California | 77-0469558 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
PART I. FINANCIAL INFORMATION | Page No. |
Item 1. Consolidated Financial Statements (unaudited): | |
Consolidated Balance Sheets | |
Consolidated Income Statements | |
Consolidated Statements of Changes in Shareholders' Equity | |
Consolidated Statements of Cash Flows | |
Notes to Consolidated Financial Statements | |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | |
Item 4. Controls and Procedures | |
PART II. OTHER INFORMATION | |
Item 1. Legal Proceedings | |
Item 1A. Risk Factors | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. Defaults Upon Senior Securities | |
Item 4. Submission of Matters to a Vote of Security Holders | |
Item 5. Other Information | |
Item 6. Exhibits | |
SIGNATURES | |
EXHIBIT INDEX | 3 |
Heritage Commerce Corp | Heritage Commerce Corp | Heritage Commerce Corp | |||||||||||
Consolidated Balance Sheets (Unaudited) | Consolidated Balance Sheets (Unaudited) | Consolidated Balance Sheets (Unaudited) | |||||||||||
March 31, | December 31, | September 30, | December 31, | ||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||
Assets | |||||||||||||
Cash and due from banks | $ | 33,718 | $ | 34,285 | $ | 51,627 | $ | 34,285 | |||||
Federal funds sold | 90,400 | 15,100 | 42,600 | 15,100 | |||||||||
Total cash and cash equivalents | 124,118 | 49,385 | 94,227 | 49,385 | |||||||||
Securities available-for-sale, at fair value | 164,800 | 172,298 | 150,116 | 172,298 | |||||||||
Loans held for sale, at lower of cost or market | 11,351 | 17,234 | - | 17,234 | |||||||||
Loans, net of deferred costs | 701,066 | 725,754 | |||||||||||
Loans, net of deferred origination costs | 954,658 | 725,754 | |||||||||||
Allowance for loan losses | (9,014) | (9,279) | (11,472) | (9,279) | |||||||||
Loans, net | 692,052 | 716,475 | 943,186 | 716,475 | |||||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 6,185 | 6,113 | 7,653 | 6,113 | |||||||||
Company owned life insurance | 36,519 | 36,174 | 38,270 | 36,174 | |||||||||
Premises and equipment, net | 2,446 | 2,539 | 9,441 | 2,539 | |||||||||
Goodwill | 42,996 | - | |||||||||||
Core deposit intangible asset | 4,863 | - | |||||||||||
Accrued interest receivable and other assets | 33,593 | 36,920 | 35,667 | 36,920 | |||||||||
Total assets | $ | 1,071,064 | $ | 1,037,138 | $ | 1,326,419 | $ | 1,037,138 | |||||
Liabilities and Shareholders' Equity | |||||||||||||
Liabilities: | |||||||||||||
Deposits | |||||||||||||
Demand, noninterest bearing | $ | 221,206 | $ | 231,841 | $ | 263,244 | $ | 231,841 | |||||
Demand, interest bearing | 141,395 | 133,413 | 146,410 | 133,413 | |||||||||
Savings and money market | 351,005 | 307,266 | 468,263 | 307,266 | |||||||||
Time deposits, under $100 | 30,730 | 31,097 | 32,341 | 31,097 | |||||||||
Time deposits, $100 and over | 96,813 | 111,017 | 138,327 | 111,017 | |||||||||
Brokered deposits, $100 and over | 42,748 | 31,959 | 52,179 | 31,959 | |||||||||
Total deposits | 883,897 | 846,593 | 1,100,764 | 846,593 | |||||||||
Notes payable to subsidiary grantor trusts | 23,702 | 23,702 | 23,702 | 23,702 | |||||||||
Securities sold under agreement to repurchase | 15,100 | 21,800 | 10,900 | 21,800 | |||||||||
Accrued interest payable and other liabilities | 22,333 | 22,223 | 22,678 | 22,223 | |||||||||
Total liabilities | 945,032 | 914,318 | 1,158,044 | 914,318 | |||||||||
Shareholders' equity: | |||||||||||||
Preferred stock, no par value; 10,000,000 shares authorized; none outstanding | - | - | - | - | |||||||||
Common Stock, no par value; 30,000,000 shares authorized; | |||||||||||||
shares outstanding: 11,636,828 at March 31, 2007 and 11,656,943 at December 31, 2006 | 61,958 | 62,363 | |||||||||||
shares outstanding: 13,123,396 at September 30, 2007 and 11,656,943 at December 31, 2006 | 98,093 | 62,363 | |||||||||||
Retained earnings | 65,786 | 62,452 | 71,540 | 62,452 | |||||||||
Accumulated other comprehensive loss | (1,712) | (1,995) | (1,258) | (1,995) | |||||||||
Total shareholders' equity | 126,032 | 122,820 | 168,375 | 122,820 | |||||||||
Total liabilities and shareholders' equity | $ | 1,071,064 | $ | 1,037,138 | $ | 1,326,419 | $ | 1,037,138 | |||||
See notes to consolidated financial statements | See notes to consolidated financial statements |
Heritage Commerce Corp | Heritage Commerce Corp | Heritage Commerce Corp | |||||||||||||||||||
Consolidated Income Statements (Unaudited) | Consolidated Income Statements (Unaudited) | Consolidated Income Statements (Unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
March 31, | Three Months Ended | Nine Months Ended | |||||||||||||||||||
2007 | 2006 | September 30, | September 30, | ||||||||||||||||||
(Dollars in thousands, except per share data) | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
Interest income: | (Dollars in thousands, except per share data) | ||||||||||||||||||||
Loans, including fees | $ | 14,670 | $ | 14,721 | $ | 19,282 | $ | 15,958 | $ | 49,541 | $ | 46,023 | |||||||||
Securities, taxable | 1,909 | 1,746 | 1,881 | 1,968 | 5,729 | 5,646 | |||||||||||||||
Securities, non-taxable | 44 | 46 | 38 | 45 | 124 | 136 | |||||||||||||||
Interest bearing deposits in other financial institutions | 32 | 18 | 31 | 36 | 104 | 96 | |||||||||||||||
Federal funds sold | 579 | 729 | 873 | 561 | 2,158 | 2,319 | |||||||||||||||
Total interest income | 17,234 | 17,260 | 22,105 | 18,568 | 57,656 | 54,220 | |||||||||||||||
Interest expense: | |||||||||||||||||||||
Deposits | 4,785 | 4,319 | 7,663 | 5,027 | 17,669 | 14,379 | |||||||||||||||
Notes payable to subsidiary grantor trusts | 581 | 562 | 585 | 587 | 1,749 | 1,724 | |||||||||||||||
Repurchase agreements and other | 137 | 188 | 76 | 140 | 333 | 486 | |||||||||||||||
Total interest expense | 5,503 | 5,069 | 8,324 | 5,754 | 19,751 | 16,589 | |||||||||||||||
Net interest income | 11,731 | 12,191 | 13,781 | 12,814 | 37,905 | 37,631 | |||||||||||||||
Provision for loan losses | (236) | (489) | (500 | ) | - | (736 | ) | (603 | |||||||||||||
Net interest income after provision for loan losses | 11,967 | 12,680 | 14,281 | 12,814 | 38,641 | 38,234 | |||||||||||||||
Noninterest income: | |||||||||||||||||||||
Gain on sale of loans | 1,011 | 1,497 | |||||||||||||||||||
Gain on sale of Capital Group loan portfolio | - | - | - | 671 | |||||||||||||||||
Gain on sale of SBA loans | 60 | 832 | 1,766 | 2,500 | |||||||||||||||||
Servicing income | 517 | 468 | 546 | 412 | 1,596 | 1,321 | |||||||||||||||
Increase in cash surrender value of life insurance | 345 | 347 | 374 | 363 | 1,071 | 1,070 | |||||||||||||||
Service charges and fees on deposit accounts | 274 | 327 | 344 | 354 | 954 | 1,008 | |||||||||||||||
Other | 368 | 255 | 315 | 338 | 1,028 | 880 | |||||||||||||||
Total noninterest income | 2,515 | 2,894 | 1,639 | 2,299 | 6,415 | 7,450 | |||||||||||||||
Noninterest expense: | |||||||||||||||||||||
Salaries and employee benefits | 4,888 | 5,109 | 5,840 | 4,941 | 15,413 | 14,703 | |||||||||||||||
Occupancy | 765 | 777 | 969 | 773 | 2,504 | 2,324 | |||||||||||||||
Professional fees | 337 | 513 | 751 | 442 | 1,489 | 1,289 | |||||||||||||||
Low income housing investment losses and writedowns | 237 | 264 | |||||||||||||||||||
Client services | 230 | 300 | |||||||||||||||||||
Advertising and promotion | 212 | 210 | 206 | 206 | 808 | 763 | |||||||||||||||
Data processing | 203 | 181 | 252 | 156 | 653 | 498 | |||||||||||||||
Client services | 155 | 230 | 631 | 772 | |||||||||||||||||
Low income housing investment losses and writedowns | 233 | 257 | 588 | 734 | |||||||||||||||||
Furniture and equipment | 110 | 109 | 200 | 140 | 429 | 397 | |||||||||||||||
Retirement plan expense | 61 | 88 | |||||||||||||||||||
Core deposit intangible amortization | 167 | - | 185 | - | |||||||||||||||||
Other | 1,257 | 1,210 | 1,745 | 1,167 | 4,618 | 4,085 | |||||||||||||||
Total noninterest expense | 8,300 | 8,761 | 10,518 | 8,312 | 27,318 | 25,565 | |||||||||||||||
Income before income taxes | 6,182 | 6,813 | 5,402 | 6,801 | 17,738 | 20,119 | |||||||||||||||
Income tax expense | 2,149 | 2,437 | 2,162 | 2,448 | 6,450 | 7,201 | |||||||||||||||
Net income | $ | 4,033 | $ | 4,376 | $ | 3,240 | $ | 4,353 | $ | 11,288 | $ | 12,918 | |||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.35 | $ | 0.37 | $ | 0.24 | $ | 0.37 | $ | 0.92 | $ | 1.09 | |||||||||
Diluted | $ | 0.34 | $ | 0.36 | $ | 0.24 | $ | 0.36 | $ | 0.91 | $ | 1.08 | |||||||||
