SOURCE: Bank of Granite Corporation
Bank of Granite Corporation Reports Third Quarter Results
GRANITE FALLS, NC--(Marketwire - October 30, 2008) - Bank of Granite Corporation (
The Company's banking subsidiary, Bank of Granite (the "Bank"), earned $760 thousand in the quarter. The Bank's deposits have remained relatively stable over the past year and stood at approximately $987 million at the end of the third quarter, which compares to $1,015 million in June and $1,011 million in September 2007. A significant factor in the Company's net loss was the market dislocation relating to financial stocks. The Company holds a portfolio of financial debt and stocks for which an other than temporary impairment charge of $636 thousand was recorded in the third quarter. Additionally, net interest income and net interest margin continued to be adversely affected by an increase in nonperforming assets, which increased to $54.84 million at September 30 from $42.10 at June 30. As previously announced, the Company is conducting a cost reduction plan that will be reflected in future quarters. The Company experienced a decrease in noninterest overhead during the quarter, related primarily to a reduction of personnel costs. Scott Anderson, CEO said, "While we are disappointed in our results, we believe actions we have taken regarding the suspension of the dividend, the cost reductions in progress, and aggressive management of our problem loans and our overall loan portfolio are measures that will hasten the Bank's return to a better performance level. I am thankful for our customers' loyal support and the work that all of the Company's associates are doing to help us through these difficult economic times."
Bank of Granite Corporation's common stock trades on the NASDAQ Global Select Market(SM) under the symbol "GRAN." Bank of Granite Corporation is the parent company of Bank of Granite and Granite Mortgage, Inc. Bank of Granite operates twenty-two full-service banking offices in eight North Carolina counties -- Burke, Caldwell, Catawba, Forsyth, Iredell, Mecklenburg, Watauga, and Wilkes, as well as a loan production office in Guilford County. Granite Mortgage, a mortgage banking company headquartered in Winston-Salem, originates home mortgages in these counties as well as in Cumberland and Rowan counties.
Please see the attached supplemental "Financial Data" tables.
Disclosures about Forward Looking Statements
The discussions included in this document contain statements that may be deemed forward looking statements within the meaning of the Private Securities Litigation Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from these statements. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as "expects," "anticipates," "believes," "estimates," "plans," "projects," or other statements concerning opinions or judgments of our Company and our management about future events. The accuracy of such forward looking statements could be affected by certain factors, including but not limited to, the financial success or changing conditions or strategies of our customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel, and general economic conditions. For additional factors that could affect the matters discussed in forward looking statements, see the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K/A filed with the Securities and Exchange Commission.
Bank of Granite Corporation
Selected
Financial Three Months Ended Nine Months Ended
Data September 30, September 30,
----------------------------- -----------------------------
(in thousands
except per % %
share data) 2008 2007 change 2008 2007 change
---------- ---------- ------ ---------- ---------- ------
Consolidated
earnings
summary:
Interest
income,
taxable
equivalent $ 16,537 $ 22,109 -25.2% $ 52,891 $ 67,900 -22.1%
Interest
expense 6,881 9,387 -26.7% 22,682 27,539 -17.6%
