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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D. C. 20549
For Quarter
Ended September 30, 2007 |
Commission File Number: 0-10140 |
California |
95-3629339 |
|||||
(State or
other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|||||
701 North
Haven Ave, Suite 350, Ontario, California |
91764 |
|||||
(Address of
Principal Executive Offices) |
(Zip Code) |
|||||
(Registrants telephone number, including area code) |
(909) 980-4030 |
PART
I FINANCIAL INFORMATION (UNAUDITED) |
||||||||||
ITEM
1. |
FINANCIAL STATEMENTS |
|||||||||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
||||||||||
ITEM
2. |
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|||||||||
GENERAL |
||||||||||
OVERVIEW |
||||||||||
CRITICAL ACCOUNTING POLICIES |
||||||||||
ANALYSIS OF THE RESULTS OF OPERATIONS ANALYSIS OF FINANCIAL CONDITION |
||||||||||
RISK
MANAGEMENT |
||||||||||
RESULTS BY BUSINESS SEGMENTS |
||||||||||
ITEM
3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|||||||||
ITEM
4. |
CONTROLS AND PROCEDURES |
|||||||||
PART
II OTHER INFORMATION |
||||||||||
ITEM
1. |
LEGAL PROCEEDINGS |
|||||||||
ITEM
1A. |
RISK
FACTORS |
|||||||||
ITEM
2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|||||||||
ITEM
3. |
DEFAULTS UPON SENIOR SECURITIES |
|||||||||
ITEM
4. |
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
|||||||||
ITEM
5. |
OTHER INFORMATION |
|||||||||
ITEM
6. |
EXHIBITS |
|||||||||
SIGNATURES |
September 30, 2007 |
December 31, 2006 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
ASSETS |
||||||||||
Cash and due
from banks |
$ | 125,997 | $ | 146,411 | ||||||
Investment
securities available-for-sale |
2,390,306 | 2,582,902 | ||||||||
Interest-bearing balances due from depository institutions |
570 | | ||||||||
Investment in
stock of Federal Home Loan Bank (FHLB) |
80,743 | 78,866 | ||||||||
Loans and
lease finance receivables, net |
3,311,749 | 3,070,196 | ||||||||
Allowance for
credit losses |
(30,428 | ) | (27,737 | ) | ||||||
Total earning
assets |
5,752,940 | 5,704,227 | ||||||||
Premises and
equipment, net |
47,048 | 44,963 | ||||||||
Intangibles |
21,858 | 10,121 | ||||||||
Goodwill |
46,582 | 31,531 | ||||||||
Cash value
life insurance |
102,434 | 99,861 | ||||||||
Accrued
interest receivable |
30,091 | 29,146 | ||||||||
Deferred tax
asset |
11,627 | 13,620 | ||||||||
Other
assets |
18,816 | 12,368 | ||||||||
TOTAL
ASSETS |
$ | 6,157,393 | $ | 6,092,248 | ||||||
LIABILITIES
AND STOCKHOLDERS EQUITY |
||||||||||
Liabilities: |
||||||||||
Deposits: |
||||||||||
Noninterest-bearing |
$ | 1,292,825 | $ | 1,363,411 | ||||||
Interest-bearing |
2,142,262 | 2,043,397 | ||||||||
Total
deposits |
3,435,087 | 3,406,808 | ||||||||
Demand Note
to U.S. Treasury |
180 | 7,245 | ||||||||
Repurchase
agreements |
580,666 | 344,350 | ||||||||
Short-term
borrowings |
340,500 | 1,094,900 | ||||||||
Long-term
borrowings |
1,205,000 | 700,000 | ||||||||
Accrued
interest payable |
19,146 | 16,156 | ||||||||
Deferred
compensation |
8,228 | 7,946 | ||||||||
Junior
subordinated debentures |
115,859 | 108,250 | ||||||||
Other
liabilities |
45,910 | 19,268 | ||||||||
TOTAL
LIABILITIES |
5,750,576 | 5,704,923 | ||||||||
COMMITMENTS
AND CONTINGENCIES |
||||||||||
Stockholders Equity: |
||||||||||
Preferred
stock, authorized, 20,000,000 shares without par; none issued or outstanding |
| | ||||||||
Common stock,
authorized, 122,070,312 shares without par; issued and outstanding 83,353,404 (2007) and 84,281,722 (2006) |
356,220 | 366,082 | ||||||||
Retained
earnings |
60,271 | 34,464 | ||||||||
Accumulated
other comprehensive loss, net of tax |
(9,674 | ) | (13,221 | ) | ||||||
Total
stockholders equity |
406,817 | 387,325 | ||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 6,157,393 | $ | 6,092,248 |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
2007 |
2006 |
|||||||||||||||||||
Interest
income: |
||||||||||||||||||||||
Loans,
including fees |
$ | 58,677 | $ | 50,564 | $ | 165,117 | $ | 142,769 | ||||||||||||||
Investment
securities: |
||||||||||||||||||||||
Taxable |
20,591 | 24,725 | 65,401 | 66,625 | ||||||||||||||||||
Tax-preferred |
7,493 | 6,510 | 22,029 | 19,563 | ||||||||||||||||||
Total
investment income |
28,084 | 31,235 | 87,430 | 86,188 | ||||||||||||||||||
Dividends
from FHLB stock |
1,047 | 958 | 3,152 | 2,672 | ||||||||||||||||||
Federal funds
sold and Interest bearing deposits with other institutions |
72 | 6 | 92 | 92 | ||||||||||||||||||
Total
interest income |
87,880 | 82,763 | 255,791 | 231,721 | ||||||||||||||||||
Interest
expense: |
||||||||||||||||||||||
Deposits |
18,445 | 18,903 | 53,531 | 48,398 | ||||||||||||||||||
Short-term
borrowings |
19,886 | 14,503 | 36,505 | 24,934 | ||||||||||||||||||
Long-term
borrowings |
5,853 | 5,890 | 40,437 | 24,724 | ||||||||||||||||||
Junior
subordinated debentures |
1,988 | 1,737 | 5,563 | 5,024 | ||||||||||||||||||
Total
interest expense |
46,172 | 41,033 | 136,036 | 103,080 | ||||||||||||||||||
Net interest
income before provision for credit losses |
41,708 | 41,730 | 119,755 | 128,641 | ||||||||||||||||||
Provision for
credit losses |
| 1,250 | | 2,400 | ||||||||||||||||||
Net interest
income after provision for credit losses |
41,708 | 40,480 | 119,755 | 126,241 | ||||||||||||||||||
Other
operating income: |
||||||||||||||||||||||
Service
charges on deposit accounts |
3,340 | 3,253 | 9,827 | 9,833 | ||||||||||||||||||
