May 1,
2009 FOR
IMMEDIATE RELEASE
CONTACT:
Kelly Polonus, Great Southern, 1.417.895.5242
kpolonus@greatsouthernbank.com
Great
Southern Bancorp, Inc. Reports Quarterly Earnings of $1.29 Per Common
Share
Earnings
affected by significant gain related to acquisition and
certain
investment securities impairment write-downs
Financial
Results for the Quarter:
|
·
|
The
Company’s FDIC-assisted acquisition of certain assets and liabilities of
TeamBank N.A. on March 20, 2009, resulted in a net gain of $25.4 million
based upon independent fair value accounting valuations of the assumed
assets and liabilities and acquisition
costs.
|
|
·
|
Total
loans, including TeamBank loans, increased $216.9 million, or 12.4%, from
December 31, 2008.
|
|
·
|
Total
deposits (excluding brokered and national certificates of deposit and
TeamBank deposits) increased $244.7 million, or 22.4%, from December 31,
2008. In addition, the Company assumed $511 million in deposits
from TeamBank.
|
|
·
|
Net
interest income decreased $288,000, or 1.6%, compared to the first quarter
2008. Excluding the amortization of the broker fee recorded as part of the
accounting change in 2005, net interest income decreased $1.5 million, or
8.0%, compared to the first quarter
2008.
|
|
·
|
Non-interest
income increased $20.8 million, or 205.1%, compared to first quarter 2008.
Of this increase, $27.8 million related to the TeamBank transaction gain
partially offset by investment securities impairment write-downs of $4.0
million. In addition, income from hedging activities decreased $2.1
million.
|
|
·
|
Non-interest
expense increased $2.1 million, or 14.9%, compared to the first quarter
2008. Excluding the $2.4 million of one-time TeamBank transaction
expenses, non-interest expense was slightly down over the same quarter a
year ago.
|
|
·
|
Non-performing
assets decreased $4.2 million, or 6.4%, from December 31,
2008.
|
(Explanations
of above financial results are detailed in body of this release
below.)
Springfield,
Mo. -- Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great
Southern Bank, today reported preliminary earnings for the quarter ended March
31, 2009, were $1.29 per diluted common share ($17,435,000) compared to a loss
of $1.13 per diluted common share ($15,153,000 loss) during the same quarter in
the prior year.
For the
three months ended March 31, 2009, return on average equity (ROAE) was 39.66%;
return on average assets (ROAA) was 2.58%; and net interest margin (NIM) was
2.81%. These operating results include the effects of assets purchased and
liabilities assumed from the FDIC from the March 20, 2009, transaction date
through March 31, 2009.
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2
“As
anticipated, this difficult economic environment has created opportunities for
well-positioned institutions. One such opportunity arose for our Company on
March 20, 2009, as we acquired certain assets and liabilities of Kansas-based
TeamBank in a FDIC-assisted transaction with loss sharing,” said Great Southern
President and CEO Joseph W. Turner. “We were attracted to this acquisition
because of the strong customer relationships TeamBank has formed throughout its
long history. This acquisition further strengthens our Company with the addition
of nearly 37,000 customer deposit accounts and expansion capabilities in two new
states, Kansas and Nebraska. We have also had the opportunity to hire
many former TeamBank associates, who are key to maintaining the excellent
customer relationships already established in these markets. The first quarter
one-time net pre-tax gain of $25.4 million associated with this transaction is a
result of independent valuations of the assumed assets and deposits and their
treatment under fair value accounting rules and related acquisition costs.
Additional income may be recognized in future periods as loans are collected. We
anticipate that this transaction will be accretive to future earnings, but we
cannot estimate the timing of this accretion due to the variables associated
with this transaction.
“The
TeamBank transaction only represented 11 days of the quarter, thus first quarter
results (excluding the acquisition one-time gain as well as one-time
acquisition-related charges) primarily reflect the performance of legacy Great
Southern. Overall, the Company performed well in the first quarter. We continued
to maintain significant capital and liquidity levels appropriate to current
market conditions. Excluding the impairment write-down of certain investment
securities and the TeamBank transaction, core operating earnings were
approximately $6.0 million (pre-tax).
“Core
deposit growth (excluding TeamBank deposits) was positive in the first quarter
with increases in most deposit types. Core deposits (excluding national and
brokered certificates of deposit) increased $244.7 million from December 31,
2008. Two of the more significant areas of change were in interest bearing and
non-interest bearing transaction accounts, which increased $96.8 million and
$32.2 million, respectively. In addition, CDARS® customer account
balances grew $101.7 million from December 31, 2008. Although some of
these deposits may prove to be seasonal, this increase is a reflection of
deposit acquisition initiatives and the hard work of Great Southern associates
in acquiring and strengthening customer relationships. In addition to customer
deposit relationships, customer repurchase agreements grew $92.3 million from
December 31, 2008.”
Turner
added, “Overall net loan balances (excluding TeamBank loans) decreased by $11.6
million from the end of the previous quarter. The reduction in loan balances was
primarily a result of decreases in the construction and land development sector.
Single family residential loans were up from the end of the fourth quarter 2008
with activity in both refinancings and new originations. Consumer lending
experienced a slight decline as loan demand continues to wane. In
addition, the Company also saw gains in commercial real estate balances from the
end of 2008.
“Credit
quality and credit issue resolution continue to be top priorities.
Non-performing assets remain elevated, but did decline $4.2 million from the end
of 2008 to $61.6 million. The allowance for loan losses increased $1.0 million
from the end of 2008 to $30.2 million. At March 31, 2009, the allowance for loan
losses to total loans, excluding those supported by the FDIC loss share
agreement, was 1.73%, comparing favorably with industry averages. We expect
non-performing assets, loan loss provision levels and net charge-offs to
continue to be elevated, but at manageable levels, in 2009 compared to our
Company’s historic results.”
