SOURCE: Timberland Bancorp, Inc.
July 29, 2010 20:13 ET
Timberland Bancorp Earns $0.08 per Share in Fiscal Third Quarter
Non-Performing Assets Decrease; Capital Ratios Remain Very Strong
HOQUIAM, WA--(Marketwire - July 29, 2010) - Timberland Bancorp, Inc. (NASDAQ: TSBK)
("Timberland" or "the Company") today reported net income of $804,000 for
its fiscal third quarter ended June 30, 2010. Net income available to
common shareholders after adjusting for the preferred stock dividend and
the preferred stock discount accretion was $543,000, or $0.08 per diluted
common share. This compares to a net loss to common shareholders of $(3.44
million), or $(0.51) per diluted common share for the quarter ended March
31, 2010 and net income available to common shareholders of $769,000, or
$0.12 per diluted common share, for the quarter ended June 30, 2009.
Fiscal Third Quarter 2010 Highlights:
- Capital levels remain very strong: Total Risk Based Capital of
15.96%; Tier 1 Leverage Capital Ratio of 11.15%; Tangible Capital to
Tangible Assets Ratio of 10.94%, all solidly above well capitalized
levels
- Non-performing loans ("NPLs") decreased 20% and represented 3.74% of
total loans at June 30, 2010
- Non-performing assets ("NPAs") decreased by $5.6 million during the
quarter
- NPAs decreased to 5.12% of assets at June 30, 2010 from 5.95% three
months earlier
- Construction and land development loans decreased 53% year over year
and 34% during the quarter, and now account for 12% of total loans
- Net interest margin for the current quarter remained strong at
3.85%
- Deposits increased 17% year over year with no brokered funds
- N.O.W. checking account balances increased to 27% of deposits compared
to 21% of deposits one year prior
"Our fiscal third quarter performance demonstrates the progress we have
made during the past few quarters toward improving the risk profile of the
Bank. Asset quality, asset mix, deposit mix and our already strong Risk
Based Capital ratios improved during the quarter," stated Michael Sand, the
Company's President and CEO. "We have relentlessly reduced our exposure to
speculative single family construction loans which at June 30, 2010,
comprised less than 1% of the total loan portfolio. Total construction
credits at June 30, 2010, exclusive of our owner builder segment,
represented less than 7% of our loan portfolio," Sand also stated. "Loan
demand remained soft during the quarter which is reflected by a 1%
reduction in net loans receivable at quarter end relative to the end of the
prior quarter. We were also pleased to have completed our annual
regulatory examination," added Sand.
Capital Ratios and Asset Quality
Timberland Bancorp remains very well capitalized with a total risk-based
capital ratio of 15.96%, a Tier 1 leverage capital ratio of 11.15% and a
tangible capital to tangible assets ratio of 10.94% at June 30, 2010.
The NPAs to total assets ratio decreased to 5.12% at June 30, 2010 from
5.95% at March 31, 2010. "We charged off a total of $6.5 million in loans
in the third fiscal quarter. This total included $5.1 million of
previously identified impairments that were provisioned for in prior
quarters. Due to improving credit metrics and appropriate provisioning in
prior periods for potential charge-offs, a $750,000 provision for the
quarter was appropriate based on our detailed allowance for loan loss
analysis," Sand stated. The allowance for loan losses of $10.9 million
represented 2.00% of loans receivable and loans held for sale at June 30,
2010. Net charge-offs for the quarter ended June 30, 2010 totaled $6.5
million compared to $3.4 million for the quarter ended March 31, 2010 and
$609,000 for the quarter ended June 30, 2009.
NPLs decreased 20% to $21.0 million at June 30, 2010 from $26.4 million at
March 31, 2010 and were comprised of 66 loans and 44 credit relationships.
