| Net interest income before provision for credit losses was $37.8 million for the second quarter of 2006, compared to $36.3 million for the first quarter of 2006 and $34.1 million for the same quarter in 2005. Net interest margin for the second quarter of 2006 was 4.76 percent, compared to 4.85 percent for the first quarter of 2006 and 4.90 percent for the same quarter in 2005. |
| Return on average assets for the second quarter of 2006 was 1.79 percent, compared to 1.75 percent for the first quarter of 2006 and 1.90 percent for the same quarter in 2005. |
| Return on average shareholders equity for the second quarter of 2006 was 14.22 percent, compared to 13.83 percent for the first quarter of 2006 and 14.48 percent for the same quarter in 2005. |
| The loan portfolio increased by $118.6 million, or 4.5 percent, to $2.76 billion at June 30, 2006 from $2.64 billion at March 31, 2006. The loan portfolio totaled $2.47 billion at December 31, 2005 and $2.40 billion at June 30, 2005. |
| The provision for credit losses was $900,000 for the second quarter of 2006, compared to $3.0 million for the first quarter of 2006 and $450,000 for the same quarter of 2005. Non-performing assets increased 12.0 percent from $10.8 million at March 31, 2006 to $12.1 million at June 30, 2006. The allowance for loan losses was 0.98 percent and 1.00 percent of the gross loan portfolio at June 30, 2006 and March 31, 2006, respectively, reflecting better collateral coverage for non-performing loans outstanding at June 30, 2006, compared to the prior quarter-end. The decrease in the provision for credit losses also is attributable to a decrease in net charge-offs from $1.2 million in the first quarter of 2006 to $353,000 in the second quarter of 2006. |
| The efficiency ratio for the second quarter of 2006 was 41.59 percent compared to 39.10 percent for the first quarter of 2006 and 40.30 percent for the same quarter in 2005. |
| Salaries and employee benefits included $473,000 of stock-based compensation expense for the second quarter of 2006, compared to $101,000 for the first quarter of 2006 and $91,000 for the same quarter of 2005, reflecting additional stock options granted in 2006. |
-1-
-2-
-3-
-4-
June 30, | December 31, | % | June 30, | % | ||||||||||||||||
2006 | 2005 | Change | 2005 | Change | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and Cash Equivalents |
$ | 111,371 | $ | 163,477 | (31.9 | )% | $ | 103,850 | 7.2 | % | ||||||||||
Investment Securities |
410,050 | 443,912 | (7.6 | )% | 411,841 | (0.4 | )% | |||||||||||||
Loans: |
||||||||||||||||||||
Loans, Net of Deferred Loan Fees |
2,787,970 | 2,494,043 | 11.8 | % | 2,426,085 | 14.9 | % | |||||||||||||
Allowance for Loan Losses |
(27,250 | ) | (24,963 | ) | 9.2 | % | (22,049 | ) | 23.6 | % | ||||||||||
