-----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, C4yMF8G/jzLkQerclKAAh6be65cM0zt2jCn/SIjxNP0BP8vlPCD8ZU+lCZxjUE2L /PqOKmC/U/UOULNrqtFp/A== 0000943374-05-001540.txt : 20051028 0000943374-05-001540.hdr.sgml : 20051028 20051028093439 ACCESSION NUMBER: 0000943374-05-001540 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051028 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051028 DATE AS OF CHANGE: 20051028 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: 051161579 BUSINESS ADDRESS: STREET 1: 830 BERGEN AVENUE CITY: JERSEY CITY STATE: NJ ZIP: 07306 BUSINESS PHONE: 2013331000 8-K 1 form8k_102605.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): October 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 Operation and Financial Condition. --------------------------------------------- On October 28, 2005, Provident Financial Services, Inc. (the "Company") issued a press release reporting its financial results for the three months and nine months ended September 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 October 28, 2005, the Company announced that its Board of Directors declared a $0.09 per common share cash dividend, payable on November 30, 2005 to stockholders of record on November 14, 2005, which represents a 12.5% increase from the prior quarter's cash dividend. This announcement was included as part of the press release announcing financial results issued by the Company on October 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 October 28, 2005 announcing its financial results for the three months and nine months ended September 30, 2005 and the declaration of a quarterly cash dividend. 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: October 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 October 28, 2005 announcing its financial results for the three months and nine months ended September 30, 2005 and the declaration of a quarterly cash dividend. EX-99.1 2 form8k_ex991-102605.txt NEWS RELEASE CONTACT: Kenneth J. Wagner, SVP Investor Relations Provident Financial Services, Inc. (201) 915-5344 FOR RELEASE 7:43 A.M. Eastern Time: October 28, 2005 Provident Financial Services, Inc. Announces 18% Increase in Quarterly Earnings Per Share and Declares Increased Quarterly Cash Dividend JERSEY CITY, NJ, October 28 /PRNewswire-First Call/ - Provident Financial Services, Inc. (NYSE:PFS) (the "Company") reported basic and diluted earnings per share of $0.23 for the quarter ended September 30, 2005, representing increases of 17.8% and 17.5%, respectively, compared to basic and diluted earnings per share of $0.19 for the quarter ended September 30, 2004. Basic and diluted earnings per share were $0.66 and $0.65, respectively, for the nine months ended September 30, 2005, representing increases of 20.9% and 20.0%, respectively, compared to basic and diluted earnings per share of $0.54 for the nine months ended September 30, 2004. Net income for the three months ended September 30, 2005 totaled $14.9 million, an increase of $1.6 million, or 11.9%, compared to $13.3 million reported for the same period in 2004. Net income was $43.7 million for the nine months ended September 30, 2005, an increase of $11.5 million, or 35.7%, compared to $32.2 million for the same period in 2004. The earnings and per share data 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, from the July 14, 2004 merger date. Earnings for the nine months ended September 30, 2005 were also impacted by the acceptance of a Voluntary Resignation Initiative ("VRI") by certain officers of the Company in the second quarter of 2005, which resulted in an after-tax charge of $815,000. Third quarter and nine months 2004 earnings were impacted by one-time expenses related to the merger and integration of First Sentinel's operations of approximately $870,000, net of tax. Paul M. Pantozzi, Chairman and Chief Executive Officer, commented, "Our third quarter results reflect our disciplined response to the challenges of the current operating environment. As the yield curve continued to flatten, we remained competitive but not aggressive in our pricing of both loans and deposits in order to minimize