NPLs were comprised of the following at June 30, 2010:
- Seven commercial real estate loans totaling $4.96 million (of which
the largest had a balance of $2.84 million)
- 22 land loans totaling $4.85 million (of which the largest had a
balance of $835,000)
- 12 single family home loans totaling $3.46 million (of which the
largest had a balance of $722,000)
- Seven land development loans totaling $3.21 million (of which the
largest had a balance of $1.49 million)
- Seven single family speculative home loans totaling $2.08 million (of
which the largest had a balance of $767,000)
- Two condominium construction loans totaling $1.93 million (of which the
largest had a balance of $1.60 million)
- One single family construction loan with a balance of $274,000
- Four home equity loans totaling $114,000
- Two commercial business loans totaling $98,000
- Two consumer loans totaling $62,000
Net charge-offs totaled $6.54 million during the quarter ended June 30,
2010 and were comprised of the following:
- $3.99 million on six land development loans (of which $3.57 million
had already been specifically reserved for in previous quarters)
- $1.74 million on 14 land loans (of which $1.37 million had already been
specifically reserved for in previous quarters)
- $189,000 on two commercial real estate properties
- $176,000 on two multi-family construction loans
- $144,000 on home equity and consumer loans
- $133,000 on three single family construction loans
- $116,000 on three single family loans
- $47,000 on two single family speculative construction loans
Other real estate owned ("OREO") and other repossessed items decreased to
$12.96 million at June 30, 2010 from $13.48 million at March 31, 2010. At
June 30, 2010 the OREO portfolio consisted of 28 individual properties and
two other repossessed assets. The properties consisted of two condominium
projects totaling $3.9 million, three land development projects totaling
$3.6 million, ten single family homes totaling $2.9 million, ten land
parcels totaling $1.3 million and three commercial real estate properties
totaling $1.3 million. During the quarter ended June 30, 2010 seven OREO
properties and three other repossessed assets totaling $1.1 million were
sold for a net book gain of $73,000. In addition to these sales, 23
residential building lots were closed in the Clark County, Washington OREO
subdivision during the quarter ended June 30, 2010 with three pending sales
at quarter end. The Bank has a 12.5% participation interest in the plat.
Also at quarter end, there were eight pending sales in the Bank's Richland,
Washington OREO plat with four sales closing during the quarter.
Balance Sheet Management
Total assets increased 1% to $732.4 million at June 30, 2010 from $724.8
million at March 31, 2010. The increase in total assets was primarily the
result of a $16.9 million increase in cash equivalents and certificates of
deposits ("CDs") held for investment, which was partially offset by a
decrease in net loans receivable. "We continue to build and maintain a
high level of liquidity, both on balance sheet and through off-balance
sheet sources," said Dean Brydon, Chief Financial Officer. Liquidity as
measured by cash equivalents, CDs held for investment and available for
sale investments increased to 18.9% of total liabilities at June 30, 2010
from 16.5% at March 31, 2010 and 9.9% one year ago.
Net loans receivable decreased 1% to $533.1 million at June 30, 2010 from
$538.7 million at March 31, 2010. "The mix of loans in our portfolio
continues to improve," said Brydon. "Overall, we have reduced our total
exposure to construction and land development loans by 34% during the last
quarter and by 53% from one year ago." During the current quarter the
one-to-four family speculative construction portfolio decreased by 50%, the
land development portfolio decreased by 49% and the multi-family
construction portfolio decreased by 35%.
