EX-99.1 2 exhibit99-1.htm CAPITAL BANK CORP RELEASE 102307 exhibit99-1.htm
Exhibit 99.1

CONTACT:
B. Grant Yarber
President and Chief Executive Officer
Phone: (919) 645-3494
Email: gyarber@capitalbank-nc.com

FOR IMMEDIATE RELEASE

Capital Bank Corporation Reports Third Quarter Results and Increased Loan Growth

RALEIGH, N.C. – October 23, 2007 – Capital Bank Corporation (Nasdaq: CBKN), the parent company of Capital Bank, today announced net income for the quarter ended September 30, 2007 of $2.8 million, a decrease of 15% from the $3.3 million earned for the third quarter of 2006. Fully diluted earnings per share were $0.24 for the quarter ended September 30, 2007 compared to $0.28 for the quarter ended September 30, 2006. For the first nine months ended September 30, 2007 and 2006, net income was $7.8 million and $9.1 million, respectively, and fully diluted earnings per share were $0.68 and $0.78, respectively.

As of September 30, 2007, total assets were $1.49 billion compared to $1.40 billion at September 30, 2006 and $1.42 billion at December 31, 2006. Loans increased 7% to $1.07 billion at September 30, 2007 from $1.00 billion at September 30, 2006 and $1.01 billion at December 31, 2006. Total deposits at September 30, 2007 were $1.09 billion compared to $1.04 billion at September 30, 2006 and $1.06 billion at December 31, 2006. Shareholders’ equity at September 30, 2007 was $164.1 million compared to $160.9 million at September 30, 2006 and $161.7 million at December 31, 2006. The Company repurchased 207,196 shares of its common stock during the quarter ended September 30, 2007 and has 341,645 common shares remaining for purchase under its current share repurchase program.

Commenting on the Company’s results, B. Grant Yarber, President and CEO, stated “We are pleased with the Company’s loan growth thus far in 2007. We are seeing continued expansion of our franchise especially in the Triangle region. We anticipate opening our twenty-seventh branch in Zebulon in the fourth quarter, and we have plans to open two more Wake County branches in early 2008.”

Net interest income for the quarter ended September 30, 2007 totaled $11.2 million, a decrease of $408,000 compared to the quarter ended September 30, 2006. The net interest margin on a fully taxable equivalent basis was 3.57% for the quarter ended September 30, 2007, a decrease of 8 basis points from 3.65% for the quarter ended June 30, 2007 and down 34 basis points from 3.91% for the quarter ended September 30, 2006. The decrease in net interest income for the quarter ended September 30, 2007 compared to the same quarter of 2006 was attributable to a lower net interest margin, which was partially offset by the $90 million growth in average earning assets. The decline in net interest margin from September 30, 2006 is primarily because of an increase in the Company’s cost of funds. The competitive environment for deposits is continuing to put pressure on the interest margin.

The Company provided a provision for loan losses for the quarter ended September 30, 2007 of $261,000 compared to a credit provision in the quarter ended September 30, 2006 of $(215,000). Net charge-offs for the quarter ended September 30, 2007 were $234,000, or an annualized rate of 0.09% of average loans, compared to net recoveries of $102,000, or 0.04% of average loans, for the quarter ended September 30, 2006. Nonperforming loans were $10.2 million at September 30, 2007 compared to $6.1 million at September 30, 2006. Total past due loans were $13.2 million, or 1.23% of average loans, at September 30, 2007 compared to $9.5 million, or 0.97% of average loans, at September 30, 2006. The allowance for loan losses was 1.25% of total loans at September 30, 2007 compared with 1.32% of total loans at December 31, 2006. Mr. Yarber added, “Although we had an increase in nonperforming loans during the quarter, these additional nonperforming loans have been adequately reserved. The Company has no subprime exposure in its loan or investment portfolios.”
 

 
- 1 -
The Company’s noninterest income for the quarter ended September 30, 2007 totaled $2.2 million, down slightly from the $2.3 million reported for the quarter ended September 30, 2006. Noninterest expense increased $230,000, or 3%, to $9.3 million for the quarter ended September 30, 2007 compared to $9.1 million for the quarter ended September 30, 2006 with the largest increase from salaries and benefits. Mr. Yarber commented, “The Company has recently seen positive results from its expense control measures as operating expenses decreased 5% in the quarter ended September 30, 2007 compared to the quarter ended June 30, 2007. We are committed to finding the most efficient ways to best serve our customers using innovative technology where appropriate. We continue to recruit talent to enhance our sales force to increase our market share.”

