8-K 1 form8k.txt PRESS RELEASE DATED 4/16/03 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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 16, 2003 SEACOAST BANKING CORPORATION OF FLORIDA (Exact Name of Registrant as Specified in Charter) Florida 1-13660 59-2260678 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 815 Colorado Avenue, Stuart, FL 34994 (Address of Principal Executive Offices) (Zip Code) -------------------------------------------------------------------------------- Registrant's telephone number, including area code (772) 287-4000 8K - 1 of 4 SEACOAST BANKING CORPORATION OF FLORIDA Item 7. Financial Statements and Exhibits Exhibit Number Description ------------------------------ ---------------------------------------- 99.1 Press Release dated April 16, 2003, with respect to Seacoast Banking Corporation of Florida's financial results for the first quarter ended March 31, 2003. Item 9. Regulation FD Disclosure Seacoast Banking Corporation of Florida (the "Registrant") is furnishing the information required by Item 12 of Form 8-K, "Results of Operations and Financial Condition," under this Item 9. On April 16, 2003, the Registrant announced its financial results for the first quarter ended March 31, 2003. A copy of the press release announcing the Registrant's results for the first quarter ended March 31, 2003 is attached hereto as Exhibit 99.1 and incorporated herein by reference. On April 16, 2003, the Registrant held an investor conference call to discuss financial results for the first quarter ended March 31, 2003. All information contained herein is presented as of April 16, 2003, and the Registrant does not assume any obligation to correct or update said information in the future. 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. SEACOAST BANKING CORPORATION OF FLORIDA (Registrant) Dated: April 16, 2003 By: /s/ William R. Hahl -------------- ------------------- Name: William R. Hahl Title: Executive Vice President & CFO Exhibit Index Exhibit Number Description ------------------------------ ------------------------------------ 99.1 Press Release dated April 16, 2003, issued by Seacoast Banking Corporation of Florida (the "Registrant"). EXHIBIT 99.1 NEWS RELEASE Dennis S. Hudson, III President and Chief Executive Officer Seacoast Banking Corporation of Florida (772) 288-6086 William R. Hahl Executive Vice President/ Chief Financial Officer (772) 221-2825 SEACOAST REPORTS AN INCREASE OF 7% IN CORE OPERATING EARNINGS FOR THE FIRST QUARTER STUART, FL., April 16, 2003 - Seacoast Banking Corporation of Florida (NASDAQ-NMS: SBCF), a bank holding company whose principal subsidiary is First National Bank and Trust Company of the Treasure Coast, today reported net income totaling $3,223,000 or $0.23 diluted earnings per share ("DEPS") for the first quarter of 2003, compared to $3,686,000 or $0.26 DEPS for the first quarter a year ago. Core operating earnings, which exclude the impacts of security gains and losses, totaled $3,955,000 or $0.28 DEPS, up $269,000 or 7.3 percent from a year ago. Included in the first quarter results is the impact on earnings from restructuring the Company's investment portfolio for better performance in the current interest rate environment. A total of $1,157,000 or $0.05 DEPS in investment security losses were recorded in first quarter earnings versus $66,000 of gains in the prior year's first quarter. "Seacoast begins 2003 with quality growth, a very strong balance sheet and the people, processes, capital, and expanded markets to allow for stronger future performance," commented Dennis S. Hudson, III, Chief Executive Officer of Seacoast. The need to restructure the investment portfolio was caused by increased prepayments of collateralized mortgage obligations, resulting in unacceptable asset sensitivity, accelerated premium amortization and a decline in investment portfolio yields. The Company's investment portfolio yield for the first quarter was 36 basis points lower than the fourth quarter yield. Highlights for the quarter included the following: o Return on average assets was 1.02 percent (1.25% excluding impacts from securities gains and losses), compared to 1.18 percent for the first quarter of 2002; o The return on average equity for the first quarter was 13.07 percent (16.04 percent excluding impacts from securities gains and losses), compared to 