LOAN PORTFOLIO
($ in thousands) June 30, 2010 March 31, 2010 June 30, 2009
Amount Percent Amount Percent Amount Percent
-------- --------- -------- --------- -------- ---------
Mortgage Loans:
One-to-four
family $116,805 21% $113,295 20% $110,338 19%
Multi-family 33,127 6 33,236 6 25,702 4
Commercial 215,336 38 198,171 34 178,941 30
Construction
and land
development 66,248 12 100,938 18 142,006 24
Land 63,684 11 63,856 11 65,736 11
-------- --------- -------- --------- -------- ---------
Total mortgage
loans 495,200 88 509,496 89 522,723 88
Consumer Loans:
Home equity
and second
mortgage 39,215 7 39,303 7 41,950 7
Other 9,514 2 9,477 1 10,107 2
-------- --------- -------- --------- -------- ---------
Total
consumer
loans 48,729 9 48,780 8 52,057 9
Commercial
business loans 18,114 3 18,173 3 15,199 3
-------- --------- -------- --------- -------- ---------
Total loans 562,043 100% 576,449 100% 589,979 100%
Less:
Undisbursed
portion of
construction
loans in
process (15,780) (18,824) (29,447)
Unearned income (2,232) (2,286) (2,326)
Allowance for
loan losses (10,900) (16,687) (12,440)
-------- -------- --------
Total loans
receivable, net $533,131 $538,652 $545,766
======== ======== ========
CONSTRUCTION LOAN
COMPOSITION
($ in thousands) June 30, 2010 March 31, 2010 June 30, 2009
Percent Percent Percent
of Loan of Loan of Loan
Amount Portfolio Amount Portfolio Amount Portfolio
-------- --------- -------- --------- -------- ---------
Custom and
owner / builder $ 29,080 5% $ 29,101 5% $ 34,373 6%
Speculative 5,071 1 10,070 2 19,332 3
Commercial real
estate 20,363 4 40,369 7 42,056 7
Multi-family
(including
condominium) 4,014 1 6,135 1 25,631 4
Land development 7,720 1 15,263 3 20,614 4
-------- --------- -------- --------- -------- ---------
Total
construction
and land
development
loans $ 66,248 12% $100,938 18% $142,006 24%
======== ========= ======== ========= ======== =========
Total loan originations were $36.5 million for the quarter ended June 30,
2010 compared to $42.6 million for the preceding quarter and $94.8 million
for the comparable quarter one year ago. Timberland continues to sell
fixed rate one-to-four family mortgage loans into the secondary market for
asset-liability management purposes and to generate non-interest income.
During the quarter ended June 30, 2010, $11.4 million one-to-four family
fixed-rate mortgage loans were sold on the secondary market compared to
$13.5 million for the preceding quarter and $69.6 million for the quarter
ended one year ago.
Timberland's mortgage-backed securities and other investments decreased by
$1.0 million during the quarter to $17.2 million at June 30, 2010 from
$18.2 million at March 31, 2010, primarily as a result of prepayments,
regular amortization and impairment related write-downs. During the
quarter ended June 30, 2010, other-than-temporary-impairment ("OTTI")
credit related write-downs and realized losses of $152,000 were recorded on
the private label mortgage-backed securities that were acquired in the
in-kind redemption from the AMF family of mutual funds in June 2008. At
June 30, 2010 the Bank's remaining private label mortgage-backed securities
portfolio had been reduced to $5.4 million from an original acquired
balance of $15.3 million.
DEPOSIT BREAKDOWN
($ in thousands) June 30, 2010 March 31, 2010 June 30, 2009
Amount Percent Amount Percent Amount Percent
-------- --------- -------- --------- -------- ---------
Non-interest
bearing $ 52,018 9% 49,870 9% $ 50,153 10%
N.O.W. checking 154,753 27 141,119 26 102,186 21
Savings 66,134 12 64,800 12 56,303 11
Money market 54,506 10 57,716 10 61,992 13
Certificates of
deposit
under $100 148,864 26 144,957 26 140,924 29
Certificates of
deposit $100
and over 91,710 16 89,262 16 75,861 16
Certificates of
deposit -
brokered -- -- 4,000 1 -- --
-------- --------- -------- --------- -------- ---------
Total deposits $567,985 100% $551,724 100% $487,419 100%
======== ========= ======== ========= ======== =========
Total deposits increased by 3% to $568.0 million at June 30, 2010, from
$551.7 million at March 31, 2010 primarily as a result of a $13.6 million
increase in N.O.W. checking account balances, a $2.1 million increase in
non-interest bearing account balances, a $6.4 million increase in CD
account balances and a $1.3 million increase in savings account balances.
These increases were partially offset by a $3.2 million decrease in money
market account balances.