CitizensTrust |
1,657 | 1,807 | 5,355 | 5,467 | ||||||||||||||||||
Bankcard
services |
678 | 697 | 1,918 | 1,857 | ||||||||||||||||||
BOLI
income |
981 | 624 | 2,896 | 2,095 | ||||||||||||||||||
Other |
1,207 | 1,461 | 3,361 | 4,377 | ||||||||||||||||||
Gain on sale
of securities, net |
| 1,029 | | 1,062 | ||||||||||||||||||
Total other
operating income |
7,863 | 8,871 | 23,357 | 24,691 | ||||||||||||||||||
Other
operating expenses: |
||||||||||||||||||||||
Salaries and
employee benefits |
13,794 | 11,541 | 41,449 | 37,031 | ||||||||||||||||||
Occupancy and
Equipment |
4,605 | 3,986 | 12,905 | 11,591 | ||||||||||||||||||
Professional
services |
1,844 | 1,237 | 4,535 | 3,995 | ||||||||||||||||||
Amortization
of intangibles |
1,086 | 588 | 2,263 | 1,765 | ||||||||||||||||||
Other |
5,889 | 5,278 | 16,811 | 15,977 | ||||||||||||||||||
Total other
operating expenses |
27,218 | 22,630 | 77,963 | 70,359 | ||||||||||||||||||
Earnings
before income taxes |
22,353 | 26,721 | 65,149 | 80,573 | ||||||||||||||||||
Income
taxes |
6,232 | 8,655 | 17,932 | 25,892 | ||||||||||||||||||
Net
earnings |
$ | 16,121 | $ | 18,066 | $ | 47,217 | $ | 54,681 | ||||||||||||||
Comprehensive
income |
$ | 31,779 | $ | 50,664 | $ | 50,764 | $ | 58,357 | ||||||||||||||
Basic
earnings per common share |
$ | 0.19 | $ | 0.21 | $ | 0.56 | $ | 0.65 | ||||||||||||||
Diluted
earnings per common share |
$ | 0.19 | $ | 0.21 | $ | 0.56 | $ | 0.64 | ||||||||||||||
Cash
dividends per common share |
$ | 0.085 | $ | 0.09 | $ | 0.255 | $ | 0.27 |
Common Shares Outstanding |
Common Stock |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Comprehensive Income |
Total |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(amounts and shares in thousands) | |||||||||||||||||||||||||||
Balance
January 1, 2007 |
84,282 | $ | 366,082 | $ | 34,464 | $ | (13,221 | ) | $ | 387,325 | |||||||||||||||||
Issuance of
common stock |
185 | 1,053 | 1,053 | ||||||||||||||||||||||||
Repurchase of
common stock |
(2,720 | ) | (30,030 | ) | (30,030 | ) | |||||||||||||||||||||
Shares issued
for the acquisition of |
|||||||||||||||||||||||||||
First Coastal
Bancshares |
1,606 | 18,046 | 18,046 | ||||||||||||||||||||||||
Tax benefit
from exercise of stock options |
317 | 317 | |||||||||||||||||||||||||
Stock-based
Compensation Expense |
752 | 752 | |||||||||||||||||||||||||
Cash
dividends ($0.255 per share) |
(21,410 | ) | (21,410 | ) | |||||||||||||||||||||||
Comprehensive
income: |
|||||||||||||||||||||||||||
Net
earnings |
47,217 | $ | 47,217 | 47,217 | |||||||||||||||||||||||
Other
comprehensive income: |
|||||||||||||||||||||||||||
Unrealized
gain on securities available-for-sale, net |
3,547 | 3,547 | 3,547 | ||||||||||||||||||||||||
Comprehensive
income |
$ | 50,764 | |||||||||||||||||||||||||
Balance
September 30, 2007 |
83,353 | $ | 356,220 | $ | 60,271 | $ | (9,674 | ) | $ | 406,817 |
Common Shares Outstanding |
Common Stock |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Comprehensive Income |
Total |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(amounts and shares in thousands) | |||||||||||||||||||||||||||
Balance
January 1, 2006 |
76,430 | $ | 252,717 | $ | 102,858 | $ | (13,386 | ) | $ | 342,189 | |||||||||||||||||
Issuance of
common stock |
140 | 698 | 698 | ||||||||||||||||||||||||
Tax benefit
from exercise of stock options |
141 | 141 | |||||||||||||||||||||||||
Stock-based
Compensation Expense |
596 | 596 | |||||||||||||||||||||||||
Cash
dividends ($0.27 per share) |
(20,710 | ) | (20,710 | ) | |||||||||||||||||||||||
Comprehensive
income: |
|||||||||||||||||||||||||||
Net
earnings |
54,681 | $ | 54,681 | 54,681 | |||||||||||||||||||||||
Other
comprehensive income: |
|||||||||||||||||||||||||||
Unrealized
gain on securities available-for-sale, net |
3,676 | 3,676 | 3,676 | ||||||||||||||||||||||||
Comprehensive
income |
$ | 58,357 | |||||||||||||||||||||||||
Balance
September 30, 2006 |
76,570 | $ | 254,152 | $ | 136,829 | $ | (9,710 | ) | $ | 381,271 |
At September 30, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
||||||||||
(amounts and shares in thousands) | |||||||||||
Disclosure of reclassification amount |
|||||||||||
Unrealized
gains on securities arising during the period |
$ | 6,115 | $ | 6,335 | |||||||
Tax
expense |
(2,568 | ) | (2,659 | ) | |||||||
Net
unrealized gain on securities |
$ | 3,547 | $ | 3,676 |
For the Nine Months Ended September 30, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
||||||||||
(Dollar amounts in thousands) | |||||||||||
CASH FLOWS
FROM OPERATING ACTIVITIES: |
|||||||||||
Interest and
dividends received |
$ | 255,894 | $ | 228,030 | |||||||
Service
charges and other fees received |
23,810 | 22,854 | |||||||||
Interest
paid |
(133,047 | ) | (101,873 | ) | |||||||
Cash paid to
vendors and employees |
(76,484 | ) | (62,208 | ) | |||||||
Income taxes
paid |
(11,250 | ) | (20,750 | ) | |||||||
Net cash
provided by operating activities |
58,923 | 66,053 | |||||||||
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|||||||||||
Proceeds from
sale of FHLB Stock |
3,712 | | |||||||||
Proceeds from
sales of MBS |
| 57,132 | |||||||||
Proceeds from
repayment of MBS |
338,605 | 297,193 | |||||||||
Proceeds from
repayment of Fed Funds Sold |
52,000 | | |||||||||
Proceeds from
maturity of investment securities |
35,955 | 4,368 | |||||||||
Purchases of
investment securities available-for-sale |
(72,608 | ) | (193,887 | ) | |||||||
Purchases of
