EX-99.1 2 v081756_ex99-1.htm Unassociated Document
Exhibit 99.1

Alabama National BanCorporation Announces Second Quarter 2007 Earnings 
 

FOR IMMEDIATE RELEASE - Birmingham, Alabama (July 24, 2007) - Alabama National BanCorporation (“ANB”) (NASDAQ/Global Select Market: ALAB) today announced earnings for the quarter and six-month period ended June 30, 2007.
 
For the 2007 second quarter, ANB reported net income of $22.0 million, or $1.06 per diluted share. Six months year-to-date net income was $42.0 million, or $2.01 per diluted share. As previously reported, ANB sold its ANB Insurance Services, Inc. subsidiary on May 1, 2007. Earnings from the operation of this subsidiary and the gain from its sale are recorded as income from discontinued operations in the income statement.
 
Excluding the discontinued insurance operations, ANB reported earnings from continuing operations of $21.1 million in the 2007 second quarter, up 6.5% from the $19.8 million earned in the 2007 first quarter and up 9.2% from the 2006 second quarter’s $19.3 million in net income. Diluted earnings per share (continuing operations) of $1.01 in the 2007 second quarter were 7.0% above the $0.94 reported in the 2007 first quarter and 0.6% below the $1.02 reported in the year ago second quarter. Diluted cash earnings per share (continuing operations) were $1.05 in the 2007 second quarter, as compared with $1.00 and $1.06 in the 2007 first quarter and 2006 second quarter, respectively.
 
ANB had a record quarter for revenue production, with total revenue from continuing operations of $85.9 million. This revenue total was up 3.6% from the $82.7 million reported in the 2007 first quarter, and up 11.8% from the 2006 second quarter’s $76.8 million.
 
On a year-to-date basis, ANB’s $40.8 million in income from continuing operations equated to $1.95 in diluted earnings per share, down 3.9% from the $2.03 earned in the first six months of 2006. Year-to-date revenue from continuing operations for the first six months of 2007 was $168.6 million, up 14.4% from the 2006 six months.
 
ANB’s taxable equivalent net interest margin held steady during the 2007 second quarter with 2007 first quarter levels, declining 2 basis points to 3.72%. On a year-to-date basis, the 2007 six months net interest margin of 3.73% was 0.24% below levels for the same period in 2006. Ending loans (excluding loans held for sale) grew $113 million during the 2007 second quarter, representing an 8.3% annualized growth rate for the quarter. Loans grew $249 million during the first six months of 2007, representing an annualized 9.4% year-to-date growth rate. Ending deposits of $5.79 billion were approximately flat with first quarter levels and grew at an 8.0% annualized rate for the first six months of the year. Average loans and average deposits grew at 10.1% and 11.6% annualized rates during the 2007 second quarter, respectively. Ending total assets at June 30, 2007 were $7.9 billion.
 
 
On the credit quality front, ANB recognized $2.48 million in net charge-offs for the quarter, representing 0.18% of loans on an annualized basis, bringing the six month year-to-date annualized rate to 0.10%. The second quarter charge-offs were primarily comprised of charge-downs on properties on which the company’s subsidiary banks have or expect to foreclose. The company recorded a provision for loan losses of $3.3 million in the 2007 second quarter, up from $1.9 million recorded in the 2006 second quarter. Nonaccrual loans were $10.7 million at quarter end, or 0.19% of total loans. Other real estate owned was $7.7 million, bringing total nonperforming assets to $18.4 million. As a percentage of period-end loans and other real estate owned, nonperforming assets rose to 0.32% in the 2007 second quarter as compared with 0.13% in the year ago quarter, and 0.24% in the quarter ended March 31, 2007.
 
“We are pleased to report improvement from the first quarter’s performance, though our results remain below our long term expectations,” said John H. Holcomb III, Chairman and CEO. “We were particularly pleased to be able to report a record quarter for revenue production. Our net interest margin held steady from first quarter 2007 levels, and we had respectable loan growth for the quarter and year-to-date. Deposit growth was also respectable on an average and year-to-date basis. Our noninterest income areas showed some improvement, with several business lines reporting record or near-record results. Although the quarter’s 18 basis points in net loan losses and the 10 basis points in year-to-date net loan losses are both above our historical average, I believe we are continuing to take appropriate action on problem credits and to recognize problems promptly, which practices will serve us well in this economy.”
 
ANB’s performance resulted in a return on average tangible assets of 1.18% and a return on average tangible equity of 16.24% for the 2007 second quarter, down from 1.20% and 17.06% in the 2006 second quarter. On a 2007 year-to-date basis, these ratios were 1.14% and 15.71%, respectively. During the 2007 second quarter, ANB repurchased 200,000 shares of its common stock in open market purchases. Tangible book value per share at June 30, 2007 was $26.46.
 
