BURR RIDGE, Ill., Feb. 20, 2008 (PRIME NEWSWIRE) -- BankFinancial Corporation (Nasdaq:BFIN) ("BankFinancial") today reported net income of $929,000 and basic earnings per share of $0.05 for the three months ended December 31, 2007, compared to net income of $1.2 million and basic earnings per share of $0.06 for the three months ended December 31, 2006.
For the year ended December 31, 2007, BankFinancial reported net income of $7.2 million and basic earnings per share of $0.35, compared to net income of $10.0 million and basic earnings per share of $0.45 for the year ended December 31, 2006.
Net income for the three months and for the year ended December 31, 2007 included a pre-tax charge of $1.2 million reflecting BankFinancial's proportionate share of Visa's estimated litigation obligations. The charge was recorded because BankFinancial, like other Visa USA members, is obligated to share expenses, resulting from certain Visa litigation, proportionately with its ownership interests in Visa USA. If Visa USA's initial public offering is completed as planned, BankFinancial's proportionate share of the proceeds of the initial offering is expected to offset or exceed the amount of this charge.
Overview of Business Conditions
Business conditions became increasingly uncertain in the fourth quarter of 2007. Our targeted commercial loan categories remained essentially constant. Our residential loan portfolio declined in part due to accelerating prepayments and in part due to a transfer of Fannie Mae-securitized loans to our available-for-sale securities portfolio. We expect that the uncertainty surrounding the U.S. economy and certain real estate markets will increase the unpredictability of the volume of our loan originations and loan repayments in 2008, though we believe the overall residential, construction and selected healthcare loan segments will decline during the year, with the decline offset by growth in commercial loans and lease receivables.
Our non-accrual loans increased this quarter, principally due to a $2.7 million loan secured by an apartment building located in a northern Chicago suburb. The borrower is now subject to, and in compliance with, a forbearance agreement that is expected to restore the loan to accrual status at the end of the first quarter of 2008. Overall trends in the quality of the multi-family and commercial real estate portfolios remained stable. The healthcare loan portfolio continues to receive priority resolution attention with our exposure expected to continue to decline materially in 2008. The quality of our overall residential and home equity portfolio remains strong.
Our construction loan portfolio quality remains stable. Reductions of the construction portfolio increased recently due to project sales, but we are closely monitoring the capability of certain borrowers to continue making debt service payments on their construction projects. We expect that there will be isolated cases where we elect not to renew certain construction loans and pursue either negotiated collateral dispositions or formal legal remedies if the borrower is unable to continue scheduled debt service or proposes unacceptable exit solutions.
As we expected, pursuant to our model, our general loan loss reserves continued to increase due to the changes in national and local economic risk factors. We continue to believe that adherence to our historical loan underwriting standards remains appropriate.
Deposits declined in the fourth quarter of 2007 principally due to our decision to reduce interest rates on higher-balance money market accounts and certificates of deposit consistent with overall declines in the Prime Rate and U.S. Treasury yields. Competition for deposits from certain institutions increased, however, as these competitors maintained constant deposit interest rates on higher-balance checking, savings, money market and certificates of deposit accounts. We expect the intensity of this competition to moderate to a limited extent in 2008, but this could be offset by the continued pressures from competitors with mortgage- or construction-related liquidity issues or competitors engaged in de novo branch office expansion.
Our net interest margin and net interest spread were relatively stable during the quarter. Nonetheless, we believe that such behavior may not necessarily continue because of further reductions in our construction and healthcare loan portfolios and continued deposit pricing pressures. These factors could be offset by a more favorable interest rate environment and potentially widening commercial credit spreads on multifamily and commercial real estate loans. In addition, on a comparative basis, other factors affecting net interest margin include the cumulative effects of our share repurchase program and the fact that our recent investment in Bank-Owned Life Insurance produces non-interest income rather than interest income. We expect that these factors will continue to affect our net interest margin in future quarters; however, we are also focused on generating positive influences through the further diversification of our commercial credit portfolio, optimization of the overall mix of the loan portfolio and gathering non-interest bearing deposits from local small businesses.
Non-interest income was essentially constant during the quarter. We expect that Title Insurance and Wealth Management will not contribute as strongly to earnings in 2008 as in 2007 based on our current expectations concerning interest rates and our anticipated residential mortgage lending activity.
Non-interest expenses rose during the quarter, principally due to seasonal factors, but the overall non-interest expense trend remained well contained. We expect expenses for marketing (especially retail deposits and small business customers), commercial business development personnel and certain technology investments related to customer service and commercial loan operations to increase in 2008, but the increase is expected to be partially offset by continued targeted reductions in staff and expenses consistent with the results of performance reviews and new technology deployments.