Total shareholders' equity increased $810,000 to $85.68 million at June 30,
2010, from $84.87 million at March 31, 2010. The increase in equity was
primarily a result of net income for the quarter and a reduction in the
accumulated other comprehensive loss equity component. Timberland
continues to remain very well capitalized with a total risk based capital
ratio of 15.96% and a Tier 1 leverage capital of 11.15%. Book value per
common share was $9.93 and tangible book value per common share was $9.04
at June 30, 2010.
Operating Results
Fiscal third quarter operating revenue (net interest income before
provision for loan losses, plus non-interest income excluding OTTI
charges), increased 1% to $8.5 million from $8.4 million for the
immediately prior quarter and decreased 6% compared to $9.0 million in the
comparable quarter one year ago. The decrease in operating revenue from
the comparable quarter one year ago was primarily the result of a decrease
in gains on sale of loans as mortgage banking activity slowed. For the
first nine months of fiscal 2010, operating revenue decreased 5% to $25.6
million compared to $26.9 million for the first nine months of fiscal 2009
primarily due to a decrease in gains on sale of loans. Also affecting the
comparison to the first nine months of fiscal 2009 was a $134,000
non-recurring gain on the Bank's investment in bank owned life insurance
("BOLI") recorded during the quarter ended March 31, 2009.
Net interest income before the provision for loan losses increased to $6.39
million for the quarter ended June 30, 2010, from $6.20 million for the
comparable quarter one year ago with interest and dividend income
decreasing by 5% and interest expense decreasing by 21%. The increase in
net interest income was primarily due to a decrease in funding costs and an
increased level of average interest earnings assets for the current
quarter. In spite of the challenging interest rate environment and
elevated liquidity levels, Timberland's net interest margin remained strong
at 3.85% for the current quarter compared to 3.93% for the quarter ended
March 31, 2010 and 3.86% for the quarter one year ago. The net interest
margin was reduced by approximately eight basis points for the quarter
ended June 30, 2010 by the reversal of interest income on loans placed on
non-accrual during the quarter. For the first nine months of fiscal 2010,
net interest income before the provision for loan losses increased 1% to
$19.2 million compared to $19.1 million for the first nine months of fiscal
2009. Timberland's net interest margin for the first nine months of fiscal
2010 was 3.91% compared to 4.03% for the first nine months of fiscal 2009.
Timberland recorded a $750,000 provision to its allowance for loan losses
for the quarter ended June 30, 2010, compared to $5.2 million in the
preceding quarter and $1.0 million in the comparable quarter one year
prior. Net charge-offs during the current quarter exceeded the quarterly
provision expense primarily due to the charge-off of $5.1 million in
impairments previously identified and factored into prior quarters'
provisions. Net charge-offs for the quarter ended June 30, 2010 totaled
$6.5 million compared to $3.4 million for the quarter ended March 31, 2010
and $609,000 for the quarter ended June 30, 2009. For the first nine
months of fiscal 2010, the provision for loan losses totaled $8.5 million
compared to $7.5 million in the first nine months of fiscal 2009. Year to
date, net charge-offs were $11.8 million compared to $3.0 million in the
first nine months of fiscal 2009.
Total operating (non-interest) expenses increased 1% to $6.42 million for
the third fiscal quarter from $6.37 million from the comparable quarter one
year ago and decreased 4% from $6.69 million for the immediately prior
quarter. Year to date, total operating expenses increased 7% to $18.61
million from $17.35 million for the first nine months of fiscal 2009.
Increased insurance expenses (FDIC and D&O), increased OREO expenses and
increased salaries and employee benefits expenses accounted for the
majority of the increased expense.
About Timberland Bancorp, Inc.
Timberland Bancorp, Inc., a Washington corporation, is the holding company
for Timberland Bank ("Bank"). The Bank opened for business in 1915 and
serves consumers and businesses across Grays Harbor, Thurston, Pierce,
King, Kitsap and Lewis counties, Washington with a full range of lending
and deposit services through its 22 branches (including its main office in
Hoquiam).