ANB is a bank holding company operating 103 banking locations through eleven bank subsidiaries in Alabama, Florida and Georgia. Alabama subsidiaries include: First American Bank in north central Alabama; Alabama Exchange Bank in Tuskegee; and Bank of Dadeville. Florida subsidiaries are: Indian River National Bank in Vero Beach; First Gulf Bank, N.A. in north west Florida and Baldwin County, Alabama; Florida Choice Bank in metropolitan Orlando and central Florida; Community Bank of Naples, N.A.; CypressCoquina Bank in Ormond Beach; and Millennium Bank in Gainesville. ANB has two subsidiaries in Georgia: Georgia State Bank and The Peachtree Bank, both in metropolitan Atlanta. ANB provides full banking services to individuals and businesses. Commercial mortgage services, including the origination of permanent commercial real estate mortgage loans for various lenders, are provided by Byars and Company, a division of First American Bank. Brokerage services are provided to customers through First American Bank’s wholly owned subsidiary, NBC Securities, Inc. Investments are not bank guaranteed, not FDIC insured and may lose value.

 
Alabama National BanCorporation common stock is traded on the NASDAQ Global Select Market under the symbol “ALAB.”
 
Conference Call Instructions:

Alabama National will discuss financial results for the second quarter and six months ended June 30, 2007, as well as its goals and general outlook for the remainder of 2007, in a conference call to be held Wednesday, July 25, 2007 at 9:00 a.m. Central Time (10:00 Eastern Time). A listen-only simulcast and replay of Alabama National’s conference call will be available on-line at the following Internet links:
 
www.alabamanational.com, under “News,”
or
www.viavid.net/dce.aspx?sid=00004139,
 
on July 25, beginning at 9:00 a.m. Central Time. The on-line replay will follow immediately and continue for 30 days.
 
For live interactive access to the teleconference, please dial 1-800-811-8824 at 9:00 a.m. Central Time (10:00 Eastern) on July 25. For those without Internet access, a telephonic replay will be available through August 25, 2007 by dialing 1-888-203-1112 and entering Replay Pass Code 1854784.
 
Many of the comparisons of financial data from period to period presented in the narrative of this release have been rounded from actual values reported in the attached selected unaudited financial tables. The percentage changes presented above are based on a comparison of the actual values recorded in the attached tables, not the rounded values.
 
This press release, including the attached selected unaudited financial tables which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These “non-GAAP” financial measures are “cash earnings from continuing operations” (cash earnings per share from continuing operations), “tangible book value” (tangible book value per share), “return on average tangible equity” and “return on average tangible assets.” ANB’s management uses these non-GAAP measures in its analysis of ANB’s performance. Cash earnings from continuing operations is defined as net income from continuing operations plus amortization expense (net of tax) applicable to intangible assets that do not qualify as regulatory capital. Cash earnings from continuing operations per basic and diluted share is defined as cash earnings from continuing operations divided by basic and diluted common shares outstanding. ANB’s management includes cash earnings from continuing operations measures to compare the company’s earnings exclusive of non-cash amortization expense and because it is a measure used by many investors as part of their analysis of ANB’s performance. Tangible book value is defined as total equity reduced by recorded intangible assets. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace that are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Alabama National that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Return on average tangible equity is defined as earnings for the period (annualized for the quarterly period) divided by average equity reduced by average goodwill and other intangible assets. Return on average tangible assets is defined as earnings for the period (annualized for the quarterly period) divided by average assets reduced by average goodwill and other intangible assets. ANB’s management includes these measures because it believes that they are important when measuring the company’s performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and these measures are used by many investors as part of their analysis of ANB. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the “Reconciliation Table” in the attached unaudited financial tables for a more detailed analysis of these non-GAAP performance measures and the most directly comparable GAAP measures.
 

This press release contains forward-looking statements as defined by federal securities laws. Statements contained in this press release which are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. ANB undertakes no obligation to update these statements following the date of this press release. In addition, ANB, through its senior management, may make from time to time forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of ANB’s senior management based upon current information and involve a number of risks and uncertainties. Certain factors which could affect the accuracy of such forward-looking statements are identified in the public filings made by ANB with the Securities and Exchange Commission, and forward looking statements contained in this press release or in other public statements of ANB or its senior management should be considered in light of those factors. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

Contacts: Alabama National BanCorporation      
 
 John H. Holcomb III
    
William E. Matthews, V
 
 Chairman of the Board and
    
Executive Vice President and
 
 Chief Executive Officer
    
Chief Financial Officer
 
 (205)583-3648
  
 
 (205)583-3650
   
 
    

# # #

 

ALABAMA NATIONAL BANCORPORATION
(Unaudited Financial Highlights)
(in thousands, except per share amounts and percentages)
               
   
Three Months Ended
 
 
 
 
 
June 30,
 
Percentage
 
 
 
2007
 
2006
 
Change (b)
 