MBS |
(85,907 | ) | (456,648 | ) | |||||||
Purchases of
FHLB stock |
(2,927 | ) | (4,629 | ) | |||||||
Net increase
in loans and lease finance receivables |
(101,124 | ) | (246,985 | ) | |||||||
Proceeds from
sales of premises and equipment |
111 | 766 | |||||||||
Purchase of
premises and equipment |
(5,935 | ) | (9,425 | ) | |||||||
Cash paid for
purchase of First Coastal Bancshares, net of cash acquired |
(743 | ) | | ||||||||
Purchase of
Bank Owned Life Insurance |
| (25,000 | ) | ||||||||
Investment in
common stock of CVB Statutory Trust III |
| (774 | ) | ||||||||
Net cash
provided by/(used in) investing activities |
161,139 | (577,889 | ) | ||||||||
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|||||||||||
Net decrease
in transaction deposits |
(145,032 | ) | (135,619 | ) | |||||||
Net
(decrease)/increase in time deposits |
(20,226 | ) | 235,051 | ||||||||
Advances from
Federal Home Loan Bank |
600,000 | 350,000 | |||||||||
Repayment of
advances from Federal Home Loan Bank |
(480,000 | ) | (445,000 | ) | |||||||
Net
(decrease) increase in short-term borrowings |
(381,464 | ) | 498,577 | ||||||||
Net increase
in repurchase agreements |
236,316 | | |||||||||
Cash
dividends on common stock |
(21,410 | ) | (20,710 | ) | |||||||
Repurchase of
common stock |
(30,030 | ) | | ||||||||
Issuance of
junior subordinated debentures |
| 25,774 | |||||||||
Proceeds from
exercise of stock options |
1,053 | 698 | |||||||||
Tax benefit
related to exercise of stock options |
317 | 141 | |||||||||
Net cash
(used in)/provided by financing activities |
(240,476 | ) | 508,912 | ||||||||
NET DECREASE
IN CASH AND CASH EQUIVALENTS |
(20,414 | ) | (2,924 | ) | |||||||
CASH AND CASH
EQUIVALENTS, beginning of period |
146,411 | 130,141 | |||||||||
CASH AND CASH
EQUIVALENTS, end of period |
$ | 125,997 | $ | 127,217 |
For the Nine Months Ended September 30, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
||||||||||
(Dollar amounts in thousands) | |||||||||||
RECONCILIATION OF NET EARNINGS TO NET CASH PROVIDED BY |
|||||||||||
OPERATING
ACTIVITIES: |
|||||||||||
Net
earnings |
$ | 47,217 | $ | 54,681 | |||||||
Adjustments
to reconcile net earnings to net cash provided by operating activities: |
|||||||||||
Gain on sale
of investment securities |
| (1,062 | ) | ||||||||
Gain on sale
of premises and equipment |
(15 | ) | (441 | ) | |||||||
Increase in
cash value of life insurance |
(3,127 | ) | (2,095 | ) | |||||||
Net
amortization of premiums on investment securities |
2,454 | 5,983 | |||||||||
Provisions
for credit losses |
| 2,400 | |||||||||
Stock-based
compensation |
752 | 596 | |||||||||
Depreciation
and amortization |
7,097 | 6,020 | |||||||||
Change in
accrued interest receivable |
(2,583 | ) | (6,844 | ) | |||||||
Change in
accrued interest payable |
2,990 | 1,207 | |||||||||
Change in
other assets and liabilities |
4,138 | 5,608 | |||||||||
Total
adjustments |
11,706 | 11,372 | |||||||||
NET CASH
PROVIDED BY OPERATING ACTIVITIES |
$ | 58,923 | $ | 66,053 | |||||||
Supplemental
Schedule of Noncash Investing and Financing Activities |
|||||||||||
Purchase of
First Coastal Bancshares: |
|||||||||||
Assets
acquired |
$ | 194,125 | $ | | |||||||
Goodwill
& Intangibles |
29,051 | | |||||||||
Liabilities
assumed |
(204,387 | ) | | ||||||||
Stock
issued |
(18,046 | ) | | ||||||||
Purchase
price of acquisition, net of cash received |
$ | 743 | $ | | |||||||
Securities
purchased and not settled |
$ | 22,515 | $ | 4,029 |
1. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2007 |
2006 |
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Income (Numerator) |
Weighted Average Shares (Denominator) |
Per Share Amount |
Income (Numerator) |
Weighted Average Shares (Denominator) |
Per Share Amount |
||||||||||||||||||||||
BASIC
EPS |
|||||||||||||||||||||||||||
Income
available to common stockholders |
$ | 47,217 | 83,716 | $ | 0.56 | $ | 54,681 | 84,136 | $ | 0.65 | |||||||||||||||||
EFFECT OF
DILUTIVE SECURITIES |
|||||||||||||||||||||||||||
Incremental
shares from assumed exercise of outstanding options |
| 657 | (0.00 | ) | | 795 | (0.01 | ) | |||||||||||||||||||
DILUTED
EPS |
|||||||||||||||||||||||||||
Income
available to common stockholders |
$ | 47,217 | 84,373 | $ | 0.56 | $ | 54,681 | 84,931 | $ | 0.64 |
2007 |
2006 |
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Income (Numerator) |
Weighted Average Shares (Denominator) |
Per Share Amount |
Income (Numerator) |
Weighted Average Shares (Denominator) |
Per Share Amount |
||||||||||||||||||||||
BASIC
EPS |
|||||||||||||||||||||||||||
Income
available to common stockholders |
$ | 16,121 | 84,373 | $ | 0.19 | $ | 18,066 | 84,160 | $ | 0.21 | |||||||||||||||||
EFFECT OF
DILUTIVE SECURITIES |
|||||||||||||||||||||||||||
Incremental
shares from assumed exercise of outstanding options |
| 357 | 0.00 | | 910 | 0.00 | |||||||||||||||||||||
DILUTED
EPS |
|||||||||||||||||||||||||||
Income
available to common stockholders |
$ | 16,121 | 84,730 | $ | 0.19 | $ | 18,066 | 85,070 | $ | 0.21 |
Three Months Ended September 30, 2007 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Business Financial Centers |
Treasury |
Other |
Eliminations |
Total |
|||||||||||||||||||
Interest
income, including loan fees |
$ | 45,362 | $ | 29,224 | $ | 13,294 | $ | | $ | 87,880 | |||||||||||||
Credit for
funds provided (1) |
16,266 | | 3,764 | (20,030 | ) | | |||||||||||||||||
Total
interest income |
