-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NZf+9UqDRwZXU7gJcdl1nity4+mrthT6JJ56ffNdjtNKRDSuW1/dMMsWGKZ4i2Pl yNfYSDeNFqjeqF52TKr4RQ== 0000943374-05-001035.txt : 20050728 0000943374-05-001035.hdr.sgml : 20050728 20050728094447 ACCESSION NUMBER: 0000943374-05-001035 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050728 DATE AS OF CHANGE: 20050728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROVIDENT FINANCIAL SERVICES INC CENTRAL INDEX KEY: 0001178970 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 421547151 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31566 FILM NUMBER: 05979279 BUSINESS ADDRESS: STREET 1: 830 BERGEN AVENUE CITY: JERSEY CITY STATE: NJ ZIP: 07306 BUSINESS PHONE: 2013331000 8-K 1 form8k_072805.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 28, 2005 ------------- PROVIDENT FINANCIAL SERVICES, INC. ---------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 001-31566 42-1547151 - ----------------------------- --------------------- ------------------- (State or Other Jurisdiction) (Commission File No.) (I.R.S. Employer of Incorporation) Identification No.) 830 Bergen Avenue, Jersey City, New Jersey 07306-4599 - ------------------------------------------ ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (201) 333-1000 -------------- Not Applicable -------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. --------------------------------------------- On July 28, 2005, Provident Financial Services, Inc. (the "Company") issued a press release reporting its financial results for the three months and six months ended June 30, 2005. A copy of the press release is attached as Exhibit 99.1 to this report and is being furnished to the SEC and shall not be deemed "filed" for any purpose. Item 7.01 Regulation FD Disclosure. ------------------------- On July 27, 2005, the Company announced that its Board of Directors declared a $0.08 per common share dividend, payable on August 31, 2005 to stockholders of record on August 12, 2005, consistent with the prior quarter's cash dividend. In addition, the Board of Directors authorized the Company's third stock repurchase program to commence upon completion of the Company's current repurchase program, under which 683,000 shares remain to be purchased. The new stock repurchase program authorizes the repurchase of 5% of the current outstanding shares of common stock, par value $0.01 per share, or approximately 3.6 million shares. These announcements were included as part of the press release announcing financial results issued by the Company on July 28, 2005 and attached as Exhibit 99.1 to this report. A copy of the press release is being furnished to the SEC and shall not be deemed "filed" for any purpose. Item 9.01. Financial Statements and Exhibits --------------------------------- (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press release issued by the Company on July 28, 2005 announcing its financial results for the three months and six months ended June 30, 2005, the declaration of a quarterly cash dividend and the authorization of a stock repurchase program. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. PROVIDENT FINANCIAL SERVICES, INC. DATE: July 28, 2005 By: /s/ Paul M. Pantozzi ------------------------------------ Paul M. Pantozzi Chairman and Chief Executive Officer EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press release issued by the Company on July 28, 2005 announcing its financial results for the three months and six months ended June 30, 2005, the declaration of a quarterly cash dividend and the authorization of a stock repurchase program. EX-99.1 2 form8k_ex991-072805.txt Provident Financial Services, Inc. Announces 60% Increase in Quarterly Earnings, Third Stock Repurchase Program and Quarterly Cash Dividend JERSEY CITY, NJ, July 28, 2005 - Provident Financial Services, Inc. (NYSE:PFS) (the "Company") reported net income of $13.8 million for the three months ended June 30, 2005 and $28.8 million for the six months ended June 