               
Net interest income
 
$
64,206
  
$
58,943
    
8.9
%
Noninterest income
   
21,657
   
17,863
   
21.2
 
Total revenue
   
85,863
   
76,806
   
11.8
 
Provision for loan and lease losses
   
3,273
   
1,920
   
70.5
 
Noninterest expense
   
50,691
   
45,377
   
11.7
 
Income before taxes from continuing operations
   
31,899
   
29,509
   
8.1
 
Income taxes
   
10,840
   
10,222
   
6.0
 
Net income from continuing operations
   
21,059
   
19,287
   
9.2
 
Income from discontinued operations (net of tax)
   
979
   
30
   
3163.3
 
Net income
 
$
22,038
  
$
19,317
    
14.1
%
                     
Weighted average common and common
                   
equivalent shares outstanding  
                    
Basic  
    
20,714
   
18,806
   
10.1
%
Diluted  
    
20,858
   
18,984
   
9.9
 
                     
Net income per common share from continuing operations
                   
Basic  
  
$
1.02
  
$
1.03
    
(0.9
)%
Diluted  
    
1.01
   
1.02
   
(.6
)
                     
Net income per common share
                   
Basic  
  
$
1.06
  
$
1.03
    
3.6
%
Diluted  
    
1.06
   
1.02
   
3.8
 
                     
Cash earnings per share from continuing operations (a)
                   
Total  
  
$
21,918
  
$
20,144
    
8.8
%
Basic  
    
1.06
   
1.07
   
(1.2
)
Diluted  
    
1.05
   
1.06
   
(1.0
)
                     
Cash dividends declared on
                   
common stock  
  
$
.41
  
$
.375
        
Return on average assets
   
1.13
%
  
1.16
%
      
Return on average tangible assets
   
1.18
   
1.20
       
Return on average equity
   
10.14
   
11.33
       
Return on average tangible equity
   
16.24
   
17.06
       
                     
Noninterest Income
                   
Service charge income
 
$
4,190
  
$
4,011
    
4.5
%
Investment services income
   
1,664
   
966
   
72.3
 
Wealth management income
   
6,332
   
5,364
   
18.0
 
Gain on sale of mortgages
   
3,693
   
2,661
   
38.8
 
Commercial mortgage banking income
   
397
   
284
   
39.8
 
Gain on disposal of assets
   
104
   
32
   
225.0
 
Securities losses
   
-
   
(516
)
  
NM
 
Bank owned life insurance
   
1,120
   
798
   
40.4
 
Other
   
4,157
   
4,263
   
(2.5
)
Total noninterest income
 
$
21,657
  
$
17,863
    
21.2
%
                     
 
(a)
Cash earnings exclude the effect on earnings of amortization expense applicable to intangible assets that  do not qualify as regulatory capital.  
(b)
Percentage change based on actual not rounded values.
NM - Not meaningful

   
Six Months Ended
     
   
June 30,
  
Percentage
 
   
2007
 
2006
 
Change (b)
 
               
Net interest income
 
$
127,257
  
$
111,518
    
14.1
%
Noninterest income
   
41,352
   
35,810
   
15.5
 
Total revenue
   
168,609
   
147,328
   
14.4
 
Provision for loan and lease losses
   
5,035
   
3,163
   
59.2
 
Noninterest expense
   
101,801
   
87,416
   
16.5
 
Income before taxes from continuing operations
   
61,773
   
56,749
   
8.9
 
Income taxes
   
20,939
   
19,664
   
6.5
 
Net income from continuing operations
   
40,834
   
37,085
   
10.1
 
Income from discontinued operations (net of tax)
   
1,149
   
105
   
994.3
 
Net income
 
$
41,983
  
$
37,190
    
12.9
%
                     
Weighted average common and common
                   
equivalent shares outstanding  
                    
Basic  
    
20,752
   
18,074
   
14.8
%
Diluted  
    
20,904
   
18,252
   
14.5
 
                     
Net income per common share from continuing operations
                   
Basic  
  
$
1.97
  
$
2.05
    
(4.1
)%
Diluted  
    
1.95
   
2.03
   
(3.9
)
                     
Net income per common share
                   
Basic  
  
$
2.02
  
$
2.06
    
(1.7
)%
Diluted  
    
2.01
   
2.04
   
(1.4
)
                     
Cash earnings per share from continuing operations (a)
                   
Total  
  
$
42,643
  
$
38,453
    
10.9
%
Basic  
    
2.05
   
2.13
   
(3.4
)
Diluted  
    
2.04
   
2.11
   
(3.2
)
                     