15.45 percent the first quarter of 2002; o Average equity to average assets remained strong at 7.81 percent compared to 7.67 percent one year earlier; o Exceptional residential mortgage production continued with a total of $85.5 million in residential applications processed in the first quarter of 2003 compared to $42 million in 2002, an increase of 103.6 percent; o Average noninterest bearing deposits increased $19 million or 11.3 percent from the first quarter last year, and now total 18.5% of total deposits; o Asset quality exhibited little change with nonperforming assets ratio of 0.29 percent compared to 0.33 percent at year-end and 0.22 percent in the first quarter 2002; and o Seacoast Marine originated loans totaling $38.3 million for the period ended March 31, 2003, compared to $15.4 million in the same period for 2002. The net interest margin for the quarter was 3.89 percent, representing a decline from the 4.05 percent achieved in last year's first quarter and the 4.02 percent in the fourth quarter of 2002. The decline in the net interest margin resulted from interest sensitive assets repricing, as a result of a flatter yield curve and the Fed's last 50-basis point rate cut on November 6 without a comparable decline in deposit rates and other interest sensitive liabilities. Net interest income declined to $11,639,000 by $177,000 or 1.5 percent from last year's first quarter, but was flat when compared to fourth quarter 2002's $11,648,000. The marginal decline in interest income comes from the shift in the Company's balance sheet during 2002 to a slightly asset sensitive position in anticipation of higher interest rates in 2003. However, the fundamentals of the Company remain very good and the prospects for margin improvement, as a result of increased loan growth from the expansion into Palm Beach County, will be a key to future increased shareholder value. The cost for interest bearing deposits declined to 1.71 percent from 2.74 percent in the first quarter 2002 and 2.01 percent in the fourth quarter. Interest bearing deposits increased $18.6 million, representing an 8.8 percent annualized growth during the first quarter 2003. Lower cost savings, NOW and money market balances increased $18.0 million or an annualized growth of 15.2 percent in the first three months of 2003 and noninterest bearing demand deposits increased $11.5 million or 24.9 percent annualized. Although total loans outstanding were lower than prior year, the Company's commercial and commercial real estate portfolio increased $7.2 million in the first quarter or 9.8 percent annualized. The response to the expansion into Palm Beach County in late 2002 has been very positive. The addition of two full service branches in January 2003, combined with three commercial loan officers, has resulted in a pipeline of over $31 million in loans in this new market. The recent acquisition of Palm Beach County's two largest community banks by large out-of-market competitors has further enhanced the prospects for future loan and deposit growth from this market. Noninterest income, excluding securities gains and losses, increased 34.8 percent when compared to the prior year's first quarter, reflecting reduced revenues from investment management services, offset by growing revenues from mortgage banking and marine lending. During the first quarter 2003, noninterest income related to mortgage loan production grew by 111.1 percent to $1,638,000 compared with $776,000 earned in the first quarter of 2003. Likewise, revenues from marine loan production increased to $807,000 or an increase of $640,000 from the prior year's first quarter. Both business lines benefited from expansion and the favorable interest rate environment. Mortgage banking has added resources in the existing Treasure Coast markets, where Seacoast ranks second in deposit market share and has the convenience of 25 full service branches, and in the fast growing Palm Beach County market, where we now have three offices and three more planned for 2004 and 2005. The Seacoast Marine Finance division added seven employees in California to its production team to fully serve the western marine markets, including the states of Washington and Oregon. The decline in revenues from investment management has been disappointing and remains extremely challenging due to the economic environment and the uncertainties