compression of our net interest margin. We viewed this as a strategic priority as opposed to balance sheet growth for its own sake. We remained similarly disciplined in our ongoing management of non-interest expense toward the goal of improvement in our operating efficiency. Finally, our capital management strategy has remained on track, as evidenced by the repurchase of 1.6 million shares during the quarter and the Board's approval of an increased cash dividend." Declaration of Quarterly Dividend The Company's Board of Directors declared a quarterly cash dividend of $0.09 per common share, an increase of 12.5% from the prior quarter's cash dividend of $0.08 per share, payable on November 30, 2005, to stockholders of record as of the close of business on November 14, 2005. Balance Sheet Summary Total assets were $6.18 billion at September 30, 2005, compared to $6.43 billion at December 31, 2004, as reductions in securities balances were used to fund repayments of borrowings, net deposit outflows and common stock repurchases. Total investments decreased $265.7 million, or 14.0%, during the nine months ended September 30, 2005. The decrease was primarily attributable to paydowns on mortgage-backed securities and maturities of debt securities. In addition, the Company sold $32.7 million of primarily mortgage-backed securities during the period as part of its ongoing interest rate risk management process. The Company's net loans decreased $26.2 million, or 0.7%, during the nine months ended September 30, 2005, despite loan originations of $841.1 million and purchases of $110.0 million, as loan repayments continued at an accelerated pace. Further contributing to this decline, the Company sold $31.5 million in 20- and 30- year fixed-rate residential mortgage loans during the nine months ended September 30, 2005, as another component of the Company's ongoing interest rate risk management process. At September 30, 2005, the Company's unfunded loan pipeline totaled $793.8 million, including $318.7 million in construction loan commitments, $172.5 million in commercial loan commitments and $89.5 million in commercial mortgage commitments. This compares with an unfunded loan pipeline of $730.9 million at June 30, 2005. Cash and cash equivalents increased $33.1 million, or 20.2%, during the nine months ended September 30, 2005, pending deployment into higher-yielding asset categories and/or repayment of maturing borrowings. Borrowed funds decreased $117.7 million, or 10.1%, during the nine months ended September 30, 2005, as a result of maturities and paydowns on amortizing obligations. Total deposits decreased $86.1 million, or 2.1%, during the nine months ended September 30, 2005. Total deposits were $3.96 billion at September 30, 2005, with core deposits, consisting of savings and demand deposit accounts, representing 64.6% of total deposits. Treasury stock increased $83.3 million for the year-to-date. Common stock repurchases for the three and nine months ended September 30, 2005, totaled 1.6 million shares at an average cost of $17.82 per share, and 4.7 million shares at an average cost of $17.87 per share, respectively. At September 30, 2005, book value per share and tangible book value per share were $15.55 and $9.24, respectively. An additional 2.7 million shares remain eligible for repurchase under the current common stock repurchase authorization. Results of Operations Net Interest Margin The net interest margin compressed three basis points to 3.31% for the quarter ended September 30, 2005, from 3.34% for the quarter ended June 30, 2005. This was a decrease of 12 basis points compared with the net interest margin of 3.43% for the quarter ended September 30, 2004. The weighted average rate for interest-earning assets was 5.11% for the three months ended September 30, 2005, compared with 5.01% for the trailing quarter and 4.89% for the three months ended September 30, 2004. The weighted average rate for interest-bearing liabilities was 2.13% for the quarter ended September 30, 2005, compared with 1.97% for the trailing quarter and 1.70% for the third quarter of 2004. For the nine months ended September 