See notes to consolidated financial statements | See notes to consolidated financial statements |
Heritage Commerce Corp | Heritage Commerce Corp | Heritage Commerce Corp | ||||||||||||||||||||||||||||||||||
Consolidated Statements of Shareholders' Equity (Unaudited) | Consolidated Statements of Shareholders' Equity (Unaudited) | Consolidated Statements of Shareholders' Equity (Unaudited) | ||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2007 and 2006 | ||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2007 and 2006 | Nine Months Ended September 30, 2007 and 2006 | |||||||||||||||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||||||||||||||
Other | Total | Other | Total | |||||||||||||||||||||||||||||||||
Common Stock | Retained | Comprehensive | Shareholder's | Comprehensive | Common Stock | Retained | Comprehensive | Shareholder's | Comprehensive | |||||||||||||||||||||||||||
Shares | Amount | Earnings | Loss | Equity | Income | Shares | Amount | Earnings | Loss | Equity | Income | |||||||||||||||||||||||||
(Dollars in thousands, except share data) | (Dollars in thousands, except share data) | |||||||||||||||||||||||||||||||||||
Balance, January 1, 2006 | 11,807,649 | $ | 66,799 | $ | 47,539 | $ | (2,721 | ) | $ | 111,617 | 11,807,649 | $ | 66,799 | $ | 47,539 | $ | (2,721) | $ | 111,617 | |||||||||||||||||
Net Income | - | - | 4,376 | - | 4,376 | $ | 4,376 | - | - | 12,918 | - | 12,918 | $ | 12,918 | ||||||||||||||||||||||
Net change in unrealized gain/loss on securities | ||||||||||||||||||||||||||||||||||||
available-for-sale and Interest-Only strips, net of | ||||||||||||||||||||||||||||||||||||
deferred income taxes | - | - | - | (688 | ) | (688 | ) | (688) | ||||||||||||||||||||||||||||
Decrease in pension liability, net of | ||||||||||||||||||||||||||||||||||||
available-for-sale and Interest-Only strips, net of reclassification | ||||||||||||||||||||||||||||||||||||
adjustment and deferred income taxes | - | - | - | 211 | 211 | 211 | ||||||||||||||||||||||||||||||
Decrease in minium pension liability, net of | ||||||||||||||||||||||||||||||||||||
deferred income taxes | - | - | - | 162 | 162 | 162 | - | - | - | 204 | 204 | 204 | ||||||||||||||||||||||||
Total comprehensive income | $ | 3,850 | $ | 13,333 | ||||||||||||||||||||||||||||||||
Amortization of restricted stock award | - | 38 | - | - | 38 | - | 115 | - | - | 115 | ||||||||||||||||||||||||||
Dividend declared on commom stock, $0.05 per share | - | - | (591 | ) | - | (591 | ) | |||||||||||||||||||||||||||||
Commom stock repurchased | (32,000 | ) | (739 | ) | - | - | (739 | ) | ||||||||||||||||||||||||||||
Cash dividend declared on common stock, $0.15 per share | - | - | (1,774) | - | (1,774) | |||||||||||||||||||||||||||||||
Common stock repurchased | (282,900) | (6,660) | - | - | (6,660) | |||||||||||||||||||||||||||||||
Stock options expense | - | 175 | - | - | 175 | - | 550 | - | - | 550 | ||||||||||||||||||||||||||
Stock options exercised, including related tax benefits | 59,197 | 847 | - | - | 847 | 156,548 | 2,155 | - | - | 2,155 | ||||||||||||||||||||||||||
Balance, March 31, 2006 | 11,834,846 | $ | 67,120 | $ | 51,324 | $ | (3,247 | ) | $ | 115,197 | ||||||||||||||||||||||||||
Balance, September 30, 2006 | 11,681,297 | $ | 62,959 | $ | 58,683 | $ | (2,306) | $ | 119,336 | |||||||||||||||||||||||||||
Balance, January 1, 2007 | 11,656,943 | $ | 62,363 | $ | 62,452 | $ | (1,995 | ) | $ | 122,820 | 11,656,943 | $ | 62,363 | $ | 62,452 | $ | (1,995) | $ | 122,820 | |||||||||||||||||
Net Income | - | - | 4,033 | - | 4,033 | $ | 4,033 | - | - | 11,288 | - | 11,288 | $ | 11,288 | ||||||||||||||||||||||
Net change in unrealized gain/loss on securities | ||||||||||||||||||||||||||||||||||||
available-for-sale and Interest-Only strips, net of | ||||||||||||||||||||||||||||||||||||
deferred income taxes | - | - | - | 268 | 268 | 268 | ||||||||||||||||||||||||||||||
available-for-sale and Interest-Only strips, net of reclassification | ||||||||||||||||||||||||||||||||||||
adjustment and deferred income taxes | - | - | - | 691 | 691 | 691 | ||||||||||||||||||||||||||||||
Decrease in pension liability, net of | ||||||||||||||||||||||||||||||||||||
deferred income taxes | - | - | - | 15 | 15 | 15 | - | - | - | 46 | 46 | 46 | ||||||||||||||||||||||||
Total comprehensive income | $ | 4,316 | $ | 12,025 | ||||||||||||||||||||||||||||||||
Issuance of 1,732,298 shares to acquire Diablo Valley Bank, net of offerings costs of $214 | 1,732,298 | 41,183 | - | - | 41,183 | |||||||||||||||||||||||||||||||
Amortization of restricted stock award | - | 38 | - | - | 38 | - | 115 | - | - | 115 | ||||||||||||||||||||||||||
Dividend declared on commom stock, $0.06 per share | - | - | (699 | ) | - | (699 | ) | |||||||||||||||||||||||||||||
Commom stock repurchased | (35,000 | ) | (892 | ) | - | - | (892 | ) | ||||||||||||||||||||||||||||
Stock options expense | - | 215 | - | - | 215 | |||||||||||||||||||||||||||||||
Stock options exercised, including related tax benefits | 14,885 | 234 | - | - | 234 | |||||||||||||||||||||||||||||||
Balance, March 31, 2007 | 11,636,828 | $ | 61,958 | $ | 65,786 | $ | (1,712 | ) | $ | 126,032 | ||||||||||||||||||||||||||
Cash dividend declared on common stock, $0.18 per share | - | - | (2,200) | - | (2,200) | |||||||||||||||||||||||||||||||
Common stock repurchased | (339,700) | (7,476) | - | - | (7,746) | |||||||||||||||||||||||||||||||
Stock options expense, including related tax benefits | - | 813 | - | - | 813 | |||||||||||||||||||||||||||||||
Stock options exercised | 73,855 | 1,095 | - | - | 1,095 | |||||||||||||||||||||||||||||||
Balance, September 30, 2007 | 13,123,396 | $ | 98,093 | $ | 71,540 | $ | (1,258) | $ | 168,375 | |||||||||||||||||||||||||||
See notes to consolidated financial statements |
Heritage Commerce Corp | ||||||
Consolidated Statements of Cash Flows (Unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2007 | 2006 | |||||
(Dollars in thousands) | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income | $ | 4,033 | $ | 4,376 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 150 | 174 | ||||
Provision for loan losses | (236) | (489) | ||||
Stock option expense | 215 | 175 | ||||
Amortization of restricted stock award | 38 | 38 | ||||
Amortization (accretion) of discounts and premiums on securities | 77 | (303) | ||||
Gain on sale of loans | (1,011) | (1,497) | ||||
Proceeds from sales of loans held for sale | 19,849 | 47,767 | ||||
Originations of loans held for sale | (13,076) | (13,756) | ||||
Maturities of loans held for sale | 120 | 6,888 | ||||
Increase in cash surrender value of life insurance | (344) | (347) | ||||
Effect of changes in: | ||||||
Accrued interest receivable and other assets | 2,960 | 2,169 | ||||
Accrued interest payable and other liabilities | 137 | (623) | ||||
Net cash provided by operating activities | 12,912 | 44,572 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Net change in loans | 24,659 | (7,074) | ||||
Purchases of securities available-for-sale | (2,295) | (17,690) | ||||
Maturities/paydowns/calls of securities available-for-sale | 10,340 | 29,392 | ||||
Purchase of premises and equipment | (57) | (22) | ||||
Purchase of other investments | (73) | (59) | ||||
Net cash provided by investing activities | 32,574 | 4,547 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Net change in deposits | 37,304 | (5,026) | ||||
Payment of other liability | - | (1,205) | ||||
Exercise of stock options | 234 | 847 | ||||
Common stock repurchased | (892) | (739) | ||||
Payment of dividends | (699) | (591) | ||||
Net change in other borrowings | (6,700) | (6,600) | ||||
Net cash provided by (used in) financing activities | 29,247 | (13,314) | ||||
Net increase in cash and cash equivalents | 74,733 | 35,805 | ||||
Cash and cash equivalents, beginning of period | 49,385 | 98,460 | ||||
Cash and cash equivalents, end of period | $ | 124,118 | $ | 134,265 | ||
Supplemental disclosures of cash flow information: | ||||||
Cash paid during the period for: | ||||||
Interest | $ | 6,050 | $ | 5,539 | ||
Income taxes | $ | - | $ | - | ||
See notes to consolidated financial statements |
Heritage Commerce Corp | |||||||
Consolidated Statements of Cash Flows (Unaudited) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2007 | 2006 | ||||||
(Dollars in thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 11,288 | $ | 12,918 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 535 | 507 | |||||