Cash dividends declared on
                   
common stock  
  
$
.82
  
$
.75
        
Return on average assets
   
1.09
%
  
1.19
%
      
Return on average tangible assets
   
1.14
   
1.22
       
Return on average equity
   
9.76
   
11.88
       
Return on average tangible equity
   
15.71
   
19.33
       
                     
Noninterest Income
                   
Service charge income
 
$
8,112
  
$
7,711
    
5.2
%
Investment services income
   
2,725
   
1,830
   
48.9
 
Wealth management income
   
12,036
   
10,731
   
12.2
 
Gain on sale of mortgages
   
6,866
   
5,272
   
30.2
 
Commercial mortgage banking income
   
796
   
1,016
   
(21.7
)
Gain on disposal of assets
   
493
   
539
   
(8.5
)
Securities (losses) gains
   
-
   
(1,250
)
  
NM
 
Bank owned life insurance
   
2,225
   
1,540
   
44.5
 
Other
   
8,099
   
8,421
   
(3.8
)
Total noninterest income
 
$
41,352
  
$
35,810
    
15.5
%
                     
 
(a)
Cash earnings exclude the effect on earnings of amortization expense applicable to intangible assets that  do not qualify as regulatory capital.  
(b)
Percentage change based on actual not rounded values.
NM - Not meaningful
 

               
   
June 30,
 
December 31,
 
Percentage
 
   
2007
 
2006
 
Change
 
Total assets
 
$
7,902,537
  
$
7,671,274
    
3.0
%
Earning assets
   
7,083,566
   
6,856,309
   
3.3
 
Securities (a)
   
1,226,486
   
1,265,774
   
(3.1
)
Loans held for sale
   
39,512
   
27,652
   
42.9
 
Loans and leases, net of unearned income
   
5,705,522
   
5,456,136
   
4.6
 
Allowance for loan and lease losses
   
70,474
   
68,246
   
3.3
 
Deposits
   
5,785,510
   
5,567,603
   
3.9
 
Short-term borrowings
   
133,372
   
161,830
   
(17.6
)
Long-term debt
   
442,378
   
402,399
   
9.9
 
Stockholders' equity
   
865,593
   
853,623
   
1.4
 
                     
(a) Excludes trading securities
                   
                     
 

ASSET QUALITY ANALYSIS
(in thousands, except percentages)
               
   
As of / For the Three Months Ended
 
   
June 30, 2007
 
March 31, 2007
 
June 30, 2006
 
Nonaccrual loans
 
$
10,686
  
$
11,985
  
$
5,625
  
Restructured loans
   
-
   
-
   
-
 
Loans past due 90 days or more and
                   
still accruing  
    
-0-
    
-0-
    
-0-
  
Total nonperforming loans
   
10,686
   
11,985
   
5,625
 
Other real estate owned
   
7,678
   
1,607
   
401
 
Total nonperforming assets
   
18,364
   
13,592
   
6,026
 
Total non performing assets as a
                   
percentage of period-end loans  
                    
and other real estate (a)  
    
0.32
%
  
0.24
%
  
0.13
%
Allowance for loan and lease losses
   
70,474
   
69,677
   
60,739
 
Provision for loan and lease losses
   
3,273
   
1,762
   
1,920
 
Loans charged off
   
2,799
   
501
   
513
 
Loan recoveries
   
323
   
170
   
405
 
Net loan and lease losses
   
2,476
   
331
   
108
 
Allowance for loan and lease losses as a
                   
percentage of period-end loans and leases (a)  
    
1.24
%
  
1.25
%
  
1.26
%
Allowance for loan and lease losses as a
                   
percentage of period-end  
                    
nonperforming loans  
    
659.50
   
581.37
   
1,079.80
 
Net losses to average loans and leases (annualized)
   
0.18
   
0.02
   
0.01
 
                     
 

   
For the Six Months Ended
     
   
June 30,
  
Percentage
 
   
2007
 
2006
 
Change
 
Provision for loan and lease losses
 
$
5,035
  
$
3,163
    
59.2
%
Loans charged off
   
3,300
   
1,018
   
224.17
 
Loan recoveries
   
493
   
700
   
(29.6
)
Net loan and lease losses
   
2,807
   
318
   
782.7
 
Net losses to average loans and leases (annualized)
   
0.10
%
  
0.01
%
      
                     
(a) Excludes loans held for sale  
                    
                     

TAXABLE EQUIVALENT YIELDS/RATES
               
   
Three Months Ended
 
   
June 30, 2007
 
March 31, 2007
 
June 30, 2006
 
Interest income:
             
Interest and fees on loans  
    
8.09
%
  
8.13
%
  
7.75
%
Interest on securities:  
                    
 Taxable
   
4.61
   
4.62
   
4.45
 
 Non-taxable
   
6.08
   
6.22
   
6.41
 
Total interest earning assets  
    
7.48
   
7.48
   
7.10
 
                     
Interest expense:
                   