30, 2005, the net interest margin was 3.35%. This was a decrease of six basis points compared with the net interest margin of 3.41% for the nine months ended September 30, 2004. The weighted average rate for interest-earning assets was 5.03% for the nine months ended September 30, 2005, compared with 4.77% for the nine months ended September 30, 2004. The weighted average rate for interest-bearing liabilities was 1.99% for the nine months ended September 30, 2005, compared with 1.69% for the nine months ended September 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 $7.8 million for the quarter ended September 30, 2005, a decrease of $380,000, or 4.6%, compared to the same period in 2004. An increase of $531,000 in fee income for the quarter ended September 30, 2005, compared with the same period in 2004, was more than offset by a decrease in net gains on securities sales of $364,000 and a $578,000 decrease in other income. The increase in fee income was primarily attributable to loan prepayment fees and fees related to the outsourcing of the official check function. The reduction in other income was primarily attributable to the recognition of losses on loan sales of $221,000 during the quarter ended September 30, 2005, compared with gains of $90,000 realized during the same period in 2004. For the year-to-date, non-interest income totaled $21.5 million, a decrease of $1.0 million, or 4.6%, compared to the same period in 2004. Increases in fee income of $1.7 million and income on Bank Owned Life Insurance ("BOLI") of $645,000 were more than offset by a reduction in securities gains of $1.2 million and a decline in other income of $2.2 million. The increase in fee income was primarily attributable to loan prepayment fees, ATM and debit card income, fees related to the outsourcing of the official check function and mortgage servicing fees. The increase in BOLI income was primarily a result of additional BOLI acquired from First Sentinel in the July 2004 merger. Other income for the nine months ended September 30, 2005, included losses on loan sales of $231,000, compared with gains of $1.4 million recorded in 2004. Non-Interest Expense For the three months ended September 30, 2005, non-interest expense decreased $4.3 million, or 12.6%, to $30.0 million, compared to $34.3 million for the three months ended September 30, 2004. Compensation and employee benefits expense decreased $2.6 million for the quarter ended September 30, 2005, compared with the same period in 2004, due primarily to reductions in staff and executive severance costs recorded in 2004. The Company employed 895 full-time equivalent employees at September 30, 2005, compared with 961 full-time equivalent employees at September 30, 2004. Advertising expense decreased $767,000 for the quarter ended September 30, 2005, compared with the same period in 2004, largely as a result of the cost of customer communications associated with the integration of the First Sentinel business in 2004. Amortization of intangibles decreased $358,000 for the quarter ended September 30, 2005, compared with the same period in 2004, primarily as a result of the conclusion of the amortization of a core deposit intangible from an earlier acquisition. Furthermore, other non-interest expense decreased $521,000 for the quarter ended September 30, 2005, compared with the same period in 2004, with significant reductions noted in consultant fees and printing and supplies expense. For the nine months ended September 30, 2005, non-interest expense increased $7.6 million, or 8.7%, to $94.6 million, compared to $87.1 million for the nine months ended September 30, 2004. Compensation and employee benefits expense increased $3.8 million for the nine months ended September 30, 2005, compared with the same period in 2004, as a result of increased staffing following the First Sentinel acquisition and a $1.4 million expense recognized in the second quarter of 2005 in connection with the VRI. Amortization of intangibles increased $2.5 million for the nine months ended September 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 $642,000 for the nine months ended