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): | April 25, 2012 |
HUDSON VALLEY HOLDING CORP.
__________________________________________
(Exact name of registrant as specified in its charter)
New York | 001-34453 | 13-3148745 |
_____________________ (State or other jurisdiction |
_____________ (Commission |
______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
21 Scarsdale Road, Yonkers, New York | 10707 | |
_________________________________ (Address of principal executive offices) |
___________ (Zip Code) |
Registrants telephone number, including area code: | (914) 961-6100 |
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On April 25, 2012, Hudson Valley Holding Corp. (the Company) issued a press release reporting its financial results for the first quarter, three months ended March 31, 2012 and announcing a cash dividend. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information disclosed in this Item 2.02 shall be considered furnished but not filed for purposes of the Securities and Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |||
99.1 | Press Release of the Company dated April 25, 2012 reporting First Quarter ended March 31, 2012 financial results and announcing a cash dividend |
The press release in Item 9.01 as Exhibit 99.1 shall be considered furnished but not filed for purpose of the Securities and Exchange Act of 1934, as amended
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.
HUDSON VALLEY HOLDING CORP. | ||||
April 25, 2012 | By: |
Stephen R. Brown
|
||
|
||||
Name: Stephen R. Brown | ||||
Title: Senior Executive Vice President, CFO |
Exhibit Index
Exhibit No. | Description | |
|
|
|
99.1
|
Press Release of the Company dated April 25, 2012 reporting First Quarter ended March 31, 2012 financial results and announcing a cash dividend |
SOURCE: HUDSON VALLEY HOLDING CORP.
FOR IMMEDIATE RELEASE
|
CONTACT | |
Hudson Valley Holding Corp. 21 Scarsdale Road Yonkers, NY 10707 |
James J. Landy President & CEO (914) 771-3230 |
Stephen R. Brown
Sr. EVP, CFO & Treasurer
(914) 771-3212
HUDSON VALLEY HOLDING CORP. FIRST QUARTER 2012 RESULTS INCLUDE SUBSTANTIAL GROWTH IN NET INCOME,
EARNINGS, AND NET INTEREST MARGIN
- Bank Continues to Improve Credit Metrics, Lower Funding Costs and
Deliver Strong Operating Efficiency -
- Board Declares Dividend of $0.18 -
- Formal Agreement with OCC Addresses Previously Disclosed Regulatory Matters -
YONKERS, N.Y. April 25, 2012 Hudson Valley Holding Corp. (NYSE: HVB) today reported net income of $18.0 million, or $0.92 per diluted share, for the quarter ended March 31, 2012, compared to a net loss of $22.9 million, or $1.18 per diluted share, during the prior quarter and net income of $4.8 million, or $0.25 per diluted share, during the first quarter of 2011.
After-tax net gains on a previously announced sale of $474 million in loans in the first quarter of 2012 amounted to $9.4 million or $0.48 per share. Excluding the effect of the loan sale in the first quarter of 2012 and the related credit mark in the fourth quarter of 2011, net income increased 59.3 percent on a linked quarter basis and 79.2 percent compared to the first quarter of 2011.
All earnings per share data reported today reflect additional shares outstanding as a result of Hudson Valleys 10 percent stock dividend issued in December 2011.
Our relationships with customers remain strong and profitable, as demonstrated by this quarters growth in customer accounts, core deposit balances, fee income generation and net interest income earned, President and Chief Executive Officer James J. Landy said. Additionally, during the quarter we successfully completed the planned and profitable disposition of held-for-sale loans and an initial redeployment of the proceeds, a full three months ahead of schedule. This is particularly gratifying as weve done so while continuing to fully meet the needs of our customers and competing aggressively in the marketplace, every single day.
Hudson Valleys net interest margin increased to 4.75 percent in the first quarter of 2012, compared to 4.60 percent in the fourth quarter of 2011 and 4.39 percent in the first quarter of 2011. Favorable re-pricing of both interest-earning assets and liabilities during the quarter drove the improvement over the linked quarter. The companys average cost of deposits fell to 28 basis points in the first quarter of 2012, compared to an average of 32 basis points in the fourth quarter of 2011 and 40 basis points in the first quarter of 2011.
The company grew top line revenue in the first quarter, in spite of industry trends and the current low-rate and difficult regulatory environment. Growth in net interest income from margin expansion contributed to strong top line revenue growth from the linked quarter and year-ago quarter, with linked-quarter growth being additionally aided by higher service charges and investment advisory fees.
Non-interest expense was $20.9 million for the three months ended March 31, 2012, representing increases of $1.9 million, or 10.1 percent, from the fourth quarter of 2011 and $0.4 million, or 2.0 percent, from the first quarter of 2011.
Hudson Valley continued to maintain its strong efficiency ratio at 56.8 percent in the first quarter of 2012, compared to 52.8 percent in the fourth quarter of 2011 and 60.3 percent in the first quarter of 2011.
Portfolio Credit Quality
The successful sale of $474 million in held-for-sale loans, including $27.8 million in nonperforming loans held-for-sale, significantly improved the banks key asset quality measures during the first quarter of 2012.
Hudson Valleys total nonperforming assets (NPAs), including nonaccrual loans, nonaccrual loans held for sale, accruing loans delinquent over 90 days and other real estate owned (OREO), were $29.0 million at March 31, 2012, compared to $58.9 million at December 31, 2011 and $ 64.7 million at March 31, 2011. NPAs totaled 1.03 percent of total assets at March 31, 2012, compared to 2.11 percent at December 31, 2011 and 2.44 percent at March 31, 2011. Hudson Valleys NPAs as a percent of total assets at the end of 2012s first quarter fell to their lowest level since December 31, 2008.
Net charge-offs during the first quarter of 2012 were $0.2 million, reflecting a meaningful improvement in asset quality and increased recoveries. As a percentage of average loans, annualized net charge-offs were 0.04 percent in the first quarter of 2012, compared to 13.03 percent in the fourth quarter of 2011 and 0.95 percent in the first quarter of 2011. The elevated ratio of annualized net charge-offs to average loans in last years fourth quarter reflected the write downs on loans transferred to held-for-sale during that quarter.