Net Loans |
2,760,720 | 2,469,080 | 11.8 | % | 2,404,036 | 14.8 | % | |||||||||||||
Customers Liability on Acceptances |
11,057 | 8,432 | 31.1 | % | 10,154 | 8.9 | % | |||||||||||||
Premises and Equipment, Net |
20,312 | 20,784 | (2.3 | )% | 20,557 | (1.2 | )% | |||||||||||||
Accrued Interest Receivable |
14,899 | 14,120 | 5.5 | % | 12,105 | 23.1 | % | |||||||||||||
Deferred Income Taxes |
12,337 | 9,651 | 27.8 | % | 4,536 | 172.0 | % | |||||||||||||
Servicing Asset |
4,302 | 3,910 | 10.0 | % | 3,434 | 25.3 | % | |||||||||||||
Goodwill |
207,646 | 209,058 | (0.7 | )% | 209,058 | (0.7 | )% | |||||||||||||
Core Deposit Intangible |
7,461 | 8,691 | (14.2 | )% | 10,031 | (25.6 | )% | |||||||||||||
Federal Reserve Bank and Federal Home Loan Bank Stock |
24,603 | 24,587 | 0.1 | % | 24,130 | 2.0 | % | |||||||||||||
Bank-Owned Life Insurance |
23,146 | 22,713 | 1.9 | % | 22,283 | 3.9 | % | |||||||||||||
Other Assets |
16,401 | 15,837 | 3.6 | % | 15,777 | 4.0 | % | |||||||||||||
Total Assets |
$ | 3,624,305 | $ | 3,414,252 | 6.2 | % | $ | 3,251,792 | 11.5 | % | ||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Noninterest-Bearing |
$ | 778,445 | $ | 738,618 | 5.4 | % | $ | 757,482 | 2.8 | % | ||||||||||
Interest-Bearing |
2,116,567 | 2,087,496 | 1.4 | % | 1,802,495 | 17.4 | % | |||||||||||||
Total Deposits |
2,895,012 | 2,826,114 | 2.4 | % | 2,559,977 | 13.1 | % | |||||||||||||
Accrued Interest Payable |
15,319 | 11,911 | 28.6 | % | 8,367 | 83.1 | % | |||||||||||||
Acceptances Outstanding |
11,057 | 8,432 | 31.1 | % | 10,154 | 8.9 | % | |||||||||||||
Other Borrowed Funds |
156,872 | 46,331 | 238.6 | % | 147,647 | 6.2 | % | |||||||||||||
Junior Subordinated Debentures |
82,406 | 82,406 | | 82,406 | | |||||||||||||||
Other Liabilities |
12,253 | 12,281 | (0.2 | )% | 18,411 | (33.4 | )% | |||||||||||||
Total Liabilities |
3,172,919 | 2,987,475 | 6.2 | % | 2,826,962 | 12.2 | % | |||||||||||||
Shareholders Equity |
451,386 | 426,777 | 5.8 | % | 424,830 | 6.3 | % | |||||||||||||
Total Liabilities and Shareholders Equity |
$ | 3,624,305 | $ | 3,414,252 | 6.2 | % | $ | 3,251,792 | 11.5 | % | ||||||||||
-5-
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
June 30, | March 31, | % | June 30, | % | June 30, | June 30, | % | |||||||||||||||||||||||||
2006 | 2006 | Change | 2005 | Change | 2006 | 2005 | Change | |||||||||||||||||||||||||
INTEREST INCOME: |
||||||||||||||||||||||||||||||||
Interest and Fees on Loans |
$ | 58,242 | $ | 52,637 | 10.6 | % | $ | 42,750 | 36.2 | % | $ | 110,879 | $ | 80,976 | 36.9 | % | ||||||||||||||||
Interest on Investments |
5,013 | 5,099 | (1.7 | )% | 4,734 | 5.9 | % | 10,112 | 9,382 | 7.8 | % | |||||||||||||||||||||
Interest on Federal Funds Sold |