Interest on deposits  
    
4.17
%
  
4.10
%
  
3.38
%
Interest on short-term borrowing  
    
5.49
   
5.11
   
4.63
 
Interest on long-term debt  
    
5.09
   
5.41
   
5.00
 
Total interest bearing liabilities  
    
4.32
   
4.28
   
3.67
 
Net interest spread  
    
3.16
   
3.20
   
3.43
 
Net interest margin  
    
3.72
   
3.74
   
3.97
 
                     
 

   
Six Months Ended
 
   
June 30,
 
   
2007
 
2006
 
Interest income:
         
Interest and fees on loans  
    
8.11
%
  
7.60
%
Interest on securities:  
              
 Taxable
   
4.61
   
4.41
 
 Non-taxable
   
6.15
   
6.47
 
Total interest earning assets  
    
7.48
   
6.95
 
               
Interest expense:
             
Interest on deposits  
    
4.13
%
  
3.21
%
Interest on short-term borrowing  
    
5.28
   
4.68
 
Interest on long-term debt  
    
5.24
   
4.86
 
Total interest bearing liabilities  
    
4.30
   
3.49
 
Net interest spread  
    
3.18
   
3.46
 
Net interest margin  
    
3.73
   
3.97
 
               


STOCKHOLDERS' EQUITY AND CAPITAL RATIOS
           
   
June 30,
 
December 31,
 
   
2007
 
2006
 
Stockholders' Equity:
         
Equity to assets  
    
10.95
%
  
11.13
%
Leverage ratio  
    
7.95
   
7.99
 
Book value per common share (a)  
  
$
42.42
  
$
41.51
  
Tangible book value per common share (a)(b)  
    
26.46
   
25.55
 
Ending shares outstanding  
    
20,407
   
20,562
 
 
(a)
Includes a cumulative mark to market adjustment to equity of $(0.48) and $(0.29) per share at June 30, 2007 and December 31, 2006, respectively.  
 
(b)
Total equity reduced by intangible assets divided by common shares outstanding.
 
 
 

RECONCILIATION TABLE
(in thousands, except per share amounts and percentages)
                   
   
Three Months Ended
 
Six Months Ended
 
   
June 30,
 
June 30,
 
   
2007
 
2006
 
2007
 
2006
 
Net income from continuing operations
 
$
21,059
  
$
19,287
  
$
40,834
  
$
37,085
  
Amortization of intangibles, net of tax
   
859
   
857
   
1,809
   
1,368
 
Cash earnings from continuing operations
 
$
21,918
  
$
20,144
  
$
42,643
  
$
38,453
  
                           
Net income per common share from
                         
continuing operations - basic  
  
$
1.02
  
$
1.03
  
$
1.97
  
$
2.05
  
Effect of amortization of intangibles per share
   
0.04
   
0.04
   
0.08
   
0.08
 
Cash earnings per common share from
                         
continuing operations - basic  
  
$
1.06
  
$
1.07
  
$
2.05
  
$
2.13
  
                           
Net income per common share from
                         
continuing operations - diluted  
  
$
1.01
  
$
1.02
  
$
1.95
  
$
2.03
  
Effect of amortization of intangibles per share
   
0.04
   
0.04
   
0.09
   
0.08
 
Cash earnings per common share from
                         
continuing operations - diluted  
  
$
1.05
  
$
1.06
  
$
2.04
  
$
2.11
  
                           
Average assets
 
$
7,825,999
  
$
6,678,659
  
$
7,776,049
  
$
6,326,862
  
Average intangible assets
   
(327,089
)
  
(229,375
)
  
(328,731
)
  
(193,489
)
Average tangible assets
 
$
7,498,910
  
$
6,449,284
  
$
7,447,318
  
$
6,133,373
  
                           
Return on average assets
   
1.13
%
  
1.16
%
  
1.09
%
  
1.19
%
Effect of average intangible assets
   
0.05
   
0.04
   
0.05
   
0.03
 
Return on average tangible assets
   
1.18
%
  
1.20
%
  
1.14
%
  
1.22
%
                           
Average equity
 
$
871,492
  
$
683,649
  
$
867,747
  
$
631,380
  
Average intangible assets
   
(327,089
)
  
(229,375
)
  
(328,731
)
  
(193,489
)
Average tangible equity
 
$
544,403
  
$
454,274
  
$
539,016
  
$
437,891
  
                           
Return on average equity
   
10.14
%
  
11.33
%
  
9.76
%
  
11.88
%
Effect of average intangible assets
   
6.10
   
5.73
   
5.95
   
7.45
 
Return on average tangible equity
   
16.24
%
  
17.06
%
  
15.71
%
  
19.33
%
                           


   
As of
 
   
June 30,
  
December 31,
  
   
2007
  
2006
  
Book value
 
$
865,593
  
$
853,623
  
Intangible assets
   
(325,566
)
  
(328,166
)
Tangible book value
 
$
540,027
  
$
525,457
  
               
Book value per common share
 
$
42.42
  
$
41.51
  
Effect of intangible assets per share
   
(15.96
)
  