September 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 $1.6 million for the nine months ended September 30, 2005, compared with the same period in 2004. The Company's annualized non-interest expense as a percentage of average assets improved to 1.9% for the quarter ended September 30, 2005, compared with 2.2% for the same period in 2004. For the nine months ended September 30, 2005, annualized non-interest expense as a percentage of average assets was 2.0%, compared with 2.4% 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 57.1% for the quarter ended September 30, 2005, compared with 62.3% for the same period in 2004. For the nine months ended September 30, 2005, the efficiency ratio was 59.3%, compared with 63.8% for the same period in 2004. Asset Quality The Company continues to emphasize asset quality. Total non-performing loans at September 30, 2005 were $6.5 million, or 0.18% of total loans, compared to $6.2 million, or 0.17% of total loans at December 31, 2004, and $4.9 million, or 0.13% of total loans at September 30, 2004. At September 30, 2005, the Company's allowance for loan losses was 0.89% of total loans, compared with 0.91% of total loans at December 31, 2004, and 0.90% of total loans at September 30, 2004. The Company recorded provisions for loan losses of $100,000 and $500,000 for the three and nine months ended September 30, 2005, respectively, compared with provisions of $1.1 million and $2.7 million for the three and nine months ended September 30, 2004, respectively. For the three and nine months ended September 30, 2005, net charge-offs totaled $832,000 and $1.6 million, respectively, compared with net charge-offs of $1.3 million and $2.6 million for the same 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 76 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 October 28, 2005 regarding highlights of the Company's third quarter 2005 financial results. The call may be accessed by dialing 1-877-407-9210 (Domestic) or 1-201-689-8049 (International). 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 September 30, 2005 (Unaudited) and December 31, 2004 (Dollars in Thousands)
Assets September 30, 2005 December 31, 2004 --------------------------------- ---------------------------- Cash and due from banks $ 127,076 $ 121,187 Federal funds sold 60,000 16,000 Short-term investments 9,680 26,507 --------------------------------- ---------------------------- Total cash and cash equivalents 196,756 163,694 --------------------------------- ---------------------------- Investment securities (market value of $420,375 at September 30, 2005 (unaudited) and $450,071 at December 31, 2004) 421,057 445,633 Securities available for sale, at fair value 1,170,318 1,406,340 Federal Home Loan Bank stock 43,208 48,283 Loans held for sale 1,664 -- Loans 3,679,907 3,707,211 Less allowance for loan losses 32,621 33,766 --------------------------------- ---------------------------- Net loans 3,647,286 3,673,445 --------------------------------- ---------------------------- Foreclosed assets, net 421 140 Banking premises and equipment, net 62,538 64,605 Accrued interest receivable 20,893 23,865 Intangible assets 437,459 443,148 Bank-owned life insurance 109,770 105,932 Other assets 64,101 58,237 --------------------------------- ---------------------------- Total assets $ 6,175,471 $ 6,433,322 ================================= ============================ Liabilities and Stockholders' Equity Deposits: Demand deposits $ 1,142,838 $ 1,116,812 Savings deposits 1,418,168 1,538,466 Certificates of deposit of $100,000 or more 278,111 253,024 Other time deposits 1,125,231 1,142,171 --------------------------------- ---------------------------- Total deposits 3,964,348 4,050,473 Mortgage escrow deposits 18,768 15,389 Borrowed funds 1,048,387 1,166,064 Subordinated debentures 26,611 27,113 Other liabilities 38,955 37,507 --------------------------------- ---------------------------- Total liabilities 5,097,069 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 69,372,501 shares outstanding at September 30, 2005, and 74,078,784 shares outstanding at December 31, 2004 799 799 Additional paid-in capital 963,545 960,792 Retained earnings 385,685 358,678 Accumulated other comprehensive (loss) income (6,893) 3,767 Treasury stock at cost (154,152) (70,810) Unallocated common stock held by Employee Stock Ownership Plan (74,062) (76,101) Common Stock acquired by the Stock Award Plan (36,520) (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 1,078,402 1,136,776 -------------------------------- ---------------------------- Total liabilities and stockholders' equity $ 6,175,471 $ 6,433,322 ================================ ============================
