Sun Bancorp, Inc. Reports Second Quarter 2012 Results

Jul 25, 2012, 17:56 ET from Sun Bancorp, Inc.

VINELAND, N.J., July 25, 2012 /PRNewswire/ -- Sun Bancorp, Inc. (NASDAQ: SNBC) reported today net income available to common shareholders of $1.3 million, or $0.02 per diluted share, for the quarter ended June 30, 2012, compared to a net loss available to common shareholders of $1.6 million, or a loss of $0.02 per diluted share, for the second quarter of 2011.

The following are key items and events that occurred during the second quarter of 2012:

  • Provision expense totaled $510 thousand as compared to $30.7 million in the first quarter of 2012. The allowance for loan losses equaled $51.4 million at quarter end, a decrease of $733 thousand from March 31, 2012, and an increase of $9.7 million from December 31, 2011. The allowance for loan losses equaled 2.29% of gross loans held for investment and 49.4% of non-performing loans as compared to 2.34% and 45.5% and 1.82% and 38.7%, respectively, at March 31, 2012 and December 31, 2011.
  • The net interest margin equaled 3.53% versus 3.48% in the linked quarter. The current quarter margin was influenced by higher fees received as a result of the Company's troubled asset disposition successes during the quarter.  Commercial loan production remained strong at $86 million during the second quarter versus $65 million in the linked quarter. The Company continues to aggressively seek opportunities to reduce its classified and non-performing loans and originate strong credits for the portfolio.
  • Non-interest income increased $2.0 million to $7.5 million as compared to the linked quarter primarily due to an increase of $1.1 million in gains on the sale of mortgage loans and gains of $430 thousand on the sale of investment securities. The Company's enhancement of the residential mortgage platform has resulted in significant volume and fee increases as $139 million in residential mortgage loans were originated and $86 million sold during the second quarter as compared to $49 million and $30 million, respectively, in the linked quarter.
  • Non-interest expense increased $3.0 million from the linked quarter to $30.6 million. The current quarter included approximately $1.7 million in additional salary and benefit costs associated with the buildup of the mortgage platform as well as a $565 thousand mortgage recourse reserve. The Company also recorded $611 thousand in advertising expenses related to its Boomerang free checking campaign. This product has enabled us to differentiate ourselves from our competitors by offering a free checking product with choice, flexibility and cash back opportunities.
  • As previously announced, the Company closed three retail branches during the second quarter in order to create cost efficiencies and enhance the Company's ability to streamline operations in the branch network. These closures resulted in approximately $235 thousand in associated write-downs upon transfer of the properties to real estate owned.
  • Total risk-based capital was 14.48% at June 30, 2012, well above the regulatory required level.

"The combination of our steadfast focus to strengthen the balance sheet and capitalize on niche growth opportunities has enabled us to return to profitability in the second quarter," said Thomas X. Geisel, Sun's President and Chief Executive Officer. "We continue to see meaningful progress in the restoration of our loan portfolio, and new loan originations. We are encouraged by this progress and remain committed to the actions and decisions that reinforce Sun's strength and success going forward."

Discussion of Results:

Balance Sheet

  • Total assets were $3.13 billion at June 30, 2012, as compared to $3.18 billion at December 31, 2011 and $3.21 billion at June 30, 2011. 
  • Gross loans held-for-investment were $2.24 billion at June 30, 2012, as compared to $2.29 billion at December 31, 2011 and $2.32 billion at June 30, 2011. This decrease is the result of paydowns generated from the implementation of the Company's workout strategies as well as first quarter charge-off activity.
  • Deposits decreased by $23.6 million from the linked quarter to $2.61 billion at June 30, 2012.  The Company experienced some run-off in its interest-bearing checking accounts due to planned rate reductions.