(15.96
)
Tangible book value per common share
 
$
26.46
  
$
25.55
  
               

             
Alabama National BanCorporation and Subsidiaries    
Consolidated Statements of Financial Condition (Unaudited)    
(In thousands, except share amounts)    
             
   
June 30, 2007 
  
December 31, 2006 
  
Assets
           
Cash and due from banks
  
$
182,101
  
$
200,153
  
Interest-bearing deposits in other banks
   
25,419
   
16,350
 
Federal funds sold and securities purchased under resell agreements
    
83,627
   
89,865
 
Trading securities, at fair value
   
3,000
   
532
 
Investment securities (fair values of $691,943 and $705,460)
    
713,900
   
716,406
 
Securities available for sale, at fair value
   
512,586
   
549,368
 
Loans held for sale
   
39,512
   
27,652
 
Loans and leases
    
5,710,253
   
5,461,400
 
Unearned income
   
(4,731
)
  
(5,264
)
Loans and leases, net of unearned income
   
5,705,522
   
5,456,136
 
Allowance for loan and lease losses
   
(70,474
)
  
(68,246
)
Net loans and leases
    
5,635,048
   
5,387,890
 
Property, equipment and leasehold improvements, net
   
164,722
   
155,001
 
Assets to be disposed of
   
-
   
3,549
 
Goodwill
   
311,682
   
311,583
 
Other intangible assets, net
   
13,884
   
16,583
 
Cash surrender value of life insurance …
    
107,248
   
104,992
 
Receivable from investment division customers
    
6,438
   
1,114
 
Other assets
   
103,370
   
90,236
 
Totals
 
$
7,902,537
  
$
7,671,274
  
               
Liabilities and Stockholders' Equity
             
Deposits:
             
Noninterest bearing
 
$
767,775
  
$
849,127
  
Interest bearing
   
5,017,735
   
4,718,476
 
Total deposits
   
5,785,510
   
5,567,603
 
Federal funds purchased and securities sold under repurchase agreements
   
611,291
   
627,297
 
Liabilities to be disposed of
   
-
   
1,019
 
Accrued expenses and other liabilities
   
54,955
   
56,057
 
Payable for securities purchased for investment division customers
    
9,438
   
1,446
 
Short-term borrowings
    
133,372
   
161,830
 
Long-term debt
   
442,378
   
402,399
 
Total liabilities
   
7,036,944
   
6,817,651
 
               
Common stock, $1 par; 50,000,000 shares authorized; 20,606,707 and 20,562,467
             
shares issued at June 30, 2007 and December 31, 2006, respectively
    
20,607
   
20,562
 
Additional paid-in capital
   
575,836
   
573,756
 
Retained earnings
   
291,562
   
266,668
 
Treasury stock at cost, 200,000 shares at June 30, 2007
   
(12,578
)
  
-
 
Accumulated other comprehensive loss, net of tax
    
(9,834
)
  
(7,363
)
Total stockholders' equity
   
865,593
   
853,623
 
Totals
 
$
7,902,537
  
$
7,671,274
  
               
               

Alabama National BanCorporation and Subsidiaries  
Consolidated Statements of Income (Unaudited)  
(In thousands, except per share data)  
                    
   
 For the Three Months
  
For the Six Months
  
   
 Ended June 30,
  
Ended June 30,
  
   
 2007
  
2006
  
2007
  
2006
  
                    
Interest income:
                  
Interest and fees on loans and leases
    
115,100
   
91,857
   
226,665
   
169,095
 
Interest on securities
   
13,838
   
12,924
   
27,966
   
25,054
 
Interest on deposits in other banks
   
270
   
146
   
554
   
225
 
Interest on trading securities
   
10
   
8
   
24
   
19
 
Interest on federal funds sold and securities purchased
                         
under resell agreements
   
907
   
993
   
1,794
   
1,725
 
Total interest income
   
130,125
   
105,928
   
257,003
   
196,118
 
                           
Interest expense:
                         
Interest on deposits 
   
51,661
   
33,943
   
100,541
   
61,040
 
Interest on federal funds purchased and securities sold
                         
under repurchase agreements
   
7,235
   
7,255
   
14,819
   
13,065
 
Interest on short-term borrowings
   
1,669
   
724
   
3,675
   
1,121
 
Interest on long-term debt
    
5,354
   
5,063
   
10,711
   
9,374
 
Total interest expense
   
65,919
   
46,985
   
129,746
   
84,600
 
Net interest income
   
64,206
   
58,943
   
127,257
   
111,518
 
Provision for loan and lease losses
   
3,273
   
1,920
   
5,035
   
3,163
 
Net interest income after provision for loan and lease losses
   
60,933
   
57,023
   
122,222
   
108,355
 
                           
Noninterest income:
                         