Provision for loan losses | (736 | ) | (603) | ||||
Stock option expense | 813 | 550 | |||||
Amortization of core deposit intangible | 186 | - | |||||
Amortization of restricted stock award | 115 | 115 | |||||
Amortization (accretion) of discounts and premiums on securities | (22) | (872) | |||||
Gain on sale of Capital Group loan portfolio | - | (671) | |||||
Gain on sale of SBA loans | (1,766) | (2,500) | |||||
Proceeds from sales of SBA loans held for sale | 35,529 | 48,703 | |||||
Originations of loans held for sale | (21,372) | (28,640) | |||||
Maturities/paydowns/payoffs of loans held for sale | 338 | 833 | |||||
Increase in cash surrender value of life insurance | (1,071) | (1,070) | |||||
Effect of changes in: | |||||||
Accrued interest receivable and other assets | 3,822 | 6,097 | |||||
Accrued interest payable and other liabilities | (1,004) | 891 | |||||
Net cash provided by operating activities | 26,655 | 36,258 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Net increase in loans | (18,164) | (28,578) | |||||
Proceeds from sales of Capital Group loan portfolio | - | 30,047 | |||||
Net decrease in Capital Group loan portfolio prior to sale | - | 2,681 | |||||
Purchases of securities available-for-sale | (9,322) | (49,098) | |||||
Maturities/paydowns/calls of securities available-for-sale | 45,008 | 75,530 | |||||
Purchase of premises and equipment | (596) | (460) | |||||
Redempton (purchase) of other investments | (823) | (184) | |||||
Cash received in bank acquisition, net of cash paid | 16,407 | - | |||||
Net cash provided by investing activities | 32,510 | 29,938 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net change in deposits | 5,525 | (63,661) | |||||
Payment of other liability | (153) | (1,378) | |||||
Exercise of stock options, including related tax benefits | 1,095 | 2,155 | |||||
Common stock repurchased | (7,476) | (6,660) | |||||
Stock offering costs | (214) | - | |||||
Payment of dividends | (2,200) | (1,774) | |||||
Net decrease in securities sold under agreement to repurchase | (10,900) | (10,900) | |||||
Net cash used in financing activities | (14,323) | (82,218) | |||||
Net increase (decrease) in cash and cash equivalents | 44,842 | (16,022) | |||||
Cash and cash equivalents, beginning of period | 49,385 | 98,460 | |||||
Cash and cash equivalents, end of period | $ | 94,227 | $ | 82,438 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 20,041 | $ | 16,919 | |||
Income taxes | $ | 3,687 | $ | 780 | |||
Supplemental schedule of non-cash investing and financing activities: | |||||||
Transfer of portfolio loans to loans held for sale | $ | - | $ | 7,797 | |||
Transfer of loans held for sale to portfolio loans | $ | 4,505 | $ | 4,383 | |||
Loans transferred to foreclosed assets | $ | 487 | $ | - | |||
Summary of assets acquired, and liabilities assumed through acquisition: | |||||||
Cash and cash equivalents | $ | 41,807 | $ | - | |||
Securities available-for-sale | $ | 12,214 | $ | - | |||
Net loans | $ | 203,793 | $ | - | |||
Goodwill and core deposit intangible asset | $ | 48,045 | $ | - | |||
Premises and equipment | $ | 6,841 | $ | - | |||
Corporate owned life insurance | $ | 1,025 | $ | - | |||
Federal Home Loan Bank Stock | $ | 717 | $ | - | |||
Other assets, net | $ | 2,686 | $ | - | |||
Deposits | $ | (248,646) | $ | - | |||
Other liabilities | $ | (1,685) | $ | - | |||
Common stock issued to acquire Diablo Valley Bank | $ | 41,397 | $ | - | |||
See notes to consolidated financial statements |
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
U.S. Government Agencies | $ | 4,745 | $ | 7 | $ | 4,912 | $ | 70 | $ | 9,657 | $ | 77 | |||||||||||
Mortgage-Backed | 18,390 | 198 | 62,387 | 2,041 | 80,777 | 2,239 | |||||||||||||||||
Municipals - Tax Exempt | - | - | 5,984 | 68 | 5,984 | 68 | |||||||||||||||||
Collateralized Mortgage Obligations | - | - | 2,980 | 112 | 2,980 | 112 | |||||||||||||||||
Total | $ | 23,135 | $ | 205 | $ | 76,263 | $ | 2,291 | $ | 99,398 | $ | 2,496 | |||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
U.S. Treasuries | $ | - | $ | - | $ | 6,000 | $ | (15) | $ | 6,000 | $ | (15) | ||||||
U.S. Government Agencies | 13,449 | (13) | 19,507 | (150) | 32,956 | (163) | ||||||||||||
Mortgage-Backed Securities | 6,257 | (27) | 70,486 | (2,604) | 76,743 | (2,631) | ||||||||||||
Municipals - Tax Exempt | - | - | 7,971 | (127) | 7,971 | (127) | ||||||||||||
Collateralized Mortgage Obligations | - | - | 3,272 | (134) | 3,272 | (134) | ||||||||||||
Total | $ | 19,706 | $ | (40) | $ | 107,236 | $ | (3,030) | $ | 126,942 | $ | (3,070) | ||||||
Weighted | Weighted | ||||||||||||||||||||||
Weighted | Average | Aggregate | Weighted | Average | Aggregate | ||||||||||||||||||
Number | Average | Remaining | Intrinsic | Number | Average | Remaining | Intrinsic | ||||||||||||||||
Total Stock Options | of Shares | Exercise Price | Contractual Life | Value | of Shares | Exercise Price | Contractual Life | Value | |||||||||||||||
Options Outstanding at January 1, 2007 | 752,983 | $ 16.56 | 752,983 | $ | 16.56 | ||||||||||||||||||
Granted | 7,000 | $ 27.17 | 321,500 | $ | 23.02 | ||||||||||||||||||
Exercised | (14,885) | $ 10.47 | (73,855 | ) | $ | 9.56 | |||||||||||||||||
Forfeited or expired | (3,881) | $ 22.78 | (27,105 | ) | $ | 21.10 | |||||||||||||||||
Options Outstanding at March 31, 2007 | 741,217 | $ 16.75 | 6.9 | $ 6,478,000 | |||||||||||||||||||
Exercisable at March 31, 2007 | 425,018 | $ 13.37 | 5.6 | $ 5,151,000 | |||||||||||||||||||
Options Outstanding at September 30, 2007 | 973,523 | $ | 19.10 | 7.6 | $ | 2,015,000 | |||||||||||||||||
Exercisable at September 30, 2007 | 451,611 | $ | 15.30 | 6.0 | $ | 2,651,000 | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||
Intrinsic value of options exercised | $ | 220,000 | $ | 805,000 | $ | 1,005,000 | $ | 2,078,000 | ||
Cash received from option exercise | $ | 156,000 | $ | 555,000 | $ | 706,000 | $ | 1,572,000 | ||
Tax benefit realized from option exercises | $ | 78,000 | $ | 292,000 | $ | 389,000 | $ | 583,000 | ||
Weighted average fair value of options granted | $ | 7.62 | $ | 8.56 | $ | 6.52 | $ | 7.57 |
2007 | 2006 | |||
Expected life in months (1) | 72 | 84 | ||
Volatility (1) | 20% | 24% | ||
Risk-free interest rate (2) | 4.71% | 4.56% | ||
Expected dividends (3) | 0.88% | 0.89% |
2007 | 2006 | |||
Expected life in months (1) | 72 | 84 | ||
Volatility (1) | 22% | 21% | ||
Risk-free interest rate (2) | 4.65% | 4.84% | ||
Expected dividends (3) | 1.05% | 0.86% |
(1) | Estimate based on historical experience. Volatility is based on the historical volatility of the stock over the most recent period that is generally commensurate with the expected life of the option. |
(2) | Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the options granted. |
(3) | The Company began paying cash dividends on common stock in 2006. Each grant’s dividend yield is calculated by annualizing the most recent quarterly cash dividend and dividing that amount by the market price of the Company’s common stock as of the grant date. |
Three Months Ended | ||||||
March 31, | ||||||
2007 | 2006 | |||||
Weighted average common shares outstanding - used | ||||||
in computing basic earnings per share | 11,602,120 | 11,821,817 | ||||
Dilutive effect of stock options outstanding, | ||||||
using the treasury stock method | 218,515 | 217,721 | ||||
Shares used in computing diluted earnings per share | 11,820,635 | 12,039,538 | ||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2007 | 2006 | 2007 | 2006 | ||||
Weighted average common shares outstanding - used | |||||||
in computing basic earnings per share | 13,235,087 | 11,781,135 | 12,211,945 | 11,812,718 | |||
Dilutive effect of stock options outstanding, | |||||||
using the treasury stock method | 152,897 | 176,089 | 171,740 | 192,214 | |||
Shares used in computing diluted earnings per share | 13,387,984 | 11,957,224 | 12,383,685 | 12,004,932 | |||
September 30, 2007 | December 31, 2006 | ||||||
(Dollars in thousands) | |||||||
Commercial | $ | 378,777 | $ | 300,611 | |||
Real estate - mortgage * | 325,327 | 239,041 | |||||
Real estate - land and construction | 205,925 | 143,834 | |||||
Home equity | 39,771 | 38,976 | |||||
Consumer | 4,131 | 2,422 | |||||
Total loans | 953,931 | 724,884 | |||||
Deferred loan costs | 727 | 870 | |||||
Allowance for loan losses | (11,472) | (9,279) | |||||
Loans, net | $ | 943,186 | $ | 716,475 | |||
For the Nine Months Ended | |||||||