Net Interest Income and Margin

  • On a tax equivalent basis, net interest income increased $215 thousand over the linked quarter to $25.1 million. The average yield on interest-earning assets increased one basis point over the linked quarter from 4.15% to 4.16%. The average cost of interest-bearing liabilities decreased four basis points to 0.80%. The net interest margin increased five basis points to 3.53% from 3.48% for the linked quarter, but decreased six basis points as compared to the same prior year quarter. The increase from the prior quarter is due to significant pre-payment fees received through the resolution of one credit relationship.  The margin variance from the prior year is due to the continuing pressures in the current interest rate environment.

Non-Interest Income

  • Non-interest income was $7.5 million for the quarter ended June 30, 2012, an increase of $2.0 million from the linked quarter of $5.5 million and $2.5 million above the comparable prior year quarter of $5.0 million. The increase from the linked quarter was primarily attributable to an increase of $1.1 million in gains on the sale of mortgage loans and gains of $430 thousand on the sale of investment securities.  In addition, the linked quarter included a negative derivative credit value adjustment of $314 thousand.  The increase from the prior year period is due to an increase of $1.2 million in mortgage gains and a prior year derivative credit valuation adjustment of $3.6 million; offset by a decrease in investment gains of $2.0 million.

Non-Interest Expense

  • The Company incurred $30.6 million of non-interest expense in the second quarter of 2012, an increase of $3.0 million over the linked quarter and an increase of $2.3 million from the comparable prior year quarter. Higher salary costs from the addition of new mortgage personnel and significantly increased volume was the primary driver of this increase. In addition, advertising expenses include $611 thousand in costs for the Company's new Boomerang free consumer checking product. The Company also recorded $565 thousand in mortgage repurchase recourse reserves. The increase in non-interest expense from the prior year period is due primarily to additional salaries and benefits expense associated with the mortgage expansion in 2012.

Asset Quality

  • The provision for loan losses for the first quarter was $510 thousand, as compared to $30.7 million in the linked quarter and $4.8 million in the comparable prior year quarter. The allowance for loan losses was $51.4 million at June 30, 2012, or 2.29% of gross loans held-for-investment, as compared to the allowance for loan losses to gross loans held-for-investment of 1.82% at December 31, 2011 and 2.52% at June 30, 2011.  Net charge-offs recorded in the current quarter were $1.2 million, or 0.06% of average loans, as compared to $20.2 million, or 0.89% of average loans for the linked quarter and $5.0 million, or 0.21% of average loans outstanding for the comparable prior year quarter.
  • Total non-performing assets were $110.1 million, or 4.84% of total gross loans held-for-investment, loans held-for-sale and real estate owned at June 30, 2012, as compared to $118.8 million, or 5.27% and $143.5 million, or 6.13%, respectively, at March 31, 2012 and June 30, 2011. Non-performing loans decreased to $104.0 million at June 30, 2012 as compared to $114.6 million at March 31, 2012. This decrease is due primarily to paydowns which occurred during the second quarter as a result of the successful implementation of the Company's workout strategies.

Capital

  • Stockholders' equity totaled $284.8 million at June 30, 2012 compared to $309.1 million at December 31, 2011. The Company's tangible equity to tangible assets ratio was 7.81% at June 30, 2012, as compared to 8.41% at December 31, 2011.  At June 30, 2012, the Company's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 14.48%, 12.88%, and 10.45%, respectively.  At June 30, 2012, Sun National Bank's total risk-based capital ratio, Tier 1 capital ratio and leverage capital ratio were approximately 13.76%, 12.50%, and 10.11%, respectively. 

The Company will hold its regularly scheduled conference call on Thursday, July 26, 2012, at 11:00 a.m. (ET).  Participants may listen to the live web cast via the "Investor Relations" section of the Sun Bancorp, Inc. web site at www.sunnb.com.  Participants are advised to log on 10 minutes ahead of the scheduled start of the call.  An Internet-based replay will be available at the Web site for two weeks following the call.

