MISSOURI
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0-20632
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43-1175538
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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135 North Meramec, Clayton, Missouri
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63105
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(Address of principal executive offices)
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(Zip code)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02
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Results of Operations and Financial Condition.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit
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|||
Number
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Description
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||
99
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Press Release issued on July 24, 2012 – filed herewith.
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FIRST BANKS, INC.
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||||
Date:
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July 24, 2012
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By:
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/s/
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Terrance M. McCarthy
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Terrance M. McCarthy
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||||
President and Chief Executive Officer
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Exhibit
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||
Number
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Description
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99
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Press Release issued on July 24, 2012.
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|
NEWS RELEASE
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Contacts:
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Terrance M. McCarthy
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Lisa K. Vansickle
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President and
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Executive Vice President and
|
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Chief Executive Officer
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Chief Financial Officer
|
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First Banks, Inc.
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First Banks, Inc.
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(314) 854-4600
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(314) 854-4600
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Traded:
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NYSE
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Symbol:
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FBSPrA – (First Preferred Capital Trust IV, an affiliated trust of First Banks, Inc.)
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FOR IMMEDIATE RELEASE:
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|
·
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The Company did not record a provision for loan losses for the second quarter of 2012, primarily as a result of the decrease in nonaccrual loans, performing troubled debt restructurings and potential problem loans during the quarter. The Company reduced its overall level of nonperforming assets by $43.7 million, or 14.4%, as compared to March 31, 2012, and $90.7 million, or 25.9%, as compared to December 31, 2011. Certain asset quality metrics as of or for the quarterly periods are summarized in the following table:
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June 30,
|
March 31,
|
June 30,
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|||||||||||
2012
|
2012
|
2011
|
|||||||||||
(dollars expressed in thousands)
|
|||||||||||||
Provision for loan losses
|
$
|
—
|
2,000
|
23,000
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|||||||||
Nonaccrual loans
|
150,372
|
185,122
|
305,803
|
||||||||||
Performing troubled debt restructurings
|
114,268
|
131,531
|
90,506
|
||||||||||
Other real estate and repossessed assets
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109,026
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117,927
|
126,244
|
||||||||||
Potential problem loans
|
184,566
|
205,527
|
303,123
|
||||||||||
Net loan charge-offs
|
10,121
|
9,362
|
45,787
|
||||||||||
Allowance for loan losses as a percent of loans, net of deferred loan fees
|
3.97
|
%
|
4.13
|
4.32
|
|
·
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Maintained First Bank’s regulatory capital ratios at “well capitalized” levels, reflecting continued and consistent improvement in each of the regulatory capital ratios, including an increase in First Bank’s Total Capital Ratio to 16.20% at June 30, 2012 from 15.63% at March 31, 2012 and 14.98% at December 31, 2011. Regulatory capital ratios for First Bank and First Banks, Inc. are summarized in the following table:
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June 30,
|
March 31,
|
June 30,
|
||||||||||
2012
|
2012
|
2011
|
||||||||||
First Bank:
|
||||||||||||
Total Capital Ratio
|
16.20
|
%
|
15.63
|
%
|
14.29
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%
|
||||||
Tier 1 Ratio
|
14.92
|
14.35
|
13.01
|
|||||||||
Leverage Ratio
|
8.71
|
8.54
|
7.96
|
|||||||||
First Banks, Inc.:
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||||||||||||
Total Capital Ratio
|
2.33
|
2.09
|
3.38
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|||||||||
Tier 1 Ratio
|
1.16
|
1.04
|
1.69
|
|||||||||
Leverage Ratio
|
0.68
|
0.62
|
1.03
|
|
·
|
Net interest income was $43.6 million for the second quarter of 2012, in comparison to $43.8 million for the first quarter of 2012 and $46.8 million for the second quarter of 2011.
|
|
·
|
The net interest margin was 2.84% for the second quarter of 2012, in comparison to 2.86% for the first quarter of 2012 and 2.83% for the second quarter of 2011. The net interest margin continues to be negatively impacted by the change in the mix of our interest-earning assets, which have shifted from loans to cash and cash equivalents and investment securities, and a decrease in the average yield on loans and investment securities due to the historically low interest rate environment, partially offset by a decrease in the cost of interest-bearing deposits resulting from the continued change in the mix of our deposits from time deposits to demand and money market accounts and the continued re-pricing of money market relationships and certificates of deposit to current market interest rates upon maturity. Yields on interest-earning assets and costs of interest-bearing liabilities are summarized in the following table:
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Three Months Ended
|
||||||||||||
June 30,
|
March 31,
|
June 30,
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||||||||||
2012
|
2012
|
2011
|
||||||||||
Average yield on loans
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4.75
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%
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4.79
|
%
|
4.87
|
%
|
||||||
Average yield on investment securities
|
2.15
|
2.17
|
2.27
|
|||||||||
Average yield on interest-earning assets
|
3.35
|
3.42
|
3.59
|
|||||||||
Average cost of interest-bearing deposits
|
0.39
|
0.43
|
0.72
|
|||||||||
Average cost of interest-bearing liabilities
|
0.66
|
0.70
|
0.91
|
|||||||||
|
·
|
The provision for loan losses was zero for the second quarter of 2012, in comparison to $2.0 million for the first quarter of 2012 and $23.0 million for the second quarter of 2011. The decrease in the provision for loan losses for the second quarter of 2012, as compared to the second quarter of 2011, was primarily attributable to the significant decrease in nonaccrual loans and potential problem loans, lower net charge-offs and less severe asset quality migration.