for improvement; however, continuing to provide these services is an important part of our SuperCommunity banking strategy. In addition, when the economy does improve, these revenues will expand and contribute to future earnings results. Noninterest expenses increased $776,000 or 7.7 percent from the fourth quarter, as a result of opening two new branches in the first quarter and increased commission expenses due to higher volumes of mortgage banking and marine lending business. Core deposit growth continued to enhance fees by increasing the customer base and usage of check cards. During the first quarter 2003, a total of $289,000 in interchange income was earned compared to $223,000 for the same period in 2002. Net loan charge offs were $280,000 for the first quarter of 2003, compared to net charge-offs of $124,000 for 2002. Loan delinquencies, nonaccruals and the percentage of loans past due 90 days to average loans declined to 0.29 percent at March 31, 2003, compared to 0.33 percent for the fourth quarter 2002. Nonperforming assets totaled $1,901,000, representing little change from the $1,670,000 for the same quarter a year ago. The consistent credit quality and low net charge-offs allowed the Company to eliminate the provision for loan losses for the quarter. No provision was made in the prior year's first quarter. The Company's effective tax rate for the first quarter 2003 was 34.7 percent compared to 39.2 percent for the same quarter in 2002. At the beginning of 2003 the Company formed a Real Estate Investment Trust to more efficiently manage its real estate assets and to reduce its effective tax rate and tax expenses. Seacoast Banking Corporation of Florida has approximately $1.3 billion in assets. It is one of the largest independent commercial banking organizations in Florida, headquartered on Florida's Treasure Coast, one of the wealthiest and fastest growing areas in the nation. -------------------------------------------------------------------------------- This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance or achievements of Seacoast Banking Corporation of Florida ("Seacoast" or the "Company") to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements. You can identify these forward-looking statements through our use of words such as "may", "will", "anticipate", "assume", "should", "indicate", "would", "believe", "contemplate", "expect", "estimate", "continue", "point to", "project", "could", "intend" or other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest sensitive assets and liabilities; interest rate risks and sensitivities; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in the Company's market area and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; the failure of assumptions underlying the establishment of reserves for possible loan losses, and the risks of mergers and acquisitions, including, without limitation, the related costs, including integrating operations as part of these transactions, and the failure to achieve the expected gains, revenue growth and/or expense savings from such transactions. All written or oral forward looking statements attributable to the Company are expressly qualified in their entirety by this Cautionary Notice including, without limitation, those risks and uncertainties, described in the Company's annual report on Form 10-K for the year ended December 31, 2002 under "Special Cautionary Notice Regarding Forward Looking Statements", and otherwise in the Company's SEC reports and filings. Such reports are available upon request from Seacoast, or from the Securities and Exchange Commission, including the SEC's website at http://www.sec.gov. FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES Three Months Ended (Dollars in thousands, March 31, except per share data) 2003 2002 -------------------------------------------------------------------------------- Summary of Earnings $ 3,223 $ 3,686 Net interest income (1) 11,639 11,816 Performance Ratios Return on average assets (2), (3) 1.02% 1.18% Return on average shareholders' equity (2), (3) 13.07 15.45 Net interest margin (1), (2) 3.89 4.05 Per Share Data (A) Net income diluted $ 0.23 $ 0.26 Net income basic 0.23 0.26 Cash dividends declared 0.11 0.10 -------------------------------------------------------------------------------- March 31, ------------------------ Increase/ 2003 2002 (Decrease) -------------------------------------------------------------------------------- Credit Analysis Net charge-offs year-to-date $ 280 $ 124 125.8% Net charge-offs to average loans 0.16% 0.06% 166.7 Loan loss provision year-to-date $ - $ - - Allowance to loans at end of period 0.99% 0.92% 7.6 Nonperforming assets $ 1,901 $ 1,670 13.8 Nonperforming assets to loans and other real estate owned at end of period 0.29% 0.22% 31.8 Selected Financial Data Total assets $1,297,826 $1,252,181 3.6 Securities - Trading (at fair value) 43,719 - n/m Securities - Available for Sale (at fair value) 440,185 339,377 29.7 Securities - Held for Sale (at amortized cost) 19,998 24,186 (17.3) Net loans 654,990 747,625 (12.4) Deposits 1,060,591 1,040,170 2.0 Shareholders' equity 100,526 94,602 6.3 Book value per share (A) 7.22 6.75 7.0 Tangible book value per share (A) 6.98 6.46 8.0 Average shareholders' equity to average assets 7.81% 7.67% 1.8 -------------------------------------------------------------------------------- (A) Per share amounts reflect impact of 3-for-1 stock split effective July 1, 2002. (1) Calculated on a fully taxable equivalent basis using amortized cost. (2) These ratios are stated on an annualized basis and are not necessarily indicative of future periods. (3) The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses) because the unrealized gains (losses) are not included in net income. n/m = not meaningful CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) -------------------------------------------------------------------------------- SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES Three Months Ended March 31, (Dollars in thousands, ---------------------------------- except per share data) 2003 2002 -------------------------------------------------------------------------------- Interest on securities: Taxable $ 4,033 $ 3,256 Nontaxable 41 52 Interest and fees on loans 11,982 14,768 Interest on federal funds sold 21 285 ----------------------------------- Total Interest Income 16,077 18,361 Interest on deposits 903 1,346 Interest on time certificates 2,701 4,388 Interest on borrowed money 873 850 ----------------------------------- Total Interest Expense 4,477 6,584 ----------------------------------- Net Interest Income 11,600 11,777 Provision for loan losses 0 0 ----------------------------------- Net Interest Income After Provision for Loan Losses 11,600 11,777 Noninterest income: Service charges on deposit accounts 1,217 1,217 Trust income 524 597 Mortgage banking fees 1,638 776 Brokerage commissions and fees 420 543 Marine finance fees 807 167 Debit card income 289 223 Other deposit based EFT fees 116 101 Other income 360 359 ----------------------------------- 5,371 3,983 Securities gains (losses) (1,157) 66 ----------------------------------- Total Noninterest Income 4,214 4,049 Noninterest expenses: Salaries and wages 4,159 3,760 Employee benefits 1,216 1,048 Occupancy expense 1,286 1,246 Furniture and equipment expense 994 829 Outsourced data processing 499 535 Marketing expense 550 513 Legal and professional fees 408 325 FDIC assessments 41 43 Amortization of intangibles 63 63 Other expense 1,659 1,406 ---------------------------------- Total Noninterest Expenses 10,875 9,768 Income Before Income Taxes 4,939 6,058 Provision for income taxes 1,716 2,372 ---------------------------------- Net Income $ 3,223 $ 3,686 ---------------------------------- -------------------------------------------------------------------------------- Per share common stock (A): Net income diluted $ 0.23 $ 0.26 Net income basic 0.23 0.26 Cash dividends declared 0.11 0.10 Average diluted shares outstanding 14,248,755 14,304,921 Average basic shares outstanding 13,923,795 14,007,291 -------------------------------------------------------------------------------- (A) Per share amounts reflect impact of 3-for-1 stock split effective July 1, 2002. CONDENSED CONSOLIDATED BALANCE SHEETS -------------------------------------------------------------------------------- SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES March 31, December 31, March 31, (Dollars in thousands) 2003 2002 2002 -------------------------------------------------------------------------------- Assets Cash and due from banks $ 63,534 $ 49,571 $ 46,992 Federal funds sold and interest bearing deposits 30,990 251 53,417 Securities: Trading (at