Disclaimer
Certain matters discussed in this press release may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are not statements of historical
fact and often include the words "believes," "expects," "anticipates,"
"estimates," "forecasts," "intends," "plans," "targets," "potentially,"
"probably," "projects," "outlook" or similar expressions or future or
conditional verbs such as "may," "will," "should," "would" and "could."
Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, assumptions and statements about
future performance. These forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that could cause our
actual results to differ materially from the results anticipated,
including, but not limited to: the credit risks of lending activities,
including changes in the level and trend of loan delinquencies and
write-offs and changes in our allowance for loan losses and provision for
loan losses that may be impacted by deterioration in the housing and
commercial real estate markets and may lead to increased losses and
non-performing assets in our loan portfolio, and may result in our
allowance for loan losses not being adequate to cover actual losses, and
require us to materially increase our reserves; changes in general economic
conditions, either nationally or in our market areas; changes in the levels
of general interest rates, and the relative differences between short and
long term interest rates, deposit interest rates, our net interest margin
and funding sources; fluctuations in the demand for loans, the number of
unsold homes, land and other properties and fluctuations in real estate
values in our market areas; secondary market conditions for loans and our
ability to sell loans in the secondary market; results of examinations of
us by the Federal Reserve and our bank subsidiary by the Federal Deposit
Insurance Corporation, the Washington State Department of Financial
Institutions, Division of Banks or other regulatory authorities, including
the possibility that any such regulatory authority may, among other things,
require us to increase our allowance for loan losses, write-down assets,
change our regulatory capital position or affect our ability to borrow
funds or maintain or increase deposits, which could adversely affect our
liquidity and earnings; our compliance with regulatory enforcement actions,
including regulatory memoranda of understandings ("MOUs") to which we are
subject; legislative or regulatory changes that adversely affect our
business including changes in regulatory policies and principles, or the
interpretation of regulatory capital or other rules; our ability to attract
and retain deposits; further increases in premiums for deposit insurance;
our ability to control operating costs and expenses; the use of estimates
in determining fair value of certain of our assets, which estimates may
prove to be incorrect and result in significant declines in valuation;
difficulties in reducing risk associated with the loans on our balance
sheet; staffing fluctuations in response to product demand or the
implementation of corporate strategies that affect our workforce and
potential associated charges; computer systems on which we depend could
fail or experience a security breach; our ability to retain key members of
our senior management team; costs and effects of litigation, including
settlements and judgments; our ability to successfully integrate any
assets, liabilities, customers, systems, and management personnel we may in
the future acquire into our operations and our ability to realize related
revenue synergies and cost savings within expected time frames and any
goodwill charges related thereto; our ability to manage loan delinquency
rates; increased competitive pressures among financial services companies;
changes in consumer spending, borrowing and savings habits; legislative or
regulatory changes that adversely affect our business including changes in
regulatory policies and principles, the interpretation of regulatory
capital or other rules and any changes in the rules applicable to
institutions participating in the TARP Capital Purchase Program; the
availability of resources to address changes in laws, rules, or regulations
or to respond to regulatory actions; adverse changes in the securities
markets; inability of key third-party providers to perform their
obligations to us; changes in accounting policies and practices, as may be
adopted by the financial institution regulatory agencies or the Financial
Accounting Standards Board, including additional guidance and
interpretation on accounting issues and details of the implementation of
new accounting methods; the economic impact of war or any terrorist
activities; other economic, competitive, governmental, regulatory, and
technological factors affecting our operations; pricing, products and
services; and other risks detailed in our reports filed with the Securities
and Exchange Commission.
Any of the forward-looking statements that we make in this press release
and in the other public statements we make are based upon management's
beliefs and assumptions at the time they are made. We undertake no
obligation to publicly update or revise any forward-looking statements
included in this report or to update the reasons why actual results could
differ from those contained in such statements, whether as a result of new
information, future events or otherwise. We caution readers not to place
undue reliance on any forward-looking statements. We do not undertake and
specifically disclaim any obligation to revise any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events
or circumstances after the date of such statements. These risks could
cause our actual results for 2010 and beyond to differ materially from
those expressed in any forward-looking statements by, or on behalf of us,
and could negatively affect the Company's operations and stock price
performance.