Sun Bancorp, Inc. (Nasdaq: SNBC) is a $3.13 billion asset bank holding company headquartered in Vineland, New Jersey, with its executive offices located in Mt. Laurel, New Jersey. Its primary subsidiary is Sun National Bank, a full service Commercial Bank serving customers through more than 60 locations. Sun National Bank was named one of Forbes magazine's "Most Trustworthy Companies" for five consecutive years.  The Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the Federal Deposit Insurance Corporation (FDIC). For more information about Sun National Bank and Sun Bancorp, Inc., visit www.sunnb.com.  

The foregoing material contains forward-looking statements concerning the financial condition, results of operations and business of the Company.  We caution that such statements are subject to a number of uncertainties and actual results could differ materially, and, therefore, readers should not place undue reliance on any forward-looking statements.  The Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Non-GAAP Financial Measures

This release references tax-equivalent interest income and non-operating income and expenses. Tax-equivalent interest income is a non-GAAP financial measure. Tax-equivalent interest income assumes a 35% marginal federal tax rate for all periods. The fully taxable equivalent adjustments for the three months ended June 30, 2012 and 2011 were $217 thousand and $368 thousand, respectively. The fully taxable equivalent adjustments for the six months ended June 30, 2012 and 2011 were $449 thousand and $777 thousand, respectively. The fully taxable equivalent adjustment for the three months ended March 31, 2012 was $233,000. Non-operating income (loss) is also a non-GAAP financial measure. Non-operating income (loss) includes impairment losses recognized on available for sale securities included in earnings. There were no non-operating income (loss) items for the three months ended June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011. Non-operating loss during the six months ended June 30, 2011 was $250 thousand.

SUN BANCORP, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

(Dollars in thousands, except per share amounts)

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

Profitability for the period:

    Net interest income

$

24,883

$

26,492

$

49,533

$

51,618

    Provision for loan losses

510

4,836

31,193

65,119

    Non-interest income

7,527

4,993

13,046

894

    Non-interest expense

30,587

28,244

58,151

56,026

    Income (loss) before income taxes

1,313

(1,595)

(26,765)

(68,633)

    Net income (loss)

1,313

(1,599)

(26,765)

(68,666)

    Net income (loss) available to common shareholders

$

1,313

$

(1,599)

$

(26,765)

$

(68,666)

Financial ratios:

    Return on average assets(1) 

0.17

%

(0.19)

%

(1.71)

%

(4.11)

%

    Return on average equity(1)

1.84

%

(2.14)

%

(17.90)

%

(47.57)

%

    Return on average tangible equity(1),(2)

2.17

%

(2.54)

%

(21.01)

%

(57.03)

%

    Net interest margin(1)

3.53

%

3.59

%

3.51

%

3.43

%

    Efficiency ratio

94.38

%

89.71

%

92.92

%

106.69

%

    Efficiency ratio, excluding non-operating income and non-operating expense(3)

94.38

%

89.71

%

92.92

%

106.19

%

    Earnings (loss) per common share:

        Basic

$

0.02

$

(0.02)

$

(0.31)

$

(1.01)

        Diluted 

$

0.02

$

(0.02)

$

(0.31)

$

(1.01)

    Average equity to average assets

9.17

%

9.11

%

9.53

%

8.64

%

June 30,

  December 31,

2012

2011

2011

At period-end:

    Total assets

$

3,133,484

$

3,213,790

$

3,183,916

    Total deposits

2,608,034

2,723,676

2,667,977

    Loans receivable, net of allowance for loan losses

2,193,492

2,258,279

2,249,455

    Loans held-for-sale(4)

24,672

20,514

23,192

    Investments

549,601

478,814

532,715

    Borrowings

50,274

33,106

31,269

    Junior subordinated debentures

92,786

92,786

92,786

    Shareholders' equity

284,768

298,819

309,083

Credit quality and capital ratios:

    Allowance for loan losses to gross loans     held-for-investment

2.29

%

2.52

%

1.82

%

    Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned

4.84

%

6.13

%

4.86

%

    Allowance for loan losses to non-performing loans held-for-investment

49.44

%

45.25

%

38.69

%

Total capital (to risk-weighted assets):

        Sun Bancorp, Inc.