Capital Bank Corporation will hold a quarterly earnings conference call on Wednesday, October 24, 2007 at 11:00 a.m. ET. Persons wishing to access the call may do so via the internet by visiting the Company’s website at www.capitalbank-nc.com. Following the completion of the call, a webcast replay will be available until November 30, 2007.

Capital Bank Corporation, headquartered in Raleigh, N.C., with approximately $1.5 billion in total assets, offers a broad range of financial services. Capital Bank operates 26 banking offices in Asheville (3), Burlington (4), Cary, Graham (2), Greensboro, Hickory, Mebane, Morrisville, Oxford, Pittsboro, Raleigh (5), Sanford (3), Siler City and Wake Forest. The Company’s website is http://www.capitalbank-nc.com.

Information in this press release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates, and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Capital Bank Corporation’s filings with the Securities and Exchange Commission, including without limitation its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. Capital Bank Corporation does not undertake a duty to update any forward-looking statements in this press release.

###
 
- 2 -
CAPITAL BANK CORPORATION
Summary of Operations
(Unaudited)
  
Three Months Ended
September 30, 2007
  
Three Months Ended
September 30, 2006
  
Nine Months Ended
September 30, 2007
  
Nine Months Ended
September 30, 2006
  
(In thousands except per share data)
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
  
$
      23,855
  
$
22,668
  
$
          70,697
  
$
63,447
  
Interest expense
    
      12,670
    
11,075
    
          37,535
    
28,856
  
Net interest income
    
      11,185
    
11,593
    
          33,162
    
34,591
  
Provision (credit) for loan losses
    
261
    
(215
)
  
               507
    
446
  
Net interest income after provision for loan losses
    
      10,924
    
11,808
    
          32,655
    
34,145
  
Noninterest income
    
        2,233
    
2,258
    
            6,730
    
6,885
  
Noninterest expense
    
        9,299
    
9,069
    
          28,323
    
27,224
  
Income before taxes
    
        3,858
    
4,997
    
           11,062
    
13,806
  
Income tax expense
    
        1,105
    
1,730
    
3,249
    
4,725
  
Net income
  
$
        2,753
  
$
3,267
  
$
            7,813
  
$
9,081
  
                           
Income per share – basic
  
$
              0.24
  
$
0.28
  
$
              0.68
  
$
0.78
  
Income per share – fully diluted
  
$
              0.24
  
$
0.28
  
$
              0.68
  
$
0.78
  
Weighted average shares outstanding:
                          
Basic
    
11,451
    
11,611
    
11,482
    
11,622
  
Fully diluted
    
11,510
    
11,694
    
11,552
    
11,708
  
 
End of Period Balances
(Unaudited)
  
2007
    
2006
  
 
  
September 30
    
June 30
    
March 31
    
December 31(a)
    
September 30
  
(Dollars in thousands except per share data)
  
 
    
 
    
 
    
 
    
 
  
 
  
 
    
 
    
 
    
 
    
 
  
Total assets
   $
1,490,244
     $
1,440,240
     $
1,481,141
     $
1,422,384
     $
1,399,673
  
Investment securities
    
249,083
      
241,666
      
248,726
      
239,047
      
200,647
  
Loans (gross)*
    
1,070,656
      
1,022,147
      
1,025,464
      
1,008,052
      
1,003,835
  
Allowance for loan losses
    
13,366
      
13,339
      
13,531
      
13,347
      
13,894
  
Total earning assets
    
1,335,434
      
1,285,715
      
1,295,018
      
1,280,301
      
1,240,343
  
Deposits
    
1,090,589
      
1,072,979
      
1,120,332
      
1,055,209
      
1,043,755
  
Shareholders’ equity
    
164,089
      
162,402
      
163,855
      
161,681
      
160,871
  
                                         
Book value per share
   $
14.58
     $
14.17
     $
14.32
     $
14.19
     $
13.98
  
Tangible book value per share
   $
8.93
     $
8.59
     $
8.71
     $
8.53
     $
8.19
  
                                         
(a) Derived from audited consolidated financial statements
  
*Includes loans held for sale ($6.7 million at September 30, 2007)
  

Average Balances
(Unaudited)
  
2007
    
2006
  
 
  