Loan loss provision of $1.4 million recorded in this years first quarter represented a significant decrease from both the year-ago and linked quarters. Loan loss provision in the fourth quarter of 2011 was $54.6 million, including $48.1 million in net credit marks taken to reduce the carrying value of loans in anticipation of the bulk sales completed in the first three months of 2012. Loan loss provision for the first quarter of 2011 was $5.5 million.
The banks allowance for loan losses was $31.9 million at March 31, 2012, compared to $30.7 million
at December 31, 2011 and $40.3 million at March 31, 2011. Allowances measured 1.94 percent, 1.95
percent, and 2.21 percent of total loans at each of those dates, respectively.
Lending Activity
Hudson Valley Bank continues to actively originate loans to meet the funding needs of middle-market commercial customers and their principals in Westchester and Rockland counties, lower Connecticut and metropolitan New York City.
CRE loans totaled $705.6 million on March 31, 2012, increasing 2.1 percent from December 31, 2011, excluding loans held for sale. CRE loans totaled $822.0 million at March 31, 2011.
Commercial and industrial (C&I) loans totaled $222.5 million at March 31, 2012, a 1.8 percent increase from December 31, 2011. C&I loans totaled $234.7 million at March 31, 2011.
The bank redeployed a portion of the proceeds from the companys first quarter loan sale by purchasing $65.8 million in adjustable rate mortgages in the period, increasing residential loan balances to $568.5 million at March 31, 2012, compared to $514.8 million at December 31, 2011 and $548.3 million at March 31, 2011.
$0.18 Cash Dividend Declared
Hudson Valleys board of directors declared a cash dividend of $0.18 per share, payable to all common stock shareholders of record as of the close of business on May 7, 2012. The dividend will be payable on May 18, 2012. This dividend represents 20 percent of GAAP net income earned in first quarter of 2012, or 41 percent of earnings excluding the gain on loans sold during the first three months of the year.
Capital Strength
At March 31, 2012, Hudson Valley Holding Corp. posted a total risk-based capital ratio of 16.3 percent, a Tier 1 risk-based capital ratio of 15.0 percent, and a Tier 1 leverage ratio of 9.4 percent.
Its Hudson Valley Bank subsidiary at March 31, 2012 recorded a total risk-based capital ratio of 15.8 percent, a Tier 1 risk-based capital ratio of 14.6 percent, and a Tier 1 leverage ratio of 9.1 percent.
Hudson Valleys capital ratios remain in excess of well capitalized levels applicable to banks under current regulations. Further, Hudson Valleys capital ratios at March 31, 2012 were in excess of the following individual requirements imposed on its bank subsidiary in 2009 by the OCC: total risk-based capital ratio of at least 12.0 percent, a Tier 1 risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 8.0 percent.
Formal Agreement with Primary Banking Regulator
On February 1, 2012, Hudson Valley announced that during a routine exam and discussions with the Office of the Comptroller of the Currency (OCC), the bank was made aware that it would be required to reduce its concentration in commercial real estate loans, including multi-family lending, as well as classified loans. As previously disclosed, the companys response to these discussions with the OCC included a commitment to reduce concentrations of CRE loans and classified assets to less than 400 percent and 25 percent of risk-based capital, respectively, in the near term.
Primarily as a result of the banks sale of $474 million in loans, during the first quarter of 2012 Hudson Valley reduced CRE loans to 401 percent of risk-based capital from 558 percent at the end of last year, while lowering classified assets to 27 percent of risk-based capital. Classified assets ranged between 56 percent and 67 percent of risk-based capital in 2011, before the impact of loan marks at December 31, 2011.
Also on February 1, Hudson Valley announced its new dividend policy capping dividend payments at no more than 50 percent of quarterly net income in 2012, and in future periods if CRE loans and classified assets exceed 400 percent and 25 percent of risk-based capital, respectively.
As forecast on February 1, the board of directors of Hudson Valley Bank yesterday signed a formal written agreement with the OCC. With this agreement, Hudson Valley is committing to adopt best practices modeled on those of the nations larger financial institutions, as well as evolving expectations of regulatory agencies on community banks. Included in the agreed-upon commitments are enhancements to the banks procedures, systems, policies, programs, plans, training and resources. The agreement is consistent with the CRE lending and classified asset concentration commitments Hudson Valley announced on February 1. The written agreement imposes no specific capital ratio mandates or other quantitative conditions or obligations on Hudson Valley and does not impose any limit on the bank boards ability to pay dividends to its parent, except those imposed by the law. The bank expects to submit to the OCC a capital plan, containing the banks near term and long term dividend policy, pursuant to the written agreement.
The board of directors is pleased with both the pace and quality of our dialogue with the OCC, which resulted in a signed formal agreement that places no further quantitative obligations on the bank, beyond the required reductions in concentrations disclosed on February 1st, Chairman William E. Griffin said. This provides clarity on our regulators current expectations for the bank, and we have full confidence in the ability of Jim Landy and our entire management team to meet or exceed the obligations set forth in the agreement. The board is committed to ensuring management has the resources needed to meet not only the terms of the agreement, but the needs and expectations of our customers, just as Hudson Valley Bank has done successfully for the last 40 years.
First Quarter Review
The company recorded net income of $18.0 million or $0.92 per diluted share for the three month period ended March 31, 2012, compared to net income of $4.8 million or $0.25 per diluted share for the same period in the prior year. Per share amounts for the 2011 periods have been adjusted to reflect the effects of the 10 percent stock dividend issued in December 2011.
Earnings for the first quarter of 2012 included a pretax gain of $15.9 million resulting from the successful completion of $474 million of loan sales announced in the fourth quarter of 2011 as part of the companys efforts to reduce the levels of nonperforming and other classified loans, and also to reduce the overall concentration in commercial real estate loans. In addition to the gains on the loan sales, income for the first quarter of 2012 was higher, compared to the same period in the prior year, primarily as a result of higher net interest income and a significantly lower provision for loan losses, partially offset by lower noninterest income, higher impairment charges on securities available for sale and slightly higher noninterest expenses.