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except per share amounts)
(unaudited)
Three Months Ended
June 30, March 31, June 30,
2010 2010 2009
--------- --------- ---------
Interest and dividend income
Loans receivable $ 8,764 $ 8,832 $ 9,240
Mortgage-backed securities and other
investments 239 239 322
Dividends from mutual funds 9 9 9
Federal funds sold -- -- 8
Interest bearing deposits in banks 90 77 32
--------- --------- ---------
Total interest and dividend income 9,102 9,157 9,611
Interest expense
Deposits 1,951 1,958 2,440
FHLB advances and other borrowings 760 753 979
--------- --------- ---------
Total interest expense 2,711 2,711 3,419
--------- --------- ---------
Net interest income 6,391 6,446 6,192
Provision for loan losses 750 5,195 1,000
--------- --------- ---------
Net interest income after
provision for loan losses 5,641 1,251 5,192
Non-interest income
OTTI loss, net (152) (1,556) (125)
Realized loss on investment securities -- (1) --
Service charges on deposits 1,066 1,022 1,066
Gain on sale of loans, net 238 300 1,170
Bank owned life insurance ("BOLI")
net earnings 120 115 123
Servicing income on loans sold 32 25 20
Valuation recovery (allowance)
on mortgage servicing rights ("MSRs") 22 (22) (169)
ATM transaction fees 439 386 326
Other 176 161 263
--------- --------- ---------
Total non-interest income 1,941 430 2,674
Non-interest expense
Salaries and employee benefits 3,117 2,921 2,919
Premises and equipment 717 702 719
Advertising 235 220 252
OREO and other repossessed items
expense, net 373 344 391
ATM expenses 164 171 162
FDIC insurance 317 806 400
Postage and courier 130 142 203
Amortization of core deposit
intangible 48 48 54
State and local taxes 159 153 152
Professional fees 193 196 199
Other 969 989 922
--------- --------- ---------
Total non-interest expense 6,422 6,692 6,373
--------- --------- ---------
Income (loss) before income taxes 1,160 (5,011) 1,493
Provision (benefit) for income taxes 356 (1,833) 435
--------- --------- ---------
Net income (loss) $ 804 $ (3,178) $ 1,058
========= ========= =========
Preferred stock dividends accrued $ 208 $ 208 $ 210
Preferred stock discount accretion 53 52 79
--------- --------- ---------
Net income (loss) to common
shareholders $ 543 $ (3,438) $ 769
========= ========= =========
Earnings (loss) per common share:
Basic $ 0.08 $ (0.51) $ 0.12
Diluted $ 0.08 $ (0.51) $ 0.12
Weighted average common shares
outstanding:
Basic 6,715,410 6,713,958 6,645,229
Diluted 6,715,410 6,713,958 6,645,229
TIMBERLAND BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except per share)
(unaudited)
Nine Months Ended
June 30, June 30,
2010 2009
--------- ---------
Interest and dividend income
Loans receivable $ 26,661 $ 28,229
Mortgage-backed securities and other investments 695 1,081
Dividends from mutual funds 27 29
Federal funds sold -- 36
Interest bearing deposits in banks 218 62
--------- ---------
Total interest and dividend income 27,601 29,437
Interest expense
Deposits 5,986 7,321
FHLB advances and other borrowings 2,387 3,043
--------- ---------
Total interest expense 8,373 10,364
--------- ---------
Net interest income 19,228 19,073
Provision for loan losses 8,545 7,491
--------- ---------
Net interest income after provision
for loan losses 10,683 11,582
Non-interest income
OTTI loss, net (2,028) (2,288)
Realized loss on investment securities (17) --
Service charges on deposits 3,218 3,224
Gain on sale of loans, net 987 2,471
BOLI net earnings 369 501
Servicing income on loans sold 86 76
Valuation allowance on MSRs -- (169)
ATM transaction fees 1,187 920
Other 538 756
--------- ---------
Total non-interest income 4,340 5,491
Non-interest expense
Salaries and employee benefits 9,019 8,818
Premises and equipment 2,120 2,079
Advertising 626 672
OREO and other repossessed items expense, net 767 552
ATM expenses 490 448
FDIC insurance 1,323 586
Postage and courier 400 448
Amortization of core deposit intangible 143 163
State and local taxes 453 449
Professional fees 561 547
Other 2,710 2,589
--------- ---------
Total non-interest expense 18,612 17,351
--------- ---------
Loss before income taxes (3,589) (278)
Benefit for income taxes (1,439) (305)
--------- ---------
Net income (loss) $ (2,150) $ 27
========= =========
Preferred stock dividends accrued $ 624 $ 437
Preferred stock discount accretion 156 79
--------- ---------
Net loss to common shareholders $ (2,930) $ (489)
========= =========
Loss per common share:
Basic $ (0.44) $ (0.07)
Diluted $ (0.44) $ (0.07)
Weighted average common shares outstanding:
Basic 6,713,103 6,609,915
Diluted 6,713,103 6,609,915
TIMBERLAND BANCORP, INC.