September 30
    
June 30
    
March 31
    
December 31(a)
    
September 30
  
(Dollars in thousands)
  
 
    
 
    
 
    
 
    
 
  
 
  
 
    
 
    
 
    
 
    
 
  
Total assets
   $
1,445,915
     $
1,436,584
     $
1,437,234
     $
1,410,668
     $
1,365,832
  
Investments
    
252,090
      
248,850
      
243,732
      
219,765
      
195,323
  
Loans (gross)*
    
1,042,635
      
1,021,517
      
1,012,483
      
1,008,053
      
982,037
  
Total earning assets
    
1,302,859
      
1,292,651
      
1,292,811
      
1,258,780
      
1,213,002
  
Deposits
    
1,064,174
      
1,078,430
      
1,084,418
      
1,050,139
      
1,020,143
  
Shareholders’ equity
    
163,850
      
164,877
      
163,291
      
162,525
      
161,901
  
                                         
(a) Derived from audited consolidated financial statements
  
*Includes loans held for sale
  
 
- 3 -
CAPITAL BANK CORPORATION
Quarterly Results
(Unaudited)
  
2007
    
2006
  
 
  
September 30
    
June 30
    
March 31
    
December 31(a)
    
September 30
  
(In thousands except per share data)
  
 
    
 
    
 
    
 
    
 
  
 
  
 
    
 
    
 
    
 
    
 
  
Interest income
   $
23,855
     $
23,668
     $
23,175
     $
23,505
     $
22,668
  
Interest expense
    
12,670
      
12,414
      
12,452
      
11,898
      
11,075
  
Net interest income
    
11,185
      
11,254
      
10,723
      
11,607
      
11,593
  
Provision (credit) for loan losses
    
261
       (91 )    
337
      
154
       (215 )
Net interest income after provision for loan losses
    
10,924
      
11,345
      
10,386
      
11,453
      
11,808
  
Noninterest income
    
2,233
      
2,307
      
2,190
      
2,448
      
2,258
  
Noninterest expense
    
9,299
      
9,788
      
9,236
      
9,098
      
9,069
  
Income before taxes
    
3,858
      
3,864
      
3,340
      
4,803
      
4,997
  
Income tax expense
    
1,105
      
1,188
      
956
      
1,546
      
1,730
  
Net income
   $
2,753
     $
2,676
     $
2,384
     $
3,257
     $
3,267
  
                                         
Income per share – basic
   $
0.24
     $
0.23
     $
0.21
     $
0.28
     $
0.28
  
Income per share – fully diluted
   $
0.24
     $
0.23
     $
0.21
     $
0.28
     $
0.28
  
Weighted average shares outstanding:
                                        
Basic
    
11,451
      
11,503
      
11,493
      
11,536
      
11,611
  
Fully diluted
    
11,510
      
11,574
      
11,573
      
11,618
      
11,694
  
                                         
(a) Derived from audited consolidated financial statements
  

Quarterly Net Interest Margin*
(Unaudited)
  
2007
    
2006
  
 
  
September 30
    
June 30
    
March 31
    
December 31(a)
    
September 30
  
                                         
Yield on earning assets
     7.42 %     7.51 %     7.43 %     7.53 %     7.53 %
Cost of interest bearing liabilities
     4.32 %     4.34 %     4.36 %     4.18 %     4.02 %
Net interest spread
     3.10 %     3.17 %     3.07 %     3.35 %     3.51 %
Net interest margin
     3.57 %     3.65 %     3.52 %     3.78 %     3.91 %
                                         
*Annualized and on a fully taxable equivalent basis
  
(a) Derived from audited consolidated financial statements
  

Nonperforming Assets
(Unaudited)
  
2007
    
2006
  
 
  
September 30
    
June 30
    
March 31
    
December 31(a)
    
September 30
  
(Dollars in thousands)
  
 
    
 
    
 
    
 
    
 
  
 
  
 
    
 
    
 
    
 
    
 
  
Commercial and commercial real estate
   $
7,304
     $
6,089
     $
5,725
     $
2,783
     $
3,885
  
Consumer
    
23
      
67
      
241
      
50
      
259
  
Equity lines
    
491
      
471
      
433
      
410
      
440
  
Construction
    
–
      
–
      
-
      
616
      
71
  
Mortgage
    
2,414
      
975
      
957
      
1,043
      
1,453
  
Total nonperforming loans
    
10,232
      
7,602
      
7,356
      
4,902
      
6,108
  
Other real estate owned
    
309
      
866
      
1,961
      
1,111
  1    
637
  1
Total nonperforming assets
   $
10,541
     $
8,468
     $
9,317
     $
6,013
     $
6,745
  
                                         
Nonperforming assets include loans that are 90 days or more past due or in nonaccrual status and other real estate owned.
  