Total loans, excluding loans held for sale, increased $68.8 million during the three month period ended March 31, 2012 compared to the period ended December 31, 2011. This increase resulted primarily from the purchase of $65.8 million of adjustable rate residential loans, which were purchased as a partial redeployment of the proceeds from the aforementioned loan sales. Additional redeployment of loan sale proceeds is expected as appropriate product becomes available.
Nonperforming assets decreased to $29.0 million at March 31, 2012, compared to $58.9 million at December 31, 2011. The reduction was the result of the sale or resolution of $27.8 million of nonperforming loans previously transferred to loans held-for-sale and $2.1 million of reductions of other nonperforming loans.
Total deposits decreased $1.4 million during the three month period ended March 31, 2012, compared to the prior year end. The company continued to experience growth in new customers both in existing branches and new branches added during the last two years. This growth was offset by planned reductions in certain deposit balances, primarily higher cost municipal demand deposits.
The companys short-term liquidity increased significantly during the first quarter of 2012 primarily as a result of not fully redeploying the proceeds of the aforementioned loan sales. The loan sales were completed during the last few days of the first quarter of 2012 and, as a result, had little impact on the quarters net interest margin, which increased to 4.75 percent, compared to 4.39 percent for the same period in the prior year. The 2012 increase was primarily the result of reinvestment of 2011 excess liquidity into loans, primarily local market multi-family loans. Prior to the loan sales, this reinvestment had significantly offset margin compression resulting from interest rates continuing at historically low levels. The company expects net interest margin compression in future quarters due to maturing loans and investments being reinvested at lower interest rates and until full redeployment of the proceeds from the recent loan sales can be completed in a manner consistent with both the companys risk management policies and the requirements of the OCC. Regardless of the timing of the aforementioned redeployment, if interest rates continue at current levels, we expect that additional downward pressure on net interest margin will continue.
As a result of the aforementioned activity in the companys core businesses of loans and deposits and other asset/liability management activities, tax equivalent basis net interest income increased by $3.7 million or 13.3 percent to $31.8 million for the three month period ended March 31, 2012, compared to $28.1 million for the same period in the prior year. The effect of the adjustment to a tax equivalent basis was $0.5 million for the three month period ended March 31, 2012, compared to $0.6 million for the same period in the prior year.
The companys non interest income was $20.8 million for the three month period ended March 31, 2012, compared to $5.4 million for the same period in the prior year. The increase resulted primarily from the $15.9 million pretax gain on sales of loans, partially offset by decreases in investment advisory fees and service charges and an increase in pre-tax impairment charges on securities available for sale. Advisory fee income decreased by $0.2 million primarily as a result of the effects of continued fluctuation in both domestic and international equity markets. Service charges decreased slightly due to decreased activity. Pre-tax impairment charges on securities available for sale were $0.5 million for the three month period ended March 31, 2012 and $0.2 million for the same period in the prior year. The impairment charges were related to the companys investments in pooled trust preferred securities. The company has continued to hold its investments in pooled trust preferred securities as it does not believe that the current market value estimates for these investments are indicative of their underlying value. The pooled trust preferred securities are primarily backed by various U.S. financial institutions, many of which are experiencing severe financial difficulties as a result of the current economic downturn. Continuation of these conditions may result in additional impairment charges on these securities in the future.
Non interest expense was $20.9 million for the three month period ended March 31, 2012. This represented an increase of $0.4 million or 2.0 percent compared to $20.5 million for the same period in the prior year. The increase in non interest expense resulted primarily from an additional provision of $1.3 million related to the previously announced ongoing investigations by the Securities and Exchange Commission (SEC) relating to issues surrounding the brokerage practices and policies and disclosures about such practices of the companys investment advisory subsidiary, A.R. Schmeidler & Co., Inc. Based on ongoing discussions with the SEC, the company believes it has substantially accrued for any penalties and related costs anticipated in the final resolution of this matter although, until final agreement is reached, the exact result cannot be determined. Noninterest expenses for the three month period ended March 31, 2012, compared to the same period in the prior year also reflected increases in costs associated with problem asset resolution, and investment in technology and personnel to accommodate growth and the expansion of services and products available to new and existing customers. These increases were partially offset by the partial reduction of previously accrued officers incentive compensation and a lower FDIC insurance assessment.
Hudson Valleys capital ratios remain in excess of well capitalized levels generally applicable to banks under current regulations. At March 31, 2012, Hudson Valley Holding Corp. posted a total risk-based capital ratio of 16.3 percent, a Tier 1 risk-based capital ratio of 15.0 percent, and a Tier 1 leverage ratio of 9.4 percent. At March 31, 2012, Hudson Valley Bank posted a total risk-based capital ratio of 15.8 percent, a Tier 1 risk-based capital ratio of 14.6 percent, and a Tier 1 leverage ratio of 9.1 percent.
Non-GAAP Financial Disclosures and Reconciliation to GAAP
In addition to evaluating Hudson Valley Holding Corps results of operations in accordance with U.S. generally accepted accounting principles (GAAP), management routinely supplements this evaluation with an analysis of certain non-GAAP financial measures, such as the tangible equity ratio and tangible book value per share. Management believes these non-GAAP financial measures provide information useful to investors in understanding Hudson Valley Holding Corps underlying operating performance and trends, and facilitates comparisons with the performance of other banks. Further, the tangible equity ratio and tangible book value per share are used by management to analyze the relative strength of Hudson Valley Holding Corps capital position.
In light of diversity in presentation among financial institutions, the methodologies used by Hudson Valley Holding Corp. for determining the non-GAAP financial measures discussed above may differ from those used by other financial institutions.
Conference Call
As previously announced, Hudson Valley will hold its quarterly conference call to review the companys financial results on Wednesday, April 25, 2012 at 10:00 AM ET:
Domestic (toll free): 1-877-317-6789; International (toll): + 1-412-317-6789.
