,261 587 4.39%
----------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,752,401 $ 4,058 0.94% 1,726,990 $ 5,482 1.26%
=============== ===============
Noninterest
Bearing
Deposits 406,380 404,103
Other
Liabilities 46,510 29,998
-------------------------- -----------
Total
Liabilities 2,205,291 2,161,091
SHAREOWNERS'
EQUITY: $ 281,634 $ 302,227
-------------------------- -----------
Total
Liabilities
and
Shareowners'
Equity $2,486,925 $2,463,318
========================== ===========
Interest Rate
Spread $27,578 4.98% $28,387 5.01%
========================================== ===============
Interest Income
and Rate
Earned(1) $31,636 5.92% $33,869 6.27%
Interest
Expense and
Rate Paid(2) 4,058 0.76% 5,482 1.01%
------------------------------------------ ---------------
Net Interest
Margin $27,578 5.16% $28,387 5.26%
========================================== ===============
Third Quarter 2008 Second Quarter 2008
--------------------------- ---------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
----------------------------------------------------------------------
ASSETS:
Loans, Net of
Unearned
Interest $1,915,008 32,622 6.78% $1,908,802 33,610 7.08%
Investment
Securities
Taxable
Investment
Securities 93,723 940 3.99% 93,814 1,028 4.38%
Tax-Exempt
Investment
Securities 98,966 1,234 4.99% 94,371 1,200 5.09%
----------------------------------------------------------------------
Total
Investment
Securities 192,689 2,174 4.50% 188,185 2,228 4.73%
Funds Sold 99,973 475 1.86% 206,984 1,028 1.96%
----------------------------------------------------------------------
Total Earning
Assets 2,207,670 $35,271 6.36% 2,303,971 $36,866 6.43%
=============== ===============
Cash and Due
From Banks 77,309 82,182
Allowance for
Loan Losses (22,851) (20,558)
Other Assets 266,510 269,176
-------------------------- -----------
Total Assets $2,528,638 $2,634,771
========================== ===========
LIABILITIES:
Interest
Bearing
Deposits
NOW Accounts $ 727,754 $ 1,443 0.79% $ 788,237 $ 1,935 0.99%
Money Market
Accounts 369,544 1,118 1.20% 376,996 1,210 1.29%
Savings
Accounts 117,970 30 0.10% 117,182 29 0.10%
Time Deposits 410,101 3,224 3.13% 443,006 3,988 3.62%
----------------------------------------------------------------------
Total Interest
Bearing
Deposits 1,625,369 5,815 1.42% 1,725,421 7,162 1.67%
Short-Term
Borrowings 51,738 230 1.76% 55,830 296 2.13%
Subordinated
Notes Payable 62,887 936 5.83% 62,887 931 5.86%
Other Long-Term
Borrowings 43,237 488 4.48% 34,612 396 4.60%
----------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,783,231 $ 7,469 1.67% 1,878,750 $ 8,785 1.88%
=============== ===============
Noninterest
Bearing
Deposits 405,314 415,125
Other
Liabilities 36,498 40,006
-------------------------- -----------
Total
Liabilities 2,225,043 2,333,881
SHAREOWNERS'
EQUITY: $ 303,595 $ 300,890
-------------------------- -----------
Total
Liabilities
and
Shareowners'
Equity $2,528,638 $2,634,771
========================== ===========
Interest Rate
Spread $27,802 4.69% $28,081 4.55%
========================================== ===============
Interest Income
and Rate
Earned(1) $35,271 6.36% $36,866 6.43%
Interest
Expense and
Rate Paid(2) 7,469 1.35% 8,785 1.53%
------------------------------------------ ---------------
Net Interest
Margin $27,802 5.01% $28,081 4.90%
========================================== ===============
First Quarter 2008
---------------------------
Average Average
(Dollars in thousands) Balance Interest Rate
----------------------------------------------------------------------
ASSETS:
Loans, Net of Unearned Interest $1,909,574 35,453 7.47%
Investment Securities
Taxable Investment Securities 94,786 1,108 4.67%
Tax-Exempt Investment Securities 90,790 1,207 5.32%
----------------------------------------------------------------------
Total Investment Securities 185,576 2,315 4.99%
Funds Sold 206,313 1,574 3.02%
----------------------------------------------------------------------
Total Earning Assets 2,301,463 $39,342 6.87%
===============
Cash and Due From Banks 94,247
Allowance for Loan Losses (18,227)
Other Assets 268,991
------------------------------------------------------
Total Assets $2,646,474
======================================================
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 773,891 $ 3,440 1.79%
Money Market Accounts 389,828 2,198 2.27%
Savings Accounts 113,163 34 0.12%
Time Deposits 467,280 4,809 4.14%
----------------------------------------------------------------------
Total Interest Bearing Deposits 1,744,162 10,481 2.42%
Short-Term Borrowings 68,095 521 3.06%
Subordinated Notes Payable 62,887 931 5.96%
Other Long-Term Borrowings 27,644 331 4.82%
----------------------------------------------------------------------
Total Interest Bearing Liabilities 1,902,788 $12,264 2.59%
===============
Noninterest Bearing Deposits 404,712
Other Liabilities 42,170
------------------------------------------------------
Total Liabilities 2,349,670
SHAREOWNERS' EQUITY: $ 296,804
------------------------------------------------------
Total Liabilities and Shareowners' Equity $2,646,474
=====================================================
Interest Rate Spread $27,078 4.28%
======================================================================
Interest Income and Rate Earned(1) $39,342 6.87%
Interest Expense and Rate Paid(2) 12,264 2.14%
----------------------------------------------------------------------
Net Interest Margin $27,078 4.73%
======================================================================
(1) Interest and average rates are calculated on a tax-equivalent
basis using the 35% Federal tax rate.
(2) Rate calculated based on average earning assets.