Securities losses
    
-
   
(516
)
  
-
   
(1,250
)
Gain on disposition of assets
   
104
   
32
   
493
   
539
 
Service charges on deposit accounts
   
4,190
   
4,011
   
8,112
   
7,711
 
Investment services income
   
1,664
   
966
   
2,725
   
1,830
 
Wealth management income
   
6,332
   
5,364
   
12,036
   
10,731
 
Gain on sale of mortgages
   
3,693
   
2,661
   
6,866
   
5,272
 
Commercial mortgage banking income
   
397
   
284
   
796
   
1,016
 
Bank owned life insurance
   
1,120
   
798
   
2,225
   
1,540
 
Other
   
4,157
   
4,263
   
8,099
   
8,421
 
Total noninterest income
   
21,657
   
17,863
   
41,352
   
35,810
 
                           
Noninterest expense:
                         
Salaries and employee benefits
   
25,187
   
22,822
   
52,255
   
45,407
 
Commission based compensation
   
5,386
   
4,423
   
9,933
   
8,557
 
Occupancy and equipment expenses
   
5,819
   
5,025
   
11,519
   
9,683
 
Amortization of intangibles 
   
1,282
   
1,276
   
2,699
   
2,028
 
Other
   
13,017
   
11,831
   
25,395
   
21,741
 
Total noninterest expense
   
50,691
   
45,377
   
101,801
   
87,416
 
                           
Income before provision for income taxes from continuing operations
   
31,899
   
29,509
   
61,773
   
56,749
 
Provision for income taxes
   
10,840
   
10,222
   
20,939
   
19,664
 
Net income from continuing operations
   
21,059
   
19,287
   
40,834
   
37,085
 
                           
Income from discontinued operations, including a gain on disposal of
                         
$1,462,000 for the three and six months ended June 30, 2007 (net of tax)
    
979
   
30
   
1,149
   
105
 
Net income
 
$
22,038
  
$
19,317
  
$
41,983
  
$
37,190
  
                           
Weighted average common shares outstanding:
                          
Basic
   
20,714
   
18,806
   
20,752
   
18,074
 
Diluted
   
20,858
   
18,984
   
20,904
   
18,252
 
                           
Earnings per common share from continuing operations:
                          
Basic
 
$
1.02
  
$
1.03
  
$
1.97
  
$
2.05
  
Diluted
 
$
1.01
  
$
1.02
  
$
1.95
  
$
2.03
  
                           
Earnings per common share:
                          
Basic
 
$
1.06
  
$
1.03
  
$
2.02
  
$
2.06
  
Diluted
  
$
1.06
  
$
1.02
  
$
2.01
  
$
2.04
  
                           

AVERAGE BALANCES, INCOME AND EXPENSES AND RATES   
(Amounts in thousands, except yields and rates)   
                            
   
 Three Months 06/30/07
 
Three Months 06/30/06
 
   
 Average
 
Income/
 
Yield/
 
Average
 
Income/
 
Yield/
 
 
 
 Balance
 
Expense
 
Cost
 
Balance
 
Expense
 
Cost
 
Assets:
                          
Earning assets:
                          
Loans and leases (1) 
 
$
5,714,954
  
$
115,303
    
8.09
%
$
4,758,596
  
$
91,978
    
7.75
%
Securities:
                                     
Taxable
   
1,078,873
   
12,393
   
4.61
   
1,089,534
   
12,087
   
4.45
 
Tax exempt
   
144,425
   
2,189
   
6.08
   
79,355
   
1,268
   
6.41
 
Cash balances in other banks
    
21,732
   
270
   
4.98
   
12,555
   
146
   
4.66
 
Funds sold
   
67,298
   
907
   
5.41
   
73,930
   
993
   
5.39
 
Trading account securities
    
859
   
10
   
4.67
   
814
   
8
   
3.94
 
Total earning assets (2)
   
7,028,141
   
131,072
   
7.48
   
6,014,784
   
106,480
   
7.10
 
Cash and due from banks
   
185,397
               
189,785
             
Premises and equipment 
   
164,020
               
131,942
             
Other assets
   
518,772
               
402,259
             
Allowance for loan and lease losses
    
(70,331
)
              
(60,111
)
            
Total assets
  
$
7,825,999
              
$
6,678,659
              
                                       
Liabilities:
                                     
Interest-bearing liabilities:
                                     