23 | 289 | (92.0 | )% | 123 | (81.3 | )% | 312 | 458 | (31.9 | )% | |||||||||||||||||||||
Total Interest Income |
63,278 | 58,025 | 9.1 | % | 47,607 | 32.9 | % | 121,303 | 90,816 | 33.6 | % | |||||||||||||||||||||
INTEREST EXPENSE: |
||||||||||||||||||||||||||||||||
Interest on Deposits |
21,921 | 19,591 | 11.9 | % | 11,345 | 93.2 | % | 41,512 | 21,156 | 96.2 | % | |||||||||||||||||||||
Interest on Borrowings |
3,588 | 2,089 | 71.8 | % | 2,117 | 69.5 | % | 5,677 | 3,653 | 55.4 | % | |||||||||||||||||||||
Total Interest Expense |
25,509 | 21,680 | 17.7 | % | 13,462 | 89.5 | % | 47,189 | 24,809 | 90.2 | % | |||||||||||||||||||||
NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES |
37,769 | 36,345 | 3.9 | % | 34,145 | 10.6 | % | 74,114 | 66,007 | 12.3 | % | |||||||||||||||||||||
| | | ||||||||||||||||||||||||||||||
Provision for Credit Losses |
900 | 2,960 | (69.6 | )% | 450 | 100.0 | % | 3,860 | 586 | 558.7 | % | |||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES |
36,869 | 33,385 | 10.4 | % | 33,695 | 9.4 | % | 70,254 | 65,421 | 7.4 | % | |||||||||||||||||||||
NON-INTEREST INCOME: |
||||||||||||||||||||||||||||||||
Service Charges on Deposit Accounts |
4,183 | 4,231 | (1.1 | )% | 3,868 | 8.1 | % | 8,414 | 7,598 | 10.7 | % | |||||||||||||||||||||
Trade Finance Fees |
1,116 | 1,071 | 4.2 | % | 1,036 | 7.7 | % | 2,187 | 1,981 | 10.4 | % | |||||||||||||||||||||
Remittance Fees |
532 | 488 | 9.0 | % | 550 | (3.3 | )% | 1,020 | 1,018 | 0.2 | % | |||||||||||||||||||||
Other Service Charges and Fees |
614 | 534 | 15.0 | % | 689 | (10.9 | )% | 1,148 | 1,268 | (9.5 | )% | |||||||||||||||||||||
Bank-Owned Life Insurance Income |
215 | 218 | (1.4 | )% | 210 | 2.4 | % | 433 | 415 | 4.3 | % | |||||||||||||||||||||
Increase in Fair Value of Derivatives |
109 | 225 | (51.6 | )% | 370 | (70.5 | )% | 334 | 789 | (57.7 | )% | |||||||||||||||||||||
Other Income |
835 | 643 | 29.9 | % | 554 | 50.7 | % | 1,478 | 1,175 | 25.8 | % | |||||||||||||||||||||
Gain on Sales of Loans |
1,311 | 839 | 56.3 | % | 56 | 2,241.1 | % | 2,150 | 364 | 490.7 | % | |||||||||||||||||||||
Gain on Sales of Securities Available for Sale |
| 5 | (100.0 | )% | 14 | (100.0 | )% | 5 | 96 | (94.8 | )% | |||||||||||||||||||||
Total Non-Interest Income |
8,915 | 8,254 | 8.0 | % | 7,347 | 21.3 | % | 17,169 | 14,704 | 16.8 | % | |||||||||||||||||||||
NON-INTEREST EXPENSES: |
||||||||||||||||||||||||||||||||
Salaries and Employee Benefits |
10,691 | 9,161 | 16.7 | % | 8,545 | 25.1 | % | 19,852 | 17,712 | 12.1 | % | |||||||||||||||||||||
Occupancy and Equipment |
2,558 | 2,318 | 10.4 | % | 2,171 | 17.8 | % | 4,876 | 4,402 | 10.8 | % | |||||||||||||||||||||
Data Processing |
1,218 | 1,215 | 0.2 | % | 1,245 | (2.2 | )% | 2,433 | 2,410 | 1.0 | % | |||||||||||||||||||||
Advertising and Promotion |