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Selected
Financial Data and Non-GAAP Reconciliation
(Dollars
in thousands)
|
Three Months Ended March 31,
2009
|
||||||||||||
|
As
Reported
|
Effect
of
Hedge
Accounting
Entries
Recorded
|
Excluding
Hedge
Accounting
Entries
Recorded
|
||||||||||
|
Net
interest income
|
$ | 17,555 | $ | (110 | ) | $ | 17,665 | |||||
|
Provision
for loan losses
|
5,000 | -- | 5,000 | |||||||||
|
Non-interest
income
|
31,037 | 847 | 30,190 | |||||||||
|
Non-interest
expense
|
16,214 | -- | 16,214 | |||||||||
|
Provision
for income taxes
|
9,119 | (258 | ) | 8,861 | ||||||||
|
Net
income
|
$ | 18,259 | $ | 479 | $ | 17,780 | ||||||
|
Net
income available to
|
||||||||||||
|
common
shareholders
|
$ | 17,435 | $ | 479 | $ | 16,956 | ||||||
|
Three Months Ended March 31,
2008
|
||||||||||||
|
As
Reported
|
Effect
of
Hedge
Accounting
Entries
Recorded
|
Excluding
Hedge
Accounting
Entries
Recorded
|
||||||||||
|
Net
interest income
|
$ | 17,843 | $ | (1,357 | ) | $ | 19,200 | |||||
|
Provision
for loan losses
|
37,750 | -- | 37,750 | |||||||||
|
Non-interest
income
|
10,174 | 2,974 | 7,200 | |||||||||
|
Non-interest
expense
|
14,108 | -- | 14,108 | |||||||||
|
Provision
(credit) for income taxes
|
(8,688 | ) | (566 | ) | (9,254 | ) | ||||||
|
Net
income (loss)
|
$ | (15,153 | ) | $ | 1,051 | $ | (16,204 | ) | ||||
Selected
Financial Data and Non-GAAP Reconciliation
(Dollars
in thousands)
|
Three
Months Ended March 31,
|
||||||||||||||||
|
2009
|
2008
|
|||||||||||||||
|
Dollars
|
Earnings
Per
Share
|
Dollars
|
Earnings
Per Share |
|||||||||||||
|
Reported
Earnings (Loss)
|
||||||||||||||||
|
Per
Common Share
|
$ | 17,435 | $ | 1.29 | $ | (15,153 | ) | $ | (1.13 | ) | ||||||
|
Amortization
of deposit broker
|
||||||||||||||||
|
origination
fees (net of taxes)
|
72 | 882 | ||||||||||||||
|
Net
change in fair value of interest
|
||||||||||||||||
|
rate
swaps and related deposits
|
||||||||||||||||
|
(net
of taxes)
|
(551 | ) | (1,933 | ) | ||||||||||||
|
Earnings
excluding impact
|
||||||||||||||||
|
of
hedge accounting entries
|
$ | 16,956 | $ | (16,204 | ) | |||||||||||
FDIC-ASSISTED ACQUISITION OF
CERTAIN ASSETS AND LIABILITIES OF TEAMBANK
On March
20, 2009, Great Southern Bank entered into a purchase and assumption agreement
with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume
all of the deposits (excluding brokered deposits) and certain assets of
TeamBank, N.A., a full service commercial bank headquartered in Paola,
Kan. TeamBank
operated 17 locations in Kansas, Missouri and Nebraska. Great Southern assumed
approximately $511 million of the deposits of TeamBank at a premium of $4.9
million. Additionally, Great Southern purchased approximately $434 million in
loans, additional loan commitments and $6 million of other real estate owned
(ORE) at a discount of $100 million. The loans, commitments and ORE purchased
are covered by a loss share agreement between the FDIC and Great Southern which
affords Great Southern significant protection. Under
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4
such
agreement, the FDIC has agreed to cover 80% of the losses on the loans,
commitments and ORE up to $115 million, and 95% of losses that exceed that
amount. In addition, Great Southern also purchased cash equivalents and
investment securities of TeamBank valued at $203 million, and assumed $80
million in Federal Home Loan Bank advances and other borrowings. The Company
anticipates buying all primary banking center buildings available for purchase
from the FDIC, except the Lee’s Summit office, which was opened in mid-2007 and
served primarily as a loan production office. This office will be closed in July
and customers of this office will have access to the existing Great Southern
banking center in Lee’s Summit, as well as an additional banking center
currently under construction. Acquisition costs of the buildings will be based
on current appraisals and determined at a later date.
The
former TeamBank franchise is currently operating under the Great Southern name.
Since the acquisition, customer deposits have remained stable with a 98%
retention rate currently. The Company expects to convert operational systems in
late July so that the Company operates under a single platform. This
conversion will allow all Great Southern and former TeamBank customers to
conduct business at all banking centers throughout the Great Southern
franchise. Upon completion of the operational conversion, back office
operations will be consolidated.
As a
result of the transaction described above, Great Southern engaged a national
independent accounting firm to assist it in determining current fair value
accounting estimates of the assumed assets and liabilities. This valuation
resulted in the Company booking a one-time gain (net of $2.4 million of
acquisition costs) of $25.4 million in accordance with FASB Statement No. 141
(R), Business
Combinations. It is expected that, based upon the analysis performed by
the independent accounting firm that the Company will accrete additional
discounts into income as the Company collects on the assets covered by the loss
share agreement. Based on the level of discounts expected to be accreted into
income in future years, the acquired TeamBank loans are not considered
non-performing as we have a reasonable expectation to recover both the
discounted book balances of such loans as well as a yield on the discounted book
balances. Loans with an unpaid balance of $435 million were recorded
at their fair value of $223 million (net of all discounts) in Great Southern’s
March 31, 2009, loan totals. In addition, Great Southern recorded an
indemnification asset from the FDIC in the amount of $154 million as part of the
loss share agreement.
The
Company operated the former TeamBank franchise for 11 days in the first quarter
with income and expenses being essentially equal. In the first quarter of 2009,
the Company expensed $2.4 million for acquisition-related costs.
NET INTEREST
INCOME
Including
the impact of the accounting entries recorded for certain interest rate swaps,
net interest income for the first quarter of 2009 decreased $288,000 to $17.6
million compared to $17.8 million for the first quarter of 2008. Net
interest margin was 2.81% in the quarter ended March 31, 2009, compared to 3.07%
in the same period in
2008, a decrease of 26 basis points. Net interest margin including the effects
of the accounting change was 2.81% in the quarter ended March 31, 2009, compared
to 2.80% in the quarter ended December 31, 2008.
Most of
the decrease in net interest margin resulted from the decision by the Company to
increase the amount of longer-term brokered certificates of deposit during 2008
to provide liquidity for operations and to maintain in reserve its available
secured funding lines with the Federal Home Loan Bank (FHLBank) and the Federal
Reserve Bank. In 2008, the Company issued approximately $359 million of new
brokered certificates which are fixed rate certificates with maturity terms of
generally two to four years, which the Company (at its discretion) may redeem at
par generally after six months. As market interest rates on these types of
deposits have decreased in recent months, the Company has begun to redeem some
of these certificates in 2009 in order to
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5
lock in
cheaper funding rates. At March 31, 2009, the Company had $266 million of
callable deposits remaining,
and has redeemed $95 million of this amount subsequent to March 31, 2009. In
addition during 2008, the Company issued approximately $137 million of new
brokered certificates, which are fixed rate certificates with maturity terms of
generally two to four years, which the Company may not redeem prior to maturity.