September 30, | |||||||
2007 | 2006 | ||||||
(Dollars in thousands) | |||||||
Balance, beginning of period | $ | 9,279 | $ | 10,224 | |||
Net recoveries (charge-offs) | 804 | (242) | |||||
Provision for loan losses | (736) | (603) | |||||
Allowance acquired in bank acquisition | 2,125 | - | |||||
Balance, end of period | $ | 11,472 | $ | 9,379 | |||
Three Months Ended | Three Months Ended | Nine Months Ended | ||||||||||||||||||||
March 31, | September 30, | September 30, | ||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||
Net Income | $ | 4,033 | $ | 4,376 | $ | 3,240 | $ | 4,353 | $ | 11,288 | $ | 12,918 | ||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||
Unrealized gains (losses) on available-for-sale of securities | ||||||||||||||||||||||
Unrealized gains (losses) on available-for-sale securities | ||||||||||||||||||||||
and I/O strips during the period | 462 | (1,186) | 2,021 | 2,335 | 1,191 | 364 | ||||||||||||||||
Deferred income tax | (194) | 498 | (848) | (981) | (500) | (153) | ||||||||||||||||
Net unrealized gains (losses) on available-for-sale | ||||||||||||||||||||||
securities and I/O strips, net of deferred income tax | 268 | (688) | 1,173 | 1,354 | 691 | 211 | ||||||||||||||||
Pension liability adjustment during the period | 26 | 279 | 26 | 36 | 79 | 352 | ||||||||||||||||
Deferred income tax | (11) | (117) | (11) | (15) | (33) | (148) | ||||||||||||||||
Pension liability adjustment, net of deferred income tax | 15 | 162 | 15 | 21 | 46 | 204 | ||||||||||||||||
Other comprehensive income (loss) | 283 | (526) | 1,188 | 1,375 | 737 | 415 | ||||||||||||||||
Comprehensive income | $ | 4,316 | $ | 3,850 | $ | 4,428 | $ | 5,728 | $ | 12,025 | $ | 13,333 | ||||||||||
Supplemental Retirement Plan |
Three Months Ended | ||||||
March 31, | ||||||
2007 | 2006 | |||||
(Dollars in thousands) | ||||||
Components of net periodic benefits cost | ||||||
Service cost | $ | 184 | $ | 200 | ||
Interest cost | 155 | 138 | ||||
Prior service cost | 9 | 9 | ||||
Amortization of loss | 17 | 36 | ||||
Net periodic cost | $ | 365 | $ | 383 | ||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||
(Dollars in thousands) | ||||||||||||||
Components of net periodic benefits cost | ||||||||||||||
Service cost | $ | 184 | $ | 200 | $ | 552 | $ | 600 | ||||||
Interest cost | 155 | 138 | 465 | 414 | ||||||||||
Prior service cost | 9 | 9 | 27 | 27 | ||||||||||
Amortization of loss | 17 | 36 | 51 | 108 | ||||||||||
Net periodic cost | $ | 365 | $ | 383 | $ | 1,095 | $ | 1,149 | ||||||
Commitments and Contingencies |
March 31, | December 31, | |||||||||||||
2007 | 2006 | September 30, 2007 | December 31, 2006 | |||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||
Commitments to extend credit | $ | 337,419 | $ | 310,200 | $ | 465,225 | $ | 310,200 | ||||||
Standby letters of credit | 12,036 | 12,020 | 12,682 | 12,020 | ||||||||||
$ | 349,455 | $ | 322,220 | $ | 468,907 | $ | 322,220 | |||||||
Acquisition of Diablo Valley Bank |
Cash and cash equivalents | $ | 41,807 | |
Securities available-for-sale | 12,214 | ||
Net loans | 203,793 | ||
Goodwill | 42,996 | ||
Core deposit intangible asset | 5,049 | ||
Premises and equipment | 6,841 | ||
Corporate owned life insurance | 1,025 | ||
Federal Home Loan Bank Stock | 717 | ||
Other assets, net | 2,686 | ||
Total assets acquired | 317,128 | ||
Deposits | (248,646) | ||
Other liabilities | (1,685) | ||
Total liabilities | (250,331) | ||
Net assets acquired | $ | 66,797 | |
Cash paid to Diablo Valley Bank common shareholders and stock option holders | $ | 24,002 | |
Common stock issued to Diablo Valley Bank shareholders | 41,397 | ||
Total consideration | 65,399 | ||
Professional fees and other acquisition costs | 1,398 | ||
Net assets acquired | $ | 66,797 | |
Three Months Ended | Nine Months Ended | |||||
September 30, | September 30, | |||||
2006 | 2007 | 2006 | ||||
(Dollars in thousands, except per share data) | ||||||
Net interest income | $ 14,981 | $ 43,133 | $ 44,407 | |||
Net income | $ 4,573 | $ 12,429 | $ 13,793 | |||
Net income per share - basic | $ 0.34 | $ 0.93 | $ 1.02 | |||
Net income per share - diluted | $ 0.33 | $ 0.92 | $ 1.00 |
10) | Reclassifications |
· | Net interest income |
· | Noninterest income decreased |
· | The efficiency ratio was |
· | Noninterest expense increased to $10.5 million for the third quarter of 2007, compared to |
· | A reverse provision for loan losses of |
· |
For the Three Months Ended | ||||||||||||||||||
March 31, | ||||||||||||||||||
2007 | 2006 | |||||||||||||||||
Average | Average | Interest | Average | |||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | |||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
Assets: | (Dollars in thousands) | |||||||||||||||||
Loans, gross | $ | 719,243 | $ | 14,670 | 8.27% | $ | 740,397 | $ | 14,721 | 8.06% | ||||||||
Securities | 173,320 | 1,953 | 4.57% | 201,074 | 1,792 | 3.61% | ||||||||||||
Interest bearing deposits in other financial institutions | 2,624 | 32 | 4.95% | 2,838 | 18 | 2.57% | ||||||||||||
Federal funds sold | 44,417 | 579 | 5.29% | 65,560 | 729 | 4.51% | ||||||||||||
Total interest earning assets | 939,604 | $ | 17,234 | 7.44% | 1,009,869 | $ | 17,260 | 6.93% | ||||||||||
Cash and due from banks | 35,331 | 36,959 | ||||||||||||||||
Premises and equipment, net | 2,503 | 2,477 | ||||||||||||||||
Other assets | 62,537 | 64,943 | ||||||||||||||||
Total assets | $ | 1,039,975 | $ | 1,114,248 | ||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Demand, interest bearing | $ | 136,503 | $ | 765 | 2.27% | $ | 157,993 | $ | 838 | 2.15% | ||||||||
Savings and money market | 318,549 | 2,283 | 2.91% | 348,130 | 2,081 | 2.42% | ||||||||||||
Time deposits, under $100 | 30,991 | 290 | 3.80% | 34,210 | 246 | 2.92% | ||||||||||||
Time deposits, $100 and over | 101,219 | 1,012 | 4.05% | 108,273 | 821 | 3.08% | ||||||||||||
Brokered time deposits, $100 and over | 41,435 | 435 | 4.26% | 36,050 | 333 | 3.75% | ||||||||||||
Notes payable to subsidiary grantor trusts | 23,702 | 581 | 9.94% | 23,702 | 562 | 9.62% | ||||||||||||
Securities sold under agreement to repurchase | 21,651 | 137 | 2.57% | 32,553 | 188 | 2.34% | ||||||||||||
Total interest bearing liabilities | 674,050 | $ | 5,503 | 3.31% | 740,911 | $ | 5,069 | 2.77% | ||||||||||
Demand, noninterest bearing | 218,039 | 235,288 | ||||||||||||||||
Other liabilities | 23,244 | 23,781 | ||||||||||||||||
Total liabilities | 915,333 | 999,980 | ||||||||||||||||
Shareholders' equity | 124,642 | 114,268 | ||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,039,975 | $ | 1,114,248 | ||||||||||||||
Net interest income / margin | $ | 11,731 | 5.06% | $ | 12,191 | 4.90% | ||||||||||||
For the Three Months Ended | ||||||||||||||||||||||
September 30, | ||||||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||
Interest | Average | Interest | Average | |||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | |||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||
Assets: | (Dollars in thousands) | |||||||||||||||||||||
Loans, gross | $ | 939,023 | $ | 19,282 | 8.15% | $ | 739,121 | $ | 15,958 | 8.57% | ||||||||||||
Securities | 166,782 | 1,919 | 4.56% | 189,491 | 2,013 | 4.21% | ||||||||||||||||
Interest bearing deposits in other financial institutions | 2,908 | 31 | 4.23% | 2,849 | 36 | 5.01% | ||||||||||||||||
Federal funds sold | 66,683 | 873 | 5.19% | 42,095 | 561 | 5.29% | ||||||||||||||||
Total interest earning assets | 1,175,396 | $ | 22,105 | 7.46% | 973,556 | $ | 18,568 | 7.57% | ||||||||||||||
Cash and due from banks | 40,334 | 36,575 | ||||||||||||||||||||
Premises and equipment, net | 9,430 | 2,450 | ||||||||||||||||||||
Other assets | 111,035 | 62,322 | ||||||||||||||||||||
Total assets | $ | 1,336,195 | $ | 1,074,903 | ||||||||||||||||||
Liabilities and shareholders' equity: | ||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||
Demand, interest bearing | $ | 153,352 | $ | 863 | 2.23% | $ | 140,205 | $ | 783 | 2.22% | ||||||||||||
Savings and money market | 460,596 | 3,981 | 3.43% | 357,003 | 2,676 | 2.97% | ||||||||||||||||
Time deposits, under $100 | 33,379 | 327 | 3.89% | 30,987 | 264 | 3.38% | ||||||||||||||||
Time deposits, $100 and over | 137,605 | 1,786 | 5.15% | 105,984 | 979 | 3.66% | ||||||||||||||||
Brokered time deposits | 59,265 | 706 | 4.73% | 34,031 | 325 | 3.79% | ||||||||||||||||
Notes payable to subsidiary grantor trusts | 23,702 | 585 | 9.79% | 23,702 | 587 | 9.83% | ||||||||||||||||