All participants should dial in at least ten minutes prior to the call and request the HVB First Quarter Earnings Call.
A replay of the call will be available one hour from the close of the conference through May 10, 2012 at 9:00 AM ET:
Domestic Toll Free: 1-877-344-7529 Conference #10012498; International Toll: +1-412-317-0088 - Conference #10012498.
Participants will be required to state their name and company upon entering call.
The company webcast will be available live at 10:00 AM ET, and archived after the call through its website at www.hudsonvalleybank.com.
About Hudson Valley Holding Corp.
About Hudson Valley Holding Corp: Hudson Valley Holding Corp., headquartered in Yonkers,
NY, is the parent company of Hudson Valley Bank (Hudson Valley). Hudson Valley Bank is a
Westchester based Bank with more than $2.8 billion in assets, serving the metropolitan area with
36 branches located in Westchester, Rockland, the Bronx, Manhattan and Brooklyn in New York and
Fairfield County and New Haven County, in Connecticut. Hudson Valley specializes in providing a
full range of financial services to businesses, professional services firms, not-for-profit
organizations and individuals; and provides investment management services through a subsidiary,
A. R. Schmeidler & Co., Inc. Hudson Valley Holding Corp.s common stock is traded on the NYSE
under the ticker symbol HVB and is included in the Russell 3000® Index. Additional information
on Hudson Valley Bank can be obtained on their web-site at www.hudsonvalleybank.com
**************************************************************************************
Hudson Valley Holding Corp. (Hudson Valley) has made in this press release various forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to earnings, credit quality and other financial and business matters for periods subsequent to December 31, 2011. These statements may be identified by such forward-looking terminology as expect, may, will, anticipate, continue, believe or similar statements or variations of such terms. Hudson Valley cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, and that statements relating to subsequent periods increasingly are subject to greater uncertainty because of the increased likelihood of changes in underlying factors and assumptions. Actual results could differ materially from forward-looking statements.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, in addition to those risk factors disclosed in the Hudson Valleys Annual Report on Form 10-K for the year ended December 31, 2011 include, but are not limited to:
| our ability to comply with the formal agreement entered into with the Office of the Comptroller of the Currency (the OCC) and any additional restrictions placed on us as a result of future regulatory exams or changes in regulatory policy implemented by the OCC or other bank regulators; |
| the OCC and other bank regulators may require us to further modify or change our mix of assets, including our concentration in certain types of loans, or require us to take further remedial actions as a result of our most recent regulatory examination; |
| the results of the investigation of A.R. Schmeidler & Co., Inc. by the Securities and Exchange Commission (the SEC) and the possibility that our managements attention will be diverted to the SEC investigation and we will incur costs and further legal expenses; |
| our intent and ability to pay quarterly cash dividends to shareholders in light of our earnings, the current and future economic environment and Federal Reserve Board guidance; |
| the possibility that we may need to raise additional capital in the future and our ability to raise such capital on terms that are favorable to us; |
| further increases in our non-performing loans and allowance for loan losses; |
| ineffectiveness in managing our commercial real estate portfolio; |
| lower than expected future performance of our investment portfolio; |
| a lack of opportunities for growth, plans for expansion (including opening new branches) and increased or unexpected competition in attracting and retaining customers; |
| continued poor economic conditions generally and in our market area in particular, which may adversely affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; |
| lower than expected demand for our products and services; |
| possible impairment of our goodwill and other intangible assets; |
| our inability to manage interest rate risk; |
| increased expense and burdens resulting from the regulatory environment in which we operate and our ability to comply with existing and future regulatory requirements; |
| our inability to maintain regulatory capital above the levels required by the OCC, or the OCC, for Hudson Valley Bank and the levels required for us to be well-capitalized, or such higher capital levels as may be required; |
| proposed legislative and regulatory action may adversely affect us and the financial services industry; |
| legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations) may subject us to additional regulatory oversight which may result in increased compliance costs and/or require us to change our business model; |
| future increased Federal Deposit Insurance Corporation, or FDIC, special assessments or changes to regular assessments; |
| potential liabilities under federal and state environmental laws; |
| our intent and ability to pay quarterly cash dividends to shareholders in light of our earnings, the current and future economic environment and OCC guidance; and |
| regulatory limitations on dividends payable by Hudson Valley or Hudson Valley Bank. |
We assume no obligation for updating any such forward-looking statements at any given time.