CONSOLIDATED BALANCE SHEET
($ in thousands, except per share amounts) (unaudited)
June 30, March 31, June 30,
2010 2010 2009
Assets --------- --------- ---------
Cash equivalents:
Cash and due from financial
institutions $ 11,748 $ 9,883 $ 12,118
Interest-bearing deposits in
other banks 83,507 65,574 31,853
--------- --------- ---------
95,255 75,457 43,971
Certificate of deposits ("CDs") held
for investment, at cost 15,188 18,108 --
Mortgage-backed securities and other
investments:
Held to maturity, at amortized cost 5,604 5,982 10,196
Available for sale, at fair value 11,578 12,225 13,898
FHLB stock 5,705 5,705 5,705
--------- --------- ---------
22,887 23,912 29,799
Loans receivable 542,577 554,880 555,961
Loans held for sale 1,454 459 2,245
Less: Allowance for loan losses (10,900) (16,687) (12,440)
--------- --------- ---------
Net loans receivable 533,131 538,652 545,766
Premises and equipment 17,529 17,751 18,174
OREO and other repossessed items 12,957 13,477 7,698
BOLI 13,278 13,158 13,403
Accrued interest receivable 2,709 2,996 2,918
Goodwill 5,650 5,650 5,650
Core deposit intangible 612 659 809
Mortgage servicing rights, net 2,683 2,678 2,366
Prepaid FDIC insurance assessment 3,569 3,863 --
Other assets 6,970 8,415 4,938
--------- --------- ---------
Total Assets $ 732,418 $ 724,776 $ 675,492
========= ========= =========
Liabilities and Shareholders' Equity
Non-interest-bearing deposits $ 52,018 $ 49,870 $ 50,153
Interest-bearing deposits 515,967 501,854 437,266
--------- --------- ---------
Total deposits 567,985 551,724 487,419
FHLB advances 75,000 75,000 95,000
Federal Reserve Bank of San Francisco
advances -- 10,000 --
Repurchase agreements 713 445 666
Other liabilities and accrued expenses 3,041 2,738 3,652
--------- --------- ---------
Total Liabilities 646,739 639,907 586,737
--------- --------- ---------
Shareholders' Equity
Preferred stock - $.01 par value;
1,000,000 shares authorized; 15,710 15,657 15,487
16,641 shares, Series A, issued and
outstanding
Series A shares: $1,000 per share
liquidation value
Common stock - $.01 par value;
50,000,000 shares authorized; 10,373 10,357 10,328
7,045,036 shares issued and
outstanding
Unearned shares - Employee Stock
Ownership Plan (2,313) (2,379) (2,578)
Retained earnings 62,641 62,098 66,802
Accumulated other comprehensive loss (732) (864) (1,284)
--------- --------- ---------
Total Shareholders' Equity 85,679 84,869 88,755
--------- --------- ---------
Total Liabilities and Shareholders'
Equity $ 732,418 $ 724,776 $ 675,492
========= ========= =========
KEY FINANCIAL RATIOS AND DATA
($ in thousands, except per share amounts) (unaudited)
Three Months Ended
---------------------------------
June 30, March 31, June 30,
2010 2010 2009
--------- --------- ---------
PERFORMANCE RATIOS:
Return (loss) on average assets (a) 0.45% (1.78)% 0.61%
Return (loss) on average equity (a) 3.78% (14.56)% 4.79%
Net interest margin (a) 3.85% 3.93% 3.86%
Efficiency ratio 77.08% 97.32% 71.88%
Core efficiency ratio (b) 70.92% 68.46% 64.72%
Nine Months Ended