61,628 | 29,224 | 17,058 | (20,030 | ) | 87,880 | |||||||||||||||||
Interest
expense |
17,025 | 24,113 | 5,034 | | 46,172 | ||||||||||||||||||
Charge for
funds used (1) |
4,477 | 8,365 | 7,188 | (20,030 | ) | | |||||||||||||||||
Total
interest expense |
21,502 | 32,478 | 12,222 | (20,030 | ) | 46,172 | |||||||||||||||||
Net interest
income |
40,126 | (3,254 | ) | 4,836 | | 41,708 | |||||||||||||||||
Provision for
credit losses |
| | | | | ||||||||||||||||||
Net interest
income after provision for credit losses |
$ | 40,126 | ($3,254 | ) | $ | 4,836 | $ | | $ | 41,708 | |||||||||||||
Non-interest
income |
4,628 | 1 | 3,234 | | 7,863 | ||||||||||||||||||
Non-interest
expense |
11,515 | 312 | 15,391 | | 27,218 | ||||||||||||||||||
Segment
pretax profit (loss) |
$ | 33,239 | ($3,565 | ) | ($7,321 | ) | $ | | $ | 22,353 |
Three Months Ended September 30, 2006 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Business Financial Centers |
Treasury |
Other |
Eliminations |
Total |
|||||||||||||||||||
Interest
income, including loan fees |
$ | 32,518 | $ | 32,213 | $ | 18,032 | $ | | $ | 82,763 | |||||||||||||
Credit for
funds provided (1) |
16,809 | | 1,466 | (18,275 | ) | | |||||||||||||||||
Total
interest income |
49,327 | 32,213 | 19,498 | (18,275 | ) | 82,763 | |||||||||||||||||
Interest
expense |
14,100 | 24,725 | 2,208 | | 41,033 | ||||||||||||||||||
Charge for
funds used (1) |
2,020 | 4,761 | 11,494 | (18,275 | ) | | |||||||||||||||||
Total
interest expense |
16,120 | 29,486 | 13,702 | (18,275 | ) | 41,033 | |||||||||||||||||
Net interest
income |
33,207 | 2,727 | 5,796 | | 41,730 | ||||||||||||||||||
Provision for
credit losses |
| | 1,250 | | 1,250 | ||||||||||||||||||
Net interest
income after provision for credit losses |
$ | 33,207 | $ | 2,727 | $ | 4,546 | $ | | $ | 40,480 | |||||||||||||
Non-interest
income |
3,993 | 1,029 | 3,849 | | 8,871 | ||||||||||||||||||
Non-interest
expense |
10,246 | 291 | 12,093 | | 22,630 | ||||||||||||||||||
Segment
pretax profit (loss) |
$ | 26,954 | $ | 3,465 | ($3,698 | ) | $ | | $ | 26,721 |
(1) |
Credit for funds provided and charge for funds used is eliminated in the consolidated presentation. |
Nine Months Ended September 30, 2007 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Business Financial Centers |
Treasury |
Other |
Eliminations |
Total |
|||||||||||||||||||
Interest
income, including loan fees |
$ | 127,191 | $ | 90,727 | $ | 37,873 | $ | | $ | 255,791 | |||||||||||||
Credit for
funds provided (1) |
47,252 | | 10,876 | (58,128 | ) | | |||||||||||||||||
Total
interest income |
174,443 | 90,727 | 48,749 | (58,128 | ) | 255,791 | |||||||||||||||||
Interest
expense |
47,655 | 74,737 | 13,644 | | 136,036 | ||||||||||||||||||
Charge for
funds used (1) |
11,292 | 24,198 | 22,638 | (58,128 | ) | | |||||||||||||||||
Total
interest expense |
58,947 | 98,935 | 36,282 | (58,128 | ) | 136,036 | |||||||||||||||||
Net interest
income |
115,496 | (8,208 | ) | 12,467 | | 119,755 | |||||||||||||||||
Provision for
credit losses |
| | | | |||||||||||||||||||
Net interest
income after provision for credit losses |
$ | 115,496 | ($8,208 | ) | $ | 12,467 | $ | | $ | 119,755 | |||||||||||||
Non-interest
income |
13,586 | 1 | 9,770 | | 23,357 | ||||||||||||||||||
Non-interest
expense |
32,695 | 857 | 44,411 | | 77,963 | ||||||||||||||||||
Segment
pretax profit (loss) |
$ | 96,387 | ($9,064 | ) | ($22,174 | ) | $ | | $ | 65,149 | |||||||||||||
Segment
assets as of September 30, 2007 |
$ | 3,479,527 | $ | 1,993,898 | $ | 685,927 | $ | | $ | 6,159,352 |
Nine Months Ended September 30, 2006 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Business Financial Centers |
Treasury |
Other |
Eliminations |
Total |
|||||||||||||||||||
Interest
income, including loan fees |
$ | 102,976 | $ | 88,989 | $ | 39,756 | $ | | $ | 231,721 | |||||||||||||
Credit for
funds provided (1) |
50,019 | | 5,793 | (55,812 | ) | | |||||||||||||||||
Total
interest income |
152,995 | 88,989 | 45,549 | (55,812 | ) | 231,721 | |||||||||||||||||
Interest
expense |
36,002 | 60,710 | 6,368 | | 103,080 | ||||||||||||||||||
Charge for
funds used (1) |
5,496 | 18,613 | 31,703 | (55,812 | ) | | |||||||||||||||||
Total
interest expense |
41,498 | 79,323 | 38,071 | (55,812 | ) | 103,080 | |||||||||||||||||
Net interest
income |
111,497 | 9,666 | 7,478 | | 128,641 | ||||||||||||||||||
Provision for
credit losses |
| | 2,400 | 2,400 | |||||||||||||||||||
Net interest
income after provision for credit losses |
$ | 111,497 | $ | 9,666 | $ | 5,078 | $ | | $ | 126,241 | |||||||||||||
Non-interest
income |
11,384 | 1,063 | 12,244 | | 24,691 | ||||||||||||||||||
Non-interest
expense |
29,877 | 800 | 39,682 | | 70,359 | ||||||||||||||||||
Segment
pretax profit (loss) |
$ | 93,004 | $ | 9,929 | ($22,360 | ) | $ | | $ | 80,573 | |||||||||||||
Segment
assets as of September 30, 2006 |
$ | 3,221,611 | $ | 2,284,708 | $ | 468,329 | $ | | $ | 5,974,648 |
(1) |
Credit for funds provided and charge for funds used is eliminated in the consolidated presentation. |
ITEM
2. |
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Nine-month period ended September 30, |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
||||||||||||||||||||||||||
ASSETS |
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
|||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
Investment
Securities |
|||||||||||||||||||||||||||
Taxable |
$ | 1,746,192 | $ | 65,401 | 5.00 | % | $ | 1,885,771 | $ | 66,625 | 4.72 | % | |||||||||||||||