There are no interest rate swaps associated with any of these brokered
certificates. These longer-term certificates carry an interest rate that is
approximately 200 to 300 basis points higher than the interest rate that the
Company would have paid if it instead utilized short-term advances from the
FHLBank. The Company decided the higher rate was justified by the longer term
and the ability to keep committed funding lines available throughout 2008 and
into 2009. The net interest margin was also negatively impacted as the Company
originated some of the new certificates in advance of the anticipated
terminations of these existing certificates, thereby causing the Company to have
excess funds for a period of time. These excess funds were invested in
short-term cash equivalents at rates that at times caused the Company to earn a
negative spread. The average balance of cash and cash equivalents in the three
months ended March 31, 2009 and 2008, was $306 million and $81 million,
respectively. Partially offsetting the increase in brokered CDs, several
existing brokered certificates were redeemed by the Company in 2008 and in the
first quarter of 2009 as the related interest rate swaps were terminated by the
swap counterparties. The Company’s interest rate swaps have been terminated as
of March 31, 2009.
The
Federal Reserve most recently cut interest rates on December 16, 2008. Great
Southern has a significant portfolio of loans which are tied to a “prime rate”
of interest. Some of these loans are tied to some national index of “prime,”
while most are indexed to “Great Southern prime.” The Company has elected to
leave its “prime rate” of interest at 5.00% in light of the current highly
competitive funding environment for deposits and wholesale funds. This does not
affect a large number of customers as a majority of the loans indexed to “Great
Southern prime” are already at interest rate floors which are provided for in
individual loan documents. At its most recent meeting on April 29, 2009, the
Federal Reserve Board elected to leave the Federal Funds rate unchanged and did
not indicate that rate changes are imminent.
For the
three months ended December 31, 2009, and 2008, interest income was reduced
$290,000 and $186,000, respectively, due to the reversal of accrued interest on
loans which were added to non-performing status during the quarter.
Non-GAAP
Reconciliation
(Dollars
in thousands)
|
Three
Months Ended March 31,
|
||||||||||||||||
|
2009
|
2008
|
|||||||||||||||
|
Dollars
|
%
|
Dollars
|
%
|
|||||||||||||
|
Net
Interest Income/Margin
|
$ | 17,555 | 2.81 | % | $ | 17,843 | 3.07 | % | ||||||||
|
Amortization
of deposit broker
|
||||||||||||||||
|
origination
fees
|
110 | .02 | 1,357 | .23 | ||||||||||||
|
Net
interest income/margin excluding
|
||||||||||||||||
|
impact
of hedge accounting entries
|
$ | 17,665 | 2.83 | % | $ | 19,200 | 3.30 | % | ||||||||
For
additional information on net interest income components, refer to “Average
Balances, Interest Rates and Yields” tables in this release. This table is
prepared including the impact of the accounting changes for interest rate
swaps.
NON-INTEREST
INCOME
Non-interest income for the first
quarter of 2009 was $31.0 million compared with $10.2 million for the first
quarter of 2008, or an increase of $20.8 million. The increase in non-interest
income was primarily the result of
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Page 6
the one-time gain of $27.8 million
related to the TeamBank transaction discussed above. The increase was partially
offset by the impairment write-down in value of certain available-for-sale
equity investments, investments in bank trust preferred securities and an
investment in one non-agency CMO. The fair value of the trust preferred
securities deteriorated significantly during the first quarter of 2009 due to
negative trends at the issuing banks. In addition, at March 31, 2009, the
non-agency CMO was put on credit watch by rating agencies for possible downgrade
from its AAA rating due to performance of the underlying collateral. The
impairment write-down totaled $4.0 million on a pre-tax basis. These investments
were previously included in securities available-for-sale at a cost of $8.4
million. It is unclear if or when the values of these investment securities will
improve, or whether such values will deteriorate further. Based on these
developments, the Company recorded an other-than-temporary impairment. The
Company continues to hold these securities in the available-for-sale
category.
First
quarter 2009 commission income from the Company’s travel, insurance and
investment divisions decreased $779,000, or 29.5%, compared to the same period
in 2008. Part of this
decrease ($445,000) was in the investment division as a result of the alliance
formed with Ameriprise Financial Services through Penney, Murray and Associates.
As a result of this change, Great Southern now records most of its investment
services activity on a net basis in non-interest income. Thus, non-interest
expense related to the investment services division is also reduced. The
Company’s travel division also experienced a decrease in commission income of
$301,000 in the first quarter of 2009 compared to the same period in 2008.
Customers are reducing their travel in light of current economic
conditions.
A
significant decrease in non-interest income was due to the change in the fair
value of certain interest rate swaps and the related change in fair value of
hedged deposits, which resulted in an increase of $846,000 in the three months
ended March 31, 2009, and an increase of $3.0 million in the three months ended
March 31, 2008. Income of this magnitude related to the change in the fair value
of certain interest rate swaps and the related change in the fair value of
hedged deposits should not be expected in future quarters. This income is part
of a 2005 accounting restatement in which approximately $3.4 million (net of
taxes) was charged against retained earnings in 2005. This charge has been
recovered in subsequent periods as interest rate swaps matured or were
terminated by the swap counterparty. At March 31, 2009, virtually all of this
charge has been recovered.
Excluding
the acquisition gain, securities losses and interest rate swap income discussed
above, non-interest income for the first quarter of 2009 was $6.4 million
compared with $7.2 million for the first quarter of 2008, or a decrease of
$808,000. This decrease was primarily attributable to the lower commission
revenue from the Company’s travel and investment divisions, which was discussed
above.
NON-INTEREST
EXPENSE
Non-interest
expense for the first quarter of 2009 was $16.2 million compared with $14.1
million for the first quarter of 2008, or an increase of $2.1 million, or 14.9%.
The Company’s efficiency ratio for the quarter ended March 31, 2009, was 33.37%
compared to 50.36% in the same quarter in 2008. The efficiency ratio in the
first quarter of 2009 was primarily positively impacted by the TeamBank-related
one-time gain and negatively impacted by the investment securities impairment
write-downs recorded by the Company. The first quarter 2009 efficiency ratio was
also negatively impacted by increased expenses related to foreclosures and FDIC
insurance premiums discussed below. The Company’s ratio of non-interest expense
to average assets decreased from 2.22% for the three months ended March 31,
2008, to 2.19% for the three months ended March 31, 2009. In addition, $2.5
million of acquisition costs were included in non-interest expense in the three
months ended March 31, 2009.
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In 2009,
the FDIC is significantly increasing insurance premiums for all banks. In the
first quarter of 2009, the Company incurred deposit insurance expense of
$799,000 compared to $488,000 in the first quarter of 2008. In
addition to the regular quarterly deposit insurance assessments, due to losses
and projected losses to the deposit insurance fund, on February 27, 2009, the
FDIC adopted a rule, effective April 1, 2009, imposing on every insured
institution a special assessment equal to 20 basis points of its assessment base
as of June 30, 2009, to be collected on September 30, 2009. There is a proposal
under discussion, under which the FDIC’s line of credit with the U.S. Treasury
would be increased and the FDIC would reduce the special assessment to 10 basis
points. The comment period for this proposal expired on April 2, 2009 and the
banking industry is awaiting the final ruling.