Securities sold under agreement to repurchase | 10,900 | 76 | 2.77% | 21,800 | 140 | 2.55% | ||||||||||||||||
Total interest bearing liabilities | 878,799 | $ | 8,324 | 3.76% | 713,712 | $ | 5,754 | 3.20% | ||||||||||||||
Demand, noninterest bearing | 263,465 | 218,766 | ||||||||||||||||||||
Other liabilities | 23,795 | 22,735 | ||||||||||||||||||||
Total liabilities | 1,166,059 | 955,213 | ||||||||||||||||||||
Shareholders' equity | 170,136 | 119,690 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,336,195 | $ | 1,074,903 | ||||||||||||||||||
Net interest income / margin | $ | 13,781 | 4.65% | $ | 12,814 | 5.22% | ||||||||||||||||
For the Nine Months Ended | |||||||||||||||||||||||
September 30, | |||||||||||||||||||||||
2007 | 2006 | ||||||||||||||||||||||
Interest | Average | Interest | Average | ||||||||||||||||||||
Average | Income / | Yield / | Average | Income / | Yield / | ||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||
Assets: | (Dollars in thousands) | ||||||||||||||||||||||
Loans, gross | $ | 800,468 | $ | 49,541 | 8.27% | $ | 738,272 | $ | 46,023 | 8.33% | |||||||||||||
Securities | 170,650 | 5,853 | 4.59% | 195,394 | 5,782 | 3.96% | |||||||||||||||||
Interest bearing deposits in other financial institutions | 2,928 | 104 | 4.75% | 2,805 | 96 | 4.58% | |||||||||||||||||
Federal funds sold | 54,996 | 2,158 | 5.25% | 63,635 | 2,319 | 4.87% | |||||||||||||||||
Total interest earning assets | 1,029,042 | $ | 57,656 | 7.49% | $ | 1,000,106 | $ | 54,220 | 7.25% | ||||||||||||||
Cash and due from banks | 36,299 | 36,584 | |||||||||||||||||||||
Premises and equipment, net | 5,116 | 2,439 | |||||||||||||||||||||
Other assets | 80,029 | 63,813 | |||||||||||||||||||||
Total assets | $ | 1,150,486 | $ | 1,102,942 | |||||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||
Demand, interest bearing | $ | 143,685 | $ | 2,409 | 2.24% | $ | 148,879 | $ | 2,451 | 2.20% | |||||||||||||
Savings and money market | 369,268 | 8,721 | 3.16% | 359,642 | 7,455 | 2.77% | |||||||||||||||||
Time deposits, under $100 | 31,873 | 917 | 3.85% | 32,475 | 761 | 3.13% | |||||||||||||||||
Time deposits, $100 and over | 113,694 | 3,865 | 4.55% | 108,419 | 2,729 | 3.37% | |||||||||||||||||
Brokered time deposits | 51,359 | 1,757 | 4.57% | 34,849 | 983 | 3.77% | |||||||||||||||||
Notes payable to subsidiary grantor trusts | 23,702 | 1,749 | 9.87% | 23,702 | 1,724 | 9.72% | |||||||||||||||||
Securities sold under agreement to repurchase | 16,266 | 333 | 2.74% | 26,653 | 486 | 2.44% | |||||||||||||||||
Total interest bearing liabilities | 749,847 | $ | 19,751 | 3.52% | 734,619 | $ | 16,589 | 3.02% | |||||||||||||||
Demand, noninterest bearing | 234,943 | 227,588 | |||||||||||||||||||||
Other liabilities | 23,319 | 23,687 | |||||||||||||||||||||
Total liabilities | 1,008,109 | 985,894 | |||||||||||||||||||||
Shareholders' equity | 142,377 | 117,048 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,150,486 | $ | 1,102,942 | |||||||||||||||||||
Net interest income / margin | $ | 37,905 | 4.92% | $ | 37,631 | 5.03% | |||||||||||||||||
Three Months Ended September 30, | |||||||||
2007 vs. 2006 | |||||||||
Increase (Decrease) Due to Change In: | |||||||||
Average | Average | Net | |||||||
Volume | Rate | Change | |||||||
(Dollars in thousands) | |||||||||
Income from the interest earning assets: | |||||||||
Loans, gross | $ | 4,099 | $ | (775) | $ | 3,324 | |||
Securities | (259) | 165 | (94) | ||||||
Interest bearing deposits in other financial institutions | 1 | (6) | (5) | ||||||
Federal funds sold | 322 | (10) | 312 | ||||||
Total interest income from interest earnings assets | $ | 4,163 | $ | (626) | $ | 3,537 | |||
Expense from the interest bearing liabilities: | |||||||||
Demand, interest bearing | $ | 75 | $ | 5 | $ | 80 | |||
Savings and money market | 895 | 410 | 1,305 | ||||||
Time deposits, under $100 | 23 | 40 | 63 | ||||||
Time deposits, $100 and over | 410 | 397 | 807 | ||||||
Brokered time deposits | 300 | 81 | 381 | ||||||
Notes payable to subsidiary grantor trusts | - | (2) | (2) | ||||||
Securities sold under agreement to repurchase | (76) | 12 | (64) | ||||||
Total interest expense on interest bearing liabilities | $ | 1,627 | $ | 943 | $ | 2,570 | |||
Net interest income | $ | 2,536 | $ | (1,569) | $ | 967 | |||
Nine Months Ended June 30, | |||||||||
2007 vs. 2006 | |||||||||
Increase (Decrease) Due to Change In: | |||||||||
Average | Average | Net | |||||||
Volume | Rate | Change | |||||||
(Dollars in thousands) | |||||||||
Income from the interest earning assets: | |||||||||
Loans, gross | $ | 3,875 | $ | (357) | $ | 3,518 | |||
Securities | (855) | 926 | 71 | ||||||
Interest bearing deposits in other financial institutions | 4 | 4 | 8 | ||||||
Federal funds sold | (341) | 180 | (161) | ||||||
Total interest income from interest earnings assets | $ | 2,683 | $ | 753 | $ | 3,436 | |||
Expense from the interest bearing liabilities: | |||||||||
Demand, interest bearing | $ | (85) | $ | 43 | $ | (42) | |||
Savings and money market | 221 | 1,045 | 1,266 | ||||||
Time deposits, under $100 | (18) | 174 | 156 | ||||||
Time deposits, $100 and over | 175 | 961 | 1,136 | ||||||
Brokered time deposits | 566 | 208 | 774 | ||||||
Notes payable to subsidiary grantor trusts | - | 25 | 25 | ||||||
Securities sold under agreement to repurchase | (213) | 60 | (153) | ||||||
Total interest expense on interest bearing liabilities | $ | 646 | $ | 2,516 | $ | 3,162 | |||
Net interest income | $ | 2,037 | $ | (1,763) | $ | 274 | |||
Three Months Ended March 31, | |||||||||
2007 vs. 2006 | |||||||||
Increase (Decrease) Due to Change In: | |||||||||
Average | Average | Net | |||||||
Volume | Rate | Change | |||||||
(Dollars in thousands) | |||||||||
Income from the interest earning assets: | |||||||||
Loans, gross | $ | (428) | $ | 377 | $ | (51) | |||
Securities | (313) | 474 | 161 | ||||||
Interest bearing deposits in other financial institutions | (3) | 17 | 14 | ||||||
Federal funds sold | (276) | 126 | (150) | ||||||
Total interest income from interest earnings assets | $ | (1,020) | $ | 994 | $ | (26) | |||
Expense from the interest bearing liabilities: | |||||||||
Demand, interest bearing | $ | (119) | $ | 46 | $ | (73) | |||
Savings and money market | (215) | 417 | 202 | ||||||
Time deposits, under $100 | (31) | 75 | 44 | ||||||
Time deposits, $100 and over | (69) | 260 | 191 | ||||||
Brokered time deposits, $100 and over | 56 | 46 | 102 | ||||||
Notes payable to subsidiary grantor trusts | - | 19 | 19 | ||||||
Securities sold under agreement to repurchase | (69) | 18 | (51) | ||||||
Total interest expense on interest bearing liabilities | $ | (447) | $ | 881 | $ | 434 | |||
Net interest income | $ | (573) | $ | 113 | $ | (460) | |||
For the Three Months Ended | Increase (decrease) | For the Three Months Ended | Increase (decrease) | |||||||||||||||||||||||
March 31, | 2007 versus 2006 | �� | September 30, | 2007 versus 2006 | ||||||||||||||||||||||
2007 | 2006 | Amount | Percent | 2007 | 2006 | Amount | Percent | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||
Gain on sale of loans | $ | 1,011 | $ | 1,497 | $ | (486) | -32% | |||||||||||||||||||
Gain on sale of SBA loans | $ | 60 | $ | 832 | $ | (772) | -93% | |||||||||||||||||||
Servicing income | 517 | 468 | 49 | 10% | 546 | 412 | 134 | 33% | ||||||||||||||||||
Increase in cash surrender value of life insurance | 345 | 347 | (2) | -1% | 374 | 363 | 11 | 3% | ||||||||||||||||||
Service charges and fees on deposit accounts | 274 | 327 | (53) | -16% | 344 | 354 | (10) | -3% | ||||||||||||||||||
Other | 368 | 255 | 113 | 44% | 315 | 338 | (23) | -7% | ||||||||||||||||||
Total noninterest income | $ | 2,515 | $ | 2,894 | $ | (379) | -13% | $ | 1,639 | $ | 2,299 | $ | (660) | -29% | ||||||||||||
For the Nine Months Ended | Increase (decrease) | |||||||||||||
September 30, | 2007 versus 2006 | |||||||||||||
2007 | 2006 | Amount | Percent | |||||||||||
(Dollars in thousands) | ||||||||||||||
Gain on sale of SBA loans | $ | 1,766 | $ | 2,500 | $ | (734) | -29% | |||||||
Gain on sale of Capital Group loan portfolio | - | 671 | (671) | -100% | ||||||||||
Servicing income | 1,596 | 1,321 | 275 | 21% | ||||||||||
Increase in cash surrender value of life insurance | 1,071 | 1,070 | 1 | 0% | ||||||||||
Service charges and fees on deposit accounts | 954 | 1,008 | (54) | -5% | ||||||||||
Other | 1,028 | 880 | 148 | 17% | ||||||||||
