-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RuY30Ih0m0591WtFw5os3a8sA4CMMi8Fh099Tx+S9oKmJlsB0CnIDUk99Yv/d6w/ bWBJz5yzAuDXMTG7RwB2SQ== 0000913849-05-000558.txt : 20050718 0000913849-05-000558.hdr.sgml : 20050718 20050718060155 ACCESSION NUMBER: 0000913849-05-000558 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050718 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20050718 DATE AS OF CHANGE: 20050718 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIVATEBANCORP INC CENTRAL INDEX KEY: 0000889936 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 363681151 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25887 FILM NUMBER: 05958301 BUSINESS ADDRESS: STREET 1: TEN NORTH DEARBORN SUITE 900 CITY: CHICAGO STATE: IL ZIP: 60602 MAIL ADDRESS: STREET 1: TEN NORTH DEARBORN STREET CITY: CHICAGO STATE: IL ZIP: 60602 8-K 1 f8k_071405.txt FORM 8-K 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): JULY 18, 2005 PRIVATEBANCORP, INC. (Exact Name of Registrant as Specified in its Charter) ---------------------------- DELAWARE 000-25887 36-3681151 (State or other jurisdiction (Commission file number) (I.R.S. employer of incorporation) identification no.) TEN NORTH DEARBORN 60602 CHICAGO, ILLINOIS (Zip Code) (Address of principal executive offices)
Registrant's telephone number, including area code: (312) 683-7100 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 (See General Instruction A.2 below): [ ] 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 July 18, 2005, PrivateBancorp, Inc. (the "Company") announced its earnings results for the quarter ended June 30, 2005. Attached as Exhibit 99.1 is a copy of the press release relating to the Company's earnings results, which is incorporated herein by reference. Certain supplemental information relating to non-GAAP financial measures reported in the attached press release is included on page 9 of Exhibit 99.1. 2 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. PRIVATEBANCORP, INC. Date: July 18, 2005 By: /s/ Ralph B. Mandell -------------------------------- Ralph B. Mandell Chairman of the Board and Chief Executive Officer 3 EXHIBIT INDEX NUMBER DESCRIPTION ------ ----------- Exhibit 99.1 Press Release dated July 18, 2005. 4 EX-99.1 2 ex99-1_071405.txt PRESS RELEASE DATED JULY 18, 2005 EXHIBIT 99.1 [LOGO] FOR FURTHER INFORMATION: Dennis Klaeser, CFO PrivateBancorp, Inc. 312-683-7100 FOR IMMEDIATE RELEASE PRIVATEBANCORP REPORTS RECORD EARNINGS PER SHARE OF $0.38 Earnings per share up 23 percent over second quarter 2004 Chicago, IL, July 18, 2005--- PrivateBancorp, Inc. (NASDAQ: PVTB) today reported earnings of $0.38 per diluted share for the second quarter 2005 compared to second quarter 2004 earnings per diluted share of $0.31, reflecting an increase of 23 percent. Net income for the second quarter 2005 was $7.9 million compared to second quarter 2004 net income of $6.5 million. Net income for the six months ended June 30, 2005 was $15.7 million, or $0.75 per diluted share, compared to net income of $12.4 million, or $0.60 per diluted share for the six months ended June 30, 2004, reflecting a 25 percent increase in diluted earnings per share between periods. Financial results for the three-month and six-month period ended June 30, 2005 include the financial results of The PrivateBank - Michigan since it was acquired on June 20, 2005. "PrivateBancorp experienced a solid second quarter in terms of growth and profitability. We announced and completed our entry into the Detroit market through the The PrivateBank - Michigan acquisition. Our new Milwaukee office, which is in temporary space, and our Gold Coast office completed their first full quarter of operations and are winning new clients and exhibiting strong momentum. Geographic expansion, coupled with ongoing investments in highly experienced managing directors, are key factors driving the Company's growth," said Ralph B. Mandell, Chairman, President and CEO. "While investing for tomorrow, we remain focused on executing our business strategy. Our unique approach to private banking continues to drive balance sheet growth and strong financial performance. Excluding the acquisition of The PrivateBank - Michigan, loans outstanding increased by 8 percent during the quarter and core deposits increased by 6 percent. Credit quality remains strong and the underlying trends continue to be positive," Mandell said. On June 20, 2005 PrivateBancorp, Inc. announced completion of its acquisition of Bloomfield Hills Bancorp. Inc., the holding company of a single bank subsidiary now referred to as The PrivateBank - Michigan with assets of $342.8 million at closing. The PrivateBank - Michigan has three banking offices located in the affluent Detroit area communities of Bloomfield Hills, Grosse Pointe and Rochester as well as a trust and wealth management unit and a mortgage-banking subsidiary. The $64.0 million cash acquisition is expected to be accretive to the Company's 2005 diluted earnings per share. The transaction was primarily funded with the issuance