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY Consolidated Statements of Income Three and Nine Months Ended September 30, 2005 and 2004 (Unaudited) (Dollars in Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------------- ---------------------------- 2005 2004 2005 2004 ------------- --------------- ------------- -------------- Interest income: Real estate secured loans $ 38,759 $ 36,978 $ 115,673 $ 84,283 Commercial loans 5,691 3,953 15,927 10,979 Consumer loans 7,889 6,552 22,390 15,948 Investment securities 4,275 4,799 12,925 14,522 Securities available for sale 12,271 14,423 38,901 32,603 Other short-term investments 103 108 419 408 Federal funds 283 95 819 469 ------------- --------------- ------------- -------------- Total interest income 69,271 66,908 207,054 159,212 ------------- --------------- ------------- -------------- Interest expense: Deposits 15,603 11,321 42,619 27,123 Borrowed funds 8,478 8,404 25,405 18,008 Subordinated debentures 379 253 1,083 253 ------------- --------------- ------------- -------------- Total interest expense 24,460 19,978 69,107 45,384 ------------- --------------- ------------- -------------- Net interest income 44,811 46,930 137,947 113,828 Provision for loan losses 100 1,050 500 2,700 ------------- --------------- ------------- -------------- Net interest income after provision for loan losses 44,711 45,880 137,447 111,128 ------------- --------------- ------------- -------------- Non-interest income: Fees 6,384 5,853 17,261 15,536 Net gain on securities transactions 213 577 151 1,312 Bank-owned life insurance 1,286 1,255 3,838 3,193 Other income (63) 515 292 2,531 ------------- --------------- ------------- -------------- Total non-interest income 7,820 8,200 21,542 22,572 ------------- --------------- ------------- -------------- Non-interest expense: Compensation and employee benefits 15,221 17,869 50,186 46,351 Net occupancy expense 4,842 4,837 14,523 12,355 Data processing expense 2,135 2,156 6,462 5,820 Amortization of intangibles 1,595 1,953 5,581 3,048 Advertising and promotion 1,086 1,853 3,290 4,897 Other operating expenses 5,151 5,672 14,593 14,612 ------------- --------------- ------------- -------------- Total non-interest expense 30,030 34,340 94,635 87,083 ------------- --------------- ------------- -------------- Income before income tax expense 22,501 19,740 64,354 46,617 Income tax expense 7,564 6,397 20,626 14,399 ------------- --------------- ------------- -------------- Net income $ 14,937 $ 13,343 $ 43,728 $ 32,218 ============= =============== ============= ============== Basic earnings per share $0.23 $0.19 $0.66 $0.54 Average basic shares outstanding 65,324,553 68,729,870 66,730,203 59,444,983 Diluted earnings per share $0.23 $0.19 $0.65 $0.54 Average diluted shares outstanding 66,081,331 69,370,675 67,487,825 59,660,492
PROVIDENT FINANCIAL SERVICES, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except share data) (Unaudited) At or for the Three At or for the Nine Months Ended Months Ended September 30, September 30, ------------------------------------------------------------- 2005 2004 2005 2004 ---- ---- ---- ---- INCOME STATEMENT: Net interest income $44,811 $46,930 $137,947 $113,828 Provision for loan losses 100 1,050 500 2,700 Non-interest income 7,820 8,200 21,542 22,572 Non-interest expense 30,030 34,340 94,635 87,083 Income before income tax expense 22,501 19,740 64,354 46,617 Net income 14,937 13,343 43,728 32,218 Basic earnings per share $0.23 $0.19 $0.66 $0.54 Diluted earnings per share $0.23 $0.19 $0.65 $0.54 Interest rate spread 2.98% 3.19% 3.04% 