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|
·
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Net loan charge-offs were $10.1 million for the second quarter of 2012, compared to $9.4 million for the first quarter of 2012 and $45.8 million for the second quarter of 2011.
|
|
·
|
Nonaccrual loans decreased $34.8 million during the second quarter of 2012 to $150.4 million at June 30, 2012 compared to $185.1 million at March 31, 2012, $220.3 million at December 31, 2011 and $305.8 million at June 30, 2011, representing a 50.8% decrease in nonaccrual loans year-over-year. Nonaccrual loans have been reduced by $540.7 million, or 78.2%, from their peak level of $691.1 million at December 31, 2009. The reduction in nonaccrual loans was achieved through continued progress in the implementation of the initiatives in the Company’s Asset Quality Improvement Plan, such as sales and other actions designed to decrease the overall balance of nonaccrual and other potential problem loans and assets.
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|
·
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Noninterest income was $16.0 million for the second quarter of 2012, in comparison to $17.2 million for the first quarter of 2012 and $15.8 million for the second quarter of 2011.
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|
·
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The gain on sale of loans was $3.6 million, $2.4 million and $1.0 million for the second quarter of 2012, the first quarter of 2012 and the second quarter of 2011, respectively, primarily reflecting an increase in loan origination volume in our mortgage division during 2012.
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·
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Net losses associated with changes in the fair value of mortgage and SBA servicing rights were $2.0 million, $210,000 and $1.9 million for the second quarter of 2012, the first quarter of 2012 and the second quarter of 2011, respectively, reflecting changes in mortgage interest rates and the related changes in estimated prepayment speeds during these time periods, as well as changes in cash flow assumptions underlying SBA loans serviced for others.
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·
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Noninterest expense was $52.4 million for the second quarter of 2012 compared to $52.1 million for the first quarter of 2012 and $57.5 million for the second quarter of 2011. The decrease in overall noninterest expense as compared to the second quarter of 2011 is primarily reflective of a lower level of expenses related to nonperforming assets and potential problem loans and the implementation of certain measures intended to improve efficiency in conjunction with the restructuring of the Company to a smaller footprint.
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|
·
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Write-downs and expenses on other real estate properties and repossessed assets were $4.7 million, $3.6 million and $5.5 million for the second quarter of 2012, the first quarter of 2012 and the second quarter of 2011, respectively. We continue to experience write-downs on certain other real estate properties due to a decline in estimated fair value less selling costs upon periodic re-appraising of the properties.
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·
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The Company recorded a provision for income taxes of $121,000 for the second quarter of 2012, compared to $95,000 for the first quarter of 2012 and $72,000 for the second quarter of 2011. The Company presently maintains a full valuation allowance against its net deferred tax assets.
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·
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Cash and cash equivalents were $323.9 million at June 30, 2012 compared to $499.4 million at March 31, 2012, $474.2 million at December 31, 2011 and $628.8 million at June 30, 2011. The decrease in cash and cash equivalents of $175.4 million during the second quarter of 2012 primarily resulted from a decrease in deposits of $125.9 million and an increase in the investment securities portfolio of $191.1 million, partially offset by a net decrease in loans of $125.0 million and certain other factors.
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·
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Cash, cash equivalents and unpledged securities were $2.91 billion and comprised 44.4% of total assets at June 30, 2012, compared to $2.92 billion and 43.8% of total assets at March 31, 2012, $2.72 billion and 41.1% of total assets at December 31, 2011, and $2.59 billion and 37.4% of total assets at June 30, 2011.
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·
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Investment securities increased to $2.84 billion at June 30, 2012 from $2.65 billion at March 31, 2012, $2.47 billion at December 31, 2011 and $2.19 billion at June 30, 2011. The Company is continuing to utilize a portion of its elevated cash and cash equivalents balances to fund gradual and planned increases in its investment securities portfolio.
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·
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Loans, net of deferred loan fees, decreased to $3.03 billion at June 30, 2012 from $3.16 billion at March 31, 2012, $3.28 billion at December 31, 2011 and $3.73 billion at June 30, 2011. The reduction in loan balances of $125.0 million during the second quarter of 2012 reflects expected loan payments and payoffs and other activity such as foreclosures and charge-offs. The Company will continue to focus on loan growth initiatives throughout the remainder of 2012 to partially offset the impact of the decrease in nonaccrual, potential problem and other loan relationships in future periods.
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·
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The Company’s loan-to-deposit ratio was 52.90% at June 30, 2012, as compared to 53.89% at March 31, 2012, 56.65% at December 31, 2011 and 61.46% at June 30, 2011.