Tax
preferenced (1) |
663,680 | 22,029 | 5.92 | % | 591,343 | 19,563 | 5.94 | % | |||||||||||||||||||
Investment in
FHLB stock |
81,041 | 3,152 | 5.19 | % | 73,333 | 2,672 | 4.86 | % | |||||||||||||||||||
Federal Funds
Sold & Interest Bearing |
|||||||||||||||||||||||||||
Deposits with
other institutions |
2,010 | 92 | 6.10 | % | 2,464 | 92 | 4.98 | % | |||||||||||||||||||
Loans (2)
(3) |
3,178,242 | 165,117 | 6.95 | % | 2,759,778 | 142,769 | 6.92 | % | |||||||||||||||||||
Total Earning
Assets |
5,671,165 | 255,791 | 6.20 | % | 5,312,689 | 231,721 | 6.00 | % | |||||||||||||||||||
Total Non
Earning Assets |
380,047 | 360,633 | |||||||||||||||||||||||||
Total
Assets |
$ | 6,051,212 | $ | 5,673,322 | |||||||||||||||||||||||
LIABILITIES
AND STOCKHOLDERS EQUITY |
|||||||||||||||||||||||||||
Savings
Deposits (4) |
$ | 1,290,946 | $ | 24,531 | 2.54 | % | $ | 1,210,910 | $ | 18,769 | 2.07 | % | |||||||||||||||
Time
Deposits |
854,353 | 29,000 | 4.54 | % | 939,699 | 29,629 | 4.22 | % | |||||||||||||||||||
Total
Deposits |
2,145,299 | 53,531 | 3.34 | % | 2,150,609 | 48,398 | 3.01 | % | |||||||||||||||||||
Other
Borrowings |
2,174,278 | 82,505 | 5.00 | % | 1,749,222 | 54,682 | 4.12 | % | |||||||||||||||||||
Interest
Bearing Liabilities |
4,319,577 | 136,036 | 4.18 | % | 3,899,831 | 103,080 | 3.51 | % | |||||||||||||||||||
Non-interest
bearing deposits |
1,289,429 | 1,358,135 | |||||||||||||||||||||||||
Other
Liabilities |
43,210 | 62,800 | |||||||||||||||||||||||||
Stockholders Equity |
398,996 | 352,556 | |||||||||||||||||||||||||
Total
Liabilities and Stockholders Equity |
$ | 6,051,212 | $ | 5,673,322 | |||||||||||||||||||||||
Net interest
income |
$ | 119,755 | $ | 128,641 | |||||||||||||||||||||||
Net interest
spread tax equivalent |
2.02 | % | 2.49 | % | |||||||||||||||||||||||
Net interest
margin |
2.84 | % | 3.26 | % | |||||||||||||||||||||||
Net interest
margin tax equivalent |
3.02 | % | 3.42 | % | |||||||||||||||||||||||
Net interest
margin excluding loan fees |
2.79 | % | 3.18 | % | |||||||||||||||||||||||
Net interest
margin excluding loan fees tax equivalent |
2.92 | % | 3.30 | % |
(1) |
Includes tax-exempt income of $7.4 million for 2007 and $6.4 million for 2006. Non tax equivalent rate was 4.43% for 2007 and 4.47% for 2006. |
(2) |
Loan fees are included in total interest income as follows, (000)s omitted: 2007, $4,106; 2006, $4,633 |
(3) |
Non performing loans are included in net loans as follows, (000)s omitted: 2007, $3,474; 2006, $0 |
(4) |
Includes interest bearing demand and money market accounts |
Three-month period ended September 30, |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
||||||||||||||||||||||||||
ASSETS |
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
|||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
Investment
Securities |
|||||||||||||||||||||||||||
Taxable |
$ | 1,643,382 | $ | 20,591 | 5.02 | % | $ | 2,018,439 | $ | 24,725 | 4.99 | % | |||||||||||||||
Tax
preferenced (1) |
671,883 | 7,493 | 5.97 | % | 602,341 | 6,510 | 5.81 | % | |||||||||||||||||||
Investment in
FHLB stock |
81,410 | 1,047 | 5.03 | % | 75,118 | 958 | 4.99 | % | |||||||||||||||||||
Federal Funds
Sold & Interest Bearing |
|||||||||||||||||||||||||||
Deposits with
other institutions |
5,377 | 72 | 5.24 | % | 32 | 6 | 73.37 | % | |||||||||||||||||||
Loans (2)
(3) |
3,327,462 | 58,677 | 7.00 | % | 2,857,573 | 50,564 | 7.02 | % | |||||||||||||||||||
Total Earning
Assets |
5,729,514 | 87,880 | 6.28 | % | 5,553,503 | 82,763 | 6.13 | % | |||||||||||||||||||
Total Non
Earning Assets |
399,936 | 378,083 | |||||||||||||||||||||||||
Total
Assets |
$ | 6,129,450 | $ | 5,931,586 | |||||||||||||||||||||||
LIABILITIES
AND STOCKHOLDERS EQUITY |
|||||||||||||||||||||||||||
Savings
Deposits (4) |
$ | 1,299,069 | $ | 8,218 | 2.51 | % | $ | 1,201,319 | $ | 7,137 | 2.36 | % | |||||||||||||||
Time
Deposits |
901,710 | 10,227 | 4.50 | % | 1,032,525 | 11,766 | 4.52 | % | |||||||||||||||||||
Total
Deposits |
2,200,779 | 18,445 | 3.33 | % | 2,233,844 | 18,903 | 3.36 | % | |||||||||||||||||||
Other
Borrowings |
2,165,624 | 27,727 | 5.01 | % | 1,914,016 | 22,130 | 4.52 | % | |||||||||||||||||||
Interest
Bearing Liabilities |
4,366,403 | 46,172 | 4.16 | % | 4,147,860 | 41,033 | 3.90 | % | |||||||||||||||||||
Non-interest
bearing deposits |
1,316,035 | 1,344,239 | |||||||||||||||||||||||||
Other
Liabilities |
47,069 | 87,216 | |||||||||||||||||||||||||
Stockholders Equity |
399,943 | 352,271 | |||||||||||||||||||||||||
Total
Liabilities and Stockholders Equity |
$ | 6,129,450 | $ | 5,931,586 | |||||||||||||||||||||||
Net interest
income |
$ | 41,708 | $ | 41,730 | |||||||||||||||||||||||
Net interest
spread tax equivalent |
2.12 | % | 2.23 | % | |||||||||||||||||||||||
Net interest
margin |
2.93 | % | 3.04 | % | |||||||||||||||||||||||
Net interest
margin tax equivalent |
3.11 | % | 3.20 | % | |||||||||||||||||||||||
Net interest
margin excluding loan fees |
2.94 | % | 3.05 | % | |||||||||||||||||||||||
Net interest
margin excluding loan fees tax equivalent |
2.99 | % | 3.09 | % |
(1) |
Includes tax-exempt income of $2.5 million for 2007 and $2.2 million for 2006. Non tax equivalent rate was 4.46% for 2007 and 4.84% for 2006. |
(2) |
Loan fees are included in total interest income as follows, (000)s omitted: 2007, $1,726; 2006, $1,600 |
(3) |
Non performing loans are included in net loans as follows, (000)s omitted: 2007, $3,474; 2006, $0 |