30, 2005, compared to $8.6 million and $18.9 million for the same periods in 2004. This represented increases of $5.2 million, or 60.5%, and $9.9 million, or 52.5%, compared with the three and six months ended June 30, 2004, respectively. Basic and diluted earnings per share were $0.21 and $0.20, respectively, for the quarter and $0.43 and $0.42, respectively, for the six months ended June 30, 2005, compared to basic and diluted earnings per share of $0.16 for the quarter and $0.34 for the six months ended June 30, 2004. The earnings and per share data for 2005 reflect the inclusion of the operations of First Sentinel Bancorp, Inc. ("First Sentinel") which merged with the Company on July 14, 2004, and the related issuance of 18.5 million shares of the Company's common stock in connection with the merger. Second quarter 2005 earnings were also impacted by the acceptance of a Voluntary Resignation Initiative ("VRI") by certain officers of the Company, which resulted in an after-tax charge of $815,000, or $0.01 per share. Paul M. Pantozzi, Chairman and Chief Executive Officer, commented, "Given the flatness of the yield curve and pricing pressures experienced on both sides of the balance sheet, our net interest margin compressed slightly during the second quarter. We addressed this by maintaining a disciplined pricing structure for both loans and deposits, albeit at the expense of some growth." Pantozzi added, "We also maintained our commitment to improve long-term management of operating expenses. In particular, the Voluntary Resignation Initiative, which was effective as of June 30, 2005, will favorably impact our staffing cost structure going forward." Authorization of Third Stock Repurchase Program On July 27, 2005, the Company's Board of Directors authorized the Company's third stock repurchase program. This program will commence upon completion of the Company's current repurchase program, under which 683,000 shares remain to be purchased. Under the new authorization, the Company may repurchase 5% of the amount of shares of common stock currently outstanding, or approximately 3.6 million shares. Repurchases will be made from time to time and will be effectuated through open market purchases, unsolicited negotiated transactions, or in such other manner deemed appropriate by management. Completion of the repurchase program will not be limited to a specific time period. The Company's repurchase activities will take into account SEC safe harbor rules and guidance for issuer repurchases. Declaration of Quarterly Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.08 per common share payable on August 31, 2005 to stockholders of record as of the close of business on August 12, 2005. Balance Sheet Summary Total assets were $6.29 billion at June 30, 2005, compared to $6.43 billion at December 31, 2004, as reductions in securities balances were used to fund repayments of borrowings and common stock repurchases. Total investments decreased $192.0 million, or 10.1%, during the six months ended June 30, 2005. The decrease was primarily attributable to paydowns on mortgage-backed securities and maturities of debt securities. In addition, the Company sold $30.5 million of mortgage-backed securities during the period as part of its ongoing interest rate risk management process. The Company's net loans decreased $23.1 million, or 0.6%, during the six months ended June 30, 2005, primarily as a result of the categorization of $18.7 million in fixed-rate residential mortgage loans as held for sale. The Company had a commitment to sell these loans at June 30, 2005. The planned loan sale is another component of the Company's ongoing interest rate risk management process. Partially offsetting these declines, cash and cash equivalents increased $45.8 million, or 28.0%, during the six months ended June 30, 2005, pending deployment into higher-yielding asset categories. Borrowed funds decreased $66.3 million, or 5.7%, during the six months ended June 30, 2005, as a result of maturities