(a) Derived from audited consolidated financial statements
  
   
1 Other real estate owned excludes $739 and $776 as of December 31, 2006 and September 30, 2006, respectively, related to branch locations that were held for sale.
  
 
- 4 -
CAPITAL BANK CORPORATION
Key Ratios
(Unaudited)
  
2007
    
2006
  
 
  
September 30
    
June 30
    
March 31
    
December 31(a)
    
September 30
  
(Dollars in thousands)
  
 
    
 
    
 
    
 
    
 
  
 
  
 
    
 
    
 
    
 
    
 
  
Past due loans
   $
13,157
     $
13,008
     $
16,241
     $
11,237
     $
9,491
  
Past due loans as a percent of average loans
     1.26 %     1.27 %     1.60 %     1.11 %     0.97 %
                                         
Net charge-offs (recoveries)
   $
234
     $
101
     $
153
     $
701
     $ (102 )
Net charge-offs (recoveries) as a percent of average loans (annualized)
     0.09 %     0.04 %     0.06 %     0.28 %     (0.04 %)
Allowance for loan losses as a percent of total loans
     1.25 %     1.31 %     1.32 %     1.32 %     1.38 %
Nonperforming assets as a percent of total assets
     0.71 %     0.59 %     0.63 %     0.42 %     0.48 %
Allowance for loan losses as a percent of nonperforming loans
     131 %     175 %     184 %     272 %     227 %
                                         
(a) Derived from audited consolidated financial statements
  
 
- 5 -
CAPITAL BANK CORPORATION
Condensed Consolidated Balance Sheets
September 30, 2007 and December 31, 2006
 
 
  
September 30, 2007
    
December 31, 2006
  
(Dollars in thousands except share data)
  
(Unaudited)
    
 
  
 
  
 
    
 
  
ASSETS
            
Cash and due from banks:
            
Interest earning
   $
3,749
     $
12,348
  
Noninterest earning
    
32,627
      
33,504
  
Federal funds sold and short term investments
    
11,946
      
8,480
  
Investment securities – available for sale, at fair value
    
238,942
      
228,214
  
Investment securities – held to maturity, at amortized cost
    
10,141
      
10,833
  
Loans – net of unearned income and deferred fees
    
1,070,656
      
1,008,052
  
Allowance for loan losses
     (13,366 )     (13,347 )
Net loans
    
1,057,290
      
994,705
  
Premises and equipment, net
    
24,142
      
23,125
  
Bank owned life insurance
    
21,353
      
20,662
  
Deposit premium and goodwill, net
    
63,643
      
64,543
  
Other assets
    
26,412
      
25,970
  
Total assets
   $
1,490,244
     $
1,422,384
  
                 
LIABILITIES
                
Deposits:
                
Demand, noninterest bearing
   $
123,831
     $
120,945
  
Savings and interest-bearing demand deposits
    
392,796
      
366,243
  
Time deposits
    
573,962
      
568,021
  
Total deposits
    
1,090,589
      
1,055,209
  
Repurchase agreements and federal funds purchased
    
34,778
      
34,238
  
Borrowings
    
155,969
      
125,924
  
Subordinated debentures
    
30,930
      
30,930
  
Other liabilities
    
13,889
      
14,402
  
Total liabilities
    
1,326,155
      
1,260,703
  
                 
SHAREHOLDERS’ EQUITY
                
Common stock, no par value; 20,000,000 authorized; 11,252,334 and 11,393,990 issued and outstanding as of September 30, 2007 and December 31, 2006, respectively
    
137,241
      
139,484
  
Retained earnings
    
28,833
      
23,754
  
Accumulated other comprehensive loss
     (1,985 )     (1,557 )
Total shareholders’ equity
    
164,089
      
161,681
  
Total liabilities and shareholders’ equity
   $
1,490,244
     $
1,422,384
  
 
- 6 -
CAPITAL BANK CORPORATION
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2007 and 2006 (Unaudited)
 