811 | 646 | 25.5 | % | 563 | 44.0 | % | 1,457 | 1,257 | 15.9 | % | |||||||||||||||||||||
Amortization of Core Deposit Intangible |
605 | 625 | (3.2 | )% | 714 | (15.3 | )% | 1,230 | 1,446 | (14.9 | )% | |||||||||||||||||||||
Supplies and Communications |
576 | 636 | (9.4 | )% | 729 | (21.0 | )% | 1,212 | 1,308 | (7.3 | )% | |||||||||||||||||||||
Professional Fees |
492 | 668 | (26.3 | )% | 560 | (12.1 | )% | 1,160 | 1,039 | 11.6 | % | |||||||||||||||||||||
Decrease in Fair Value of Embedded Option |
112 | 102 | 9.8 | % | 2 | 5,500.0 | % | 214 | 575 | (62.8 | )% | |||||||||||||||||||||
Other Operating Expenses |
2,353 | 2,068 | 13.8 | % | 2,192 | 7.3 | % | 4,421 | 3,977 | 11.2 | % | |||||||||||||||||||||
Merger-Related Expenses |
| | | (509 | ) | (100.0 | )% | | (509 | ) | (100.0 | )% | ||||||||||||||||||||
Total Non-Interest Expenses |
19,416 | 17,439 | 11.3 | % | 16,212 | 19.8 | % | 36,855 | 33,617 | 9.6 | % | |||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
26,368 | 24,200 | 9.0 | % | 24,830 | 6.2 | % | 50,568 | 46,508 | 8.7 | % | |||||||||||||||||||||
Income Taxes |
10,428 | 9,398 | 11.0 | % | 9,792 | 6.5 | % | 19,826 | 18,138 | 9.3 | % | |||||||||||||||||||||
NET INCOME |
$ | 15,940 | $ | 14,802 | 7.7 | % | $ | 15,038 | 6.0 | % | $ | 30,742 | $ | 28,370 | 8.4 | % | ||||||||||||||||
EARNINGS PER SHARE: |
||||||||||||||||||||||||||||||||
Basic |
$ | 0.33 | $ | 0.30 | 10.0 | % | $ | 0.30 | 10.0 | % | $ | 0.63 | $ | 0.57 | 10.5 | % | ||||||||||||||||
Diluted |
$ | 0.32 | $ | 0.30 | 6.7 | % | $ | 0.30 | 6.7 | % | $ | 0.62 | $ | 0.56 | 10.7 | % | ||||||||||||||||
WEIGHTED-AVERAGE SHARES OUTSTANDING: |
||||||||||||||||||||||||||||||||
Basic |
48,822,729 | 48,714,435 | 49,556,926 | 48,768,881 | 49,508,917 | |||||||||||||||||||||||||||
Diluted |
49,404,204 | 49,318,397 | 50,213,725 | 49,366,709 | 50,218,948 | |||||||||||||||||||||||||||
SHARES OUTSTANDING AT PERIOD-END |
48,908,580 | 48,856,216 | 49,651,477 | 48,908,580 | 49,651,477 |
-6-
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
June 30, | March 31, | % | June 30, | % | June 30, | June 30, | % | |||||||||||||||||||||||||
2006 | 2006 | Change | 2005 | Change | 2006 | 2005 | Change | |||||||||||||||||||||||||
AVERAGE BALANCES: |
||||||||||||||||||||||||||||||||
Average Gross Loans, Net of Deferred Loan Fees |
$ | 2,729,218 | $ | 2,547,421 | 7.1 | % | $ | 2,334,803 | 16.9 | % | $ | 2,638,822 | $ | 2,287,253 | 15.4 | % | ||||||||||||||||
Average Interest-Earning Assets |
3,180,999 | 3,036,300 | 4.8 | % | 2,793,143 | 13.9 | % | 3,109,051 | 2,765,114 | 12.4 | % | |||||||||||||||||||||
Average Total Assets |
3,570,389 | 3,423,419 | 4.3 | % | 3,168,995 | 12.7 | % | 3,497,310 | 3,136,419 | 11.5 | % | |||||||||||||||||||||
Average Deposits |