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·
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Total assets were $6.57 billion at June 30, 2012 as compared to $6.68 billion at March 31, 2012, $6.61 billion at December 31, 2011 and $6.92 billion at June 30, 2011. The decrease in total assets of $112.1 million during the second quarter of 2012 is reflective of a decrease in cash and cash equivalents, loans and other real estate and repossessed assets, partially offset by an increase in the investment securities portfolio.
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|
·
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Deposits were $5.73 billion at June 30, 2012, in comparison to $5.86 billion at March 31, 2012, $5.80 billion at December 31, 2011 and $6.08 billion at June 30, 2011. The decrease in deposits of $125.9 million during the second quarter of 2012 is reflective of the Company’s efforts to exit certain certificate of deposit and money market relationships and reduce deposit costs. Certificates of deposit, money market and savings and demand deposits declined $72.5 million, $38.4 million and $14.9 million, respectively, during the second quarter of 2012.
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FINANCIAL SUMMARY
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(dollars expressed in thousands, except per share data)
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(UNAUDITED)
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SELECTED OPERATING DATA
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
June 30,
|
March 31,
|
June 30,
|
June 30,
|
June 30,
|
||||||||||||||||
2012
|
2012
|
2011
|
2012
|
2011
|
||||||||||||||||
Interest income
|
$
|
51,608
|
52,341
|
59,285
|
103,949
|
122,061
|
||||||||||||||
Interest expense
|
8,001
|
8,569
|
12,506
|
16,570
|
26,458
|
|||||||||||||||
Net interest income
|
43,607
|
43,772
|
46,779
|
87,379
|
95,603
|
|||||||||||||||
Provision for loan losses
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—
|
2,000
|
23,000
|
2,000
|
33,000
|
|||||||||||||||
Net interest income after provision
for loan losses
|
43,607
|
41,772
|
23,779
|
85,379
|
62,603
|
|||||||||||||||
Noninterest income
|
16,036
|
17,219
|
15,828
|
33,255
|
30,214
|
|||||||||||||||
Noninterest expense
|
52,399
|
52,058
|
57,511
|
104,457
|
116,752
|
|||||||||||||||
Income (loss) before provision for
income taxes
|
7,244
|
6,933
|
(17,904
|
)
|
14,177
|
(23,935
|
)
|
|||||||||||||
Provision for income taxes
|
121
|
95
|
72
|
216
|
124
|
|||||||||||||||
Net income (loss)
|
7,123
|
6,838
|
(17,976
|
)
|
13,961
|
(24,059
|
)
|
|||||||||||||
Less: net loss attributable to noncontrolling interest in subsidiary
|
(385
|
)
|
(60
|
)
|
(927
|
)
|
(445
|
)
|
(862
|
)
|
||||||||||
Net income (loss) attributable to
First Banks, Inc.
|
$
|
7,508
|
6,898
|
(17,049
|
)
|
14,406
|
(23,197
|
)
|
||||||||||||
Basic and diluted earnings (loss) per
common share
|
$
|
81.78
|
58.63
|
(945.00
|
)
|
140.41
|
(1,426.41
|
)
|
SELECTED FINANCIAL DATA
|
June 30,
|
December 31,
|
June 30,
|
||||||||||
2012
|
2011
|
2011
|
||||||||||
Total assets
|
$
|
6,566,164
|
6,608,913
|
6,919,276
|
||||||||
Cash and cash equivalents
|
323,939
|
474,158
|
628,756
|
|||||||||
Investment securities
|
2,841,624
|
2,470,704
|
2,185,730
|
|||||||||
Loans, net of deferred loan fees
|
3,031,445
|
3,284,279
|
3,734,603
|
|||||||||
Allowance for loan losses
|
120,227
|
137,710
|
161,186
|
|||||||||
Goodwill and other intangible assets
|
125,967
|
125,967
|
127,455
|
|||||||||
Deposits
|
5,730,826
|
5,797,704
|
6,076,145
|
|||||||||
Other borrowings
|
37,947
|
51,182
|
51,247
|
|||||||||
Subordinated debentures
|
354,095
|
354,057
|
354,019
|
|||||||||
Stockholders’ equity
|
286,133
|
263,671
|
309,319
|
|||||||||
Nonperforming assets
|
259,398
|
350,147
|
432,047
|
SELECTED FINANCIAL RATIOS
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
June 30,
|
March 31,
|
June 30,
|
June 30,
|
June 30,
|
||||||||||||||||
2012
|
2012
|
2011
|
2012
|
2011
|
||||||||||||||||
Net interest margin
|
2.84
|
%
|
2.86
|
%
|
2.83
|
%
|
2.85
|
%
|
2.86
|
%
|
||||||||||
Yield on loans
|
4.75
|
4.79
|
4.87
|
4.77
|
4.92
|
|||||||||||||||
Cost of interest-bearing deposits
|
0.39
|
0.43
|
0.72
|
0.41
|
0.76
|
|||||||||||||||
Loan-to-deposit ratio
|
52.90
|
53.89
|
61.46
|
52.90
|
61.46
|