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||
For the three months ended March 31, 2012 and 2011 | ||||||||
Dollars in thousands, except per share amounts | ||||||||
Three Months Ended | ||||||||
Mar 31 | ||||||||
2012 | 2011 | |||||||
Interest Income: |
||||||||
Loans, including fees |
$ | 28,915 | $ | 26,332 | ||||
Securities: |
||||||||
Taxable |
3,313 | 2,950 | ||||||
Exempt from Federal income taxes |
986 | 1,161 | ||||||
Federal funds sold |
8 | 26 | ||||||
Deposits in banks |
56 | 164 | ||||||
Total interest income |
33,278 | 30,633 | ||||||
Interest Expense: |
||||||||
Deposits |
1,750 | 2,274 | ||||||
Securities sold under repurchase agreements and other short-term borrowings |
51 | 47 | ||||||
Other borrowings |
181 | 844 | ||||||
Total interest expense |
1,982 | 3,165 | ||||||
Net Interest Income |
31,296 | 27,468 | ||||||
Provision for loan losses |
1,359 | 5,451 | ||||||
Net interest income after provision for loan losses |
29,937 | 22,017 | ||||||
Non Interest Income: |
||||||||
Service charges |
1,867 | 2,040 | ||||||
Investment advisory fees |
2,398 | 2,606 | ||||||
Recognized impairment charge on securities available for sale (includes $500 and $773 of
total losses
in 2012 and 2011, respectively, less $22 and $612 of losses on securities available for sale,
recognized in other comprehensive income in 2012 and 2011, respectively) |
(478 | ) | (161 | ) | ||||
Gains on sales and revaluations of loans and other real estate owned, net |
15,935 | 127 | ||||||
Other income |
632 | 607 | ||||||
Total non interest income |
20,354 | 5,219 | ||||||
Non Interest Expense: |
||||||||
Salaries and employee benefits |
10,818 | 10,818 | ||||||
Occupancy |
2,232 | 2,345 | ||||||
Professional services |
1,867 | 1,453 | ||||||
Equipment |
1,068 | 1,010 | ||||||
Business development |
517 | 506 | ||||||
FDIC assessment |
628 | 1,111 | ||||||
Other operating expenses |
3,746 | 3,207 | ||||||
Total non interest expense |
20,876 | 20,450 | ||||||
Income Before Income Taxes |
29,415 | 6,786 | ||||||
Income Taxes |
11,402 | 1,962 | ||||||
Net Income |
$ | 18,013 | $ | 4,824 | ||||
Basic Earnings Per Common Share (1) |
$ | 0.92 | $ | 0.25 | ||||
Diluted Earnings Per Common Share (1) |
$ | 0.92 | $ | 0.25 | ||||
(1) March 2011 per share amounts have been restated to reflect the effects of the 10% stock dividend issued in December 2011. |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
March 31, 2012 and December 31, 2011 | ||||||||
Dollars in thousands, except per share and share amounts | ||||||||
Mar 31 | Dec 31 | |||||||
2012 | 2011 | |||||||
ASSETS |
||||||||
Cash and non interest earning due from banks |
$ | 44,906 | $ | 43,743 | ||||
Interest earning deposits in banks |
522,837 | 34,361 | ||||||
Federal funds sold |
11,878 | 16,425 | ||||||
Securities available for sale, at estimated fair value (amortized cost of $446,117 in |
||||||||
2012 and $503,584 in 2011) |
448,028 | 507,897 | ||||||
Securities held to maturity, at amortized cost (estimated fair value of $13,010 in |
||||||||
2012 and $13,819 in 2011) |
12,160 | 12,905 | ||||||
Federal Home Loan Bank of New York (FHLB) stock |
3,831 | 3,831 | ||||||
Loans (net of allowance for loan losses of $31,856 in 2012 and $30,685 in 2011) |
1,609,199 | 1,541,405 | ||||||
Loans held for sale |
2,532 | 473,814 | ||||||
Accrued interest and other receivables |
29,165 | 40,405 | ||||||
Premises and equipment, net |
25,622 | 25,936 | ||||||
Other real estate owned |
1,174 | 1,174 | ||||||
Deferred income tax, net |
19,793 | 19,822 | ||||||
Bank owned life insurance |
38,126 | 37,563 | ||||||
Goodwill |
23,842 | 23,842 | ||||||
Other intangible assets |
1,464 | 1,651 | ||||||
Other assets |
10,719 | 12,896 | ||||||
TOTAL ASSETS |
$ | 2,805,276 | $ | 2,797,670 | ||||
LIABILITIES |
||||||||
Deposits: |
||||||||
Non interest bearing |
$ | 935,501 | $ | 910,329 | ||||
Interest bearing |
1,488,400 | 1,514,953 | ||||||
Total deposits |
2,423,901 | 2,425,282 | ||||||
Securities sold under repurchase agreements and other short-term borrowings |
46,337 | 53,056 | ||||||
Other borrowings |
16,457 | 16,466 | ||||||
Accrued interest and other liabilities |
27,697 | 25,304 | ||||||
TOTAL LIABILITIES |
2,514,392 | 2,520,108 | ||||||
STOCKHOLDERS EQUITY |
||||||||
Preferred Stock, $0.01 par value; authorized 15,000,000 shares; no shares |
||||||||
outstanding in 2012 and 2011, respectively |
| | ||||||
Common stock, $0.20 par value; authorized 25,000,000 shares: outstanding |
||||||||
19,568,620 and 19,516,490 shares in 2012 and 2011, respectively |
4,174 | 4,163 | ||||||
Additional paid-in capital |
348,095 | 347,764 | ||||||
Retained earnings (deficit) |
(4,030 | ) | (18,527 | ) | ||||
Accumulated other comprehensive income |
209 | 1,726 | ||||||
Treasury stock, at cost; 1,299,414 shares in 2012 and 2011 |
(57,564 | ) | (57,564 | ) | ||||
Total stockholders equity |
290,884 | 277,562 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 2,805,276 | $ | 2,797,670 | ||||
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||||||||||||||||||
Average Balances and Interest Rates | ||||||||||||||||||||||||
For the three months ended March 31, 2012 and 2011 | ||||||||||||||||||||||||