and paydowns on amortizing obligations. Total deposits decreased $54.9 million, or 1.4%, during the six months ended June 30, 2005. Total deposits were $4.00 billion at June 30, 2005, with core deposits, consisting of savings and demand deposit accounts, representing 65.2% of total deposits. Treasury stock increased $54.8 million for the year-to-date. Common stock repurchases for the three and six months ended June 30, 2005 totaled 1.6 million shares at an average cost of $17.76 per share, and 3.1 million shares at an average cost of $17.90 per share, respectively. At June 30, 2005, book value per share and tangible book value per share were $15.50 and $9.32, respectively. An additional 683,000 shares remain eligible for repurchase under the current common stock repurchase authorization. Results of Operations Net Interest Margin The net interest margin was 3.34% for the quarter ended June 30, 2005 and 3.38% for the quarter ended March 31, 2005. This was an increase of six basis points compared with the net interest margin of 3.28% for the quarter ended June 30, 2004. The weighted average rate for interest-earning assets was 5.01% for the three months ended June 30, 2005, compared with 4.97% for the trailing quarter and 4.58% for the three months ended June 30, 2004. The weighted average rate for interest-bearing liabilities was 1.97% for the quarter ended June 30, 2005, compared with 1.88% for the trailing quarter and 1.69% for the second quarter of 2004. For the six months ended June 30, 2005, the net interest margin was 3.36%. This was a decrease of three basis points compared with the net interest margin of 3.39% for the six months ended June 30, 2004. The weighted average rate for interest-earning assets was 4.99% for the six months ended June 30, 2005, compared with 4.68% for the six months ended June 30, 2004. The weighted average rate for interest-bearing liabilities was 1.93% for the six months ended June 30, 2005, compared with 1.68% for the six months ended June 30, 2004. The increases in rates on interest-earning assets and interest-bearing liabilities reflect increases in market interest rates experienced throughout the past year. Non-Interest Income Non-interest income totaled $7.6 million for the quarter ended June 30, 2005, an increase of $836,000, or 12.4%, compared to the same period in 2004. Fee income increased $1.2 million for the quarter ended June 30, 2005, compared with the same period in 2004, primarily as a result of an increase in loan and retail fees of $308,000, an increase of $358,000 in checking and retail deposit fees and an increase of $145,000 in ATM and debit card income. In addition, income on bank-owned life insurance ("BOLI") increased $305,000 for the three months ended June 30, 2005, compared with the second quarter of 2004, primarily as a result of additional BOLI acquired from First Sentinel in the July 2004 merger. Partially offsetting these increases, net gains on securities sales decreased $239,000 for the quarter ended June 30, 2005, compared with the same period in 2004, and other income decreased $467,000 for the quarter ended June 30, 2005, compared with the same period in 2004. For the year-to-date, non-interest income totaled $13.7 million, a decrease of $650,000, or 4.5%, compared to the same period in 2004. Increases in fee income of $1.2 million and BOLI income of $614,000 were more than offset by a reduction in securities gains of $797,000 and a decline in other income of $1.7 million. Other income for the six months ended June 30, 2005 included losses on loan sales of $10,000, compared with gains of $1.3 million recorded in 2004. Non-Interest Expense For the three months ended June 30, 2005, non-interest expense increased $7.2 million, or 27.4%, to $33.2 million, compared to $26.1 million for the three months ended June 30, 2004. Compensation and employee benefits expense increased $3.8 million for the quarter ended June 30, 2005, compared with the same period in 2004, due primarily to increased headcount