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
 
  
2007
    
2006
    
2007
    
2006
  
(Dollars in thousands except share and per share data)
  
 
    
 
    
 
  
 
  
 
    
 
    
 
    
 
  
Interest income:
                        
Loans and loan fees
   $
20,830
     $
19,982
     $
61,231
     $
55,646
  
Investment securities
    
2,918
      
2,223
      
8,583
      
6,488
  
Federal funds and other interest income
    
107
      
463
      
883
      
1,313
  
Total interest income
    
23,855
      
22,668
      
70,697
      
63,447
  
Interest expense:
                                
Deposits
    
9,847
      
8,677
      
29,771
      
22,115
  
Borrowings and repurchase agreements
    
2,823
      
2,398
      
7,764
      
6,741
  
Total interest expense
    
12,670
      
11,075
      
37,535
      
28,856
  
Net interest income
    
11,185
      
11,593
      
33,162
      
34,591
  
Provision (credit) for loan losses
    
261
       (215 )    
507
      
446
  
Net interest income after provision (credit) for loan losses
    
10,924
      
11,808
      
32,655
      
34,145
  
Noninterest income:
                                
Service charges and other fees
    
1,021
      
895
      
2,947
      
2,921
  
Mortgage fees and revenues
    
561
      
507
      
1,682
      
1,525
  
Net gain on sale of securities
    
–
      
128
      
–
      
128
  
Other noninterest income
    
651
      
728
      
2,101
      
2,311
  
Total noninterest income
    
2,233
      
2,258
      
6,730
      
6,885
  
Noninterest expense:
                                
Salaries and employee benefits
    
4,890
      
4,287
      
15,298
      
13,680
  
Occupancy
    
1,058
      
1,044
      
3,029
      
2,760
  
Furniture and equipment
    
664
      
675
      
1,926
      
1,729
  
Director fees
    
72
      
369
      
569
      
1,028
  
Data processing
    
350
      
214
      
972
      
814
  
Advertising
    
272
      
234
      
771
      
813
  
Amortization of deposit premiums
    
300
      
342
      
900
      
1,028
  
Professional fees
    
369
      
290
      
956
      
856
  
Other expenses
    
1,324
      
1,614
      
3,902
      
4,516
  
Total noninterest expense
    
9,299
      
9,069
      
28,323
      
27,224
  
Net income before tax expense
    
3,858
      
4,997
      
11,062
      
13,806
  
Income tax expense
    
1,105
      
1,730
      
3,249
      
4,725
  
Net income
   $
2,753
     $
3,267
     $
7,813
     $
9,081
  
 
                                
Earnings per share – basic
   $
0.24
     $
0.28
     $
0.68
     $
0.78
  
Earnings per share – diluted
   $
0.24
     $
0.28
     $
0.68
     $
0.78
  
 
                                
Weighted average shares:
                                
Basic
    
11,451,322
      
11,611,476
      
11,482,352
      
11,622,422
  
Fully diluted
    
11,510,127
      
11,694,498
      
11,551,677
      
11,708,446
  
 
- 7 -
CAPITAL BANK CORPORATION
Average Balances, Interest Earned or Paid, and Interest Yields/Rates
For the Three Months Ended September 30, 2007, June 30, 2007 and September 30, 2006 (Unaudited)
Tax Equivalent Basis 1

   
Quarter Ended September 30, 2007
  
Quarter Ended June 30, 2007
  
Quarter Ended September 30, 2006
  
(Dollars in thousands)
  
Average Balance
  
Amount Earned
  
Average Rate
  
Average Balance
  
Amount Earned
  
Average Rate
  
Average Balance
  
Amount Earned
  
Average Rate
  
Assets
                                                        
Loans receivable 2
  
$
1,042,635
 
$
20,830
 
 
7.93
%
$
1,021,517
 
$
20,519
 
 
8.06
%
$
982,037
 
$
19,980
 
 
8.07
%
Investment securities 3 
 
 
252,090
 
 
3,443
 
 
5.42
%
 
248,850
 
 
3,382
 
 
5.45
%
 
195,323
 
 
2,586
 
 
5.25
%
Federal funds sold and other interest on short-term investments
 
 
8,134
 
 
107
 
 
5.22
%
 
22,284
 
 
291
 
 
5.24
%
 
35,642
 
 
463
 
 
5.15
%
Total interest earning assets
 
 
1,302,859
 
$
24,380
 
 
7.42
%
 
1,292,651
 
$
24,192
 
 
7.51
%
 
1,213,002
 
$
23,029
 
 
7.53
%
Cash and due from banks
 
 
28,261
 
 
 