Due to
increases in the level of foreclosed assets, foreclosure-related expenses in the
first quarter of 2009 were higher than the comparable 2008 period by
approximately $646,000.
Non-GAAP
Reconciliation:
(Dollars
in thousands)
|
Three
Months Ended March 31,
|
||||||||||||||||||||||||
|
2009
|
2008
|
|||||||||||||||||||||||
|
Non-Interest
Expense
|
Revenue
Dollars*
|
%
|
Non-Interest
Expense
|
Revenue
Dollars*
|
%
|
|||||||||||||||||||
|
Efficiency
Ratio
|
$ | 16,214 | $ | 48,592 | 33.37 | % | $ | 14,108 | $ | 28,017 | 50.36 | % | ||||||||||||
|
Amortization
of deposit broker
|
||||||||||||||||||||||||
|
origination
fees
|
-- | 110 | (.08 | ) | -- | 1,357 | (2.58 | ) | ||||||||||||||||
|
Net
change in fair value of interest
|
||||||||||||||||||||||||
|
rate
swaps and related deposits
|
-- | (847 | ) | .59 | -- | (2,974 | ) | 5.66 | ||||||||||||||||
|
Efficiency
ratio excluding impact
|
||||||||||||||||||||||||
|
of
hedge accounting entries
|
$ | 16,214 | $ | 47,855 | 33.88 | % | $ | 14,108 | $ | 26,400 | 53.44 | % | ||||||||||||
|
*
Net interest income plus non-interest income.
|
||||||||||||||||||||||||
INCOME
TAXES
For the
three months ended March 31, 2009, the Company’s effective tax rate was 33.3%.
In future periods, the Company expects its effective tax rate to be
32-35%.
CAPITAL
As of
March 31, 2009, total stockholders’ equity was $254.8 million (7.5% of total
assets). As of March 31, 2009, common stockholders’ equity was $199.2 million
(5.8% of total assets), equivalent to a book value of $14.88
per common share. Stockholders’ equity at December 31, 2008, was $234.1 million
(8.8% of total assets). As of December 31, 2008, common stockholders’ equity was
$178.5 million (6.7% of total assets), equivalent to a book value of $13.34 per
common share.
At March
31, 2009, the Company’s tangible common equity to total assets ratio was 5.7% as
compared to 6.6% at December 31, 2008. Tangible common equity to
total risk-weighted assets ratio was 9.8% at March 31, 2009.
As of
March 31, 2009, the Company’s and the Bank’s regulatory capital levels were
categorized as “well capitalized” as defined by the Federal banking agencies’
capital-related regulations. On March 31, 2009, and on a preliminary basis, the
Bank’s Tier 1 leverage ratio was 8.19%, Tier 1 risk-based capital ratio was
11.69%,
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and total
risk-based capital ratio was 12.95%. On March 31, 2009, and on a preliminary
basis, the Company’s Tier 1 leverage ratio was 9.75%, Tier 1 risk-based capital
ratio was 13.91%, and total risk-based capital ratio was 15.16%.
On
December 5, 2008, Great Southern Bancorp, Inc. became a participant in the U.S.
Treasury’s voluntary Capital Purchase Program (CPP), a part of the Emergency
Economic Stabilization Act of 2008, designed to provide capital to healthy
financial institutions to promote confidence and stabilization in the economy.
At the time the Company was approved to participate in the CPP, it exceeded all
“well-capitalized” regulatory benchmarks. The Company issued to the
U.S. Treasury 58,000 shares of the Company’s newly authorized Fixed Rate
Cumulative Perpetual Preferred Stock, Series A, in an aggregate exchange of
$58.0 million. Great Southern also issued to the U.S. Treasury a warrant to
purchase 909,091 shares of common stock at $9.57 per share. The amount of
preferred shares sold represents approximately 3% of the Company’s risk-weighted
assets as of September 30, 2008.
Through
its preferred stock investment, the Treasury will receive a cumulative dividend
of 5% per year for the first five years, or $2.9 million per year, and 9% per
year thereafter. The preferred shares are callable after three years at 100% of
the issue price, subject to the approval of the Company’s federal regulator.
Earlier redemptions of the preferred stock require that the Company complete an
equity offering of at least $14.5 million (or 25% of original preferred stock
issuance).
PROVISION FOR LOAN LOSSES
AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses decreased
$32.8 million, from $37.8 million during the three months ended
March 31, 2008, to $5.0
million during the three months ended March 31, 2009. See the Company’s Quarterly Report on
Form 10-Q for March 31,
2008, for additional information regarding the large provision for loan losses
in the first quarter of 2008. The allowance for loan losses increased $1.0
million, or 3.4%, to $30.2 million at March 31, 2009, compared to $29.2 million at
December 31, 2008. Net charge-offs were $4.0 million in the three months ended
March 31, 2009, versus
$36.7 million in the three months ended March 31, 2008. Three relationships make up
$2.9 million of the net charge-off total for the 2009 first quarter. One of
these relationships is included in non-performing loans, and two relationships
are included in foreclosed assets. In addition, general market conditions,
and more specifically, housing supply, absorption rates and unique circumstances
related to individual borrowers and projects also contributed to increased
provisions and charge-offs. As properties were transferred into non-performing
loans or foreclosed assets, evaluations were made of the value of these assets
with corresponding charge-offs as appropriate.
Management records a provision for loan
losses in an amount it believes sufficient to result in an allowance for loan
losses that will cover current net charge-offs as well as risks believed to be
inherent in the loan portfolio of the Bank. The amount of provision charged
against current income is based on several factors, including, but not limited
to, past loss experience, current portfolio mix, actual and potential losses
identified in the loan portfolio, economic conditions, regular reviews by
internal staff and regulatory examinations.
Weak economic conditions, higher
inflation or interest rates, or other factors may lead to increased losses in
the portfolio and/or requirements for an increase in loan loss provision
expense. Management has long ago established various controls in an attempt to
limit future losses, such as a watch list of possible problem loans, documented
loan administration policies and a loan review staff to review the quality and
anticipated collectability of the portfolio. More recently, additional
procedures have been implemented to provide for more frequent management review
of the loan portfolio based on loan size, loan type, delinquencies, on-going
correspondence with borrowers, and problem loan work-outs. Management determines
which loans are potentially uncollectible, or represent a greater risk of loss,
and makes additional provisions to expense, if necessary, to maintain the
allowance at a satisfactory level.
More
Page 9
The Bank's allowance for loan losses as
a percentage of total loans, excluding loans supported by the FDIC loss share
agreement, was 1.73% and 1.66% at March 31, 2009 and December 31, 2008,
respectively. Management considers the allowance for loan losses adequate to
cover losses inherent in the Company's loan portfolio at this time, based on
recent internal and external reviews of the Company's loan portfolio and current
economic conditions. If economic conditions remain weak or
deteriorate significantly, it is possible that additional loan loss provisions
would be required, thereby adversely affecting future results of operations and
financial condition.