Total noninterest income | $ | 6,415 | $ | 7,450 | $ | 1,035 | -14% | |||||||
For the Three Months Ended | Increase (decrease) | ||||||||||||||
September 30, | 2007 versus 2006 | ||||||||||||||
2007 | 2006 | Amount | Percent | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Salaries and employee benefits | $ | 5,840 | $ | 4,941 | $ | 899 | 18% | ||||||||
Occupancy | 969 | 773 | 196 | 25% | |||||||||||
Professional fees | 751 | 442 | 309 | 70% | |||||||||||
Advertising and promotion | 206 | 206 | - | 0% | |||||||||||
Data processing | 252 | 156 | 96 | 62% | |||||||||||
Client services | 155 | 230 | (75) | -33% | |||||||||||
Low income housing investment losses and writedowns | 233 | 257 | (24) | -9% | |||||||||||
Furniture and equipment | 200 | 140 | 60 | 43% | |||||||||||
Core deposit intangible amortization | 167 | - | 167 | N/A | |||||||||||
Other | 1,745 | 1,167 | 578 | 50% | |||||||||||
Total noninterest expense | $ | 10,518 | $ | 8,312 | $ | 2,206 | 27% | ||||||||
For the Nine Months Ended | Increase (decrease) | ||||||||||||||
September 30, | 2007 versus 2006 | ||||||||||||||
2007 | 2006 | Amount | Percent | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Salaries and employee benefits | $ | 15,413 | $ | 14,703 | $ | 710 | 5% | ||||||||
Occupancy | 2,504 | 2,324 | 180 | 8% | |||||||||||
Professional fees | 1,489 | 1,289 | 200 | 16% | |||||||||||
Advertising and promotion | 808 | 763 | 45 | 6% | |||||||||||
Data processing | 653 | 498 | 155 | 31% | |||||||||||
Client services | 631 | 772 | (141) | -18% | |||||||||||
Low income housing investment losses and writedowns | 588 | 734 | (146) | -20% | |||||||||||
Furniture and equipment | 429 | 397 | 32 | 8% | |||||||||||
Core deposit intangible amortization | 185 | - | 185 | N/A | |||||||||||
Other | 4,618 | 4,085 | 533 | 13% | |||||||||||
Total noninterest expense | $ | 27,318 | $ | 25,565 | $ | 1,753 | 7% | ||||||||
For the Three Months Ended | Increase (decrease) | |||||||||||
March 31, | 2007 versus 2006 | |||||||||||
2007 | 2006 | Amount | Percent | |||||||||
(Dollars in thousands) | ||||||||||||
Salaries and employee benefits | $ | 4,888 | $ | 5,109 | $ | (221) | -4% | |||||
Occupancy | 765 | 777 | (12) | -2% | ||||||||
Professional fees | 337 | 513 | (176) | -34% | ||||||||
Low income housing investment losses and writedowns | 237 | 264 | (27) | -10% | ||||||||
Client services | 230 | 300 | (70) | -23% | ||||||||
Advertising and promotion | 212 | 210 | 2 | 1% | ||||||||
Data processing | 203 | 181 | 22 | 12% | ||||||||
Furniture and equipment | 110 | 109 | 1 | 1% | ||||||||
Retirement plan expense | 61 | 88 | (27) | -31% | ||||||||
Other | 1,257 | 1,210 | 47 | 4% | ||||||||
Total noninterest expense | $ | 8,300 | $ | 8,761 | $ | (461) | -5% | |||||
For The Three Months Ended March 31, | ||||||||||||
Percent | Percent | |||||||||||
2007 | of Total | 2006 | of Total | |||||||||
(Dollars in thousands) | ||||||||||||
Salaries and employee benefits | $ | 4,888 | 59% | $ | 5,109 | 58% | ||||||
Occupancy | 765 | 9% | 777 | 9% | ||||||||
Professional fees | 337 | 4% | 513 | 6% | ||||||||
Low income housing investment losses and writedowns | 237 | 3% | 264 | 3% | ||||||||
Client services | 230 | 3% | 300 | 3% | ||||||||
Advertising and promotion | 212 | 3% | 210 | 3% | ||||||||
Data processing | 203 | 2% | 181 | 2% | ||||||||
Furniture and equipment | 110 | 1% | 109 | 1% | ||||||||
Retirement plan expense | 61 | 1% | 88 | 1% | ||||||||
Other | 1,257 | 15% | 1,210 | 14% | ||||||||
Total noninterest expense | $ | 8,300 | 100% | $ | 8,761 | 100% | ||||||
For The Three Months Ended September 30, | |||||||||||||||
Percent | Percent | ||||||||||||||
2007 | of Total | 2006 | of Total | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Salaries and employee benefits | $ | 5,840 | 56% | $ | 4,941 | 59% | |||||||||
Occupancy | 969 | 9% | 773 | 9% | |||||||||||
Professional fees | 751 | 7% | 442 | 5% | |||||||||||
Advertising and promotion | 206 | 2% | 206 | 3% | |||||||||||
Client services | 252 | 2% | 156 | 2% | |||||||||||
Data processing | 155 | 1% | 230 | 3% | |||||||||||
Low income housing investment losses and writedowns | 233 | 2% | 257 | 3% | |||||||||||
Furniture and equipment | 200 | 2% | 140 | 2% | |||||||||||
Intangible amortization | 167 | 2% | - | 0% | |||||||||||
Other | 1,745 | 17% | 1,167 | 14% | |||||||||||
Total noninterest expense | $ | 10,518 | 100% | $ | 8,312 | 100% | |||||||||
For The Nine Months Ended September 30, | |||||||||||||||
Percent | Percent | ||||||||||||||
2007 | of Total | 2006 | of Total | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Salaries and employee benefits | $ | 15,413 | 56% | $ | 14,703 | 58% | |||||||||
Occupancy | 2,504 | 9% | 2,324 | 9% | |||||||||||
Professional fees | 1,489 | 6% | 1,289 | 5% | |||||||||||
Advertising and promotion | 808 | 3% | 763 | 3% | |||||||||||
Client services | 653 | 2% | 498 | 2% | |||||||||||
Data processing | 631 | 2% | 772 | 3% | |||||||||||
Low income housing investment losses and writedowns | 588 | 2% | 734 | 3% | |||||||||||
Furniture and equipment | 429 | 2% | 397 | 1% | |||||||||||
Intangible amortization | 185 | 1% | - | 0% | |||||||||||
Other | 4,618 | 17% | 4,085 | 16% | |||||||||||
Total noninterest expense | $ | 27,318 | 100% | $ | 25,565 | 100% | |||||||||
For the Three Months Ended | ||||||
March 31, | ||||||
2007 | 2006 | |||||
Effective income tax rate | 34.76% | 35.77% |
For the Three Months Ended | For the Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2007 | 2006 | 2007 | 2006 | |||||
Effective income tax rate | 40.0% | 36.0% | 36.4% | 35.8% | ||||
March 31, | December 31, | September 30, | December 31, | ||||||||||||||||
2007 | 2006 | 2006 | 2007 | 2006 | 2006 | ||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||
Securities available-for-sale (at fair value) | |||||||||||||||||||
U.S. Treasury | $ | 5,985 | $ | 5,905 | $ | 5,963 | $ | 4,955 | $ | 5,942 | $ | 5,963 | |||||||
U.S. Government Agencies | 53,081 | 73,794 | 59,396 | 46,146 | 62,345 | 59,396 | |||||||||||||
Mortgage-Backed | 89,479 | 90,837 | 90,186 | 84,506 | 87,548 | 90,186 | |||||||||||||
Municipals - Taxable | 499 | - | - | ||||||||||||||||
Municipals - Tax Exempt | 7,844 | 8,117 | 8,142 | 5,984 | 8,199 | 8,142 | |||||||||||||
Collateralized Mortgage Obligations | 8,411 | 7,515 | 8,611 | 8,026 | 9,769 | 8,611 | |||||||||||||
Total | $ | 164,800 | $ | 186,168 | $ | 172,298 | |||||||||||||
Total available-for-sale | $ | 150,116 | $ | 173,723 | $ | 172,298 | |||||||||||||
March 31, 2007 | September 30, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity | Maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
After One and | After Five and | After One and | After Five and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Within One Year | Within Five Years | Within TenYears | After Ten Years | Total | Within One Year | Within Five Years | Within TenYears | After Ten Years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale (at fair value) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | $ | 5,985 | 3.50% | $ | - | - | $ | - | - | $ | - | - | $ | 5,985 | 3.50% | $ | 4,955 | 4.80% | $ | - | - | $ | - | - | $ | - | - | $ | 4,955 | 4.80% | ||||||||||||||||||||||||||||||
U.S. Government Agencies | 28,878 | 5.13% | 24,203 | 4.68% | - | - | - | - | 53,081 | 4.92% | 34,753 | 4.95% | 11,393 | 4.52% | - | - | - | - | 46,146 | 4.84% | ||||||||||||||||||||||||||||||||||||||||
Mortgage Backed | - | - | 1,960 | 3.49% | 6,919 | 4.43% | 80,600 | 4.52% | 89,479 | 4.49% | - | - | 1,799 | 2.96% | 6,248 | 4.43% | 76,460 | 4.54% | 84,507 | 4.50% | ||||||||||||||||||||||||||||||||||||||||
Municipals - non-taxable | 3,780 | 2.80% | 4,064 | 3.14% | - | - | - | - | 7,844 | 2.98% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Municipals - Taxable | 499 | 3.43% | - | - | - | - | - | - | 499 | 3.43% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Municipals - Tax Exempt | 3,956 | 3.03% | 2,028 | 3.34% | - | - | - | - | 5,984 | 3.14% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized Mortgage Obligations | - | - | - | - | 5,273 | 5.60% | 3,138 | 3.08% | 8,411 | 4.66% | - | - | - | - | 5,046 | 5.55% | 2,979 | 4.84% | 8,025 | 5.29% | ||||||||||||||||||||||||||||||||||||||||
Total | $ | 38,643 | 4.65% | $ | 30,227 | 4.40% | $ | 12,192 | 4.94% | $ | 83,738 | 4.47% | $ | 164,800 | 4.53% | |||||||||||||||||||||||||||||||||||||||||||||