 
 
 
 
 
27,489
 
 
 
 
 
 
 
 
32,094
 
 
 
 
 
 
 
Other assets
 
 
128,078
 
 
 
 
 
 
 
 
129,972
 
 
 
 
 
 
 
 
133,897
 
 
 
 
 
 
 
Allowance for loan losses
 
 
(13,283
)
 
 
 
 
 
 
 
(13,528
)
 
 
 
 
 
 
 
(13,161
)
 
 
 
 
 
 
Total assets
 
$
1,445,915
 
 
 
 
 
 
 
$
1,436,584
 
 
 
 
 
 
 
$
1,365,832
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Savings deposits
 
$
33,402
 
$
51
 
 
0.61
%
$
33,664
 
$
44
 
 
0.52
%
$
38,137
 
$
48
 
 
0.50
%
Interest-bearing demand deposits
 
 
366,824
 
 
3,230
 
 
3.49
%
 
377,274
 
 
3,264
 
 
3.47
%
 
304,355
 
 
2,521
 
 
3.29
%
Time deposits
 
 
549,968
 
 
6,566
 
 
4.74
%
 
554,979
 
 
6,610
 
 
4.78
%
 
578,018
 
 
6,107
 
 
4.19
%
Total interest-bearing deposits
 
 
950,194
 
 
9,847
 
 
4.11
%
 
965,917
 
 
9,918
 
 
4.12
%
 
920,510
 
 
8,676
 
 
3.74
%
Borrowed funds
 
 
147,843
 
 
1,841
 
 
4.94
%
 
119,978
 
 
1,567
 
 
5.24
%
 
110,164
 
 
1,402
 
 
5.05
%
Subordinated debt
 
 
30,930
 
 
599
 
 
7.68
%
 
30,930
 
 
592
 
 
7.68
%
 
30,930
 
 
619
 
 
7.94
%
Repurchase agreements
 
 
34,233
 
 
383
 
 
4.44
%
 
31,696
 
 
337
 
 
4.26
%
 
31,562
 
 
378
 
 
4.75
%
Total interest-bearing liabilities
 
 
1,163,200
 
$
12,670
 
 
4.32
%
 
1,148,521
 
$
12,414
 
 
4.34
%
 
1,093,166
 
$
11,075
 
 
4.02
%
Noninterest-bearing deposits
 
 
113,980
 
 
 
 
 
 
 
 
112,513
 
 
 
 
 
 
 
 
99,633
 
 
 
 
 
 
 
Other liabilities
 
 
4,885
 
 
 
 
 
 
 
 
10,673
 
 
 
 
 
 
 
 
11,132
 
 
 
 
 
 
 
Total liabilities
 
 
1,282,065
 
 
 
 
 
 
 
 
1,271,707
 
 
 
 
 
 
 
 
1,203,931
 
 
 
 
 
 
 
Shareholders’ equity
 
 
163,850
 
 
 
 
 
 
 
 
164,877
 
 
 
 
 
 
 
 
161,901
 
 
 
 
 
 
 
Total liabilities and shareholders’ equity
 
$
1,445,915
 
 
 
 
 
 
 
$
1,436,584
 
 
 
 
 
 
 
$
1,365,832
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest spread 4 
 
 
 
 
 
 
 
 
3.10
%
 
 
 
 
 
 
 
3.17
%
 
 
 
 
 
 
 
3.51
%
Tax equivalent adjustment
 
 
 
 
$
525
 
 
 
 
 
 
 
$
524
 
 
 
 
 
 
 
$
363
 
 
 
 
Net interest income and net interest margin 5 
 
 
 
 
$
11,710
 
 
3.57
%
 
 
 
$
11,778
 
 
3.65
%
 
 
 
$
11,954
 
 
3.91
%
 
1
The tax equivalent basis is computed using a blended federal and state tax rate of approximately 36% and 38% in 2007 and 2006, respectively.
2
Loans receivable include nonaccrual loans for which accrual of interest has not been recorded and includes loans held for sale.
3
The average balance for investment securities excludes the effect of their mark-to-market adjustment, if any.
4
Net interest spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
5 Net interest margin represents net interest income divided by average interest-earning assets.
 
- 8 -