3.08% Net interest margin 3.31% 3.43% 3.35% 3.41% PROFITABILITY: Annualized return on average assets 0.96% 0.87% 0.93% 0.88% Annualized return on average equity 5.42% 5.16% 5.28% 4.84% Annualized non-interest expense to average assets 1.93% 2.21% 2.02% 2.37% Efficiency ratio (1) 57.06% 62.29% 59.34% 63.84% ASSET QUALITY: Non-performing loans $6,465 $4,889 Foreclosed assets 421 32 Non-performing loans to total loans 0.18% 0.13% Non-performing assets to total assets 0.11% 0.08% Allowance for loan losses $32,621 $33,630 Allowance for loan losses to non-performing loans 504.58% 687.92% Allowance for loan losses to total loans 0.89% 0.90% AVERAGE BALANCE SHEET DATA: Assets $6,188,773 $6,154,411 $6,266,827 $4,886,347 Loans, net 3,659,764 3,405,859 3,658,180 2,636,690 Earning assets 5,402,747 5,442,634 5,481,589 4,461,198 Core deposits 2,566,915 2,540,794 2,581,520 2,019,111 Borrowings 1,103,611 1,173,304 1,131,788 854,321 Interest-bearing liabilities 4,565,435 4,670,130 4,635,726 3,591,234 Stockholders' equity 1,092,876 1,034,078 1,108,125 889,517 Average yield on interest- earning assets 5.11% 4.89% 5.03% 4.77% Average cost of interest- bearing liabilities 2.13% 1.70% 1.99% 1.69%
Notes (1) Efficiency Ratio Calculation
Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2005 2004 2005 2004 ---- ---- ---- ---- Net interest income $44,811 $46,930 $137,947 $113,828 Non-interest income 7,820 8,200 21,542 22,572 --------- --------- ---------- ---------- Total income $52,631 $55,130 $159,489 $136,400 ====== ====== ======= ======= Non-interest expense $30,030 $34,340 $ 94,635 $ 87,083 ====== ====== ====== ====== Expense/Income: 57.06% 62.29% 59.34% 63.84% ====== ====== ====== ======
Average Quarterly Balances NET INTEREST MARGIN ANALYSIS (Unaudited) (Dollars in Thousands) September 30, 2005 June 30, 2005 ------------------ ------------- Average Average Average Average Balance Interest Yield Balance Interest Yield --------------------------------------- --------------------------------- Interest-Earning Assets: Federal Funds Sold and Other Short-Term Investments $ 46,332 $ 386 3.31% $ 82,202 $ 588 2.87% Investment Securities (1) 429,596 4,275 3.99% 425,340 4,218 3.97% Securities Available for Sale 1,222,842 11,705 3.83% 1,276,344 12,302 3.86% Federal Home Loan Bank Stock 44,213 566 5.08% 45,423 548 4.84% Net Loans (2) Total Mortgage Loans 2,747,397 38,759 5.63% 2,772,638 38,636 5.57% Total Commercial Loans 371,342 5,691 6.00% 356,216 5,283 5.87% Total Consumer Loans 541,025 7,889 5.79% 531,252 7,251 5.47% ------------- ------------ ----------- ---------- Total Interest-Earning Assets 5,402,747 69,271 5.11% 5,489,415 68,826 5.01% ------------- ------------ ----------- ---------- Non-Interest Earning Assets: Cash and Due from Banks 102,519 101,294 Other Assets 683,507 683,839 ------------- ----------- Total Assets $ 6,188,773 $ 6,274,548 ============= =========== Interest-Bearing Liabilities: Demand Deposits $ 614,294 1,698 1.10% $ 606,275 1,245 0.82% Savings Deposits 1,468,944 4,119 1.11% 1,520,867 4,004 1.06% Time Deposits 1,378,586 9,786 2.82% 1,393,860 8,862 2.55% ------------- ------------ ----------- ---------- Total Deposits 3,461,824 15,603 1.79% 3,521,002 14,111 1.61% ------------- ------------ ----------- ---------- Borrowed Funds 1,103,611 8,857 3.18% 1,124,017 8,744 3.12% ------------- ------------ ----------- ---------- Total Borrowings 1,103,611 8,857 3.18% 1,124,017 8,744 3.12% ------------- ------------ ----------- ---------- Total Interest-Bearing Liabilities 4,565,435 24,460 2.13% 4,645,019 22,855 1.97% ------------- ------------ ----------- ---------- Non-Interest Bearing Liabilities 530,462 523,149 ------------- ----------- Total Liabilities 5,095,897 5,168,168 Stockholders' Equity 1,092,876 1,106,380 ------------- ----------- Total Liabilities & Stockholders' Equity $ 6,188,773 $ 6,274,548 ============= =========== Net interest income $ 44,811 $ 45,971 ============ ========== Net interest rate spread 2.98% 3.04% ==== ==== Net interest-earning assets $ 837,312 $ 844,396 ============= =========== Net interest margin (3) 3.31% 3.34% ==== ==== 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.