as a result of the First Sentinel acquisition. The Company employed 913 full-time equivalent employees at June 30, 2005, compared with 695 full-time equivalent employees at June 30, 2004. In addition, the Company recorded a charge of $1.4 million in 2005 in connection with the VRI. Amortization of intangibles increased $1.3 million for the quarter ended June 30, 2005, compared with the same period in 2004, primarily as a result of amortization of the core deposit intangible recorded in connection with the First Sentinel acquisition. Additional increases in occupancy expense of $1.1 million and data processing expense of $383,000 for the quarter ended June 30, 2005, compared with the same period in 2004, were also due primarily to the acquisition and integration of First Sentinel's operations. As a result of the First Sentinel acquisition, the Company added 22 full-service branch locations, including the former headquarters building, which now serves as the Provident Loan Center. Partially offsetting these increases, advertising and promotions expense declined $167,000 for the quarter ended June 30, 2005, compared with the same period in 2004. For the six months ended June 30, 2005, non-interest expense increased $11.9 million, or 22.5%, to $64.6 million, compared to $52.7 million for the six months ended June 30, 2004. Compensation and employee benefits expense increased $6.5 million for the six months ended June 30, 2005, compared with the same period in 2004, as a result of increased staffing and the $1.4 million VRI expense. Amortization of intangibles increased $2.9 million for the six months ended June 30, 2005, compared with the same period in 2004, primarily as a result of amortization of the core deposit intangible recorded in connection with the First Sentinel acquisition. Additional increases in occupancy expense of $2.2 million and data processing expense of $663,000 for the six months ended June 30, 2005, compared with the same period in 2004, were also due primarily to the acquisition and integration of First Sentinel's operations. Partially offsetting these increases, advertising and promotions expense declined $840,000 for the six months ended June 30, 2005, compared with the same period in 2004. The Company's annualized non-interest expense as a percentage of average assets improved to 2.1% for the quarter ended June 30, 2005, compared with 2.5% for the same period in 2004. For the six months ended June 30, 2005, annualized non-interest expense as a percentage of average assets was 2.1%, compared with 2.5% for the same period in 2004. The efficiency ratio (non-interest expense divided by the sum of net interest income and non-interest income) improved to 62.1% for the quarter ended June 30, 2005, compared with 66.5% for the same period in 2004. For the six months ended June 30, 2005, the efficiency ratio was 60.5%, compared with 64.9% for the same period in 2004. Asset Quality The Company continues to emphasize asset quality. Total non-performing loans as of June 30, 2005 were $7.3 million, or 0.20% of total loans, compared to $6.2 million, or 0.17% of total loans at December 31, 2004, and $4.0 million, or 0.17% of total loans at June 30, 2004. At June 30, 2005, the Company's allowance for loan losses was 0.91% of total loans, compared with 0.91% of total loans at December 31, 2004, and 0.88% of total loans at June 30, 2004. The Company recorded a $400,000 provision for loan losses for the three and six months ended June 30, 2005, compared with provisions of $1.1 million and $1.7 million for the three and six months ended June 30, 2004, respectively. For the three and six months ended June 30, 2005, net charge-offs totaled $884,000 and $813,000, respectively, compared with net charge-offs of $750,000 and $1.4 million for the same respective periods in 2004. About the Company Provident Financial Services, Inc. is the holding company for The Provident Bank, a community-oriented bank that offers a full range of retail and commercial loan and deposit