of $50.0 million in fixed and floating rate trust preferred securities through PrivateBancorp Statutory Trust II, a newly created business trust subsidiary. The Company recorded $42.4 million in goodwill and $3.7 million in client intangibles in connection with the closing. For the second quarter 2005, net interest income of the Company totaled $21.8 million compared to second quarter 2004 net interest income of $17.3 million, primarily due to growth in earning assets compared to the year earlier period. Net interest margin (on a tax equivalent basis) was 3.53 percent in the second quarter 2005, up slightly from 3.51 percent in the prior year second quarter and down from 3.57 percent in the first quarter 2005. During the second quarter 2005, total cost of funds increased by 31 basis points from first quarter 2005, as a result of increases in money market deposit rates, the repricing of wholesale funding and to a lesser extent, the impact of the issuance of $50.0 million of trust preferred securities on June 20, 2005 in connection with The PrivateBank - Michigan acquisition. Yield on average interest earning assets increased by 23 basis points during the quarter due primarily to increases in the prime rate. Approximately 70 2 percent of the loan portfolio is indexed to the prime rate of interest or otherwise adjusts with other short-term interest rates. Investment securities were $769.2 million at June 30, 2005, relatively unchanged from March 31, 2005 levels and up 6 percent from $722.6 million at June 30, 2004. Investment securities of The PrivateBank - Michigan were $5.1 million at June 30, 2005. During the second quarter 2005, the annualized yield on the Federal Home Loan Bank of Chicago ("FHLB Chicago") stock dividend was unchanged at 5.5 percent. On July 15, 2005, the Company redeemed $10.0 million of its FHLB Chicago stock, reducing this investment to $157.0 million. The provision for loan losses was $1.9 million in the second quarter 2005, compared to $0.7 million in the prior year second quarter and $0.9 million in the first quarter 2005. The increase in the provision for loan losses reflects the impact of continued strong loan growth and an increase in net charge-offs during the quarter. Net charge-offs totaled $310,000 in the second quarter 2005 versus net recoveries of $51,000 in the prior year quarter and net recoveries of $60,000 in the first quarter 2005. The allowance for loan losses as a percentage of total loans was 1.15 percent as of June 30, 2005, unchanged from March 31, 2005 and down from 1.23 percent at June 30, 2004. At June 30, 2005, nonperforming loans as a percentage of total loans were 0.17 percent, up from 0.16 percent at March 31, 2005 and up from 0.06 percent at June 30, 2004. The growth in non-interest income during the second quarter 2005 as compared to the prior year second quarter was primarily driven by growth in wealth management income, mortgage banking income and bank-owned life insurance ("BOLI") income. Wealth management fee income increased to $2.5 million for the second quarter 2005, up from $2.1 million in the second quarter 2004 and up from $2.3 million in the first quarter 2005. Wealth management assets under management increased 25 percent to $2.0 billion at June 30, 2005 compared to $1.6 billion at June 30, 2004 and $1.7 billion at March 31, 2005, reflecting the addition of $210.0 million of assets under management as a result of The PrivateBank - Michigan acquisition. Excluding the acquisition, wealth management 3 assets under management at June 30, 2005 were even with first quarter 2005 levels. Mortgage banking income grew 38 percent to $1.1 million for the second quarter 2005 compared to $0.8 million for the second quarter 2004 and $0.7 million during the first quarter 2005. Income from BOLI increased to $317,000 from $125,000 in the second quarter 2004 and was down from $326,000 in the first quarter 2005. The increase in BOLI revenue as compared to the prior year quarter results from an additional $22.0 million BOLI investment made in the third quarter 2004. For the second quarter 2005, a $972,000 loss from an interest rate swap combined with security gains of $1.045 million, resulted in a $73,000 net gain, compared to a net gain of $159,000 in the second quarter 2004 and $374,000 in the first quarter 2005. Non-interest expense increased to $12.9 million in the second quarter 2005 from $11.2 million in the prior year quarter and $12.6 million in first quarter 2005. The 15 percent increase in non-interest expense as compared to the second quarter 2004 is primarily attributable to increases in personnel, occupancy and data processing costs. The increase in non-interest expense on a quarter-linked basis of $316,000 is due primarily to the addition of The PrivateBank - Michigan since closing of the acquisition. The Company continues to add experienced managing directors to support growth. Full-time equivalent employees at quarter's end increased to 362 from 252 at June 30, 2004 and from 278 at March 31, 2005. The acquisition