fair value) 43,719 - - Available for sale (at fair value) 440,185 466,278 339,377 Held for Sale (at amortized cost) 19,998 32,181 24,186 ----------------------------------------- Total Securities 503,902 498,459 363,563 Loans sold and available for sale 11,696 13,814 10,095 Loans 661,536 688,161 754,535 Less: Allowance for loan losses (6,546) (6,826) (6,910) ----------------------------------------- Net Loans 654,990 681,335 747,625 Bank premises and equipment 16,036 16,045 15,101 Other real estate owned - 8 192 Other assets 16,678 21,814 15,196 ----------------------------------------- $1,297,826 $1,281,297 $1,252,181 ----------------------------------------- Liabilities and Shareholders' Equity Liabilities Deposits Demand deposits (noninterest bearing) $ 195,989 $ 184,524 $ 178,781 Savings deposits 490,976 472,976 474,107 Other time deposits 276,777 279,255 297,559 Time certificates of $100,000 or more 96,849 93,785 89,723 ----------------------------------------- Total Deposits 1,060,591 1,030,540 1,040,170 Federal funds purchased and securities sold under agreements to repurchase, maturing within 30 days 65,241 102,967 70,754 Other borrowings 65,000 40,000 40,000 Other liabilities 6,468 7,043 6,655 ----------------------------------------- 1,197,300 1,180,550 1,157,579 Shareholders' Equity Preferred stock - - - Common stock 1,555 1,555 1,554 Additional paid in capital 26,994 26,994 26,888 Retained earnings 90,533 89,960 82,815 Treasury stock (17,916) (18,578) (16,440) ----------------------------------------- 101,166 99,931 94,817 Securities valuation equity (allowance) (640) 816 (215) ----------------------------------------- Total Shareholders' Equity 100,526 100,747 94,602 ----------------------------------------- $1,297,826 $1,281,297 $1,252,181 ----------------------------------------- Common Shares Outstanding 13,928,951 13,890,001 14,015,874 -------------------------------------------------------------------------------- Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date. CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) -------------------------------------------------------------------------------- SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES
Quarters ------------------------------------------------------ 2003 2002 ------------------------------------------------------ (Dollars in thousands, Last 12 except per share data) First Fourth Third Second Months --------------------------------------------------------------------------------------------------------------------------- Operating Ratios Return on average assets (2),(3) 1.02% 1.32% 1.17% 1.33% 1.21% Return on average shareholders' equity (2),(3) 13.07 16.24 14.19 16.76 15.06 Net interest margin (1),(2) 3.89 4.02 4.17 4.23 4.09 Average equity to average assets 7.81 8.12 8.26 7.92 8.02 Credit Analysis Net charge-offs $ 280 $ 7 $ 69 $ 8 $ 364 Net charge-offs to average loans 0.16% 0.00% 0.04% 0.00% 0.05% Loan loss provision $ - $ - $ - $ - $ - Allowance to loans at end of period 0.99% 0.99% 0.95% 0.94% Nonperforming assets $ 1,901 $2,249 $2,454 $1,993 Nonperforming assets to loans and other real estate owned at end of period 0.29% 0.33% 0.34% 0.27% Nonaccrual loans and accruing loans 90 days or more past due to loans outstanding at end of period 0.29 0.33 0.32 0.26 Per Share Common Stock (A) Net income diluted $ 0.23 $ 0.28 $ 0.25 $ 0.28 $ 1.04 Net income basic 0.23 0.29 0.25 0.29 1.07 Cash dividends declared 0.11 0.11 0.10 0.10 0.42 Book value per share 7.22 7.25 7.11 7.05 -------------------------------------------------------------------------------------------------------------------------- (A) Per share amounts reflect impact of 3-for-1 stock split effective July 1, 2002. (1) Calculated on a fully taxable equivalent basis using amortized cost. (2) These ratios are stated on an annualized basis and are not necessarily indicative of ratios which may be expected for the entire year. (3) The calculation of ROA and ROE do not include the mark-to-market unrealized gains (losses), because the unrealized gains (losses) are not included in net income.