ASSET
QUALITY
Former
TeamBank non-performing assets, including foreclosed assets, are not included in
the totals and discussion of non-performing loans, potential problem loans and
foreclosed assets below due to the loss share agreement with the FDIC, which
substantially covers principal losses that may be incurred in these
portfolios.
As a result of changes in balances and
composition of the loan portfolio, changes in economic and market conditions
that occur from time to time, and other factors specific to a borrower's
circumstances, the level of non-performing assets will fluctuate. Non-performing
assets at March 31, 2009, were $61.6 million, down $4.2 million from December 31, 2008.
Non-performing assets as a percentage of total assets were 1.81% at March 31,
2009, compared to 2.48% at December 31, 2008. Compared to December 31, 2008,
non-performing loans decreased $9.1 million to $24.1 million while foreclosed
assets increased $4.8 million to $37.5 million. Commercial real estate,
construction and business loans comprised $20.6 million, or 85%, of the total
$24.1 million of non-performing loans at March 31, 2009.
Non-performing
Loans. Compared to December
31, 2008, the total amount of non-performing loans decreased $9.1 million to
$24.1 million at March 31, 2009. Decreases in non-performing loans during the
quarter ended March 31, 2009, were primarily due to the transfer of three loan
relationships from the Non-performing Loans category to the Foreclosed Assets
category. These three relationships were described in the Company’s December 31,
2008 Annual Report on
Form 10-K:
|
·
|
An $8.3 million loan relationship,
which is secured primarily by lots in multiple subdivisions in the
St. Louis area, was reduced to $1.8 million through the transfer of $5.4
million to foreclosed assets and the charge-off of $1.4 million. This relationship was previously
charged down $2 million upon transfer to non-performing loans. The
$1.8 million remaining balance represents lots in two subdivisions in the
St. Louis area. The $5.4 million remaining balance in foreclosed assets
represents lots in seven subdivisions in the St. Louis
area.
|
|
·
|
A
$2.5 million loan relationship, which involves a condominium development
in Kansas City, was transferred to foreclosed assets. The balance
remaining in Foreclosed Assets is $2.3 million at March 31, 2009. At March
31, 2009, $180,000 of this relationship remains in loans and is secured by
various real estate collateral not related to the condominium
development.
|
|
·
|
A $2.3 million loan relationship,
which involves commercial land to be developed into commercial lots in
Northwest Arkansas, was transferred to foreclosed assets. This
relationship was previously charged down approximately $285,000 upon
transfer to non-performing loans and was charged down an additional
$320,000 in the first quarter of 2009 upon the transfer to foreclosed
assets. The balance remaining in Foreclosed Assets is $2.0 million at
March 31, 2009.
|
More
Page 10
Partially offsetting these decreases in
non-performing loans were the following additions to non-performing loans during
the three months ended March 31, 2009:
|
·
|
A $2.0 million loan relationship,
which is secured primarily by an office building and commercial
land near Springfield, Missouri and commercial land in Branson,
Missouri. This relationship
was charged down approximately $1.2 million upon transfer to
non-performing loans.
|
|
·
|
A
$1.1 million loan relationship, which is secured primarily by a motel in
central Missouri. The collateral was purchased by a third party at
foreclosure and the loan was paid off in April
2009.
|
At March 31, 2009, five significant loan
relationships accounted for $14.2 million of the total non-performing loan
balance of $24.1 million. In addition to the two new relationships noted above,
three other significant loan relationships were previously included in
Non-performing Loans and remained there at March 31, 2009. These three
relationships are described below:
|
·
|
A $7.7 million loan relationship,
which is secured by a condominium and retail historic rehabilitation
development in St. Louis. The original relationship has been reduced
through the receipt of Tax Increment Financing funds and a portion of the
Federal and State historic tax credits expected to be received by the
Company in 2009. Upon receipt of the remaining
Federal and State tax credits, the Company expects to reduce the balance
of this relationship to approximately $5.0 million, the value of which is
substantiated by a recent appraisal. The Company expects to remove this
relationship from loans and hold it as a real estate asset once
the tax credit process is completed. This relationship was described more
fully in the Company’s 2008 Annual Report
on Form 10-K under
“Non-performing Assets.”
|
|
·
|
A
$1.8 million loan relationship, which is secured primarily by lots in two
subdivisions in the St. Louis area. This relationship was updated
above.
|
|
·
|
A $1.6 million loan relationship,
which is secured primarily by eleven houses for sale in Northwest
Arkansas. Four of the houses
are either under contract or have contracts pending, but none of these
sales have been completed at this
time.
|
Potential Problem Loans.
Potential problem loans decreased $3.0 million during the three months
ended March 31, 2009, from
$17.8 million at December
31, 2008, to $14.8 million at March 31, 2009. Potential problem
loans are loans which management has identified as having possible credit
problems that may cause the borrowers difficulty in complying with current
repayment terms. These loans are not reflected in the non-performing assets.
During the three months ended March 31, 2009, Potential Problem
Loans decreased primarily from the transfer of one relationship described above
as a $2.0 million relationship (previously $3.2 million) added in the
Non-performing Loans category and other smaller relationships which were
transferred to the Non-performing Loans category. Increases in Potential Problem
Loans resulted primarily due to the addition of two unrelated relationships
totaling $1.9 million to the Potential Problem Loans category. These two
additional relationships include: a $991,000 relationship primarily secured by
six duplexes near Springfield, Mo.; and a $919,000 relationship primarily
secured by eight rental houses and two houses held for resale near Lake of the
Ozarks, Mo.
Foreclosed Assets.
Foreclosed
assets increased $4.8 million during the three months ended March 31, 2009, from $32.7
million at December 31,
2008, to $37.5 million at March
31, 2009. During the three months ended March 31, 2009, foreclosed assets
increased, as described above, primarily due to the addition of one $5.4 million
relationship consisting of lots in
multiple subdivisions in the St. Louis area; the addition of one $2.3
million relationship consisting of condominium units in Kansas City, Mo.; the
addition of one $2.0 million relationship consisting of commercial land to be developed into
commercial lots in Northwest Arkansas and the addition of several smaller
relationships that involve houses which are completed and for sale or under
construction, as well as developed subdivision lots. Foreclosed assets decreased
primarily due to the sale of
More
Page
11
one $3.9
million relationship consisting of an office building in Southeast Missouri, the
reduction of $476,000 to a $2.3 million relationship in Northwest Arkansas
through the sale of a portion of the assets, the reduction of $587,000 to a $2.4
million relationship in the Branson, Missouri area through the sale of a portion
of the assets and the sale of several smaller relationships that involve houses
which are completed or under construction, as well as developed subdivision
lots.
At March 31, 2009, ten separate
relationships comprise $25.2 million, or 67%, of the total foreclosed assets
balance. In addition to the three new relationship described above, seven of
these relationships were previously described more fully in the Company’s
December 31, 2008 Annual
Report on Form 10-K under “Foreclosed Assets.”