The following table sets forth the average balances of interest earning assets and interest bearing liabilities for | ||||||||||||||||||||||||
the periods indicated, as well as total interest and corresponding yields and rates. | ||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||
- | - | - | ||||||||||||||||||||||
(Unaudited) |
Average | Yield/ | Average | Yield/ | ||||||||||||||||||||
Balance | Interest (3) | Rate | Balance | Interest (3) | Rate | |||||||||||||||||||
ASSETS |
||||||||||||||||||||||||
Interest earning assets: |
||||||||||||||||||||||||
Deposits in Banks |
$ | 122,635 | $ | 56 | 0.18 | % | $ | 276,957 | $ | 164 | 0.24 | % | ||||||||||||
Federal funds sold |
16,636 | 8 | 0.19 | % | 44,662 | 26 | 0.23 | % | ||||||||||||||||
Securities: (1) |
||||||||||||||||||||||||
Taxable |
394,994 | 3,313 | 3.35 | % | 339,975 | 2,950 | 3.47 | % | ||||||||||||||||
Exempt from federal income taxes |
100,659 | 1,517 | 6.03 | % | 115,360 | 1,786 | 6.19 | % | ||||||||||||||||
Loans, net (2) |
1,997,391 | 28,915 | 5.79 | % | 1,727,420 | 26,332 | 6.10 | % | ||||||||||||||||
Total interest earning assets |
2,632,315 | 33,809 | 5.14 | % | 2,504,374 | 31,258 | 4.99 | % | ||||||||||||||||
Non interest earning assets: |
||||||||||||||||||||||||
Cash & due from banks |
49,420 | 41,022 | ||||||||||||||||||||||
Other assets |
159,252 | 153,212 | ||||||||||||||||||||||
Total non interest earning assets |
208,672 | 194,234 | ||||||||||||||||||||||
Total assets |
$ | 2,840,987 | $ | 2,698,608 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||||||
Interest bearing liabilities: |
||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||
Money market |
$ | 982,858 | $ | 1,239 | 0.50 | % | $ | 870,155 | $ | 1,539 | 0.71 | % | ||||||||||||
Savings |
115,795 | 113 | 0.39 | % | 114,769 | 127 | 0.44 | % | ||||||||||||||||
Time |
144,942 | 254 | 0.70 | % | 184,473 | 435 | 0.94 | % | ||||||||||||||||
Checking with interest |
300,673 | 144 | 0.19 | % | 280,805 | 173 | 0.25 | % | ||||||||||||||||
Securities sold under repo & other s/t borrowings |
53,584 | 51 | 0.38 | % | 39,708 | 47 | 0.47 | % | ||||||||||||||||
Other borrowings |
16,460 | 181 | 4.40 | % | 75,063 | 844 | 4.50 | % | ||||||||||||||||
Total interest bearing liabilities |
1,614,312 | 1,982 | 0.49 | % | 1,564,973 | 3,165 | 0.81 | % | ||||||||||||||||
Non interest bearing liabilities: |
||||||||||||||||||||||||
Demand deposits |
921,891 | 819,945 | ||||||||||||||||||||||
Other liabilities |
25,198 | 22,713 | ||||||||||||||||||||||
Total non interest bearing liabilities |
947,089 | 842,658 | ||||||||||||||||||||||
Stockholders equity (1) |
279,586 | 290,977 | ||||||||||||||||||||||
Total liabilities and stockholders equity |
$ | 2,840,987 | $ | 2,698,608 | ||||||||||||||||||||
Net interest earnings |
$ | 31,827 | $ | 28,093 | ||||||||||||||||||||
Net yield on interest earning assets |
4.84 | % | 4.49 | % | ||||||||||||||||||||
(1) Excludes unrealized gains (losses) on securities available for sale. Management believes that this presentation more closely |
||||||||||||||||||||||||
reflects actual performance, as it is more consistent with the Companys stated asset/liability management strategies, which have not |
||||||||||||||||||||||||
resulted in significant realization of temporary market gains or losses on securities available for sale which were primarily related |
||||||||||||||||||||||||
to changes in interest rates. Effects of these adjustments are presented in the table below. |
||||||||||||||||||||||||
(2) Includes loans classified as non-accrual and loans held-for-sale. |
||||||||||||||||||||||||
(3) The data contained in the table has been adjusted to a tax equivalent basis, based on the Companys federal statutory rate of 35 |
||||||||||||||||||||||||
percent. Management believes that this presentation provides comparability of net interest income and net interest margin arising from |
||||||||||||||||||||||||
both taxable and tax-exempt sources and is consistent with industry practice and SEC rules. Effects of these adjustments are presented |
||||||||||||||||||||||||
in the table below. |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||
Financial Highlights | ||||||||
First Quarter 2012 | ||||||||
(Dollars in thousands, except per share amounts) | ||||||||
3 mos end | 3 mos end | |||||||
Mar 31 | Mar 31 | |||||||
2012 | 2011 | |||||||
Earnings: |
||||||||
Net Interest Income |
$ | 31,296 | $ | 27,468 | ||||
Non Interest Income |
$ | 20,354 | $ | 5,219 | ||||
Non Interest Expense |
$ | 20,876 | $ | 20,450 | ||||
Net Income |
$ | 18,013 | $ | 4,824 | ||||
Net Interest Margin |
4.75 | % | 4.39 | % | ||||
Net Interest Margin (FTE) (2) |
4.84 | % | 4.49 | % | ||||
Diluted Earnings Per Share (1) |
$ | 0.92 | $ | 0.25 | ||||
Dividends Per Share (1) |
$ | 0.18 | $ | 0.14 | ||||
Return on Average Equity |
25.51 | % | 6.62 | % | ||||
Return on Average Assets |
2.53 | % | 0.71 | % | ||||
Average Balances: |
||||||||
Average Assets |
$ | 2,845,223 | $ | 2,699,169 | ||||
Average Net Loans |
$ | 1,997,391 | $ | 1,727,420 | ||||
Average Investments |
$ | 495,653 | $ | 455,335 | ||||
Average Interest Earning Assets |
$ | 2,636,551 | $ | 2,504,935 | ||||
Average Deposits |
$ | 2,466,159 | $ | 2,270,147 | ||||
Average Borrowings |