---------- ---------- ---------- ----------
Net interest
income,
taxable
equivalent 9,656 12,722 -24.1% 30,209 40,361 -25.2%
Taxable
equivalent
adjustment
(1) 170 205 -17.1% 548 653 -16.1%
---------- ---------- ---------- ----------
Net
interest
income 9,486 12,517 -24.2% 29,661 39,708 -25.3%
Loan loss
provision 3,581 42,737 -91.6% 13,437 52,125 -74.2%
Noninterest
income 2,494 3,193 -21.9% 8,875 9,644 -8.0%
Noninterest
expense 8,775 9,380 -6.4% 28,843 26,505 8.8%
---------- ---------- ---------- ----------
Loss before
income tax
benefit (376) (36,407) -99.0% (3,744) (29,278) -87.2%
Income tax
benefit (105) (14,391) -99.3% (1,826) (12,043) -84.8%
---------- ---------- ---------- ----------
Net loss $ (271) $ (22,016) -98.8% $ (1,918) $ (17,235) -88.9%
========== ========== ========== ==========
Loss per
share -
Basic $ (0.02) $ (1.40) -98.6% $ (0.12) $ (1.09) -89.0%
Loss per
share -
Diluted (0.02) (1.40) -98.6% (0.12) (1.09) -89.0%
---------- ---------- ---------- ----------
Average
shares -
Basic 15,454 15,694 -1.5% 15,446 15,879 -2.7%
Average
shares -
Diluted 15,454 15,694 -1.5% 15,446 15,879 -2.7%
Consolidated
balance sheet
data at
September 30:
Total assets $1,159,917 $1,189,176 -2.5%
Total deposits 969,172 979,365 -1.0%
Loans (gross) 951,665 909,653 4.6%
Stockholders'
equity 108,673 116,112 -6.4%
Consolidated
average balance
sheet data:
Total
assets $1,181,505 $1,212,281 -2.5% $1,200,537 $1,208,255 -0.6%
Total
deposits 980,633 977,049 0.4% 986,273 969,327 1.7%
Loans
(gross) 958,033 942,154 1.7% 955,173 934,682 2.2%
Stockholders'
equity 110,616 143,726 -23.0% 114,614 147,338 -22.2%
Consolidated
performance
ratios:
Return on
average
assets* -0.09% -7.21% -0.21% -1.91%
Return on
average
equity* -0.97% -60.77% -2.24% -15.64%
Net interest
margin* 3.56% 4.48% 3.67% 4.80%
Efficiency
ratio (2) 72.22% 58.94% 73.80% 53.00%
========== ========== ====== ========== ========== ======
Consolidated
asset quality
data and ratios:
Nonaccruing
loans $ 51,132 $ 27,267 87.5%
Accruing
loans 90
days past
due 466 491 -5.1%
---------- ----------
Nonperforming
loans 51,598 27,758 85.9%
Foreclosed
properties 3,237 2,605 24.3%
---------- ----------
Nonperforming
assets 54,835 30,363 80.6%
---------- ----------
Allowance
for loan losses 21,553 17,569 22.7%
---------- ----------
Loans charged
off 12,411 50,523 -75.4%
Recoveries
of loans
charged off 2,854 180 n/m
---------- ----------
Net loan
charge-offs 9,557 50,343 -81.0%
---------- ----------
Net
charge-offs
to average
loans* 1.34% 7.20%
Nonperforming
loans to
total assets 4.45% 2.33%
Allowance
coverage
of
nonperforming
loans 41.77% 63.29%
Allowance
for loan
losses to
gross
loans 2.26% 1.93%
Allowance
for loan
losses to
net loans 2.32% 1.97%
Subsidiary
earnings
summary:
Bank of Granite
Net interest
income $ 8,871 $ 11,863 -25.2% $ 27,417 $ 37,886 -27.6%
Loan loss
provision 3,556 42,725 -91.7% 13,376 52,089 -74.3%
Noninterest
income 2,348 2,160 8.7% 6,700 6,644 0.8%
Noninterest
expense 6,878 7,584 -9.3% 23,146 21,328 8.5%
Income tax
expense
(benefit) 25 (14,456)-100.2% (1,803) (12,289) -85.3%
Net income
(loss) 760 (21,830)-103.5% (602) (16,598) -96.4%
---------- ---------- ------ ---------- ---------- ------
Granite Mortgage
Net interest
income $ 703 $ 857 -18.0% $ 2,541 $ 2,498 1.7%
Loan loss
provision 25 12 108.3% 61 36 69.4%
Noninterest
income 849 1,033 -17.8% 2,878 3,000 -4.1%
Noninterest
expense 1,852 1,715 8.0% 5,415 4,847 11.7%
Income tax
expense
(benefit) (130) 65 -300.0% (23) 246 -109.3%
Net income
(loss) (195) 98 -299.0% (34) 369 -109.2%
========== ========== ====== ========== ========== ======
* Annualized based on number of days in the period.
(1) Yields and interest income on tax-exempt investments have been
adjusted to tax equivalent basis using a 35% tax rate.
(2) Calculated by dividing noninterest expense by the sum of tax
equivalent net interest income and noninterest income.