BUSINESS
INITIATIVES
The
Company is expanding its retail banking center network in the St. Louis and
Kansas City metropolitan regions. This is part of the Company’s overall
long-term plan to open two to three banking centers per year as market
conditions warrant. The Company’s first retail banking center in the St. Louis
market is expected to open on May 11, 2009. Located in Creve Coeur, Mo., the
full-service banking center will complement a loan production office and a Great
Southern Travel office already in operation in this market. Construction is
underway on a second banking center in the Lee’s Summit, Mo., market, a suburb
of Kansas City. The banking center should be completed in late 2009 and will
enhance access and service to Lee’s Summit-area customers. Great Southern opened
its first Lee’s Summit retail location in 2006.
Great
Southern Bancorp, Inc. will hold its 20th Annual Meeting of Shareholders at
10:00 a.m. CDT on Wednesday, May 13, 2009, at the Great Southern Operations
Center, 218 S. Glenstone, Springfield, Mo. Holders of Great Southern Bancorp, Inc.
common stock at the close of business on the record date, March 4, 2009, can
vote at the annual meeting, either in person or by proxy. Material to be
presented at the Annual Meeting will be available on the company’s Web site,
www.greatsouthernbank.com,
prior to the start of the meeting.
The
common stock of Great Southern Bancorp, Inc., is quoted on the Nasdaq Global
Select Market System under the symbol “GSBC”. The last reported sale price of
GSBC stock in the quarter ended March 31, 2009, was $14.01.
Great
Southern offers a broad range of banking, investment, insurance and travel
services to customers and clients. Headquartered in Springfield, Mo., Great
Southern operates 56 banking centers and over 200 ATMs in Missouri, Kansas and
Nebraska. The Company also serves lending needs through loan production offices
in Overland Park, Kan., Rogers, Ark., and St. Louis.
www.greatsouthernbank.com
Forward-Looking
Statements
When used
in future filings by the Company with the Securities and Exchange Commission
(the "SEC"), in the Company's press releases or other public or shareholder
communications, and in oral statements made with the approval of an authorized
executive officer, the words or phrases "will likely result" "are expected to,"
"will continue," "is anticipated," "estimate," "project," "intends" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are subject to certain risks and uncertainties, including, among other things,
changes in economic conditions in the Company's market area, changes in policies
by regulatory agencies, fluctuations in interest rates, the risks of lending and
investing activities, including changes in the level and direction of loan
delinquencies and write-offs and changes in estimates of the adequacy of the
allowance for loan losses, the Company's ability to access cost-effective
funding, fluctuations in real estate values and both residential and commercial
real estate market conditions, demand for loans and deposits in the Company's
market area and competition, that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected. The Company wishes to advise readers that the factors listed above
could affect the Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current
statements.
The
Company does not undertake-and specifically declines any obligation- to publicly
release the result of any revisions which may be made to any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated
events.
The
following tables set forth certain selected consolidated financial information
of the company at and for the periods indicated. Financial data for
all periods is unaudited. In the opinion of management, all
adjustments, which consist only of normal recurring accruals, necessary for a
fair presentation of the results for and at such unaudited periods have been
included. The results of operations and other data for the three
months ended March 31, 2009 and 2008 are not necessarily indicative of the
results of operations, which may be expected for any future period.
|
Selected
Financial Condition Data:
|
March 31,
|
December
31,
|
||||||
|
2009
|
2008
|
|||||||
|
|
(Dollars
in thousands)
|
|||||||
|
Total
assets
|
$ | 3,407,855 | $ | 2,659,923 | ||||
|
Loans
receivable, gross
|
1,963,053 | 1,746,159 | ||||||
|
Allowance
for loan losses
|
30,168 | 29,163 | ||||||
|
Foreclosed
assets, net
|
40,394 | 32,659 | ||||||
|
Available-for-sale
securities, at fair value
|
768,420 | 647,678 | ||||||
|
Deposits
|
2,453,768 | 1,908,028 | ||||||
|
Total
borrowings
|
678,590 | 500,030 | ||||||
|
Total
stockholders' equity
|
254,841 | 234,087 | ||||||
|
Common
stockholders' equity
|
199,154 | 178,507 | ||||||
|
Non-performing
assets (excluding FDIC-supported
|
||||||||
|
assets)
|
61,615 | 65,861 | ||||||
|
Three
Months Ended
March
31,
|
Three
Months Ended
December
31,
|
|||||||||||
|
2009
|
2008
|
2008
|
||||||||||
|
Selected
Operating Data:
|
(Dollars
in thousands)
|
|||||||||||
|
Interest
income
|
$ | 34,301 | $ | 38,340 | $ | 35,786 | ||||||
|
Interest
expense
|
16,746 | 20,497 | 18,544 | |||||||||
|
Net
interest income
|
17,555 | 17,843 | 17,242 | |||||||||
|
Provision
for loan losses
|
5,000 | 37,750 | 5,000 | |||||||||
|
Non-interest
income
|
31,037 | 10,174 | 6,309 | |||||||||
|
Non-interest
expense
|
16,214 | 14,108 | 13,383 | |||||||||
|
Provision
(credit) for income taxes
|
9,119 | (8,688 | ) | 1,599 | ||||||||
|
Net
income (loss)
|
$ | 18,259 | $ | (15,153 | ) | $ | 3,569 | |||||
|
Net
income (loss) available to
|
||||||||||||
|
common
shareholders
|
$ | 17,435 | $ | (15,153 | ) | $ | 3,327 | |||||