of The PrivateBank - Michigan added 73 full-time equivalent employees, including 18 managing directors. At June 30, 2005, the Company had 105 managing directors compared to 71 at June 30, 2004 and 84 managing directors at March 31, 2005. However, as a result of the growth achieved, the efficiency ratio was 47 percent in the second quarter 2005 compared to 51 percent in the prior year quarter and 48 percent in the first quarter 2005. Total assets were $3.2 billion at June 30, 2005 compared to $2.2 billion at June 30, 2004, an increase of 46 percent. Excluding The PrivateBank - Michigan total assets of $418.6 million, the Company had assets of $2.8 billion at June 30, 2005 compared to $2.6 billion in assets at March 31, 2005, an increase of 7 percent. At June 30, 2005, total 4 loans were $2.2 billion, versus $1.4 billion at June 30, 2004 and $1.7 billion at March 31, 2005. The PrivateBank - Michigan had $315.8 million in total loans at June 30, 2005. Total deposits were $2.4 billion at June 30, 2005, up from $1.7 billion at June 30, 2004 and up from $2.0 billion at March 31, 2005. Excluding the $301.3 million in deposits acquired in The PrivateBank - Michigan acquisition, deposits increased by 5 percent to $2.1 billion during the second quarter 2005 as compared to total deposits of $2.0 billion at March 31, 2005. Core deposits, defined as total deposits less brokered deposits, increased 61 percent to $2.0 billion compared to $1.3 billion at June 30, 2004, and increased 25 percent from $1.6 billion at March 31, 2005. Brokered deposits were $385.7 million at June 30, 2005, a decrease of 7 percent, or $28.1 million, from $413.8 million at June 30, 2004, and relatively unchanged from $387.4 million at March 31, 2005. The PrivateBank - Michigan did not have any brokered deposits at June 30, 2005. Brokered deposits as a percentage of total deposits declined to 16 percent as of June 30, 2005 compared to 25 percent at June 30, 2004 and 19 percent at March 31, 2005. Funds borrowed, which include Federal Home Loan Bank advances, increased 52 percent to $464.8 million at June 30, 2005 from $306.4 million at June 30, 2004, and increased 36 percent from $340.7 million at March 31, 2005. The PrivateBank - Michigan had $39.9 million of funds borrowed at June 30, 2005. During the quarter, prior to the closing of the acquisition of The PrivateBank - Michigan, the Company completed a private placement of $7.6 million of its common stock to investors in that bank's market area, including certain members of the management team, who purchased $2.9 million of stock. PrivateBancorp, Inc. was organized in 1989 to provide highly personalized financial services primarily to affluent individuals, professionals, owners of closely-held businesses and commercial real estate investors. The Company uses a European tradition of "private banking" as a model to develop lifetime relationships with its clients. Utilizing a team of highly qualified managing directors, The PrivateBank tailors products and services to meet each client's needs in personal and commercial banking services and 5 wealth management services. The Company, which has assets of $3.2 billion as of June 30, 2005, currently has banking offices in downtown Chicago, Chicago's Gold Coast, Wilmette, Oak Brook, St. Charles, Lake Forest, Winnetka, and Geneva, Illinois; in Bloomfield Hills, Rochester and Grosse Pointe, Michigan; in St. Louis, Missouri; and in Milwaukee, Wisconsin. Additional information can be found in the Investor Relations section of PrivateBancorp, Inc.'s website at http://www.pvtb.com. Forward-Looking Statements: Statements contained in this news release that are not historical facts may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, fluctuations in market rates of interest and loan and deposit pricing, greater than anticipated deterioration in asset quality due to a prolonged economic downturn in the greater Chicago, Detroit and St. Louis metropolitan areas, legislative or regulatory changes, adverse developments in the Company's loan or investment portfolios, changes in the current redemption practices of the FHLBC relating to its stock, slower than anticipated growth of its business or unanticipated business declines, unforeseen difficulties in integrating the acquisition of The PrivateBank - Michigan or higher than expected operational costs, unexpected difficulties in the continued integration of or in operating our mortgage banking business, unanticipated construction or other delays relating to our new office to be located in Milwaukee, Wisconsin, competition and the possible dilutive effect of potential acquisitions, expansion or future capital raises. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update publicly any of these statements in light of future events. Editor's Note: Financial highlights attached. # # # 6 [LOGO] CONSOLIDATED STATEMENTS OF INCOME (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2005 2004 2005 2004 ----------- ----------- ----------- ----------- UNAUDITED UNAUDITED UNAUDITED UNAUDITED INTEREST INCOME Interest and fees on loans........... $ 29,198 $ 18,702 $ 54,789 $ 36,382 Interest on investment securities.... 