products. The Bank currently operates 78 full service branches throughout northern and central New Jersey. Post Earnings Conference Call Representatives of the Company will hold a conference call for investors at 10:00 a.m. Eastern Time on July 28, 2005 regarding highlights of the Company's second quarter 2005 financial results. The call may be accessed by dialing 1-800-798-2884 (Domestic) or 1-617-614-6207 (International) and stating the pass code number: 39243491. Internet access to the call is also available (listen only) at www.providentnj.com by going to Investor Relations and clicking on Webcast. Forward Looking Statements Certain statements contained herein are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Condition June 30, 2005 (Unaudited) and December 31, 2004 (Dollars in Thousands)
Assets June 30, 2005 December 31, 2004 --------------------------------- ---------------------------- Cash and due from banks $ 140,967 $ 121,187 Federal funds sold 54,000 16,000 Short-term investments 14,531 26,507 --------------------------------- ---------------------------- Total cash and cash equivalents 209,498 163,694 --------------------------------- ---------------------------- Investment securities (market value of $439,601 at June 30, 2005 (unaudited) and $450,071 at December 31, 2004) 435,249 445,633 Securities available for sale, at fair value 1,227,790 1,406,340 Federal Home Loan Bank stock 45,254 48,283 Loans held for sale 18,650 -- Loans 3,683,736 3,707,211 Less allowance for loan losses 33,353 33,766 --------------------------------- ---------------------------- Net loans 3,650,383 3,673,445 --------------------------------- ---------------------------- Foreclosed assets, net 584 140 Banking premises and equipment, net 63,365 64,605 Accrued interest receivable 23,031 23,865 Intangible assets 438,996 443,148 Bank-owned life insurance 108,484 105,932 Other assets 67,470 58,237 --------------------------------- ---------------------------- Total assets $ 6,288,754 $ 6,433,322 ================================= ============================ Liabilities and Stockholders' Equity Deposits: Demand deposits $ 1,105,476 $ 1,116,812 Savings deposits 1,500,893 1,538,466 Certificates of deposit of $100,000 or more 266,563 253,024 Other time deposits 1,122,657 1,142,171 --------------------------------- ---------------------------- Total deposits 3,995,589 4,050,473 Mortgage escrow deposits 21,223 15,389 Borrowed funds 1,099,790 1,166,064 Subordinated debentures 26,778 27,113 Other liabilities 44,237 37,507 --------------------------------- ---------------------------- Total liabilities 5,187,617 5,296,546 --------------------------------- ---------------------------- Stockholders' Equity: Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued -- -- Common stock, $0.01 par value, 200,000,000 shares authorized, 79,879,017 shares issued and 71,028,196 shares outstanding at June 30, 2005, and 79,879,017 shares issued and 74,078,784 shares outstanding at December 31, 2004 799 799 Additional paid-in capital 962,643 960,792 Retained earnings 376,449 358,678 Accumulated other comprehensive (loss) income (679) 3,767 Treasury stock at cost (125,565) (70,810) Unallocated common stock held by Employee Stock Ownership Plan (74,742) (76,101) Common Stock acquired by the Stock Award Plan (37,768) (40,349) Common Stock acquired by the Directors' Deferred Fee Plan (13,224) (13,379) Deferred compensation - Directors' Deferred Fee Plan 13,224 13,379 --------------------------------- ---------------------------- Total stockholders' equity 1,101,137 1,136,776 --------------------------------- ---------------------------- Total liabilities and stockholders' equity $ 6,288,754 $ 6,433,322 ================================= ============================
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Income Three and Six Months Ended June 30, 2005 and 2004 (Dollars in Thousands, Except Per Share Data)