CONSOLIDATED QUARTERLY FINANCIAL DATA -------------------------------------------------------------------------------- SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES -------------------------------------------------------------------------------- March 31, December 31, March 31, SECURITIES 2003 2002 2002 -------------------------------------------------------------------------------- Mortgage-backed $ 43,719 $ - $ - ---------------------------------------------- Securites Trading 43,719 - - ---------------------------------------------- U.S. Treasury and U.S. Government Agencies $ 2,501 $ 2,508 $ 2,538 Mutual funds - 292 278 Mortgage-backed 431,289 456,655 329,067 Other securities 6,395 6,823 7,494 ---------------------------------------------- Securities Available for Sale 440,185 466,278 339,377 ---------------------------------------------- Mortgage-backed 16,828 28,555 20,321 Obligations of states and political subdivisions 3,170 3,626 3,865 ---------------------------------------------- Securities Held for Investment 19,998 32,181 24,186 ---------------------------------------------- Total Securities $503,902 $498,459 $363,563 ---------------------------------------------- -------------------------------------------------------------------------------- March 31, December 31, March 31, LOANS 2003 2002 2002 -------------------------------------------------------------------------------- Real estate construction $ 84,821 $ 77,909 $ 75,234 Real estate mortgage 452,465 478,123 540,108 Instalment loans to individuals 82,011 91,307 99,946 Commercial and financial 41,809 40,491 38,779 Other loans 430 331 468 ---------------------------------------------- Total Loans $661,536 $688,161 $754,535 ---------------------------------------------- --------------------------------------------------------------------------------
AVERAGE BALANCES, YIELDS AND RATES SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES 2003 2002 ------------------------------------------------------------------- First Quarter Fourth Quarter First Quarter ------------------------------------------------------------------- Average Yield/ Average Yield/ Average Yield/ (Dollars in thousands) Balance Rate Balance Rate Balance Rate ------------------------------------------------------------------------------------------------------ Assets Earning assets: Securities: Taxable $512,781 3.15% $411,457 3.49% $313,853 4.15% Nontaxable 3,193 7.77 3,505 7.99 4,009 7.78 ------------------------------------------------------------------ Total Securities 515,974 3.17 414,962 3.53 317,862 4.20 Federal funds sold and other short- term investments 6,723 1.27 17,001 1.40 69,478 1.66 Loans, net 690,022 7.05 718,650 7.14 781,662 7.59 ------------------------------------------------------------------ Total Earning Assets 1,212,719 5.39 1,150,613 5.74 1,169,002 6.33 Allowance for loan losses (6,795) (6,817) (6,993) Cash and due from banks 47,048 44,982 40,855 Premises and equipment 16,122 16,161 15,287 Other assets 12,105 12,357 13,806 ------------------------------------------------------------------- $1,281,199 $1,217,296 $1,231,957 ------------------------------------------------------------------- Liabilities and Shareholders' Equity Interest-bearing liabilities: NOW (including Super NOW) $ 67,373 0.66% $ 61,321 0.77% $ 65,168 1.11% Savings deposits 148,857 0.62 145,226 0.80 147,916 1.12 Money market accounts 265,843 0.86 254,627 1.01 242,428 1.27 Time deposits 372,273 2.94 376,043 3.36 394,162 4.51 Federal funds purchased and securities sold under agreements to repurchase 78,495 0.96 54,876 0.88 75,515 1.17 Other borrowings 56,944 4.90 40,000 6.42 40,000 6.42 -------------------------------------------------------------------- Total Interest-Bearing Liabilities 989,785 1.83 932,093 2.13 965,189 2.77 Demand deposits (noninterest-bearing) 186,613 180,763 167,618 Other liabilities 4,787 5,612 4,709 -------------------------------------------------------------------- Total Liabilities 1,181,185 1,118,468 1,137,516 Shareholders' equity 100,014 98,803 94,441 -------------------------------------------------------------------- $1,281,199 $1,217,271 $1,231,957 -------------------------------------------------------------------- Interest expense as a % of earning assets 1.50% 1.73% 2.28% Net interest income as a % of earning assets 3.89 4.02 4.05 --------------------------------------------------------------------------------
(1) On a fully taxable equivalent basis. All yields and rates have been computed on an annualized basis using amortized cost. Fees on loans have been included in interest on loans. Nonaccrual loans are included in loan balances.