9,428 7,820 18,641 15,749 Interest on short-term investments... 93 4 127 10 ----------- ----------- ----------- ----------- TOTAL INTEREST INCOME................ 38,719 26,526 73,557 52,141 ----------- ----------- ----------- ----------- INTEREST EXPENSE Interest on deposits................. 13,586 7,155 24,838 13,248 Interest on borrowings............... 2,750 1,552 5,224 3,038 Interest on long-term debt - trust preferred securities......... 591 485 1,076 970 ----------- ----------- ----------- ----------- TOTAL INTEREST EXPENSE............... 16,927 9,192 31,138 17,256 ----------- ----------- ----------- ----------- NET INTEREST INCOME.................. 21,792 17,334 42,419 34,885 Provision for loan losses............ 1,900 724 2,802 2,050 ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION.. 19,892 16,610 39,617 32,835 ----------- ----------- ----------- ----------- NON INTEREST INCOME Wealth management income............. 2,468 2,129 4,783 4,087 Mortgage banking income.............. 1,076 782 1,818 1,246 Other income......................... 885 561 1,751 1,119 Net securities (losses) gains........ 1,045 (1,166) 940 (168) Gains (losses) on interest rate swap. (972) 1,325 (493) 259 ----------- ----------- ----------- ----------- TOTAL NON INTEREST INCOME............ 4,502 3,631 8,799 6,543 ----------- ----------- ----------- ----------- NON INTEREST EXPENSE Salaries and benefits................ 7,158 6,057 14,176 12,092 Occupancy expense.................... 1,804 1,350 3,542 2,710 Professional fees.................... 1,343 1,451 2,676 2,565 Marketing............................ 645 703 1,259 1,198 Data processing...................... 627 513 1,209 960 Amortization of intangibles.......... 57 42 99 84 Insurance............................ 270 207 533 422 Other operating expenses............. 995 897 1,988 1,728 ----------- ----------- ----------- ----------- TOTAL NON INTEREST EXPENSE........... 12,899 11,220 25,482 21,759 ----------- ----------- ----------- ----------- Minority interest expense............ 73 65 149 132 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES........... 11,422 8,956 22,785 17,487 ----------- ----------- ----------- ----------- Income tax expense................... 3,523 2,500 7,080 5,081 ----------- ----------- ----------- ----------- NET INCOME........................... $ 7,899 $ 6,456 $ 15,705 $ 12,406 =========== =========== =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING.. 20,065,931 19,706,993 19,985,936 19,541,468 DILUTED AVERAGE SHARES OUTSTANDING... 20,971,907 20,708,906 20,884,463 20,506,098 EARNINGS PER SHARE Basic................................ $ 0.39 $ 0.33 $ 0.79 $ 0.63 Diluted.............................. $ 0.38 $ 0.31 $ 0.75 $ 0.60
NOTE 1: Certain reclassifications have been made to prior period statements to place them on a basis comparable with the current period financial statements. 7 [LOGO] CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) 06/30/05 12/31/04 06/30/04 ---------- ---------- ---------- UNAUDITED AUDITED UNAUDITED ASSETS Cash and due from banks......... $ 33,359 $ 49,534 $ 22,414 Short-term investments.......... 74,873 1,120 1,779 Investment securities: available-for-sale............ 769,218 763,985 722,582 Loans held for sale............. 12,532 7,200 6,419 Loans........................... 2,192,542 1,653,363 1,407,586 Allowance for loan losses....... (25,152) (18,986) (17,304) ---------- ---------- ---------- Net loans....................... 2,167,390 1,634,377 1,390,282 Premises and equipment, net..... 8,580 6,486 5,711 Goodwill........................ 62,981 20,547 20,547 Other assets.................... 73,139 52,568 29,436 ---------- ---------- ---------- TOTAL ASSETS.................... $3,202,072 $2,535,817 $2,199,170 ========== ========== ========== LIABILITIES Non-interest bearing deposits... $ 245,019 $ 165,170 $ 163,543 Interest bearing deposits....... 2,162,322 1,707,465 1,509,861 ---------- ---------- ---------- Total deposits.................. 2,407,341 1,872,635 1,673,404 ---------- ---------- ---------- Funds borrowed.................. 464,799 414,519 306,447 Long-term debt - trust preferred securities.......... 78,000 20,000 20,000 Other liabilities............... 32,026 34,590 25,650 ---------- ---------- ---------- TOTAL LIABILITIES............... 2,982,166 2,341,744 2,025,501 ---------- ---------- ---------- STOCKHOLDERS' EQUITY Common stock and additional paid-in-capital............... 133,346 120,491 119,499 Treasury stock.................. (2,635) (2,207) (1,662) Retained earnings............... 88,659 73,789 57,682 Accumulated other comprehensive income.......... 9,179 7,056 3,052 Deferred compensation........... (8,643) (5,056) (4,902) ---------- ---------- ---------- TOTAL STOCKHOLDERS' EQUITY...... 219,906 194,073 173,669 ---------- ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............ $3,202,072 $2,535,817 $2,199,170 ========== ========== ========== BOOK VALUE PER SHARE............ $ 10.51 $ 9.51 $ 8.54 Note 1: Certain reclassifications have been made to prior period statements to place them on a basis comparable with the current period financial statements. 8 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