2,832,218 | 2,810,313 | 0.8 | % | 2,542,886 | 11.4 | % | 2,821,648 | 2,531,123 | 11.5 | % | |||||||||||||||||||||
Average Interest-Bearing Liabilities |
2,341,481 | 2,215,781 | 5.7 | % | 1,960,987 | 19.4 | % | 2,278,944 | 1,943,789 | 17.2 | % | |||||||||||||||||||||
Average Shareholders Equity |
449,664 | 434,220 | 3.6 | % | 416,465 | 8.0 | % | 443,507 | 411,270 | 7.8 | % | |||||||||||||||||||||
Average Tangible Equity |
232,802 | 216,723 | 7.4 | % | 197,080 | 18.1 | % | 226,329 | 191,159 | 18.4 | % | |||||||||||||||||||||
PERFORMANCE RATIOS (Annualized): |
||||||||||||||||||||||||||||||||
Return on Average Assets |
1.79 | % | 1.75 | % | 1.90 | % | 1.77 | % | 1.82 | % | ||||||||||||||||||||||
Return on Average Shareholders Equity |
14.22 | % | 13.83 | % | 14.48 | % | 13.98 | % | 13.91 | % | ||||||||||||||||||||||
Return on Average Tangible Equity |
27.46 | % | 27.70 | % | 30.61 | % | 27.39 | % | 29.93 | % | ||||||||||||||||||||||
Efficiency Ratio |
41.59 | % | 39.10 | % | 40.30 | % | 40.37 | % | 42.28 | % | ||||||||||||||||||||||
Net Interest Margin |
4.76 | % | 4.85 | % | 4.90 | % | 4.81 | % | 4.81 | % | ||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES: |
||||||||||||||||||||||||||||||||
Balance at the Beginning of Period |
$ | 26,703 | $ | 24,963 | 7.0 | % | $ | 22,621 | 18.0 | % | $ | 24,963 | $ | 22,702 | 10.0 | % | ||||||||||||||||
Provision Charged to Operating Expense |
900 | 2,960 | (69.6 | )% | 450 | 100.0 | % | 3,860 | 450 | 757.8 | % | |||||||||||||||||||||
Charge-Offs, Net of Recoveries |
(353 | ) | (1,220 | ) | (71.1 | )% | (1,022 | ) | (65.5 | )% | (1,573 | ) | (1,103 | ) | 42.6 | % | ||||||||||||||||
Balance at the End of Period |
$ | 27,250 | $ | 26,703 | 2.0 | % | $ | 22,049 | 23.6 | % | $ | 27,250 | $ | 22,049 | 23.6 | % | ||||||||||||||||
Allowance for Loan Losses to Total Gross Loans |
0.98 | % | 1.00 | % | 0.91 | % | 0.98 | % | 0.91 | % | ||||||||||||||||||||||
Allowance for Loan Losses to Total Non-Performing Loans |
224.5 | % | 259.5 | % | 361.6 | % | 224.5 | % | 361.6 | % | ||||||||||||||||||||||
ALLOWANCE FOR OFF-BALANCE SHEET ITEMS: |
||||||||||||||||||||||||||||||||
Balance at the Beginning of Period |
$ | 2,130 | $ | 2,130 | | $ | 1,936 | 10.0 | % | $ | 2,130 | $ | 1,800 | 18.3 | % | |||||||||||||||||
Provision Charged to Operating Expense |
| | | | | | 136 | (100.0 | )% | |||||||||||||||||||||||
Balance at the End of Period |
$ | 2,130 | $ | 2,130 | | $ | 1,936 | 10.0 | % | $ | 2,130 | $ | 1,936 | 10.0 | % | |||||||||||||||||
-7-
June 30, | Dec. 31, | % | June 30, | % | ||||||||||||||||
2006 | 2005 | Change | 2005 | Change | ||||||||||||||||
NON-PERFORMING ASSETS: |
||||||||||||||||||||
Non-Accrual Loans |
$ | 12,001 | $ | 10,122 | 18.6 | % | $ | 5,688 | 111.0 | % | ||||||||||
Loans 90 Days or More Past Due and Still Accruing |