9/30/05 6/30/05 3/31/05 12/31/04 9/30/04 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. Interest-Earning Assets: Securities 3.88% 3.86% 3.90% 3.76% 3.79% Net Loans 5.69% 5.58% 5.53% 5.52% 5.55% Total Interest-Earning Assets 5.11% 5.01% 4.97% 4.90% 4.89% Interest-Bearing Liabilities: Total Deposits 1.79% 1.61% 1.48% 1.37% 1.29% Total Borrowings 3.18% 3.12% 3.08% 3.01% 2.94% Total Interest-Bearing Liabilities 2.13% 1.97% 1.88% 1.79% 1.70% Interest Rate Spread 2.98% 3.04% 3.09% 3.11% 3.19% Net Interest Margin 3.31% 3.34% 3.38% 3.38% 3.43% Ratio of Interest-Earning Assets to Total Interest-Bearing Liabilities 1.18x 1.18x 1.18x 1.18x 1.17x
Average YTD Balances NET INTEREST MARGIN ANALYSIS (Unaudited)(Dollars in Thousands)
September 30, 2005 June 30, 2005 ------------------ ------------- Average Average Average Average Balance Interest Yield Balance Interest Yield --------------------------------------- --------------------------------- Interest-Earning Assets: Federal Funds Sold and Other Short-Term Investments $ 58,256 $ 1,238 2.84% $ 106,645 $ 877 1.10% Investment Securities (1) 431,567 12,925 4.00% 494,534 14,522 3.92% Securities Available for Sale 1,287,927 37,399 3.87% 1,185,256 32,192 3.63% Federal Home Loan Bank Stock 45,659 1,502 4.40% 38,073 411 1.44% Net Loans (2) Total Mortgage Loans 2,768,364 115,673 5.57% 1,960,222 84,283 5.74% Total Commercial Loans 358,960 15,927 5.85% 314,134 10,979 4.67% Total Consumer Loans 530,856 22,390 5.64% 362,334 15,948 5.88% ------------- ------------ ----------- ---------- Total Interest-Earning Assets 5,481,589 207,054 5.03% 4,461,198 159,212 4.77% ------------- ------------ ----------- ---------- Non-Interest Earning Assets: Cash and Due from Banks 102,015 88,748 Other Assets 683,223 336,401 ------------- ----------- Total Assets $ 6,266,827 $ 4,886,347 ============= =========== Interest-Bearing Liabilities: Demand Deposits $ 611,943 4,139 0.90% $ 508,172 3,143 0.83% Savings Deposits 1,502,628 11,745 1.05% 1,155,000 7,327 0.85% Time Deposits 1,389,367 26,735 2.57% 1,073,741 16,653 2.07% ------------- ------------ ----------- ---------- Total Deposits 3,503,938 42,619 1.63% 2,736,913 27,123 1.32% ------------- ------------ ----------- ---------- Borrowed Funds 1,131,788 26,488 3.13% 854,321 18,261 2.86% ------------- ------------ ----------- ---------- Total Borrowings 1,131,788 26,488 3.13% 854,321 18,261 2.86% ------------- ------------ ----------- ---------- Total Interest-Bearing Liabilities 4,635,726 69,107 1.99% 3,591,234 45,384 1.69% ------------- ------------ ----------- ---------- Non-Interest Bearing Liabilities 522,976 405,596 ------------- ----------- Total Liabilities 5,158,702 3,996,830 Stockholders' Equity 1,108,125 889,517 ------------- ----------- Total Liabilities & Stockholders' Equity $ 6,266,827 $ 4,886,347 ============= =========== Net interest income $ 137,947 $ 113,828 ============ ========== Net interest rate spread 3.04% 3.08% ==== ==== Net interest-earning assets $ 845,863 $ 869,964 ============= =========== Net interest margin (3) 3.35% 3.41% ==== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.18x 1.24x ============= =========== - ---------------------------------------------- (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.
Nine Months Ended --------------------------------------- 9/30/05 9/30/04 9/30/03 ------- ------- ------- Interest-Earning Assets: Securities 3.88% 3.51% 3.26% Net Loans 5.60% 5.63% 6.28% Total Interest-Earning Assets 5.03% 4.77% 4.82% Interest-Bearing Liabilities: Total Deposits 1.63% 1.32% 1.76% Total Borrowings 3.13% 2.86% 2.77% Total Interest-Bearing Liabilities 1.99% 1.69% 1.95% Interest Rate Spread 3.04% 3.08% 2.87% Net Interest Margin 3.35% 3.41% 3.35% Ratio of Interest-Earning Assets to Total Interest-Bearing Liabilities 1.18x 1.24x 1.33x
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