2Q05 1Q05 4Q04 3Q04 2Q04 ---------- ---------- ---------- ---------- ---------- KEY STATISTICS Net income................ $ 7,899 $ 7,806 $ 7,526 $ 7,063 $ 6,456 Basic earnings per share.. $ 0.39 $ 0.39 $ 0.38 $ 0.35 $ 0.33 Diluted earnings per share................... $ 0.38 $ 0.37 $ 0.36 $ 0.34 $ 0.31 Return on average total assets.................. 1.18% 1.24% 1.24% 1.23% 1.20% Return on average total equity.................. 15.45% 15.81% 15.65% 15.29% 14.86% Dividend payout ratio..... 11.73% 11.77% 8.11% 8.63% 9.42% Fee revenue as a percent of total revenue(1).............. 16.89% 15.98% 16.03% 17.41% 16.69% Wealth management assets under management. 1,984,371 1,735,292 1,727,479 1,620,487 1,590,119 Non-interest income to average assets.......... 0.67% 0.68% 0.61% 0.71% 0.67% Non-interest expense to average assets.......... 1.92% 2.01% 1.98% 2.08% 2.08% Net overhead ratio(2)..... 1.25% 1.32% 1.37% 1.37% 1.41% Efficiency ratio(3)....... 47.0% 48.3% 48.3% 50.0% 50.8% Net interest margin(4).... 3.53% 3.57% 3.63% 3.58% 3.51% Yield on average earning assets.......... 6.16% 5.93% 5.70% 5.46% 5.27% Cost of average interest-bearing liabilities............. 2.99% 2.68% 2.36% 2.14% 2.03% Net interest spread(5).... 3.17% 3.25% 3.34% 3.32% 3.24% Tax equivalent adjustment to net interest income(6)...... $ 1,125 $ 1,107 $ 1,040 $ 1,224 $ 1,100 (1) Represents wealth management, mortgage banking and other income as a percentage of the sum of net interest income and wealth management, mortgage banking and other income. (2) Non-interest expense less non-interest income divided by average total assets. (3) Non-interest expense divided by the sum of net interest income, on a tax equivalent basis, plus non-interest income. (4) Net interest income, on a tax equivalent basis, divided by average interest-earning assets. (5) Yield on average interest-earning assets less rate on average interest-bearing liabilities. (6) The company adjusts GAAP reported net interest income by the tax equivalent adjustment amount to account for the tax attributes on federally tax exempt municipal securities. For GAAP purposes, tax benefits associated with federally tax exempt municipal securities are recorded as a benefit in income tax expense. The following table reconciles reported net interest income to net interest income on a tax equivalent basis for the periods presented:
RECONCILIATION OF NET INTEREST INCOME TO NET INTEREST INCOME ON A TAX EQUIVALENT BASIS 2Q05 1Q05 4Q04 3Q04 2Q04 ------- ------- ------- ------- ------- Net interest income......... $21,792 $20,627 $20,172 $18,485 $17,334 Tax equivalent adjustment to net interest income.... 1,125 1,107 1,040 1,224 1,100 ------- ------- ------- ------- ------- Net interest income, tax equivalent basis.......... $22,917 $21,734 $21,212 $19,709 $18,434 ------- ------- ------- ------- ------- 9 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
2Q05 1Q05 4Q04 3Q04 2Q04 ----------- ----------- ----------- ----------- ----------- BALANCE SHEET RATIOS Loans to Deposits (period end)................ 91.08% 86.35% 88.29% 81.34% 84.12% Average interest-earning assets to average interest-bearing liabilities................. 113.6 113.5 114.1 114.0 114.9 PER SHARE DATA Dividends..................... $ 0.045 $ 0.045 $ 0.030 $ 0.030 $ 0.030 Book value (period end)................ $ 10.51 $ 9.79 $ 9.51 $ 9.19 $ 8.54 Tangible book value (period end)(1)....... $ 7.22 $ 8.68 $ 8.40 $ 8.07 $ 7.41 SHARE PRICE DATA (PERIOD END) Closing Price................. $ 35.38 $ 31.41 $ 32.23 $ 26.96 $ 27.48 Diluted earnings multiple (2)................ 23.21 x 20.93 x 22.57 x 19.99 x 22.10 x Book value multiple........... 3.37 x 3.21 x 3.39 x 2.93 x 3.22 x Common Stock Information Outstanding shares at end of period................... 20,928,869 20,467,143 20,400,103 20,346,303 20,344,073 Number of shares used to compute: Basic earnings per share................... 20,065,931 19,973,853 19,911,662 19,921,465 19,706,993 Diluted earnings per share................... 20,971,907 20,998,095 20,992,893 20,947,078 20,708,906 Capital Ratios (period end)(3): Total equity to total assets................ 6.87% 7.70% 7.65% 7.95% 7.90% Total risk-based capital ratio............... 10.92% 11.07% 11.29% 11.80% 12.14% Tier-1 risk-based capital ratio............... 9.49% 10.03% 10.24% 10.71% 11.00% Leverage ratio................ 8.22% 7.61% 7.71% 7.74% 7.83% (1) Tangible book value is total capital less goodwill and other intangibles divided by outstanding shares at end of period. (2) Period end closing stock price divided by annualized quarterly earnings for the quarter then ended. (3) Capital ratios for the most recent period presented in the press release are based on preliminary data.