14.48

%

14.51

%

15.22

%

        Sun National Bank

13.76

%

12.97

%

13.39

%

Tier 1 capital (to risk-weighted assets):

        Sun Bancorp, Inc.

12.88

%

13.14

%

13.96

%

        Sun National Bank

12.50

%

11.71

%

12.13

%

Leverage ratio:

        Sun Bancorp, Inc.

10.45

%

10.47

%

11.09

%

        Sun National Bank

10.11

%

9.35

%

9.64

%

    Book value per common share

$

3.31

$

3.60

$

3.61

    Tangible book value per common share

$

2.81

$

3.03

$

3.08

(1) Amounts for the three and six months ended are annualized.

(2) Return on average tangible equity is computed by dividing annualized net income for the period by average tangible equity. Average tangible equity equals average equity less average identifiable intangible assets and goodwill.

(3) Efficiency ratio, excluding non-operating income and non-operating expense, is computed by dividing non-interest expense for the period by the summation of net interest income and non-interest income. Non-interest income for the six months ended June 30, 2011 excludes net impairment losses on available for sale securities of $250 thousand.

(4) Amount at June 30, 2011 includes $11.3 million of commercial real estate loans marked at fair value.

 

SUN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollars in thousands, except par value amounts)

June 30,

2012

December 31, 2011

ASSETS

Cash and due from banks

$

75,235

$

68,773

Interest-earning bank balances

40,656

51,049

Cash and cash equivalents

115,891

119,822

Investment securities available for sale (amortized cost of $529,237 and $514,488 at June 30, 2012 and December 31, 2011, respectively)

532,275

515,545

Investment securities held to maturity (estimated fair value of $984 and $1,413 at June 30, 2012 and December 31, 2011, respectively)

920

1,344

Loans receivable (net of allowance for loan losses of $51,394 and $41,667 at June 30, 2012 and December 31, 2011, respectively)

2,193,492

2,249,455

Loans held-for-sale

24,672

23,192

Restricted equity investments

16,654

15,826

Bank properties and equipment, net

52,121

54,756

Real estate owned

6,116

5,020

Accrued interest receivable

8,130

8,912

Goodwill

38,188

38,188

Intangible assets

5,104

6,947

Bank owned life insurance (BOLI)

75,881

74,871

Other assets

64,043

70,038

Total assets

$

3,133,487

$

3,183,916

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits

$

2,608,034

$

2,667,977

Securities sold under agreements to repurchase – customers

5,454

5,668

Advances from the Federal Home Loan Bank of New York (FHLBNY)

2,080

2,733

Securities sold under agreements to repurchase – FHLBNY

35,000

15,000

Obligations under capital lease

7,740

7,868

Junior subordinated debentures

92,786

92,786

Deferred taxes, net

1.241

432

Other liabilities

96.384

82,369

Total liabilities

2,848,719

2,874,833

Shareholders' equity:

Preferred stock, $1 par value, 1,000,000 shares authorized; none issued

-

-

Common stock, $1 par value, 100,000,000 shares authorized; 88,066,015 shares issued and 85,859,292 shares outstanding at June 30, 2012; 87,825,038 shares issued and 85,718,315 shares outstanding at December 31, 2011

88.073

87,825

Additional paid-in capital

505.577

504,508

Retained deficit

(284.285)

(257,520)

Accumulated other comprehensive income

1,797

625

Deferred compensation plan trust

(232)

(193)

Treasury stock at cost, 2,106,723 shares at  June 30, 2012 and December 31, 2011

(26,162)

(26,162)

Total shareholders' equity

284,768

309,083

Total liabilities and shareholders' equity

$

3,133,487

$

3,183,916

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Dollars in thousands, except per share amounts)