|
Three
Months Ended
March
31,
|
Three
Months Ended
December
31,
|
|||||||||||
|
2009
|
2008
|
2008
|
||||||||||
|
Per
Common Share:
|
||||||||||||
|
Net
income (loss) (fully diluted)
|
$ | 1.29 | $ | (1.13 | ) | $ | .25 | |||||
|
Book
value
|
$ | 14.88 | $ | 12.82 | $ | 13.34 | ||||||
|
Earnings
Performance Ratios:
|
||||||||||||
|
Annualized
return on average assets
|
2.58 | % | (2.45 | )% | 0.55 | % | ||||||
|
Annualized
return on average stockholders’ equity
|
39.66 | % | (31.01 | )% | 8.32 | % | ||||||
|
Net
interest margin
|
2.81 | % | 3.07 | % | 2.80 | % | ||||||
|
Net
interest margin excluding hedge acctg. entries
|
2.83 | % | 3.30 | % | 2.90 | % | ||||||
|
Average
interest rate spread
|
2.69 | % | 2.69 | % | 2.56 | % | ||||||
|
Efficiency
ratio
|
33.37 | % | 50.36 | % | 56.83 | % | ||||||
|
Non-interest
expense to average total assets
|
2.19 | % | 2.22 | % | 1.90 | % | ||||||
|
Asset
Quality Ratios (excluding FDIC-supported assets):
|
||||||||||||
|
Allowance
for loan losses to period-end loans
|
1.73 | % | 1.42 | % | 1.66 | % | ||||||
|
Non-performing
assets to period-end assets
|
1.81 | % | 2.18 | % | 2.48 | % | ||||||
|
Non-performing
loans to period-end loans
|
1.23 | % | 1.71 | % | 1.90 | % | ||||||
|
Annualized
net charge-offs to average loans
|
.91 | % | 7.81 | % | 1.16 | % | ||||||
GREAT
SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
(In
thousands, except number of shares)
|
March
31,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Cash
|
$ | 316,802 | $ | 135,043 | ||||
|
Interest-bearing
deposits in other financial institutions
|
106,452 | 32,877 | ||||||
|
Cash
and cash equivalents
|
423,254 | 167,920 | ||||||
|
Available-for-sale
securities
|
768,420 | 647,678 | ||||||
|
Held-to-maturity
securities (fair value $1,444 – March 2009;
|
||||||||
|
$1,422
– December 2008)
|
1,360 | 1,360 | ||||||
|
Mortgage
loans held for sale
|
4,421 | 4,695 | ||||||
|
Loans
receivable (1), net of allowance for loan losses of
|
||||||||
|
$30,168
- March 2009; $29,163 – December 2008
|
1,928,464 | 1,716,996 | ||||||
|
FDIC
indemnification asset
|
153,578 | -- | ||||||
|
Interest
receivable
|
15,870 | 13,287 | ||||||
|
Prepaid
expenses and other assets
|
13,955 | 14,179 | ||||||
|
Foreclosed
assets held for sale (1), net
|
40,394 | 32,659 | ||||||
|
Premises
and equipment, net
|
35,674 | 30,030 | ||||||
|
Goodwill
and other intangible assets
|
4,589 | 1,687 | ||||||
|
Investment
in Federal Home Loan Bank stock
|
12,268 | 8,333 | ||||||
|
Refundable
income taxes
|
2,696 | 7,048 | ||||||
|
Deferred
income taxes
|
2,912 | 14,051 | ||||||
|
Total
Assets
|
$ | 3,407,855 | $ | 2,659,923 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Liabilities:
|
||||||||
|
Deposits
|
$ | 2,453,768 | $ | 1,908,028 | ||||
|
Securities
sold under reverse repurchase agreements with customers
|
311,143 | 215,261 | ||||||
|
Federal
Home Loan Bank advances
|
201,194 | 120,472 | ||||||
|
Structured
repurchase agreements
|
50,000 | 50,000 | ||||||
|
Short-term
borrowings
|
85,324 | 83,368 | ||||||
|
Subordinated
debentures issued to capital trust
|
30,929 | 30,929 | ||||||
|
Accrued
interest payable
|
9,038 | 9,225 | ||||||
|
Advances
from borrowers for taxes and insurance
|
997 | 334 | ||||||
|
Accounts
payable and accrued expenses
|
10,621 | 8,219 | ||||||
|
Total
Liabilities
|
3,153,014 | 2,425,836 | ||||||
|
Stockholders’
Equity:
|
||||||||
|
Capital
stock
|
||||||||
|
Serial
preferred stock, $.01 par value;
|
||||||||
|
authorized
1,000,000 shares; issued and outstanding March 2009 and
|
||||||||
|
December
2008 – 58,000 shares
|
55,687 | 55,580 | ||||||
|
Common
stock, $.01 par value; authorized 20,000,000 shares; issued
and
|
||||||||
|
outstanding
March 2009 – 13,380,969 shares; December 2008 –
|
||||||||
|
13,380,969
shares
|
134 | 134 | ||||||
|
Stock
warrants; March 2009 and December 2008 – 909,091 shares
|
2,452 | 2,452 | ||||||
|
Additional
paid-in capital
|
19,928 | 19,811 | ||||||
|
Retained
earnings
|
171,274 | 156,247 | ||||||
|
Accumulated
other comprehensive income (loss)
|
5,366 | (137 | ) | |||||
|
Total
Stockholders' Equity
|
254,841 | 234,087 | ||||||
|
Total
Liabilities and Stockholders' Equity
|
$ | 3,407,855 | $ | 2,659,923 | ||||
|
(1)
|
Includes
loans net of discounts totaling $222.6 million and foreclosed assets net
of discounts
|
totaling
$2.9 million, which are subject to significant FDIC support through the loss
share agreement.
GREAT
SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
thousands, except per share data)
|
THREE
MONTHS ENDED
|
THREE
MONTHS ENDED
|
|||||||||||
|
March
31,
|
December
31,
|
|||||||||||
|
2009
|
2008
|
2008
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||
|
INTEREST
INCOME
|
||||||||||||
|
Loans
|
$ | 26,737 | $ | 32,739 | $ | 28,436 | ||||||
|
Investment
securities and other
|
7,564 | 5,601 | 7,350 | |||||||||
|
TOTAL
INTEREST INCOME
|
34,301 | 38,340 | 35,786 | |||||||||
|
INTEREST
EXPENSE
|
||||||||||||
|
Deposits
|
14,000 | 16,900 | 15,405 | |||||||||
|
Federal
Home Loan Bank advances
|
946 | 1,582 | 1,138 | |||||||||
|
Short-term
borrowings and repurchase agreements
|
1,547 | 1,597 | 1,636 | |||||||||
|
Subordinated
debentures issued to capital trust
|
253 | 418 | 365 | |||||||||
|
TOTAL
INTEREST EXPENSE
|
16,746 | 20,497 | 18,544 | |||||||||
|
NET
INTEREST INCOME
|
17,555 | 17,843 | 17,242 | |||||||||
|
PROVISION
FOR LOAN LOSSES
|
5,000 | 37,750 | 5,000 | |||||||||
|
NET
INTEREST INCOME (LOSS) AFTER PROVISION FOR LOAN LOSSES
|
12,555 | (19,907 | ) | 12,242 | ||||||||
|
NON-INTEREST
INCOME
|
||||||||||||
|
Commissions
|
1,861 | 2,640 | 1,687 | |||||||||
|