---------------------------------
June 30, June 30,
2010 2009
--------- ---------
Return (loss) on average assets (a) (0.40)% 0.01%
Return (loss) on average equity (a) (3.31)% 0.04%
Net interest margin (a) 3.91% 4.03%
Efficiency ratio 78.97% 70.64%
Core efficiency ratio (b) 67.11% 61.57%
June 30, March 31, June 30,
2010 2010 2009
--------- --------- ---------
ASSET QUALITY RATIOS:
Non-performing loans $ 21,031 $ 26,351 $ 25,113
Non-performing investment securities 3,482 3,262 175
OREO and other repossessed assets 12,957 13,477 7,698
--------- --------- ---------
Total non-performing assets $ 37,470 $ 43,090 $ 32,986
========= ========= =========
Non-performing assets to total
assets (c) 5.12% 5.95% 4.88%
Allowance for loan losses to
non-performing loans 52% 63% 50%
Allowance for loan losses to
net loans receivable 2.00% 3.00% --
Troubled debt restructured loans (d) $ 14,359 $ 18,623 $ --
Past due 90 days and still accruing $ 1,198 $ 5,216 $ 830
CAPITAL RATIOS:
Tier 1 leverage capital 11.15% 11.27% 12.30%
Tier 1 risk based capital 14.70% 14.04% 14.93%
Total risk based capital 15.96% 15.31% 16.19%
Tangible capital to tangible assets 10.94% 10.93% 12.30%
BOOK VALUES:
Book value per common share $ 9.93 $ 9.82 $ 10.39
Tangible book value per common
share (e) $ 9.04 $ 8.93 $ 9.33
(a) Annualized
(b) Calculation excludes OTTI losses, OREO expenses, realized losses on
investment securities, valuation allowance / recovery on MSRs and
amortization of CDI. For the nine-month period ending June 30, 2010
the non-recurring FDIC insurance expense accrual adjustment ($512)
has also been excluded.
(c) Non-performing assets include non-accrual loans, non-accrual
investment securities, and other real estate owned and other
repossessed assets
(d) At June 30, 2010, $5,464 of the $14,359 in troubled debt
restructured loans were on non-accrual status and included in
non-performing loans. At March 31, 2010, $10,265 of the $18,623 in
troubled debt restructured loans were on non-accrual status and
included in total non-performing loans.
(e) Calculation subtracts goodwill and core deposit intangible from the
equity component
AVERAGE BALANCE SHEET:
Three Months Ended
---------------------------------
June 30, March 31, June 30,
2010 2010 2009
--------- --------- ---------
Average total loans $ 552,055 $ 562,335 $ 562,105
Average total interest-earning
assets (a) 663,511 655,357 641,468
Average total assets 721,001 712,205 688,411
Average total interest-bearing
deposits 508,185 496,148 450,974
Average FHLB advances and other
borrowings 75,859 76,561 95,612
Average shareholders' equity 85,101 87,333 88,433
Nine Months Ended
---------------------------------
June 30, June 30,
2010 2009
--------- ---------
Average total loans $ 558,586 $ 565,274
Average total interest-earning
assets (a) 655,847 630,421
Average total assets 711,551 676,809
Average total interest-bearing
deposits 492,999 438,762
Average FHLB advances and other
borrowings 79,352 97,954
Average shareholders' equity 86,732 85,445
(a) Includes loans on non-accrual status