(4) |
Includes interest bearing demand and money market accounts |
Comparison of nine months ended September 30, 2007 Compared to 2006 Increase (Decrease) Due to |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Volume |
Rate |
Rate/ Volume |
Total |
||||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Interest
Income: |
|||||||||||||||||||
Taxable
investment securities |
$ | (4,919 | ) | $ | 3,959 | $ | (264 | ) | $ | (1,224 | ) | ||||||||
Tax-advantaged securities |
3,172 | (89 | ) | (617 | ) | 2,466 | |||||||||||||
Fed funds
sold & interest-bearing deposits with other institutions |
(17 | ) | 21 | (4 | ) | | |||||||||||||
Investment in
FHLB stock |
281 | 181 | 18 | 480 | |||||||||||||||
Loans |
21,659 | 619 | 70 | 22,348 | |||||||||||||||
Total
interest on earning assets |
20,176 | 4,691 | (797 | ) | 24,070 | ||||||||||||||
Interest
Expense: |
|||||||||||||||||||
Savings
deposits |
1,239 | 4,257 | 286 | 5,782 | |||||||||||||||
Time
deposits |
(2,694 | ) | 2,249 | (204 | ) | (649 | ) | ||||||||||||
Other
borrowings |
13,280 | 11,673 | 2,870 | 27,823 | |||||||||||||||
Total
interest on interest-bearing liabilities |
11,825 | 18,179 | 2,952 | 32,956 | |||||||||||||||
Net Interest
Income |
$ | 8,351 | $ | (13,488 | ) | $ | (3,749 | ) | $ | (8,886 | ) |
Comparison of quarters ended September 30, 2007 Compared to 2006 Increase (Decrease) Due to |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Volume |
Rate |
Rate/ Volume |
Total |
||||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Interest
Income: |
|||||||||||||||||||
Taxable
investment securities |
$ | (4,659 | ) | $ | 151 | $ | 374 | $ | (4,134 | ) | |||||||||
Tax-advantaged securities |
1,003 | 241 | (261 | ) | 983 | ||||||||||||||
Fed funds
sold & interest-bearing deposits with other institutions |
980 | (5 | ) | (909 | ) | 66 | |||||||||||||
Investment in
FHLB stock |
78 | 8 | 3 | 89 | |||||||||||||||
Loans |
8,314 | (144 | ) | (57 | ) | 8,113 | |||||||||||||
Total
interest on earning assets |
5,716 | 251 | (850 | ) | 5,117 | ||||||||||||||
Interest
Expense: |
|||||||||||||||||||
Savings
deposits |
581 | 454 | 46 | 1,081 | |||||||||||||||
Time
deposits |
(1,490 | ) | (52 | ) | 3 | (1,539 | ) | ||||||||||||
Other
borrowings |
2,906 | 2,397 | 294 | 5,597 | |||||||||||||||
Total
interest on interest-bearing liabilities |
1,997 | 2,799 | 343 | 5,139 | |||||||||||||||
Net Interest
Income |
$ | 3,719 | $ | (2,548 | ) | $ | (1,193 | ) | $ | (22 | ) |
September 30, 2007 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost |
Gross Unrealized Holding Gain |
Gross Unrealized Holding Loss |
Market Value |
Total Percent |
|||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Investment
Securities Available-for-Sale: |
|||||||||||||||||||||||
U.S. Treasury
securities |
$ | 987 | $ | 4 | $ | | $ | 991 | 0.04% | ||||||||||||||
Government
agency & government-sponsored enterprises |
66,188 | 437 | (106 | ) | 66,519 | 2.78% | |||||||||||||||||
Mortgage-backed securities |
1,037,604 | 1,764 | (21,380 | ) | 1,017,988 | 42.59% | |||||||||||||||||
CMOs /
REMICs |
616,264 | 1,762 | (3,459 | ) | 614,567 | 25.71% | |||||||||||||||||
Municipal
bonds |
685,944 | 10,787 | (6,490 | ) | 690,241 | 28.88% | |||||||||||||||||
Other
securities |
| | | | 0.00% | ||||||||||||||||||
Total
Investment Securities |
$ | 2,406,987 | $ | 14,754 | $ | (31,435 | ) | $ | 2,390,306 | 100.00% |
December 31, 2006 |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amortized Cost |
Gross Unrealized Holding Gain |
Gross Unrealized Holding Loss |
Market Value |
Total Percent |
|||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||
Investment
Securities Available-for-Sale: |
|||||||||||||||||||||||||||
U.S. Treasury
securities |
$ | 971 | $ | | $ | (1 | ) | $ | 970 | 0.04% | |||||||||||||||||
Government
agency & government-sponsored enterprises |
68,679 | 124 | (503 | ) | 68,300 | 2.64% | |||||||||||||||||||||
Mortgage-backed securities |
1,103,664 | 1,793 | (27,606 | ) | 1,077,851 | 41.73% | |||||||||||||||||||||
CMOs /
REMICs |
791,265 | 2,589 | (6,584 | ) | 787,270 | 30.48% | |||||||||||||||||||||
Municipal
bonds |
638,391 | 12,249 | (4,855 | ) | 645,785 | 25.00% | |||||||||||||||||||||
Other
securities |
2,726 | | | 2,726 | 0.11% | ||||||||||||||||||||||
Total
Investment Securities |
$ | 2,605,696 | $ | 16,755 | $ | (39,549 | ) | $ | 2,582,902 | 100.00% |
September 30, 2007 |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months |
12 months or longer |
Total |
|||||||||||||||||||||||||
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
||||||||||||||||||||||
Description of Securities |
(amounts in thousands) | ||||||||||||||||||||||||||
U.S. Treasury
Obligation |
$ | | $ | | $ | | $ | | $ | | $ | | |||||||||||||||
Government
agency & government- sponsored enterprises |
| | 10,375 | 106 | 10,375 | 106 | |||||||||||||||||||||
Mortgage-backed securities |
97,333 | 841 | 757,768 | 20,539 | 855,101 | 21,380 | |||||||||||||||||||||
CMO/REMICs |
91,235 | 487 | 315,918 | 2,972 | 407,153 | 3,459 | |||||||||||||||||||||
Municipal
bonds |
319,309 | 4,632 | 75,509 | 1,858 | 394,818 | 6,490 | |||||||||||||||||||||
$ | 507,877 | $ | 5,960 | $ | 1,159,570 | $ | 25,475 | $ | 1,667,447 | $ | 31,435 |
December 31, 2006 |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Less than 12 months |
12 months or longer |
Total |
|||||||||||||||||||||||||
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