10 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS)
2Q05 1Q05 4Q04 3Q04 2Q04 ------- ------- ------- ------- ------- SUMMARY INCOME STATEMENT INTEREST INCOME Interest and fees on loans........... $29,198 $25,591 $22,802 $20,315 $18,702 Interest on investment securities......................... 9,428 9,213 9,386 8,436 7,820 Interest on short-term investments........................ 93 34 12 18 4 ------- ------- ------- ------- ------- TOTAL INTEREST INCOME.................. 38,719 34,838 32,200 28,769 26,526 INTEREST EXPENSE....................... 16,927 14,211 12,028 10,284 9,192 ------- ------- ------- ------- ------- NET INTEREST INCOME.................... 21,792 20,627 20,172 18,485 17,334 Provision for loan losses............ 1,900 902 1,498 851 724 ------- ------- ------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES............ 19,892 19,725 18,674 17,634 16,610 ------- ------- ------- ------- ------- NON INTEREST INCOME Wealth management income............. 2,468 2,316 2,113 2,117 2,129 Mortgage banking income.............. 1,076 742 834 776 782 Other income......................... 885 865 903 1,006 561 Net securities (losses) gains........ 1,045 (105) (123) 1,259 (1,166) Gains (losses) on interest rate swap. (972) 479 (11) (1,118) 1,325 ------- ------- ------- ------- ------- TOTAL NON INTEREST INCOME.............. 4,502 4,297 3,716 4,040 3,631 ------- ------- ------- ------- ------- NON INTEREST EXPENSE Salaries and benefits................ 7,158 7,018 7,124 6,811 6,057 Occupancy expense.................... 1,804 1,738 1,567 1,394 1,350 Professional fees.................... 1,343 1,333 1,082 1,407 1,451 Marketing............................ 645 614 695 628 703 Data processing...................... 627 582 529 520 513 Insurance............................ 270 263 276 221 207 Amortization of intangibles.......... 57 42 42 42 42 Other operating expenses............. 995 993 717 860 897 ------- ------- ------- ------- ------- TOTAL NON INTEREST EXPENSE............. 12,899 12,583 12,032 11,883 11,220 ------- ------- ------- ------- ------- Minority interest expense............ 73 76 64 74 65 ------- ------- ------- ------- ------- INCOME BEFORE INCOME TAXES............. 11,422 11,363 10,294 9,717 8,956 Income tax expense................... 3,523 3,557 2,768 2,654 2,500 ------- ------- ------- ------- ------- NET INCOME............................. $ 7,899 $ 7,806 $ 7,526 $ 7,063 $ 6,456 ======= ======= ======= ======= =======
11 [LOGO] KEY FINANCIAL DATA UNAUDITED (DOLLARS IN THOUSANDS)
2Q05 1Q05 4Q04 3Q04 2Q04 ------- ------- ------- ------- ------- CREDIT QUALITY KEY RATIOS Net charge-offs (recoveries) to average loans......... 0.07% -0.01% 0.07% 0.11% -0.01% Total non-performing loans to total loans........................ 0.17% 0.16% 0.15% 0.17% 0.06% Total non-performing assets to total assets................ 0.11% 0.11% 0.10% 0.10% 0.04% Nonaccrual loans to: total loans........................... 0.06% 0.08% 0.07% 0.05% 0.01% total assets.......................... 0.04% 0.06% 0.04% 0.03% 0.01% Allowance for loan losses to: total loans........................... 1.15% 1.15% 1.15% 1.21% 1.23% non-performing loans.................. 689% 717% 751% 729% 2175% nonaccrual loans...................... 2076% 1377% 1742% 2228% 11422% NON-PERFORMING ASSETS: Loans delinquent over 90 days......... $ 2,026 $ 1,335 $ 1,438 $ 1,638 $ 644 Nonaccrual loans...................... 1,212 1,448 1,090 797 151 OREO.................................. 413 - - - - ------- ------- ------- ------- ------- Total non-performing assets............. $ 3,651 $ 2,783 $ 2,528 $ 2,435 $ 795 ======= ======= ======= ======= ======= NET LOAN CHARGE-OFFS (RECOVERIES): Loans charged off....................... $ 328 $ 3 $ 330 $ 831 $ 0 (Recoveries)............................ (18) (63) (67) (427) (51) ------- ------- ------- ------- ------- Net charge-offs (recoveries)............ $ 310 ($ 60) $ 263 $ 404 ($ 51) ======= ======= ======= ======= ======= PROVISION FOR LOAN LOSSES................. $ 1,900 $ 902 $ 1,498 $ 851 $ 724 ======= ======= ======= ======= ======= ALLOWANCE FOR LOAN LOSSES SUMMARY Balance at beginning of period.......... $19,948 $18,986 $17,751 $17,304 $16,529 Provision............................... 1,900 902 1,498 851 724 Net charge-offs (recoveries)............ 310 (60) 263 404 (51) ------- ------- ------- ------- ------- Balance at end of period................ $21,538 $19,948 $18,986 $17,751 $17,304 ======= ======= ======= ======= ======= NET LOAN CHARGE-OFFS (RECOVERIES): Commercial real estate.................. - - - - - Residential real estate................. - - - - - Commercial.............................. $ 270 ($ 60) $ 184 ($ 314) ($ 49) Personal................................ $ 40 - 79 718 (2) Home equity............................. - - - - - Construction............................ - - - - - ------- ------- ------- ------- ------- Total net loan charge-offs (recoveries). $ 310 ($ 60) $ 263 $ 404 ($ 51) ======= ======= ======= ======= =======
12 [LOGO] BALANCE SHEETS (DOLLARS IN THOUSANDS)
unaudited unaudited audited unaudited unaudited 06/30/05 03/31/05 12/31/04 09/30/04 06/30/04 ---------- ---------- ---------- ---------- ---------- ASSETS - ------ Cash and due from banks......... $ 33,359 $ 29,943 $ 49,534 $ 44,814 $ 22,414 Short-term investments.......... 74,873 5,047 1,120 11,004 1,779 Investment securities: available-for-sale............ 769,218 764,917 763,985 759,328 722,582 Loans held for sale............. 12,532 8,678 7,200 8,014 6,419 Loans........................... 2,192,542 1,729,882 1,653,363 1,471,083 1,407,586 Less: Allowance for loan losses................. (25,152) (19,948) (18,986) (17,751) (17,304) ---------- ---------- ---------- ---------- ---------- Net loans..................... 2,167,390 1,709,934 1,634,377 1,453,332 1,390,282 ---------- ---------- ---------- ---------- ---------- Premises and equipment, net................ 8,580 6,990 6,486 6,013 5,711 Goodwill........................ 62,981 20,547 20,547 20,547 20,547 Other assets.................... 73,139 55,634 52,568 49,314 29,436 ---------- ---------- ---------- ---------- ---------- Total Assets................ $3,202,072 $2,601,690 $2,535,817 $2,352,366 $2,199,170 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------ Non-interest bearing deposits...................... $ 245,019 $ 173,558 $ 165,170 $ 170,315 $ 163,543 Interest bearing demand deposits............... 118,089 100,598 106,846 89,538 89,810 Savings and money market deposits............... 1,153,918 1,016,876 854,163 864,794 683,205 Time deposits................... 890,315 712,207 746,456 683,885 736,846 ---------- ---------- ---------- ---------- ---------- Total deposits................ 2,407,341 2,003,239 1,872,635 1,808,532 1,673,404 Funds borrowed.................. 464,799 340,737 414,519 301,558 306,447 Long-term debt - Trust Preferred Securities.......... 78,000 20,000 20,000 20,000 20,000 Other liabilities............... 32,026 37,342 34,590 35,241 25,650 ---------- ---------- ---------- ---------- ---------- Total liabilities............. 2,982,166 2,401,318 2,341,744 2,165,331 2,025,501 Stockholders' equity............ 219,906 200,372 194,073 187,035 173,669 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity...... $3,202,072 $2,601,690 $2,535,817 $2,352,366 $2,199,170 ========== ========== ========== ========== ==========
13 [LOGO] AVERAGE QUARTERLY BALANCE SHEETS (UNAUDITED, DOLLARS IN THOUSANDS)
06/30/05 03/31/05 12/31/04 09/30/04 06/30/04 -------- -------- -------- -------- -------- ASSETS - ------ Cash and due from banks........... $ 28,483 $ 32,559 $ 27,459 $ 26,706 $ 31,788 Short-term investments............ 12,643 4,245 1,878 3,949 1,944 Investment securities: available-for-sale.............. 768,523 752,794 775,602 744,446 713,099 Loans held for sale............... 8,517 7,339 6,324 4,704 10,335 Loans............................. 1,803,580 1,686,713 1,535,642 1,432,003 1,370,030 Less:Allowance for loan losses. (20,665) (19,360) (18,167) (17,781) (16,838) ---------- ---------- ---------- ---------- ---------- Net loans...................... 