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2012

2011

2012

2011

INTEREST INCOME

Interest and fees on loans

$

26,202

$

28,538

$

52,406

$

56,966

Interest on taxable investment securities

2,515

2,864

5,057

5,483

Interest on non-taxable investment securities

401

683

835

1,442

Dividends on restricted equity investments

284

220

511

463

Total interest income

29,402

32,305

58,809

64,354

INTEREST EXPENSE

Interest on deposits

3,447

4,808

7,131

10,398

Interest on funds borrowed

368

356

719

711

Interest on junior subordinated debentures

704

649

1,426

1,627

Total interest expense

4,519

5,813

9,276

12,736

Net interest income

24,883

26,492

49,533

51,618

PROVISION FOR LOAN LOSSES

510

4,836

31,193

65,119

Net Interest income (loss) after provision for loan losses

24,373

21,656

18,340

(13,501)

NON-INTEREST INCOME

Service charges on deposit accounts

2,730

2,702

5,398

5,252

Other service charges

80

88

153

174

Gain on sale of loans

1,865

708

2,581

1,633

Impairment losses on available for sale securities

-

-

-

(250)

Gain on sale of investment securities

430

2,421

430

1,408

Investment products income

748

1,010

1,180

1,898

BOLI income

492

560

1,009

1,106

Derivative credit valuation adjustment

(13)

(3,624)

(327)

(12,015)

Other

1,195

1,128

2,622

1,688

Total non-interest income

7,527

4,993

13,046

894

NON-INTEREST EXPENSE

Salaries and employee benefits

15,756

12,885

30,527

25,871

Occupancy expense

3,271

3,305

6,320

6,709

Equipment expense

1,763

1.903

3,528

3,585

Amortization of intangible assets

921

921

1,842

1,842

Data processing expense

1,106

1,111

2,162

2,176

Professional fees

757

1,215

1,236

1,980

Insurance expenses

1,464

1,261

2,943

3,274

Advertising expense

1,008

1,322

1,305

1,887

Problem loan expense

1,274

1,863

2,751

4,970

Real estate owned expense, net

490

635

571

630

Office supplies expense

328

324

647

669

Other

2,449

1,499

4,319

2,433

Total non-interest expense

30,587

28,244

58,151

56,026

INCOME (LOSS) BEFORE INCOME TAXES

1,313

(1,595)

(26,765)

(68,633)

INCOME TAX EXPENSE

-

4

-

33

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS

$

1,313

$

(1,599)

$

(26,765)

$

(68,666)

Basic earnings (loss) per share

$

0.02

$

(0.02)

$

(0.31)

$

(1.01)

Diluted earnings (loss) per share

$

0.02

$

(0.02)

$

(0.31)

$

(1.01)

Weighted average shares – basic

85,884,671

82,585,859

85,830,764

68,160,742

Weighted average shares - diluted

85,916,426

82,585,859

85,830,764

68,160,742

 

 

SUN BANCORP, INC. AND SUBSIDIARIES

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

(Dollars in thousands)

2012

2012

2011

2011

2011

Q2

Q1

Q4

Q3

Q2

Balance sheet at quarter end: 

Cash and cash equivalents

$

115,891

$

87,553

$

119,822

$

134,209

$

192,645

Investment securities

549,849

576,457

532,715

557,380

478,814

Loans held-for-investment: 

        Commercial and industrial

1,794,830

1,820,054

1,878,026

1,899,231

1,905,628

        Home equity 

217,768

219,926

224,517

230,098

234,688

        Second mortgage 

36,429

38,815

41,470

45,030

47,920

        Residential real estate 

153,373

109,807

100,438

82,967

75,546

        Other 

42,486

36,952

46,671

49,077

52,825

            Total gross loans held-for-investment

2,244,886

2,225,554

2,291,122

2,306,403

2,316,607

Allowance for loan losses 

(51,394)

(52,127)

(41,667)

(55,227)

(58,328)