Interest-bearing transaction accounts
  
$
1,199,127
  
$
8,717
    
2.92
%
$
1,145,632
  
$
7,651
    
2.68
%
Savings deposits
   
1,102,663
   
9,682
   
3.52
   
936,041
   
6,061
   
2.60
 
Time deposits
   
2,667,493
   
33,262
   
5.00
   
1,950,926
   
20,231
   
4.16
 
Funds purchased
   
611,175
   
7,235
   
4.75
   
634,029
   
7,255
   
4.59
 
Other short-term borrowings
   
121,946
   
1,669
   
5.49
   
62,783
   
724
   
4.63
 
Long-term debt
   
422,275
   
5,354
   
5.09
   
406,217
   
5,063
   
5.00
 
Total interest-bearing liabilities
   
6,124,679
   
65,919
   
4.32
   
5,135,628
   
46,985
   
3.67
 
Demand deposits
   
779,936
               
773,744
             
Accrued interest and other liabilities
    
49,892
               
85,638
             
Stockholders' equity
   
871,492
               
683,649
             
Total liabilities and stockholders' equity
 
$
7,825,999
              
$
6,678,659
              
                                       
Net interest spread
                
3.16
%
              
3.43
%
Net interest income/margin on
                                     
a taxable equivalent basis
         
65,153
   
3.72
%
        
59,495
   
3.97
%
Tax equivalent adjustment (2)
          
947
               
552
       
Net interest income/margin
        
$
64,206
    
3.66
%
      
$
58,943
    
3.93
%
                                       
                                       
 
(1)
Average loans include nonaccrual loans. All loans and deposits are domestic.
(2)
Tax equivalent adjustments are based on the assumed rate of 34%, and do not give effect to the disallowance for Federal income tax purposes of interest expense related to certain tax-exempt assets.
 
AVERAGE BALANCES, INCOME AND EXPENSES AND RATES
(Amounts in thousands, except yields and rates)
                            
   
 Six Months 06/30/07
 
Six Months 06/30/06
 
 
 
 Average
 
Income/
 
Yield/
 
Average
 
Income/
 
Yield/
 
 
 
 Balance
 
Expense
 
Cost
 
Balance
 
Expense
 
Cost
 
Assets:
                          
Earning assets:
                          
Loans and leases (1) 
 
$
5,647,459
  
$
227,079
    
8.11
%
$
4,493,694
  
$
169,344
    
7.60
%
Securities:
                                     
Taxable
   
1,097,562
   
25,098
   
4.61
   
1,079,285
   
23,627
   
4.41
 
Tax exempt
   
142,551
   
4,345
   
6.15
   
67,408
   
2,162
   
6.47
 
Cash balances in other banks
    
22,538
   
554
   
4.96
   
10,137
   
225
   
4.48
 
Funds sold
   
68,704
   
1,794
   
5.27
   
69,894
   
1,725
   
4.98
 
Trading account securities
   
982
   
24
   
4.93
   
904
   
19
   
4.24
 
Total earning assets (2)
   
6,979,796
   
258,894
   
7.48
   
5,721,322
   
197,102
   
6.95
 
Cash and due from banks
    
185,379
               
185,844
             
Premises and equipment
   
161,637
               
123,415
             
Other assets
   
518,970
               
353,164
             
Allowance for loan and lease losses
   
(69,733
)
              
(56,883
)
            
Total assets
 
$
7,776,049
              
$
6,326,862
              
                                       
Liabilities:
                                     
Interest-bearing liabilities:
                                     
Interest-bearing transaction accounts
 
$
1,190,925
  
$
17,105
    
2.90
%
$
1,087,705
  
$
13,445
    
2.49
%
Savings deposits
   
1,114,971
   
19,424
   
3.51
   
917,604
   
11,174
   
2.46
 
Time deposits
   
2,599,553
   
64,012
   
4.97
   
1,833,611
   
36,421
   
4.01
 
Funds purchased
   
627,872
   
14,819
   
4.76
   
608,120
   
13,065
   
4.33
 
Other short-term borrowings
   
140,443
   
3,675
   
5.28
   
48,349
   
1,121
   
4.68
 
Long-term debt
   
412,058
   
10,711
   
5.24
   
388,676
   
9,374
   
4.86
 
Total interest-bearing liabilities
   
6,085,822
   
129,746
   
4.30
   
4,884,065
   
84,600
   
3.49
 
Demand deposits
   
766,770
               
730,340
             
Accrued interest and other liabilities
   
55,710
               
81,077
             
Stockholders' equity
   
867,747
               
631,380
             
Total liabilities and stockholders' equity
 
$
7,776,049
              
$
6,326,862
              
                                       
Net interest spread
                
3.18
%
              
3.46
%
Net interest income/margin on
                                     
a taxable equivalent basis
         
129,148
   
3.73
%
        
112,502
   
3.97
%
Tax equivalent adjustment (2)
         
1,891
               
984
       
Net interest income/margin 
       
$
127,257
    
3.68
%
      
$
111,518
    
3.93
%
                                       
 
(1)
Average loans include nonaccrual loans. All loans and deposits are domestic.
(2)
Tax equivalent adjustments are based on the assumed rate of 34%, and do not give effect to the disallowance for Federal income tax purposes of interest expense related to certain tax-exempt assets.