Bank of Granite Corporation
Supplemental Quarterly Financial
Data Quarters Ended
(in thousands ----------------------------------------------------------
except per Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
share data) 2008 2008 2008 2007 2007
---------- ---------- ---------- ---------- ----------
Consolidated
earnings
summary:
Interest
income,
taxable
equivalent $ 16,537 $ 17,254 $ 19,101 $ 22,273 $ 22,109
Interest
expense 6,881 7,190 8,611 9,309 9,387
---------- ---------- ---------- ---------- ----------
Net interest
income,
taxable
equivalent 9,656 10,064 10,490 12,964 12,722
Taxable
equivalent
adjustment
(1) 170 182 197 205 205
---------- ---------- ---------- ---------- ----------
Net interest
income 9,486 9,882 10,293 12,759 12,517
Loan loss
provision 3,581 8,445 1,411 3,006 42,737
Noninterest
income 2,494 3,103 3,278 3,535 3,193
Noninterest
expense 8,775 10,409 9,659 10,496 9,380
---------- ---------- ---------- ---------- ----------
Income (loss)
before income
taxes (benefits) (376) (5,869) 2,501 2,792 (36,407)
Income tax
expense
(benefit) (105) (2,507) 786 860 (14,391)
---------- ---------- ---------- ---------- ----------
Net income
(loss) $ (271) $ (3,362) $ 1,715 $ 1,932 $ (22,016)
========== ========== ========== ========== ==========
Earnings
(loss) per
share -
Basic $ (0.02) $ (0.22) $ 0.11 $ 0.12 $ (1.40)
Earnings
(loss) per
share -
Diluted (0.02) (0.22) 0.11 0.12 (1.40)
---------- ---------- ---------- ---------- ----------
Average
shares -
Basic 15,454 15,446 15,438 15,468 15,694
Average
shares -
Diluted 15,454 15,446 15,457 15,490 15,694
========== ========== ========== ========== ==========
Consolidated ending
balance sheet data:
Total assets $1,159,917 $1,187,696 $1,235,624 $1,219,148 $1,189,176
Total deposits 969,172 982,213 1,011,717 971,989 979,365
Loans (gross) 951,665 955,497 949,065 946,326 909,653
Stockholders'
equity 108,673 109,458 115,434 115,265 116,112
========== ========== ========== ========== ==========
Consolidated average
balance sheet data:
Total assets $1,181,505 $1,205,959 $1,214,147 $1,198,879 $1,212,281
Total deposits 980,633 989,560 988,626 971,663 977,049
Loans (gross) 958,033 958,754 948,732 929,342 942,154
Stockholders'
equity 110,616 115,545 117,681 117,042 143,726
========== ========== ========== ========== ==========
Consolidated performance
ratios:
Return on
average
assets* -0.09% -1.12% 0.57% 0.64% -7.21%
Return on
average
equity* -0.97% -11.70% 5.86% 6.55% -60.77%
Net interest
margin* 3.56% 3.66% 3.80% 4.69% 4.48%
Efficiency
ratio (2) 72.22% 79.05% 70.16% 63.62% 58.94%
========== ========== ========== ========== ==========
Consolidated
asset quality
data and ratios:
Nonaccruing
loans $ 51,132 $ 39,629 $ 40,260 $ 36,450 $ 27,267
Accruing
loans 90
days past
due 466 297 969 162 491
---------- ---------- ---------- ---------- ----------
Nonperforming
loans 51,598 39,926 41,229 36,612 27,758
Foreclosed
properties 3,237 2,172 2,511 2,491 2,605
---------- ---------- ---------- ---------- ----------
Nonperforming
assets 54,835 42,098 43,740 39,103 30,363
---------- ---------- ---------- ---------- ----------
Allowance
for loan
losses 21,553 18,833 15,459 17,673 17,569
---------- ---------- ---------- ---------- ----------
Loans
charged off 1,712 6,097 4,602 3,140 47,308
Recoveries
of loans
charged off 851 1,027 976 237 39
---------- ---------- ---------- ---------- ----------
Net loan
charge-offs 861 5,070 3,626 2,903 47,269
---------- ---------- ---------- ---------- ----------
Net charge-offs
to average
loans* 0.36% 2.13% 1.54% 1.24% 19.90%
Nonperforming
loans to total
assets 4.45% 3.36% 3.34% 3.00% 2.33%
Allowance
coverage of
nonperforming
loans 41.77% 47.17% 37.50% 48.27% 63.29%
Allowance
for loan
losses to
gross loans 2.26% 1.97% 1.63% 1.87% 1.93%
Allowance
for loan
losses to
net loans 2.32% 2.01% 1.66% 1.90% 1.97%
========== ========== ========== ========== ==========
Subsidiary
earnings
summary:
Bank of Granite
Net interest
income $ 8,871 $ 9,003 $ 9,543 $ 12,207 $ 11,863
Loan loss
provision 3,556 8,421 1,399 2,994 42,725
Noninterest
income 2,348 2,117 2,235 2,619 2,160
Noninterest
expense 6,878 8,421 7,847 8,777 7,584
Income tax
expense
(benefit) 25 (2,539) 711 852 (14,456)
Net income
(loss) 760 (3,183) 1,821 2,203 (21,830)
---------- ---------- ---------- ---------- ----------
Granite Mortgage
Net interest
income $ 703 $ 996 $ 842 $ 751 $ 857
Loan loss
provision 25 24 12 12 12
Noninterest
income 849 986 1,043 916 1,033
Noninterest
expense 1,852 1,878 1,685 1,635 1,715
Income tax
expense
(benefit) (130) 32 75 8 65
Net income
(loss) (195) 48 113 12 98
========== ========== ========== ========== ==========
* Annualized based on number of days in the period.
(1) Yields and interest income on tax-exempt investments have been
adjusted to tax equivalent basis using a 35% tax rate.
(2) Calculated by dividing noninterest expense by the sum of tax
equivalent net interest income and noninterest income.
Scott Anderson
Chief Executive Officer
828.345.6866
Email Contact
Kirby Tyndall
Chief Financial Officer
828.496.2026
Email Contact