Three Months Ended Six Months Ended June 30 June 30 ----------------------------- ---------------------------- 2005 2004 2005 2004 ------------- --------------- ------------- -------------- (Unaudited) (Unaudited) Interest income: Real estate secured loans $ 38,636 $ 23,539 $ 76,914 $ 47,305 Commercial loans 5,283 3,728 10,236 7,026 Consumer loans 7,251 4,761 14,501 9,396 Investment securities 4,218 4,581 8,650 9,723 Securities available for sale 12,850 8,344 26,630 18,180 Other short-term investments 170 130 316 300 Federal funds 418 234 536 374 ------------- --------------- ------------- -------------- Total interest income 68,826 45,317 137,783 92,304 ------------- --------------- ------------- -------------- Interest expense: Deposits 14,111 7,936 27,016 15,802 Borrowed funds 8,385 4,885 16,927 9,604 Subordinated debentures 359 -- 704 -- ------------- --------------- ------------- -------------- Total interest expense 22,855 12,821 44,647 25,406 ------------- --------------- ------------- -------------- Net interest income 45,971 32,496 93,136 66,898 Provision for loan losses 400 1,050 400 1,650 ------------- --------------- ------------- -------------- Net interest income after provision for loan losses 45,571 31,446 92,736 65,248 ------------- --------------- ------------- -------------- Non-interest income: Fees 6,185 4,948 10,877 9,683 Net gain (loss) on securities transactions 69 308 (62) 735 Bank-owned life insurance 1,256 951 2,552 1,938 Other income 42 509 355 2,016 ------------- --------------- ------------- -------------- Total non-interest income 7,552 6,716 13,722 14,372 ------------- --------------- ------------- -------------- Non-interest expense: Compensation and employee benefits 17,921 14,074 34,965 28,482 Net occupancy expense 4,781 3,720 9,681 7,518 Data processing expense 2,207 1,824 4,327 3,664 Advertising and promotion expense 1,474 1,641 2,204 3,044 Amortization of intangibles 1,858 573 3,986 1,095 Other operating expenses 4,987 4,245 9,442 8,940 ------------- --------------- ------------- -------------- Total non-interest expense 33,228 26,077 64,605 52,743 ------------- --------------- ------------- -------------- Income before income tax expense 19,895 12,085 41,853 26,877 Income tax expense 6,126 3,504 13,062 8,002 ------------- --------------- ------------- -------------- Net income $ 13,769 $ 8,581 $ 28,791 $ 18,875 ============= =============== ============= ============== Basic earnings per share $0.21 $0.16 $0.43 $0.34 Average basic shares outstanding 66,724,470 54,924,643 67,444,677 54,791,399 Diluted earnings per share $0.20 $0.16 $0.42 $0.34 Average diluted shares outstanding 67,479,362 54,924,725 68,202,721 54,791,440
PROVIDENT FINANCIAL SERVICES, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except share data) (Unaudited) At or for the Three At or for the Six Months Ended Months Ended June 30 June 30 ------------------------------------------------------------- 2005 2004 2005 2004 ---- ---- ---- ---- INCOME STATEMENT: Net interest income $45,971 $32,496 $93,136 $66,898 Provision for loan losses 400 1,050 400 1,650 Non-interest income 7,552 6,716 13,722 14,372 Non-interest expense 33,228 26,077 64,605 52,743 Income before income tax expense 19,895 12,085 41,853 26,877 Net income 13,769 8,581 28,791 18,875 Basic earnings per share $0.21 $0.16 $0.43 $0.34 Diluted earnings per share $0.20 $0.16 $0.42 $0.34 Interest rate spread 3.04% 2.89% 3.06% 3.00% Net interest margin 3.34% 3.28% 3.36% 3.39% PROFITABILITY: Annualized return on average assets 0.88% 0.81% 0.92% 0.89% Annualized return on average equity 4.98% 4.21% 5.20% 4.65% Annualized non-interest expense to average assets 2.12% 2.45% 2.07% 2.50% Efficiency ratio (1) 62.08% 66.50% 60.46% 64.90% ASSET QUALITY: Non-performing loans $7,345 $3,986 Foreclosed assets 584 32 Non-performing loans to total loans 0.20% 0.17% Non-performing assets to total assets 0.13% 0.09% Allowance for loan losses $33,353 $20,920 Allowance for loan losses to non-performing loans 454.09% 524.84% Allowance for loan losses to total loans 0.91% 0.88% AVERAGE BALANCE SHEET DATA: Assets $6,274,548 $4,252,727 $6,306,501 $4,241,480 Loans, net 3,660,106 2,290,966 3,657,375 2,247,879 Earning assets 5,489,415 3,981,525 5,521,664 3,965,092 Core deposits 2,590,589 1,768,765 2,594,026 1,755,395 Borrowings 1,124,017 693,534 1,146,110 691,009 Interest-bearing liabilities 4,645,019 3,058,327 4,671,454 3,046,419 Stockholders' equity 1,106,380 814,845 1,115,876 816,443 Average yield on interest- earning assets 5.01% 4.58% 4.99% 4.68% Average cost of interest- bearing liabilities 1.97% 1.69% 1.93% 1.68%