            Net loans held-for-investment

2,193,492

2,173,427

2,249,455

2,251,176

2,258,279

   Loans held-for-sale

24,672

25,034

23,192

20,868

20,514

    Goodwill 

38,188

38,188

38,188

38,188

38,188

    Intangible assets

5,104

6,025

6,947

7,868

8,789

    Total assets 

3,133,487

3,113,269

3,183,916

3,236,219

3,213,790

    Total deposits

2,608,034

2,631,652

2,667,977

2,727,650

2,723,676

    Securities sold under agreements to repurchase - customers

5,454

5,870

5,668

6,026

6,743

    Advances from FHLBNY

2,080

2,408

2,733

3,054

3,372

    Securities sold under agreements to repurchase - FHLBNY

35,000

15,000

15,000

15,000

15,000

    Obligations under capital lease

7,740

7,805

7,868

7,930

7,991

    Junior subordinated debentures

92,786

92,786

92,786

92,786

92,786

    Total shareholders' equity

284,768

283,163

309,083

308,055

298,819

Quarterly average balance sheet: 

    Loans(1)

        Commercial and industrial 

$

1,815,704

$

1,849,216

$

1,910,635

$

1,901,394

$

1,936,621

        Home equity

218,910

220,411

226,345

232,458

234,451

        Second mortgage 

38,545

41,346

44,600

47,844

50,257

        Residential real estate

155,479

123,567

111,514

89,010

76,816

        Other

34,765

41,733

46,248

49,361

52,831

            Total gross loans 

2,263,403

2,276,273

2,339,342

2,320,067

2,350,976

    Securities and other interest-earning assets 

583,788

580,349

602,485

616,679

643,808

    Total interest-earning assets 

2,847,191

2,856,622

2,941,827

2,936,746

2,994,784

    Total assets 

3,116,627

3,154,984

3,229,699

3,234,551

3,287,485

    Non-interest-bearing demand deposits 

493,707

487,088

536,558

528,505

491,235

    Total deposits 

2,604,083

2,621,736

2,706,772

2,716,542

2,774,767

    Total interest-bearing liabilities 

2,259,370

2,265,830

2,294,786

2,313,896

2,409,629

    Total shareholders' equity 

285,667

312,281

310,786

308,025

299,427

Capital and credit quality measures:

Total capital (to risk-weighted assets) (2):

        Sun Bancorp, Inc.

14.48%

14.49%

15.22%

14.85%

14.51%

        Sun National Bank

13.76%

13.77%

13.39%

13.07%

12.97%

    Tier 1 capital (to risk-weighted assets) (2):

        Sun Bancorp, Inc.

12.88%

12.86%

13.96%

13.59%

13.14%

        Sun National Bank

12.50%

12.51%

12.13%

11.81%

11.71%

    Leverage ratio:

        Sun Bancorp, Inc.

10.45%

10.21%

11.09%

11.08%

10.47%

        Sun National Bank

10.11%

9.93%

9.64%

9.64%

9.35%

    Average equity to average assets

9.17%

9.91%

9.62%

9.52%

9.11%

    Allowance for loan losses to total gross loans held-for-investment 

 

2.29%

 

2.34%

 

1.82%

2.39%

2.52%

    Non-performing assets to gross loans held-for-investment, loans held-for-sale and real estate owned

4.84%

5.27%

4.86%

6.04%

6.13%

    Allowance for loan losses to non-performing loans held-for-investment

 

49.44%

 

45.52%

 

38.69%

42.23%

45.25%

Other data:

Net charge-offs

(1,243)

(20,223)

(20,386)

(5,809)

(5,006)

Non-performing assets:

            Non-accrual loans

$

79,696

$

87,847

$

89,656

$

107,665

$

113,806

        Non-accrual loans held-for-sale

-

-

-

5,186

11,296

            Troubled debt restructurings, non-accrual

24,256

26,674

17,875

22,353

15,090

            Loans past due 90 days and accruing

-

74

154

744

-

            Real estate owned, net 

6,116

4,165

5,020

4,893

3,306

                Total non-performing assets

110,068

118,760

112,705

140,841

143,498

(1)     Average balances include non-accrual loans and loans held-for-sale

(2)     June 30, 2012 capital ratios are estimated, subject to regulatory filings.