Fair Value |
Gross Unrealized Holding Losses |
||||||||||||||||||||||
Description of Securities |
(amounts in thousands) | ||||||||||||||||||||||||||
U.S. Treasury
& Government Securities |
$ | 970 | $ | 1 | $ | | $ | | $ | 970 | $ | 1 | |||||||||||||||
Government
agency & government- sponsored enterprises |
12,040 | 45 | 41,101 | 458 | 53,141 | 503 | |||||||||||||||||||||
Mortgage-backed securities |
74,274 | 388 | 880,162 | 27,218 | 954,436 | 27,606 | |||||||||||||||||||||
CMO/REMICs |
53,681 | 241 | 454,693 | 6,343 | 508,374 | 6,584 | |||||||||||||||||||||
Municipal
bonds |
276,512 | 3,474 | 60,065 | 1,381 | 336,577 | 4,855 | |||||||||||||||||||||
$ | 417,477 | $ | 4,149 | $ | 1,436,021 | $ | 35,400 | $ | 1,853,498 | $ | 39,549 |
September 30, 2007 |
December 31, 2006 |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Commercial
and Industrial |
$ | 345,697 | 10.4% | $ | 264,416 | 8.6% | ||||||||||||
Real
Estate: |
||||||||||||||||||
Construction |
307,506 | 9.3% | 299,112 | 9.7% | ||||||||||||||
Commercial
Real Estate |
1,775,812 | 53.4% | 1,642,370 | 53.3% | ||||||||||||||
SFR
Mortgage |
363,765 | 10.9% | 284,725 | 9.2% | ||||||||||||||
Consumer |
62,979 | 1.9% | 54,125 | 1.8% | ||||||||||||||
Municipal
lease finance receivables |
143,399 | 4.3% | 126,393 | 4.1% | ||||||||||||||
Auto and
equipment leases, net of unearned discount |
58,958 | 1.8% | 51,420 | 1.7% | ||||||||||||||
Dairy and
Livestock |
265,806 | 8.0% | 358,259 | 11.6% | ||||||||||||||
Gross
Loans |
3,323,922 | 100.0% | 3,080,820 | 100.0% | ||||||||||||||
Less: |
||||||||||||||||||
Allowance for
credit losses |
(30,428 | ) | (27,737 | ) | ||||||||||||||
Deferred net
loan fees |
(12,173 | ) | (10,624 | ) | ||||||||||||||
Net
Loans |
$ | 3,281,321 | $ | 3,042,459 |
September 30, 2007 |
December 31, 2006 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Amounts in thousands) | |||||||||||||||||||
Non-interest
bearing deposits |
|||||||||||||||||||
Demand
deposits |
$ | 1,292,825 | 37.6% | $ | 1,363,411 | 40.0% | |||||||||||||
Interest
bearing deposits |
|||||||||||||||||||
Savings
Deposits |
1,278,939 | 37.3% | 1,215,419 | 35.7% | |||||||||||||||
Time
deposits |
863,323 | 25.1% | 827,978 | 24.3% | |||||||||||||||
Total
deposits |
$ | 3,435,087 | 100.0% | $ | 3,406,808 | 100.0% |
Maturity by Period |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total |
Less Than One Year |
One Year to Three Years |
Four Year to Five Years |
After Five Years |
|||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Deposits |
$ | 3,435,087 | $ | 3,413,631 | $ | 17,293 | $ | 824 | $ | 3,339 | |||||||||||||
FHLB and
Other Borrowings |
2,126,346 | 671,346 | 1,100,000 | 350,000 | 5,000 | ||||||||||||||||||
Junior
Subordinated Debentures |
115,859 | | | | 115,859 | ||||||||||||||||||
Deferred
Compensation |
8,228 | 751 | 1,502 | 1,380 | 4,595 | ||||||||||||||||||
Operating
Leases |
21,433 | 4,615 | 8,435 | 3,211 | 5,172 | ||||||||||||||||||
Total |
$ | 5,706,953 | $ | 4,090,343 | $ | 1,127,230 | $ | 355,415 | $ | 133,965 |
Maturity by Period |
|||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total |
Less Than One Year |
One Year to Three Years |
Four Year to Five Years |
After Five Years |
|||||||||||||||||||||||
2007 |
(amounts in thousands) | ||||||||||||||||||||||||||
Commitment to
extend credit |
857,095 | 278,311 | 58,842 | 66,936 | 453,006 | ||||||||||||||||||||||
Obligations
under letters of credit |
57,618 | 43,302 | 14,316 | | | ||||||||||||||||||||||
Total |
$ | 914,713 | $ | 321,613 | $ | 73,158 | $ | 66,936 | $ | 453,006 |
September 30, 2007 |
December 31, 2006 |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Capital Ratios |
Required Minimum Ratios |
Company |
Bank |
Company |
Bank |
||||||||||||||||||
Risk-based
capital ratios: |
|||||||||||||||||||||||
Tier
I |
4.00% | 11.41 | % | 10.98 | % | 12.23 | % | 11.02 | % | ||||||||||||||
Total |
8.00% | 12.35 | % | 11.80 | % | 13.00 | % | 11.79 | % | ||||||||||||||
Leverage
ratio |
4.00% | 7.57 | % | 7.24 | % | 7.79 | % | 7.01 | % |
|
then-existing general economic and business conditions affecting the key lending areas of the Company, | |
|
then-existing economic and business conditions of areas outside
the lending areas, such as other sections of the United States, Asia and Latin America, |
|
|
credit quality trends (including trends in non-performing loans expected to result from existing conditions), | |
|
collateral values | |
|
loan volumes and concentrations, | |
|
seasoning of the loan portfolio, | |
|
specific industry conditions within portfolio segments, | |
|
recent loss experience in particular segments of the portfolio, | |
|
duration of the current business cycle, | |
|
bank regulatory examination results and | |
|
findings of the Companys external credit examiners. |
Nine months ended September 30, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
||||||||||
(amounts in thousands) | |||||||||||
Amount of
Total Loans at End of Period (1) |
$ | 3,311,749 | $ | 2,917,027 | |||||||
Average Total
Loans Outstanding (1) |
$ | 3,178,242 | $ | 2,759,778 | |||||||
Allowance for
Credit Losses: |
|||||||||||
Beginning of
Period |
$ | 27,737 | $ | 23,204 | |||||||
Loans
Charged-Off: |
|||||||||||
Real Estate
Loans |
| | |||||||||
Commercial
and Industrial |
123 | 36 | |||||||||
Lease
Financing Receivables |
182 | 79 | |||||||||
Consumer
Loans |
40 | 30 | |||||||||
Total Loans
Charged-Off |