Notes (1) Efficiency Ratio Calculation
Three Months Ended June 30 Six Months Ended June 30 -------------------------- ------------------------ 2005 2004 2005 2004 ---- ---- ---- ---- Net interest income $ 45,971 $ 32,496 $ 93,136 $ 66,898 Non-interest income 7,552 6,716 13,722 14,372 --------- --------- --------- --------- Total income $ 53,523 $ 39,212 $ 106,858 $ 81,270 ======= ====== ======= ====== Non-interest expense $ 33,228 $ 26,077 $ 64,605 $ 52,743 ====== ====== ====== ====== Expense/Income: 62.08% 66.50% 60.46% 64.90% ====== ====== ====== ======
Average Quarterly Balances NET INTEREST MARGIN ANALYSIS (Unaudited) (Dollars in Thousands) June 30, 2005 March 31, 2005 ------------- -------------- Average Average Average Average Balance Interest Yield Balance Interest Yield --------------------------------------- --------------------------------- Interest-Earning Assets: Federal Funds Sold and Other Short-Term Investments $ 82,202 $ 588 2.87% $ 46,234 $ 264 2.32% Investment Securities (1) 425,340 4,218 3.97% 439,877 4,432 4.04% Securities Available for Sale 1,276,344 12,302 3.86% 1,366,170 13,392 3.92% Federal Home Loan Bank Stock 45,423 548 4.84% 47,376 388 3.32% Net Loans (2) Total Mortgage Loans 2,772,638 38,636 5.57% 2,785,029 38,278 5.50% Total Commercial Loans 356,216 5,283 5.87% 348,828 4,953 5.68% Total Consumer Loans 531,252 7,251 5.47% 520,757 7,250 5.63% ------------- ------------ ----------- ---------- Total Interest-Earning Assets 5,489,415 68,826 5.01% 5,554,271 68,957 4.97% ------------- ------------ ----------- ---------- Non-Interest Earning Assets: Cash and Due from Banks 101,294 102,229 Other Assets 683,839 682,684 ------------- ----------- Total Assets $ 6,274,548 $ 6,339,184 ============= =========== Interest-Bearing Liabilities: Demand Deposits $ 606,275 1,245 0.82% $ 615,272 1,196 0.79% Savings Deposits 1,520,867 4,004 1.06% 1,518,618 3,622 0.97% Time Deposits 1,393,860 8,862 2.55% 1,395,844 8,087 2.35% ------------- ------------ ----------- ---------- Total Deposits 3,521,002 14,111 1.61% 3,529,734 12,905 1.48% ------------- ------------ ----------- ---------- Borrowed Funds 1,124,017 8,744 3.12% 1,168,448 8,887 3.08% ------------- ------------ ----------- ---------- Total Borrowings 1,124,017 8,744 3.12% 1,168,448 8,887 3.08% ------------- ------------ ----------- ---------- Total Interest-Bearing Liabilities 4,645,019 22,855 1.97% 4,698,182 21,792 1.88% ------------- ------------ ----------- ---------- Non-Interest Bearing Liabilities 523,149 515,523 ------------- ----------- Total Liabilities 5,168,168 5,213,705 Stockholders' Equity 1,106,380 1,125,479 ------------- ----------- Total Liabilities & Stockholders' Equity $ 6,274,548 $ 6,339,184 ============= =========== Net interest income $ 45,971 $ 47,165 ============ ========== Net interest rate spread 3.04% 3.09% ==== ==== Net interest-earning assets $ 844,396 $ 856,089 ============= =========== Net interest margin (3) 3.34% 3.38% ==== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.18x 1.18x ============= =========== - ---------------------------------------------- (1) Average outstanding balance amounts shown are amortized cost. (2) Average outstanding balances are net of the allowance for loan losses, deferred loan fees and expenses, loan premiums and discounts and include non-accrual loans. (3) Annualized net interest income divided by average interest-earning assets.
The following table summarizes the quarterly net interest margin for the previous year, inclusive.