 

SUN BANCORP, INC. AND SUBSIDIARIES

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

(Dollars in thousands, except share and per share amounts)

2012

2012

2011

2011

2011

Q2

Q1

Q4

Q3

Q2

Profitability for the quarter:

Tax-equivalent interest income

$

29,619

$

29,641

$

31,087

$

31,802

$

32,673

Interest expense

4,519

4,758

5,087

5,329

5,813

Tax-equivalent net interest income

25,098

24,883

26,000

26,473

26,860

Tax-equivalent adjustment

217

233

271

292

368

Provision for loan losses

510

30,683

6,826

2,321

4,836

Non-interest income (loss) excluding net impairment losses on available for sale securities

7,527

5,519

6,804

5,770

4,993

Non-interest expense excluding amortization of intangible assets

29,666

26,643

26,305

26,051

27,323

Amortization of intangible assets

921

921

921

922

921

Income (loss) before income taxes

1,313

(28,078)

(1,519)

2,657

(1,595)

Income tax (benefit) expense

-

-

-

(23)

4

Net income (loss)

1,313

(28,078)

(1,519)

2,680

(1,599)

Net income (loss) available to common shareholders

$

 

1,313

$

 

(28,078)

$

 

(1,519)

$

2,680

$

(1,599)

Financial ratios:

Return on average assets (1)

0.17%

(3.56)%

(0.19)%

0.33%

(0.19)%

Return on average equity (1)

1.84%

(35.97)%

(1.96)%

3.48%

(2.14)%

Return on average tangible equity (1),(2)

2.17%

(41.97)%

(2.29)%

4.10%

(2.54)%

Net interest margin (1)

3.53%

3.48%

3.54%

3.61%

3.59%

Efficiency ratio

94.38%

91.37%

83.69%

84.42%

89.71%

Per share data:

Income (loss) per common share:

Basic

$

0.02

$

(0.34)

$

(0.02)

$

0.03

$

(0.02)

Diluted

$

0.02

$

(0.34)

$

(0.02)

$

0.03

$

(0.02)

Book value

$

3.31

$

3.30

$

3.61

$

3.60

$

3.60

Tangible book value

$

2.81

$

2.78

$

3.08

$

3.06

$

3.03

Average basic shares

85,884,671

85,776,858

85,587,878

84,429,644

82,585,859

Average diluted shares

85,916,426

85,776,858

85,587,878

84,538,449

82,585,859

Operating non-interest income (loss):

Service charges on deposit accounts

$

2,730

$

2,668

$

2,799

$

2,838

$

2,702

Other service charges

80

73

71

85

88

Gain on sale of loans

1,865

716

906

708

708

Net gain on sale of available for sale securities

430

-

280

-

2,421

Investment products income

748

432

453

562

1,010

BOLI income

492

516

1,309

549

560

Derivative credit valuation adjustment

(13)

(314)

(214)

(309)

(3,624)

Other income

1,195

1,428

1,200

1,337

1,128

        Total non-interest income

$

7,527

$

5,519

$

6,804

5,770

$

4,993

Operating non-interest expense:

    Salaries and employee benefits

$

15,756

$

14,771

$

13,011

$

13,619

$

12,885

    Occupancy expense

3,271

3,049

3,643

3,021

3,305

    Equipment expense

1,763

1,765

1,858

1,899

1,903

    Data processing expense

1,106

1,056

1,118

1,058

1,111

    Amortization of intangible assets

921

921

921

922

921

    Insurance expense

1,464

1,479

1,433

1,479

1,261

    Professional fees

757

479

412

879

1,215

    Advertising expense

1,008

297

664

395