Total available-for-sale | $ | 44,163 | 4.75% | $ | 15,220 | 4.18% | $ | 11,294 | 4.93% | $ | 79,439 | 4.55% | $ | 150,116 | 4.60% | |||||||||||||||||||||||||||||||||||||||||||||
March 31, | March 31, | December 31, 2006 | ||||||||||||||||
2007 | % to Total | 2006 | % to Total | 2006 | % to Total | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Commercial | $ | 294,010 | 42% | $ | 262,625 | 38% | $ | 300,611 | 42% | |||||||||
Real estate - mortgage | 239,082 | 34% | 232,790 | 34% | 239,041 | 33% | ||||||||||||
Real estate - land and construction | 128,663 | 19% | 156,468 | 22% | 143,834 | 20% | ||||||||||||
Home equity | 36,067 | 5% | 41,429 | 6% | 38,976 | 5% | ||||||||||||
Consumer | 2,620 | 0% | 1,495 | 0% | 2,422 | 0% | ||||||||||||
Total loans | 700,442 | 100% | 694,807 | 100% | 724,884 | 100% | ||||||||||||
Deferred loan costs | 624 | 1,058 | 870 | |||||||||||||||
Allowance for loan losses | (9,014) | (9,748) | (9,279) | |||||||||||||||
Loans, net | $ | 692,052 | $ | 686,117 | $ | 716,475 | ||||||||||||
September 30, | September 30, | December 31, 2006 | |||||||||||||||||||||
2007 | % to Total | 2006 | % to Total | 2006 | % to Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial | $ | 378,777 | 40% | $ | 281,488 | 40% | $ | 300,611 | 42% | ||||||||||||||
Real estate - mortgage | 325,327 | 34% | 227,732 | 32% | 239,041 | 33% | |||||||||||||||||
Real estate - land and construction | 205,925 | 22% | 160,137 | 22% | 143,834 | 20% | |||||||||||||||||
Home equity | 39,771 | 4% | 41,784 | 6% | 38,976 | 5% | |||||||||||||||||
Consumer | 4,131 | 0% | 1,387 | 0% | 2,422 | 0% | |||||||||||||||||
Total loans | 953,931 | 100% | 712,528 | 100% | 724,884 | 100% | |||||||||||||||||
Deferred loan costs | 727 | 1,172 | 870 | ||||||||||||||||||||
Allowance for loan losses | (11,472) | (9,379) | (9,279) | ||||||||||||||||||||
Loans, net | $ | 943,186 | $ | 704,321 | $ | 716,475 | |||||||||||||||||
Over One | Over One | |||||||||||||||||||||||||
Due in | Year But | Due in | Year But | |||||||||||||||||||||||
One Year | Less than | Over | One Year | Less than | Over | |||||||||||||||||||||
or Less | Five Years | Five Years | Total | or Less | Five Years | Five Years | Total | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||
Commercial | $ | 275,982 | $ | 12,971 | $ | 5,057 | $ | 294,010 | $ | 315,843 | $ | 51,544 | $ | 11,380 | $ | 378,777 | ||||||||||
Real estate - mortgage | 103,816 | 74,364 | 60,902 | 239,082 | 62,190 | 171,122 | 92,015 | 325,327 | ||||||||||||||||||
Real estate - land and construction | 128,591 | 72 | - | 128,663 | 196,562 | 9,363 | - | 205,925 | ||||||||||||||||||
Home equity | 36,067 | - | - | 36,067 | 33,148 | 130 | 6,493 | 39,771 | ||||||||||||||||||
Consumer | 2,019 | 601 | - | 2,620 | 2,456 | 1,675 | - | 4,131 | ||||||||||||||||||
Total loans | $ | 546,475 | $ | 88,008 | $ | 65,959 | $ | 700,442 | $ | 610,199 | $ | 233,844 | $ | 109,888 | $ | 953,931 | ||||||||||
Loans with variable interest rates | $ | 515,428 | $ | 20,740 | $ | 64 | $ | 536,232 | $ | 591,216 | $ | 90,029 | $ | 1,557 | $ | 682,802 | ||||||||||
Loans with fixed interest rates | 31,047 | 67,268 | 65,895 | 164,210 | 18,983 | 143,815 | 108,331 | 271,129 | ||||||||||||||||||
Total loans | $ | 546,475 | $ | 88,008 | $ | 65,959 | $ | 700,442 | $ | 610,199 | $ | 233,844 | $ | 109,888 | $ | 953,931 | ||||||||||
For the Three Months Ended | For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
March 31, | September 30, | September 30, | ||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
Beginning of period balance at January 1, | $ | 2,154 | $ | 2,171 | ||||||||||||||||
Beginning of period balance | $ | 2,138 | $ | 2,161 | $ | 2,154 | $ | 2,171 | ||||||||||||
Additions | 316 | 289 | 42 | 314 | 575 | 912 | ||||||||||||||
Amortization | (280) | (299) | (234) | (365) | (783) | (973) | ||||||||||||||
End of period balance at March 31, | $ | 2,190 | $ | 2,161 | ||||||||||||||||
End of period balance | $ | 1,946 | $ | 2,110 | $ | 1,946 | $ | 2,110 | ||||||||||||
For the Three Months Ended | For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
March 31, | September 30, | September 30, | ||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
Beginning of period balance at January 1, | $ | 4,537 | $ | 4,679 | ||||||||||||||||
Beginning of period balance | $ | 3,750 | $ | 4,792 | $ | 4,537 | $ | 4,679 | ||||||||||||
Additions | 21 | 312 | - | 8 | 27 | 788 | ||||||||||||||
Amortization | (464) | (321) | (182) | (395) | (833) | (1,001) | ||||||||||||||
Unrealized holding gain (loss) | (163) | (119) | 74 | (224) | (89) | (285) | ||||||||||||||
End of period balance at March 31, | $ | 3,931 | $ | 4,551 | ||||||||||||||||
End of period balance | $ | 3,642 | $ | 4,181 | $ | 3,642 | $ | 4,181 | ||||||||||||
March 31, | December 31, | September 30, | December 31, | |||||||||||||||||
2007 | 2006 | 2006 | 2007 | 2006 | 2006 | |||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
Nonaccrual loans | $ 3,315 | $ 2,292 | $ 3,866 | $ | 2,862 | $ | 2,083 | $ | 3,866 | |||||||||||
Loans 90 days past due and still accruing | - | 238 | 451 | 18 | 879 | 451 | ||||||||||||||
Total nonperforming loans * | 3,315 | 2,530 | 4,317 | |||||||||||||||||
Total nonperforming loans | 2,880 | 2,962 | 4,317 | |||||||||||||||||
Other real estate owned | - | - | - | 487 | - | - | ||||||||||||||
Total nonperforming assets | $ | 3,315 | $ | 2,530 | $ | 4,317 | $ | 3,367 | $ | 2,962 | $ | 4,317 | ||||||||
Nonperforming assets as a percentage of | ||||||||||||||||||||
loans plus other real estate owned | 0.47% | 0.36% | 0.60% | |||||||||||||||||
Nonperforming assets as a percentage of loans plus other real estate owned | 0.35% | 0.42% | 0.60% |
· | Levels and trends in delinquencies, non-accruals, charge offs and recoveries |
· | Trends in volume and loan terms |
· | Lending policy or procedural changes |
· | Experience, ability, and depth of lending management and staff |
· | National and local economic trends and conditions |
· | Concentrations of credit |
For the Three Months Ended | For the Year Ended | ||||||||
March 31, | December 31, | ||||||||
2007 | 2006 | 2006 | |||||||
(Dollars in thousands) | |||||||||
Balance, beginning of period / year | $ | 9,279 | $ | 10,224 | $ | 10,224 | |||
Net charge-offs | (29) | 13 | (442) | ||||||
Provision for loan losses | (236) | (489) | (503) | ||||||
Balance, end of period/ year | $ | 9,014 | $ | 9,748 | $ | 9,279 | |||
RATIOS: | |||||||||
Net charge-offs to average loans outstanding * | 0.02% | -0.01% | 0.06% | ||||||
Allowance for loan losses to average loans * | 1.29% | 1.41% | 1.32% | ||||||
Allowance for loan losses to total loans * | 1.29% | 1.40% | 1.28% | ||||||
Allowance for loan losses to nonperforming loans | 272% | 385% | 215% | ||||||
* Average loans and total loans exclude loans held for sale |
For the Nine Months Ended | For the Year Ended | ||||||||
September 30, | December 31, | ||||||||
2007 | 2006 | 2006 | |||||||
(Dollars in thousands) | |||||||||
Balance, beginning of period / year | $ | 9,279 | $ | 10,224 | $ | 10,224 | |||
Net recoveries (charge-offs) | 804 | (242) | (442) | ||||||
Provision for loan losses | (736) | (603) | (503) | ||||||
Allowance acquired in bank acquisition | 2,125 | - | - | ||||||
Balance, end of period/ year | $ | 11,472 | $ | 9,379 | $ | 9,279 | |||
RATIOS: | |||||||||
Net (recoveries) charge-offs to average loans outstanding * | -0.14% | 0.05% | 0.06% | ||||||
Allowance for loan losses to total loans * | 1.20% | 1.31% | 1.28% | ||||||
Allowance for loan losses to nonperforming loans | 398% | 317% | 215% | ||||||
* Average loans and total loans excluding loans held for sale |
March 31, 2007 | March 31, 2006 | December 31, 2006 | ||||||||||||||||
Balance | % to Total | Balance | % to Total | Balance | % to Total | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Demand, noninterest bearing | $ | 221,206 | 25% | $ | 243,816 | 26% | $ | 231,841 | 27% | |||||||||
Demand, interest bearing | 141,395 | 16% | 154,277 | 16% | 133,413 | 16% | ||||||||||||
Savings and money market | 351,005 | 40% | 352,304 | 38% | 307,266 | 36% | ||||||||||||
Time deposits, under $100 | 30,730 | 3% | 33,003 | 4% | 31,097 | 4% | ||||||||||||
Time deposits, $100 and over | 96,813 | 11% | 115,293 | 12% | 111,017 | 13% | ||||||||||||
Brokered deposits, $100 and over | 42,748 | 5% | 36,040 | 4% | 31,959 | 4% | ||||||||||||
Total deposits | $ | 883,897 | 100% | $ | 934,733 | 100% | $ | 846,593 | 100% | |||||||||
September 30, 2007 | September 30, 2006 | December 31, 2006 | |||||||||||||||||||||