6/30/05 3/31/05 12/31/04 9/30/04 6/30/04 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. -------- -------- -------- -------- -------- Interest-Earning Assets: Securities 3.86% 3.90% 3.76% 3.79% 3.16% Net Loans 5.58% 5.53% 5.52% 5.55% 5.62% Total Interest-Earning Assets 5.01% 4.97% 4.90% 4.89% 4.58% Interest-Bearing Liabilities: Total Deposits 1.61% 1.48% 1.37% 1.29% 1.35% Total Borrowings 3.12% 3.08% 3.01% 2.94% 2.83% Total Interest-Bearing Liabilities 1.97% 1.88% 1.79% 1.70% 1.69% Interest Rate Spread 3.04% 3.09% 3.11% 3.19% 2.89% Net Interest Margin 3.34% 3.38% 3.38% 3.43% 3.28% Ratio of Interest-Earning Assets to Total Interest-Bearing Liabilities 1.18x 1.18x 1.18x 1.17x 1.30x
Average YTD Balances NET INTEREST MARGIN ANALYSIS (Unaudited) (Dollars in Thousands) June 30, 2005 June 30, 2004 ------------- ------------- Average Average Average Average Balance Interest Yield Balance Interest Yield --------------------------------------- --------------------------------- Interest-Earning Assets: Federal Funds Sold and Other Short-Term Investments $ 64,317 $ 852 2.67% $ 131,214 $ 674 1.03% Investment Securities (1) 432,569 8,650 4.01% 504,858 9,723 3.87% Securities Available for Sale 1,321,009 25,694 3.89% 1,048,455 17,935 3.44% Federal Home Loan Bank Stock 46,394 936 4.07% 32,686 245 1.51% Net Loans (2) Total Mortgage Loans 2,779,021 76,914 5.53% 1,637,212 47,305 5.81% Total Commercial Loans 352,667 10,236 5.77% 296,808 7,026 4.76% Total Consumer Loans 525,687 14,501 5.56% 313,859 9,396 6.02% ------------- ----------- ---------- ---------- Total Interest-Earning Assets 5,521,664 137,783 4.99% 3,965,092 92,304 4.68% ------------- ----------- ---------- ---------- Non-Interest Earning Assets: Cash and Due from Banks 101,759 82,814 Other Assets 683,078 193,574 ------------- ---------- Total Assets $ 6,306,501 $ 4,241,480 ============= ========== Interest-Bearing Liabilities: Demand Deposits $ 610,748 2,441 0.81% $ 431,703 1,613 0.75% Savings Deposits 1,519,749 7,626 1.01% 984,036 4,362 0.89% Time Deposits 1,394,847 16,949 2.45% 939,671 9,827 2.10% ------------- ----------- ---------- ---------- Total Deposits 3,525,344 27,016 1.55% 2,355,410 15,802 1.35% ------------- ----------- ---------- ---------- Borrowed Funds 1,146,110 17,631 3.10% 691,009 9,604 2.79% ------------- ----------- ---------- ---------- Total Borrowings 1,146,110 17,631 3.10% 691,009 9,604 2.79% ------------- ----------- ---------- ---------- Total Interest-Bearing Liabilities 4,671,454 44,647 1.93% 3,046,419 25,406 1.68% ------------- ----------- ---------- ---------- Non-Interest Bearing Liabilities 519,171 378,618 ------------- ---------- Total Liabilities 5,190,625 3,425,037 Stockholders' Equity 1,115,876 816,443 ------------- ---------- Total Liabilities & Stockholders' Equity $ 6,306,501 $ 4,241,480 ============= ========== Net interest income $ 93,136 $ 66,898 =========== ========= Net interest rate spread 3.06% 3.00% ==== ==== Net interest-earning assets $ 850,210 $ 918,673 ============= ========== Net interest margin (3) 3.36% 3.39% ==== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.18x 1.30x ============= ========== - ---------------------------------------------- (1) Average outstanding balance amounts shown are amortized cost. (2) Average outstanding balances are net of the allowance for loan losses, deferred loan fees and expenses, loan premiums and discounts and include non-accrual loans. (3) Annualized net interest income divided by average interest-earning assets.
The following table summarizes the YTD net interest margin for the previous three years, inclusive.
Six Months Ended ---------------------------------------- 6/30/05 6/30/04 6/30/03 ------- ------- ------- Interest-Earning Assets: Securities 3.88% 3.35% 3.46% Net Loans 5.56% 5.70% 6.43% Total Interest-Earning Assets 4.99% 4.68% 5.00% Interest-Bearing Liabilities: Total Deposits 1.55% 1.35% 1.91% Total Borrowings 3.10% 2.79% 2.75% Total Interest-Bearing Liabilities 1.93% 1.68% 2.05% Interest Rate Spread 3.06% 3.00% 2.94% Net Interest Margin 3.36% 3.39% 3.46% Ratio of Interest-Earning Assets to Total Interest-Bearing Liabilities 1.18x 1.30x 1.34x
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