Service
charges and ATM fees
|
3,372 | 3,566 | 3,749 | |||||||||
|
Net
realized gains on sales of loans
|
606 | 393 | 288 | |||||||||
|
Net
realized gains (losses) on sales and impairments of
|
||||||||||||
|
available-for-sale
securities
|
(3,985 | ) | 6 | (2,056 | ) | |||||||
|
Net
gain (loss) on sales of fixed assets
|
16 | -- | 16 | |||||||||
|
Late
charges and fees on loans
|
134 | 219 | 188 | |||||||||
|
Change
in interest rate swap fair value net of change
|
||||||||||||
|
in
hedged deposit fair value
|
846 | 2,977 | 1,695 | |||||||||
|
Gain
recognized on business acquisition
|
27,833 | -- | -- | |||||||||
|
Other
income
|
354 | 373 | 742 | |||||||||
|
TOTAL
NON-INTEREST INCOME
|
31,037 | 10,174 | 6,309 | |||||||||
|
NON-INTEREST
EXPENSE
|
||||||||||||
|
Salaries
and employee benefits
|
8,616 | 8,276 | 7,273 | |||||||||
|
Net
occupancy and equipment expense
|
2,681 | 2,048 | 2,069 | |||||||||
|
Postage
|
566 | 564 | 551 | |||||||||
|
Insurance
|
954 | 614 | 561 | |||||||||
|
Advertising
|
515 | 278 | 206 | |||||||||
|
Office
supplies and printing
|
180 | 219 | 166 | |||||||||
|
Telephone
|
346 | 372 | 343 | |||||||||
|
Legal,
audit and other professional fees
|
664 | 378 | 504 | |||||||||
|
Expense
(income) on foreclosed assets
|
753 | 353 | 947 | |||||||||
|
Other
operating expenses
|
939 | 1,006 | 763 | |||||||||
|
TOTAL
NON-INTEREST EXPENSE
|
16,214 | 14,108 | 13,383 | |||||||||
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
27,378 | (23,841 | ) | 5,168 | ||||||||
|
PROVISION
(CREDIT) FOR INCOME TAXES
|
9,119 | (8,688 | ) | 1,599 | ||||||||
|
NET
INCOME (LOSS)
|
18,259 | (15,153 | ) | 3,569 | ||||||||
|
PREFERRED
STOCK DIVIDENDS AND DISCOUNT ACCRETION
|
824 | -- | 242 | |||||||||
|
NET
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
|
$ | 17,435 | $ | (15,153 | ) | $ | 3,327 | |||||
|
BASIC
EARNINGS PER COMMON SHARE
|
$ | 1.30 | $ | (1.13 | ) | $ | .25 | |||||
|
DILUTED
EARNINGS PER COMMON SHARE
|
$ | 1.29 | $ | (1.13 | ) | $ | .25 | |||||
|
DIVIDENDS
DECLARED PER COMMON SHARE
|
$ | .18 | $ | .18 | $ | .18 | ||||||
Average
Balances, Interest Rates and Yields
The following table presents, for the
periods indicated, the total dollar amount of interest income from average
interest-earning assets and the resulting yields, as well as the interest
expense on average interest-bearing liabilities, expressed both in dollars and
rates, and the net interest margin. Average balances of loans
receivable include the average balances of non-accrual loans for each
period. Interest income on loans includes interest received on
non-accrual loans on a cash basis. Interest income on loans includes
the amortization of net loan fees, which were deferred in accordance with
accounting standards. Fees included in interest income were $438,000
and $756,000 for the periods ended March 31, 2009, and 2008,
respectively. Tax-exempt income was not calculated on a tax
equivalent basis. The table does not reflect any effect of income
taxes.
|
Three
Months Ended
March
31, 2009
|
Three
Months Ended
March
31, 2008
|
||||||||
|
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
||||
|
(Dollars
in thousands)
|
|||||||||
|
Interest-earning
assets:
|
|||||||||
|
Loans
receivable:
|
|||||||||
|
One-
to four-family
residential
|
$ 240,419
|
$3,578
|
6.04%
|
$ 193,807
|
$3,263
|
6.77%
|
|||
|
Other
residential
|
126,371
|
1,865
|
5.98
|
92,910
|
1,769
|
7.66
|
|||
|
Commercial
real estate
|
502,779
|
7,697
|
6.21
|
468,702
|
8,436
|
7.24
|
|||
|
Construction
|
552,717
|
7,733
|
5.67
|
703,250
|
12,203
|
6.98
|
|||
|
Commercial
business
|
131,172
|
2,038
|
6.30
|
201,532
|
3,266
|
6.52
|
|||
|
Other
loans
|
191,842
|
2,846
|
6.02
|
164,545
|
2,866
|
7.01
|
|||
|
Industrial
revenue bonds
|
60,224
|
980
|
6.61
|
55,011
|
936
|
6.85
|
|||
|
Total
loans receivable
|
1,805,524
|
26,737
|
6.01
|
1,879,757
|
32,739
|
7.00
|
|||
|
Investment
securities and other
interest-earning
assets
|
724,155
|
7,564
|
4.24
|
458,141
|
5,601
|
4.92
|
|||
|
Total
interest-earning assets
|
2,529,679
|
34,301
|
5.50
|
2,337,898
|
38,340
|
6.60
|
|||
|
Non-interest-earning
assets:
|
|||||||||
|
Cash
and cash equivalents
|
224,845
|
67,432
|
|||||||
|
Other
non-earning assets
|
71,251
|
68,565
|
|||||||
|
Total
assets
|
$2,825,775
|
$2,473,895
|
|||||||
|
Interest-bearing
liabilities:
|
|||||||||
|
Interest-bearing
demand and
savings
|
$ 498,969
|
1,387
|
1.13
|
$ 540,016
|
3,017
|
2.25
|
|||
|
Time
deposits
|
1,379,692
|
12,613
|
3.71
|
1,146,664
|
13,883
|
4.87
|
|||
|
Total
deposits
|
1,878,661
|
14,000
|
3.02
|
1,686,680
|
16,900
|
4.03
|
|||
|
Short-term
borrowings and
repurchase
agreements
|
382,189
|
1,547
|
1.64
|
224,908
|
1,597
|
2.86
|
|||
|
Subordinated
debentures issued
to
capital trust
|
30,929
|
253
|
3.32
|
30,929
|
418
|
5.44
|
|||
|
FHLB
advances
|
129,975
|
946
|
2.95
|
165,774
|
1,582
|
3.84
|
|||
|
Total
interest-bearing
liabilities
|
2,421,754
|
16,746
|
2.81
|
2,108,291
|
20,497
|
3.91
|
|||
|
Non-interest-bearing
liabilities:
|
|||||||||
|
Demand
deposits
|
144,395
|
151,813
|
|||||||
|
Other
liabilities
|
19,820
|
18,341
|
|||||||
|
Total
liabilities
|
2,585,969
|
2,278,445
|
|||||||
|
Stockholders’
equity
|
239,806
|
195,450
|
|||||||
|
Total
liabilities and
stockholders’
equity
|
$2,825,775
|
$2,473,895
|
|||||||
|
Net
interest income:
|
|||||||||
|
Interest
rate spread
|
$17,555
|
2.69%
|
$17,843
|
2.69%
|
|||||
|
Net
interest margin*
|
2.81%
|
3.07%
|
|||||||
|
Average
interest-earning assets
to
average interest-bearing
liabilities
|
104.5%
|
110.9%
|
|||||||
_______________
*Defined
as the Company’s net interest income divided by total interest-earning
assets.