$ | 70,044 | $ | 114,771 | ||||
Average Interest Bearing Liabilities |
$ | 1,614,312 | $ | 1,564,973 | ||||
Average Stockholders Equity |
$ | 282,459 | $ | 291,426 | ||||
Asset Quality During Period: |
||||||||
Provision for loan losses |
$ | 1,359 | $ | 5,451 | ||||
Net Chargeoffs |
$ | 187 | $ | 4,113 | ||||
Annualized Net Chargeoffs/Avg Net Loans |
0.04 | % | 0.95 | % | ||||
(1) 2011 per share amounts have been restated to reflect the effects of the 10% stock dividend issued in December 2011. |
||||||||
(2) See Non-GAAP financial measures and reconciliation to GAAP below. |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||||||||||||||
Selected Balance Sheet Data | ||||||||||||||||||||
First Quarter 2012 | ||||||||||||||||||||
(Dollars in thousands except per share amounts) | ||||||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||
2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
Period End Balances: |
||||||||||||||||||||
Total Assets |
$ | 2,805,276 | $ | 2,797,670 | $ | 2,922,257 | $ | 2,817,815 | $ | 2,655,273 | ||||||||||
Total Investments |
$ | 460,188 | $ | 520,802 | $ | 499,811 | $ | 476,309 | $ | 448,973 | ||||||||||
Net Loans |
$ | 1,609,199 | $ | 1,541,405 | $ | 1,993,658 | $ | 1,888,761 | $ | 1,774,679 | ||||||||||
Goodwill and Other Intangible Assets |
$ | 25,306 | $ | 25,493 | $ | 25,680 | $ | 25,885 | $ | 26,090 | ||||||||||
Total Deposits |
$ | 2,423,901 | $ | 2,425,282 | $ | 2,529,668 | $ | 2,418,391 | $ | 2,243,613 | ||||||||||
Total Stockholders Equity |
$ | 290,884 | $ | 277,562 | $ | 303,511 | $ | 295,686 | $ | 290,654 | ||||||||||
Tangible Common Equity (2) |
$ | 265,578 | $ | 252,069 | $ | 277,831 | $ | 269,801 | $ | 264,564 | ||||||||||
Common Shares Outstanding (1) |
19,568,620 | 19,516,490 | 19,463,727 | 19,457,954 | 19,454,669 | |||||||||||||||
Book Value Per Share (1) |
$ | 14.86 | $ | 14.22 | $ | 15.59 | $ | 15.20 | $ | 14.94 | ||||||||||
Tangible Book Value Per Share (1) (2) |
$ | 13.57 | $ | 12.92 | $ | 14.27 | $ | 13.87 | $ | 13.60 | ||||||||||
Tangible Common Equity Ratio HVHC (2) |
9.6 | % | 9.1 | % | 9.6 | % | 9.7 | % | 10.1 | % | ||||||||||
Tier 1 Leverage Ratio HVHC |
9.4 | % | 8.8 | % | 9.7 | % | 9.8 | % | 9.9 | % | ||||||||||
Tier 1 Risk Based Capital Ratio HVHC |
15.0 | % | 11.3 | % | 12.7 | % | 13.2 | % | 13.5 | % | ||||||||||
Total Risk Based Capital Ratio HVHC |
16.3 | % | 12.6 | % | 14.0 | % | 14.4 | % | 14.8 | % | ||||||||||
Tier 1 Leverage Ratio HVB |
9.1 | % | 8.4 | % | 9.2 | % | 9.1 | % | 9.1 | % | ||||||||||
Tier 1 Risk Based Capital Ratio HVB |
14.6 | % | 10.8 | % | 12.1 | % | 12.3 | % | 12.4 | % | ||||||||||
Total Risk Based Capital Ratio HVB |
15.8 | % | 12.1 | % | 13.4 | % | 13.5 | % | 13.7 | % | ||||||||||
Loan Categories (excluding Loans Held-For-Sale): |
||||||||||||||||||||
Commercial Real Estate |
$ | 705,603 | $ | 690,837 | $ | 817,998 | $ | 844,741 | $ | 821,959 | ||||||||||
Construction |
106,698 | 110,027 | 145,682 | 148,439 | 168,567 | |||||||||||||||
Residential |
568,472 | 514,828 | 812,203 | 671,638 | 548,346 | |||||||||||||||
Commercial and Industrial |
222,485 | 218,500 | 221,208 | 227,008 | 234,742 | |||||||||||||||
Individuals |
28,316 | 29,222 | 29,714 | 29,620 | 30,616 | |||||||||||||||
Lease Financing |
13,187 | 12,538 | 13,036 | 13,329 | 14,923 | |||||||||||||||
Total Loans |
$ | 1,644,761 | $ | 1,575,952 | $ | 2,039,841 | $ | 1,934,775 | $ | 1,819,153 | ||||||||||
Asset Quality Period End: |
||||||||||||||||||||
Allowance for Loan Losses |
$ | 31,856 | $ | 30,685 | $ | 42,150 | $ | 41,889 | $ | 40,287 | ||||||||||
Loans 31-89 Days Past Due Accruing |
$ | 10,250 | $ | 4,974 | $ | 8,737 | $ | 12,361 | $ | 12,745 | ||||||||||
Loans 90 Days or More Past Due Accruing (90 PD) |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
Nonaccrual Loans (NAL) |
$ | 27,859 | $ | 29,892 | $ | 58,537 | $ | 57,617 | $ | 54,433 | ||||||||||
Other Real Estate Owned (OREO) |
$ | 1,174 | $ | 1,174 | $ | 924 | $ | 2,370 | $ | 4,810 | ||||||||||
Nonperforming Loans Held For Sale (HFS) |
$ | 0 | $ | 27,848 | $ | 2,244 | $ | 4,506 | $ | 5,506 | ||||||||||
Nonperforming Assets (90 PD+NAL+OREO+HFS) |
$ | 29,033 | $ | 58,914 | $ | 61,705 | $ | 64,493 | $ | 64,749 | ||||||||||
Allowance / Total Loans |
1.94 | % | 1.95 | % | 2.07 | % | 2.17 | % | 2.21 | % | ||||||||||
NAL / Total Loans |
1.69 | % | 1.90 | % | 2.87 | % | 2.98 | % | 2.99 | % | ||||||||||
NAL + 90 PD / Total Loans |
1.69 | % | 1.90 | % | 2.87 | % | 2.98 | % | 2.99 | % | ||||||||||
NAL + 90 PD + OREO / Total Assets |
1.03 | % | 1.11 | % | 2.03 | % | 2.13 | % | 2.23 | % | ||||||||||
Nonperforming Assets / Total Assets |
1.03 | % | 2.11 | % | 2.11 | % | 2.29 | % | 2.44 | % | ||||||||||
(1) Share and per share amounts for September, June & March 2011 have been restated to reflect the effects of the 10% stock
dividend issued in December 2011. |
||||||||||||||||||||
(2) See Non-GAAP financial disclosures and reconciliation to GAAP below. |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||||||||||||||
Selected Income Statement Data | ||||||||||||||||||||
First Quarter 2012 | ||||||||||||||||||||
(Dollars in thousands except per share amounts) | ||||||||||||||||||||