345 | 145 | |||||||||
Recoveries: |
|||||||||||
Real Estate
Loans |
3 | 1,020 | |||||||||
Commercial
and Industrial |
338 | 327 | |||||||||
Lease
Financing Receivables |
4 | 61 | |||||||||
Consumer
Loans |
20 | 45 | |||||||||
Total Loans
Recovered |
365 | 1,453 | |||||||||
Net Loans
(Recovered) |
(20 | ) | (1,308 | ) | |||||||
Provision
Charged to Operating Expense |
| 2,400 | |||||||||
Acquisition
of First Coastal Bank |
2,671 | ||||||||||
Allowance for
Credit Losses at End of period |
$ | 30,428 | $ | 26,912 | |||||||
(1) Net of deferred loan fees |
|||||||||||
Net Loans
Charged-Off (Recovered) to Average Total Loans |
0.00 | % | 0.05 | % | |||||||
Net Loans
Charged-Off (Recovered) to Total Loans at End of Period |
0.00 | % | 0.04 | % | |||||||
Allowance for
Credit Losses to Average Total Loans |
0.96 | % | 0.98 | % | |||||||
Allowance for
Credit Losses to Total Loans at End of Period |
0.92 | % | 0.92 | % | |||||||
Net Loans
Charged-Off (Recovered) to Allowance for Credit Losses |
0.07 | % | 4.86 | % | |||||||
Net Loans
Charged-Off (Recovered) to Provision for Credit Losses |
| 54.50 | % |
Nine months ended September 30, |
Three months ended September 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
2007 |
2006 |
||||||||||||||||
Key Measures: |
(Dollars in thousands) | ||||||||||||||||||
Statement
of Operations |
|||||||||||||||||||
Interest
income |
$ | 174,443 | $ | 152,995 | $ | 61,628 | $ | 49,327 | |||||||||||
Interest
expense |
58,947 | 41,498 | 21,502 | 16,120 | |||||||||||||||
Non-interest
income |
13,586 | 11,384 | 4,628 | 3,993 | |||||||||||||||
Non-interest
expense |
32,695 | 29,877 | 11,515 | 10,246 | |||||||||||||||
Segment
pretax profit |
$ | 96,387 | $ | 93,004 | $ | 33,239 | $ | 26,954 | |||||||||||
Balance
Sheet |
|||||||||||||||||||
Average
loans |
$ | 3,178,242 | $ | 2,759,778 | $ | 3,327,462 | $ | 2,857,573 | |||||||||||
Average
interest-bearing deposits |
$ | 2,145,299 | $ | 2,150,609 | $ | 2,200,779 | $ | 2,233,844 | |||||||||||
Yield on
loans |
6.95 | % | 6.92 | % | 7.00 | % | 7.02 | % | |||||||||||
Rate paid on
deposits |
3.34 | % | 3.01 | % | 3.33 | % | 3.36 | % |
Nine months ended September 30, |
Three months ended September 30, |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 |
2006 |
2007 |
2006 |
||||||||||||||||
Key Measures: |
(Dollars in thousands) | ||||||||||||||||||
Statement of Operations |
|||||||||||||||||||
Interest
income |
$ | 90,727 | $ | 88,989 | $ | 29,224 | $ | 32,213 | |||||||||||
Interest
expense |
98,935 | 79,323 | 32,478 | 29,486 | |||||||||||||||
Non-interest
income |
1 | 1,063 | 1 | 1,029 | |||||||||||||||
Non-interest
expense |
857 | 800 | 312 | 291 | |||||||||||||||
Segment
pretax profit (loss) |
$ | (9,064 | ) | $ | 9,929 | $ | (3,565 | ) | $ | 3,465 | |||||||||
Balance
Sheet |
|||||||||||||||||||
Average
investments |
$ | 2,492,923 | $ | 2,552,911 | $ | 2,402,052 | $ | 2,695,930 | |||||||||||
Average
borrowings |
$ | 2,174,278 | $ | 1,749,222 | $ | 2,165,624 | $ | 1,914,016 | |||||||||||
Yield on
investments-TE |
5.25% | 5.01% | 5.29% | 5.18% | |||||||||||||||
Non-tax
equivalent yield |
4.43% | 4.47% | 4.46% | 4.84% | |||||||||||||||
Rate paid on
borrowings |
5.00% | 4.12% | 5.01% | 4.52% |
ITEM
3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Simulated Rate Changes |
Estimated Net Interest Income Sensitivity |
|||||
---|---|---|---|---|---|---|
+200 basis
points |
(1.83%) | |||||
200
basis points |
3.20% |
1. |
All banks of comparable size | |
2. |
High performing banks | |
3. |
A list of specific banks |
ITEM
4. |
CONTROLS AND PROCEDURES |
ITEM
1. |
LEGAL PROCEEDINGS |
ITEM
1A. |
RISK FACTORS |
ITEM
2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Programs |
Maximum Number of Shares that May Yet Be Purchased Under the Program |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1/1/071/31/07 |
| | | | ||||||||||||||
2/1/072/28/07 |
| | | | ||||||||||||||
3/1/073/31/07 |
814,100 | $ | 12.00 | 814,100 | 1,961,063 | |||||||||||||
4/1/074/30/07 |
393,124 | $ | 12.04 | 393,124 | 1,567,939 | |||||||||||||
5/1/075/31/07 |
146,550 | $ | 11.92 | 146,550 | 1,421,389 | |||||||||||||
6/1/076/30/07 |
| | | | ||||||||||||||
7/1/077/31/07 |
757,000 | $ | 9.92 | 757,000 | 664,389 | |||||||||||||
8/1/078/31/07 |
609,000 | $ | 10.01 | 609,000 | 5,055,389 | |||||||||||||
9/1/079/30/07 |
| $ | | | | |||||||||||||
Total |
2,719,774 | $ | 11.18 | 2,719,774 | 5,055,389 |
ITEM
3. |
DEFAULTS UPON SENIOR SECURITIES |
ITEM
4. |
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
ITEM
5. |
OTHER INFORMATION |
ITEM
6. |
EXHIBITS |
Exhibit No. |
Description of Exhibits |
||||
---|---|---|---|---|---|
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
||||
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
||||
32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
||||
32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Date: November 9,
2007 |
/s/ Edward J. Biebrich Jr. Edward J. Biebrich Jr. Chief Financial Officer |
Date: November 9,
2007 |
/s/ Christopher D. Myers Christopher D. Myers Chief Executive Officer |
Date: November 9,
2007 |
/s/ Edward J. Biebrich, Jr. Edward J. Biebrich, Jr. Chief Financial Officer |
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 9,
2007 |
/s/ Christopher D. Myers Christopher D. Myers Chief Executive Officer |
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 9,
2007 |
/s/ Edward J. Biebrich Jr. Edward J. Biebrich Jr. Chief Financial Officer |