1,782,915 1,667,353 1,517,475 1,414,222 1,353,192 ---------- ---------- ---------- ---------- ---------- Premises and equipment, net....... 7,241 6,966 6,251 5,788 5,854 Goodwill.......................... 25,486 20,547 20,547 20,547 19,242 Other assets...................... 62,007 53,770 52,493 51,115 28,874 ---------- ---------- ---------- ---------- ---------- Total Assets.................... $2,695,815 $2,545,573 $2,408,029 $2,271,477 $2,164,328 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------ Non-interest bearing deposits..... $ 190,477 $ 171,845 $ 168,942 $ 157,312 $ 152,817 Interest bearing demand deposits.. 110,956 100,843 99,758 89,754 88,982 Savings and money market deposits. 1,038,059 918,113 867,787 780,746 660,324 Time deposits..................... 743,221 748,909 688,156 719,528 724,794 ---------- ---------- ---------- ---------- ---------- Total deposits................. 2,082,713 1,939,710 1,824,643 1,747,340 1,626,917 Funds borrowed.................... 348,216 357,712 342,184 293,942 320,766 Long-term debt - Trust Preferred Securities.................... 27,229 20,000 20,000 20,000 20,000 Other liabilities................. 32,583 28,046 30,412 26,901 22,469 ---------- ---------- ---------- ---------- ---------- Total liabilities.............. 2,490,741 2,345,468 2,217,239 2,088,183 1,990,152 Stockholders' equity.............. 205,074 200,105 190,790 183,294 174,176 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity......... $2,695,815 $2,545,573 $2,408,029 $2,271,477 $2,164,328 ========== ========== ========== ========== ==========
14 [LOGO] AVERAGE YEAR-TO-DATE BALANCE SHEETS (UNAUDITED, DOLLARS IN THOUSANDS)
06/30/05 03/31/05 12/31/04 09/30/04 06/30/04 -------- -------- -------- -------- -------- ASSETS - ------ Cash and due from banks........... $ 30,370 $ 32,559 $ 30,387 $ 31,557 $ 33,630 Short-term investments............ 8,540 4,245 2,358 2,468 1,797 Investment securities: available-for-sale............. 760,700 752,794 731,152 727,466 701,963 Loans held for sale............... 8,710 7,339 7,028 5,350 8,842 Loans............................. 1,744,754 1,686,713 1,399,849 1,365,261 1,314,683 Less: Allowance for loan losses...................... (20,016) (19,360) (17,087) (16,844) (16,191) ---------- ---------- ---------- ---------- ---------- Net loans...................... 1,724,738 1,667,353 1,382,762 1,348,417 1,298,492 ---------- ---------- ---------- ---------- ---------- Premises and equipment, net....... 7,104 6,966 6,013 5,895 6,008 Goodwill.......................... 23,116 20,547 20,850 20,917 20,290 Other assets...................... 58,612 53,770 39,735 35,278 25,929 ---------- ---------- ---------- ---------- ---------- Total Assets................... $2,621,890 $2,545,573 $2,220,285 $2,177,348 $2,096,951 ========== ========== ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY ------ Non-interest bearing deposits..... $ 181,274 $ 171,845 $ 151,588 $ 147,818 $ 140,188 Interest bearing demand deposits.. 105,927 100,843 90,888 87,906 86,978 Savings and money market deposits. 978,402 918,113 722,923 683,121 620,493 Time deposits..................... 746,049 748,909 712,399 734,053 721,038 ---------- ---------- ---------- ---------- ---------- Total deposits................. 2,011,652 1,939,710 1,677,798 1,652,898 1,568,697 Funds borrowed.................... 352,931 357,712 315,719 302,291 313,348 Long-term debt - Trust Preferred Securities..................... 23,615 20,000 20,000 20,000 20,000 Other liabilities................. 30,963 28,046 26,370 24,646 21,459 ---------- ---------- ---------- ---------- ---------- Total liabilities.............. 2,419,161 2,345,468 2,039,887 1,999,835 1,923,504 Stockholders' equity.............. 202,729 200,105 180,398 177,513 173,447 ---------- ---------- ---------- ---------- ---------- Total Liabilities and Stockholders' Equity........ $2,621,890 $2,545,573 $2,220,285 $2,177,348 $2,096,951 ========== ========== ========== ========== ==========
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