3 mos end | 3 mos end | 3 mos end | 3 mos end | 3 mos end | ||||||||||||||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||
2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
Interest Income |
$ | 33,278 | $ | 32,936 | $ | 32,586 | $ | 32,462 | $ | 30,633 | ||||||||||
Interest Expense |
1,982 | 2,197 | 2,548 | 2,848 | 3,165 | |||||||||||||||
Net Interest Income |
31,296 | 30,739 | 30,038 | 29,614 | 27,468 | |||||||||||||||
Provision for Loan Losses |
1,359 | 54,621 | 2,536 | 1,546 | 5,451 | |||||||||||||||
Non Interest Income |
20,354 | 4,136 | 5,714 | 3,831 | 5,219 | |||||||||||||||
Non Interest Expense |
20,876 | 18,967 | 20,090 | 20,648 | 20,450 | |||||||||||||||
Income (Loss) Before Income Taxes |
29,415 | (38,713 | ) | 13,126 | 11,251 | 6,786 | ||||||||||||||
Income Taxes (Benefit) |
11,402 | (15,812 | ) | 4,618 | 3,819 | 1,962 | ||||||||||||||
Net Income (Loss) |
$ | 18,013 | ($22,901 | ) | $ | 8,508 | $ | 7,432 | $ | 4,824 | ||||||||||
Diluted Earnings (Loss) per share (1) |
$ | 0.92 | ($1.18 | ) | $ | 0.43 | $ | 0.38 | $ | 0.25 | ||||||||||
Net Interest Margin |
4.75 | % | 4.60 | % | 4.47 | % | 4.55 | % | 4.39 | % | ||||||||||
Average Cost of Deposits (2) |
0.28 | % | 0.32 | % | 0.36 | % | 0.38 | % | 0.40 | % | ||||||||||
(1) Share and per share amounts for September, June & March 2011 have been restated to reflect
the effects of the 10% stock dividend issued in December 2011. |
||||||||||||||||||||
(2) Includes noninterest bearing deposits |
HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES | ||||||||
Non-GAAP Financial Measures and Reconciliation to GAAP | ||||||||
(Dollars in thousands except per share amounts) | ||||||||
Three Months Ended | ||||||||
Mar 31 | ||||||||
2012 | 2011 | |||||||
Total interest earning assets: |
||||||||
As reported |
$ | 2,636,551 | $ | 2,504,935 | ||||
Unrealized gain on securities |
||||||||
available-for-sale (a) |
4,236 | 561 | ||||||
Adjusted total interest earning assets (1) |
$ | 2,632,315 | $ | 2,504,374 | ||||
Net interest earnings: |
||||||||
As reported |
$ | 31,296 | $ | 27,468 | ||||
Adjustment to tax equivalency basis (b) |
531 | 625 | ||||||
Adjusted net interest earnings (1) |
$ | 31,827 | $ | 28,093 | ||||
Net yield on interest earning assets: |
||||||||
As reported |
4.75 | % | 4.39 | % | ||||
Effects of (a) and (b) above |
0.09 | % | 0.10 | % | ||||
Adjusted net yield on interest earning assets (1) |
4.84 | % | 4.49 | % | ||||
Average stockholders equity: |
||||||||
As reported |
$ | 282,459 | $ | 291,426 | ||||
Effects of (a) and (b) above |
2,873 | 449 | ||||||
Adjusted average stockholders equity (1) |
$ | 279,586 | $ | 290,977 | ||||
Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||
2012 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
Tangible Equity Ratio: |
||||||||||||||||||||
Total Stockholders Equity: |
||||||||||||||||||||
As reported |
$ | 290,884 | $ | 277,562 | $ | 303,511 | $ | 295,686 | $ | 290,654 | ||||||||||
Less: Goodwill and other intangible assets |
25,306 | 25,493 | 25,680 | 25,885 | 26,090 | |||||||||||||||
Tangible stockholders equity |
$ | 265,578 | $ | 252,069 | $ | 277,831 | $ | 269,801 | $ | 264,564 | ||||||||||
Total Assets: |
||||||||||||||||||||
As reported |
$ | 2,805,276 | $ | 2,797,670 | $ | 2,922,257 | $ | 2,817,815 | $ | 2,655,273 | ||||||||||
Less: Goodwill and other intangible assets |
25,306 | 25,493 | 25,680 | 25,885 | 26,090 | |||||||||||||||
Tangible assets |
$ | 2,779,970 | $ | 2,772,177 | $ | 2,896,577 | $ | 2,791,930 | $ | 2,629,183 | ||||||||||
Tangible equity ratio (2) |
9.6 | % | 9.1 | % | 9.6 | % | 9.7 | % | 10.1 | % | ||||||||||
Tangible Book Value Per Share: |
||||||||||||||||||||
Tangible stockholders equity |
$ | 265,578 | $ | 252,069 | $ | 277,831 | $ | 269,801 | $ | 264,564 | ||||||||||
Common shares outstanding |
19,568,620 | 19,516,490 | 19,463,727 | 19,457,954 | 19,454,669 | |||||||||||||||
Tangible book value per share (2) |
$ | 13.57 | $ | 12.92 | $ | 14.27 | $ | 13.87 | $ | 13.60 | ||||||||||
(1) Adjusted total interest earning assets, net interest earnings, net yield on interest earning assets and average
stockholders equity exclude the effects of unrealized net gains and losses on securities available for sale. These are
non-GAAP financial measures. Management believes that this alternate presentation more closely reflects actual
performance, as it is more consistent with the Companys stated asset/liability management strategies which have not
resulted in significant realization of temporary market gains or losses on securities available for sale which were
primarily related to changes in interest rates. As noted in the Companys 2012 Proxy Statement, net income as a percentage
of adjusted average stockholders equity is one of several factors utilized by management to determine total compensation. |
||||||||||||||||||||
(2) Tangible equity ratio and tangible book value for share are non-GAAP financial measurements. Management believes these
non-GAAP financial measures provide information useful to investors in understanding the Companys underlying operating
performance and trends, and facilitates comparisons with the performance of other banks and are used by management to
analyze the relative strength of the Companys capital position. |