135 | 9 | N/M | 409 | (67.0 | )% | ||||||||||||||
Total Non-Performing Loans |
12,136 | 10,131 | 19.8 | % | 6,097 | 99.0 | % | |||||||||||||
Other Real Estate Owned |
| | | | | |||||||||||||||
Total Non-Performing Assets |
$ | 12,136 | $ | 10,131 | 19.8 | % | $ | 6,097 | 99.0 | % | ||||||||||
Total Non-Performing Loans/Total Gross Loans |
0.43 | % | 0.41 | % | 0.25 | % | ||||||||||||||
Total Non-Performing Assets/Total Assets |
0.33 | % | 0.30 | % | 0.19 | % | ||||||||||||||
Total Non-Performing Assets/Allowance for Loan Losses |
44.5 | % | 40.6 | % | 27.7 | % | ||||||||||||||
DELINQUENT LOANS |
$ | 23,084 | $ | 21,188 | 8.9 | % | $ | 14,190 | 62.7 | % | ||||||||||
LOAN PORTFOLIO: |
||||||||||||||||||||
Real Estate Loans |
$ | 1,029,462 | $ | 974,172 | 5.7 | % | $ | 934,789 | 10.1 | % | ||||||||||
Commercial and Industrial Loans |
1,663,449 | 1,431,492 | 16.2 | % | 1,408,468 | 18.1 | % | |||||||||||||
Consumer Loans |
98,974 | 92,154 | 7.4 | % | 87,287 | 13.4 | % | |||||||||||||
Total Gross Loans |
2,791,885 | 2,497,818 | 11.8 | % | 2,430,544 | 14.9 | % | |||||||||||||
Deferred Loan Fees |
(3,915 | ) | (3,775 | ) | 3.7 | % | (4,459 | ) | (12.2 | )% | ||||||||||
Allowance for Loan Losses |
(27,250 | ) | (24,963 | ) | 9.2 | % | (22,049 | ) | 23.6 | % | ||||||||||
Loans Receivable, Net |
$ | 2,760,720 | $ | 2,469,080 | 11.8 | % | $ | 2,404,036 | 14.8 | % | ||||||||||
LOAN MIX: |
||||||||||||||||||||
Real Estate Loans |
36.87 | % | 39.00 | % | 38.46 | % | ||||||||||||||
Commercial and Industrial Loans |
59.58 | % | 57.31 | % | 57.95 | % | ||||||||||||||
Consumer Loans |
3.55 | % | 3.69 | % | 3.59 | % | ||||||||||||||
Total Gross Loans |
100.00 | % | 100.00 | % | 100.00 | % | ||||||||||||||
DEPOSIT PORTFOLIO: |
||||||||||||||||||||
Demand Noninterest-Bearing |
$ | 778,445 | $ | 738,618 | 5.4 | % | $ | 757,482 | 2.8 | % | ||||||||||
Money Market |
440,970 | 526,171 | (16.2 | )% | 518,893 | (15.0 | )% | |||||||||||||
Savings |
110,492 | 121,574 | (9.1 | )% | 141,440 | (21.9 | )% | |||||||||||||
Time Deposits of $100,000 or More |
1,287,257 | 1,161,950 | 10.8 | % | 916,212 | 40.5 | % | |||||||||||||
Other Time Deposits |
277,848 | 277,801 | | 225,950 | 23.0 | % | ||||||||||||||
Total Deposits |
$ | 2,895,012 | $ | 2,826,114 | 2.4 | % | $ | 2,559,977 | 13.1 | % | ||||||||||
DEPOSIT MIX: |
||||||||||||||||||||
Demand Noninterest-Bearing |
26.89 | % | 26.14 | % | 29.59 | % | ||||||||||||||
Money Market |
15.23 | % | 18.62 | % | 20.27 | % | ||||||||||||||
Savings |
3.82 | % | 4.30 | % | 5.53 | % | ||||||||||||||
Time Deposits of $100,000 or More |
44.46 | % | 41.11 | % | 35.79 | % | ||||||||||||||
Other Time Deposits |
9.60 | % | 9.83 | % | 8.82 | % | ||||||||||||||
Total Deposits |
100.00 | % | 100.00 | % | 100.00 | % | ||||||||||||||
-8-