Balance | % to Total | Balance | % to Total | Balance | % to Total | ||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Demand, noninterest bearing | $ | 263,244 | 24% | $ | 226,297 | 26% | $ | 231,841 | 27% | ||||||||||||||
Demand, interest bearing | 146,410 | 13% | 133,636 | 15% | 133,413 | 16% | |||||||||||||||||
Savings and money market | 468,263 | 42% | 349,436 | 40% | 307,266 | 36% | |||||||||||||||||
Time deposits, under $100 | 32,341 | 3% | 31,522 | 4% | 31,097 | 4% | |||||||||||||||||
Time deposits, $100 and over | 138,327 | 13% | 101,198 | 11% | 111,017 | 13% | |||||||||||||||||
Brokered deposits | 52,179 | 5% | 34,009 | 4% | 31,959 | 4% | |||||||||||||||||
Total deposits | $ | 1,100,764 | 100% | $ | 876,098 | 100% | $ | 846,593 | 100% | ||||||||||||||
Balance | % of Total | Balance | % of Total | |||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||
Three months or less | $ | 51,737 | 37% | $ | 79,390 | 57% | ||||||
Over three months through six months | 32,518 | 23% | 26,980 | 20% | ||||||||
Over six months through twelve months | 37,234 | 27% | 27,314 | 20% | ||||||||
Over twelve months | 18,072 | 13% | 4,643 | 3% | ||||||||
Total | $ | 139,561 | 100% | $ | 138,327 | 100% | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2007 | 2006 | |||||
Return on average assets | 1.57% | 1.59% | ||||
Return on average equity | 13.12% | 15.53% | ||||
Dividend payout ratio | 17.33% | 13.51% | ||||
Average equity to average assets | 11.99% | 10.26% |
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2007 | 2006 | 2007 | 2006 | |||||
Return on average tangible assets | 1.00% | 1.61% | 1.33% | 1.57% | ||||
Return on average tangible equity | 10.55% | 14.43% | 12.12% | 14.76% | ||||
Dividend payout ratio | 24.75% | 13.60% | 19.49% | 13.73% | ||||
Average tangible equity to average tangible assets | 9.46% | 11.13% | 11.00% | 10.61% | ||||
March 31, | September 30, | |||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||
Average balance year-to-date | $ | 21,651 | $ | 32,553 | $ | 16,266 | $ | 26,653 | ||||
Average interest rate year-to-date | 2.56% | 2.34% | 2.74% | 2.44% | ||||||||
Maximum month-end balance during the quarter | $ | 21,800 | $ | 32,700 | $ | 10,900 | $ | 21,800 | ||||
Average rate at March 31, | 2.56% | 2.34% | ||||||||||
Average rate at September 30 | 2.77% | 2.56% |
March 31, | December 31, | |||||||||||
2007 | 2006 | 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Capital components: | ||||||||||||
Tier 1 Capital | $ | 150,525 | $ | 139,704 | $ | 147,600 | ||||||
Tier 2 Capital | 9,492 | 9,921 | 9,756 | |||||||||
Total risk-based capital | $ | 160,017 | $ | 149,625 | $ | 157,356 | ||||||
Risk-weighted assets | $ | 844,645 | $ | 835,679 | $ | 855,715 | ||||||
Average assets for capital purposes | $ | 1,043,076 | $ | 1,118,272 | $ | 1,087,502 | ||||||
Minimum | ||||||||||||
Regulatory | ||||||||||||
Capital ratios | Requirements | |||||||||||
Total risk-based capital | 18.9% | 17.9% | 18.4% | 8.00% | ||||||||
Tier 1 risk-based capital | 17.8% | 16.7% | 17.3% | 4.00% | ||||||||
Leverage (1) | 14.4% | 12.5% | 13.6% | 4.00% |
September 30, | December 31, | |||||||||||
2007 | 2006 | 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Capital components: | ||||||||||||
Tier 1 Capital | $ | 144,579 | $ | 142,967 | $ | 147,600 | ||||||
Tier 2 Capital | 12,365 | 9,754 | 9,756 | |||||||||
Total risk-based capital | $ | 156,944 | $ | 152,721 | $ | 157,356 | ||||||
Risk-weighted assets | $ | 1,135,878 | $ | 839,097 | $ | 855,715 | ||||||
Average assets for capital purposes | $ | 1,291,775 | $ | 1,079,571 | $ | 1,087,502 | ||||||
Minimum | ||||||||||||
Regulatory | ||||||||||||
Capital ratios | Requirements | |||||||||||
Total risk-based capital | 13.8% | 18.2% | 18.4% | 8.00% | ||||||||
Tier 1 risk-based capital | 12.7% | 17.0% | 17.3% | 4.00% | ||||||||
Leverage (1) | 11.2% | 13.2% | 13.6% | 4.00% | ||||||||
(1) | Leverage ratio is equal to Tier 1 capital divided by quarterly average assets (excluding |
September 30, 2006 | September 30, 2005 | September 30, 2007 | September 30, 2006 | |||||||||||||||||||||||||||||||||||||||||||||
$ Change | % Change | Market Value as a % of | $ Change | % Change | Market Value as a % of | $ Change | % Change | Market Value as a % of | $ Change | % Change | Market Value as a % of | |||||||||||||||||||||||||||||||||||||
in Market | in Market | Present Value of Assets | in Market | in Market | Present Value of Assets | in Market | in Market | Present Value of Assets | in Market | in Market | Present Value of Assets | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Value | Value | MV Ratio | Change (bp) | Value | Value | MV Ratio | Change (bp) | ||||||||||||||||||||||||||||||||||||||||
Value | Value | MV Ratio | Change (bp) | Value | Value | MV Ratio | Change (bp) | |||||||||||||||||||||||||||||||||||||||||
Dollars in thousands | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Change in rates | ||||||||||||||||||||||||||||||||||||||||||||||||
+ 200 bp | $ | 55,254 | 28.6% | 23.44% | 522 | $ | 41,775 | 18.8% | 23.96% | 379 | $ | 37,805 | 17.2% | 19.39% | 284 | $ | 34,859 | 21.0% | 19.10% | 331 | ||||||||||||||||||||||||||||
0 bp | $ | - | 0.0% | 18.22% | 0 | $ | - | 0.0% | 20.17% | 0 | $ | - | - | 16.54% | - | $ | - | - | 15.80% | - | ||||||||||||||||||||||||||||
- 200 bp | $ | (25,106) | -13.0% | 15.85% | (237) | $ | (66,765) | -30.1% | 14.1% | (607) | $ | (56,407) | -25.7% | 12.30% | (424) | $ | (50,121) | -30.2% | 11.00% | (477) | ||||||||||||||||||||||||||||
Approximate | ||||||||||||
Total Number of | Dollar of Shares That | |||||||||||
Shares Purchased | May Yet Be | |||||||||||
Total Number of | Price Paid | as Part of Publicly | Purchased | |||||||||
Settlement Date | Shares Purchased | Per Share | Announced Plans | Under the Plan | ||||||||
3/9/2007 | 5,000 | $ | 25.21 | 5,000 | $ | 1,965,942 | ||||||
3/12/2007 | 5,000 | $ | 25.32 | 5,000 | $ | 1,839,343 | ||||||
3/13/2007 | 5,000 | $ | 25.90 | 5,000 | $ | 1,709,859 | ||||||
3/14/2007 | 5,000 | $ | 25.73 | 5,000 | $ | 1,581,220 | ||||||
3/15/2007 | 5,000 | $ | 25.98 | 5,000 | $ | 1,451,316 | ||||||
3/16/2007 | 5,000 | $ | 25.45 | 5,000 | $ | 1,324,053 | ||||||
3/19/2007 | 5,000 | $ | 24.86 | 5,000 | $ | 1,199,757 | ||||||
35,000 | 35,000 | |||||||||||
Approximate | ||||||||||||||
Total Number of | Dollar of Shares That | |||||||||||||
Shares Purchased | May Yet Be | |||||||||||||
Total Number of | Price Paid | as Part of Publicly | Purchased | |||||||||||
Settlement Date | Shares Purchased | Per Share | Announced Plans | Under the Plan | ||||||||||
8/16/2007 | 10,000 | $ | 21.24 | 10,000 | $ | 29,787,592 | ||||||||
8/17/2007 | 12,000 | $ | 20.39 | 12,000 | $ | 29,542,967 | ||||||||
8/20/2007 | 40,000 | $ | 21.00 | 40,000 | $ | 28,702,967 | ||||||||
8/21/2007 | 10,000 | $ | 21.41 | 10,000 | $ | 28,488,826 | ||||||||
8/22/2007 | 10,000 | $ | 23.11 | 10,000 | $ | 28,257,751 | ||||||||
8/23/2007 | 10,000 | $ | 21.83 | 10,000 | $ | 28,039,414 | ||||||||
8/24/2007 | 10,000 | $ | 21.45 | 10,000 | $ | 27,824,889 | ||||||||
8/27/2007 | 10,000 | $ | 22.22 | 10,000 | $ | 27,602,650 | ||||||||
8/28/2007 | 10,000 | $ | 21.91 | 10,000 | $ | 27,383,599 | ||||||||
8/29/2007 | 10,000 | $ | 21.78 | 10,000 | $ | 27,165,845 | ||||||||
8/30/2007 | 13,000 | $ | 22.04 | 13,000 | $ | 26,879,336 | ||||||||
8/31/2007 | 13,000 | $ | 21.42 | 13,000 | $ | 26,600,902 | ||||||||
9/4/2007 | 13,000 | $ | 21.29 | 13,000 | $ | 26,324,091 | ||||||||
9/5/2007 | 13,000 | $ | 21.43 | 13,000 | $ | 26,045,445 | ||||||||
9/6/2007 | 13,000 | $ | 21.11 | 13,000 | $ | 25,770,952 | ||||||||
9/7/2007 | 15,000 | $ | 20.99 | 15,000 | $ | 25,456,106 | ||||||||
9/10/2007 | 15,000 | $ | 21.25 | 15,000 | $ | 25,137,356 | ||||||||
9/11/2007 | 10,000 | $ | 21.07 | 10,000 | $ | 24,926,618 | ||||||||
9/12/2007 | 15,000 | $ | 21.05 | 15,000 | $ | 24,610,892 | ||||||||
9/13/2007 | 5,000 | $ | 21.22 | 5,000 | $ | 24,504,778 | ||||||||
9/14/2007 | 5,900 | $ | 21.42 | 5,900 | $ | 24,378,393 | ||||||||
9/17/2007 | 5,200 | $ | 21.73 | 5,200 | $ | 24,265,374 | ||||||||
9/18/2007 | 7,700 | $ | 21.55 | 7,700 | $ | 24,099,424 | ||||||||
9/19/2007 | 3,700 | $ | 21.08 | 3,700 | $ | 24,021,440 | ||||||||
279,500 | 279,500 | |||||||||||||
Heritage Commerce Corp | ||
| ||
/s/ Walter T. Kaczmarek | ||
Date | Walter T. Kaczmarek | |
Chief Executive Officer | ||
/s/ Lawrence D. McGovern | ||
Date | Lawrence D. McGovern | |
Chief Financial Officer |