Overview of Financial Condition and Operating Results
Financial Condition
Net loans receivable decreased $22.3 million, or 1.7%, to $1.254 billion during the fourth quarter of 2007, primarily due to a reduction of our holdings of one- to four-family residential real estate loans by $28.6 million, or 7.6%, to $345.2 million. Multi-family real estate loans increased $2.5 million, or 0.9%, to $291.4 million, and commercial loans increased $2.9 million, or 3.6%, to $83.2 million. Construction and land loans increased $3.0 million, or 4.9%, to $64.5 million. Other loan categories remained relatively constant. Nonresidential real estate loans decreased by $483,000, or 0.1%, to $325.9 million, and commercial leases decreased by $920,000, or 0.6%, to $144.8 million. Future loan growth could be adversely affected by our unwillingness to compete for loans by relaxing our historical underwriting standards.
Securities available-for-sale increased by $9.4 million, or 13.8%, to $77.0 million. During the fourth quarter of 2007 we securitized $23.5 million of conforming adjustable rate residential mortgage loans with Fannie Mae. We received securities in exchange for the securitized loans, and recorded no gain or loss on the transaction. In addition the balance of the securities available-for-sale decreased due to maturing securities and a negative $13.2 million change in market value principally related to our Freddie Mac preferred stocks.
Total deposits decreased by $24.9 million, or 2.3%, during the fourth quarter of 2007, primarily due to the reduction of higher cost money market accounts and certificates of deposits. Money market accounts decreased by $16.1 million, or 6.0%, and certificates of deposit decreased by $13.7 million, or 4.3%. NOW accounts increased by $8.9 million, or 3.0%, and savings accounts decreased by $3.9 million, or 3.9%. Federal Home Loan Bank advances increased by $17.5 million, or 27.3%.
Asset Quality
Non-performing loans increased by $2.5 million to $12.1 million during the fourth quarter, and represented 0.95% of loans. The increase was due in substantial part to our placing on non-accrual status a $2.7 million loan that is secured by an apartment building located in a northern Chicago suburb. We placed the loan on non-accrual status because the borrowers used the investment property cash flow to make equity investor distributions rather than to make scheduled loan payments that were due on or before December 31, 2007. We subsequently entered into a forbearance agreement with the borrowers that is expected to restore the loan to accrual status by the end of the first quarter of 2008. The same borrowers have a second loan that is secured by a similarly-situated apartment building that remained on accrual status as of December 31, 2007.
Our allowance for loan losses totaled $11.051 million at December 31, 2007, a decrease of $29,000 compared to the allowance at September 30, 2007. The decrease was based on several factors, including our reversal and partial recharacterization of a $428,000 specific loan loss reserve that we recorded during the first quarter of 2007 based on defalcations committed by a third-party loan servicing company that initiated bankruptcy proceedings. We settled the claims that we made with the bankruptcy trustee and our blanket bond carrier for the defalcations during the fourth quarter of 2007. This reduction to our allowance for loan losses was partially offset by a $95,000 net increase in the portion of the allowance that we allocate to impaired loans pursuant to SFAS No. 114 and a $304,000 net increase in the general loan loss reserves that we establish pursuant to SFAS No. 5 based on changes to the economic factors utilized in our model.
As of December 31, 2007, our SFAS No. 114 allocation for impaired loans totaled $806,000. The specific reserves that we allocate to loans are strongly influenced by the market value of the underlying collateral for the loans. As changes in the market value of the underlying collateral occur, fluctuations in the specific reserves attributable to loans secured by the collateral should also be expected to occur, and any declines in the market value of collateral could result in new or additional provisions for specific reserves. Certain types of collateral, such as marketable securities, are particularly susceptible to sudden changes in market value.
Fourth Quarter of 2007 Operating Results
We had net income of $929,000 for the fourth quarter of 2007, compared to net income of $1.2 million for the fourth quarter of 2006. Our operating results for the fourth quarter of 2007 included a pre-tax charge of $1.2 million, which reflected our proportionate share of Visa's estimated litigation obligations. The charge was recorded because BankFinancial, like other Visa USA members, is obligated to share expenses, resulting from certain indemnified Visa litigation, proportionately with its ownership interests in Visa USA. If Visa USA's initial public offering is completed as planned, BankFinancial's proportionate share of the proceeds of the initial offering is expected to offset or exceed the amount of this charge. Net of tax, the amount of the Visa litigation charge was $747,000, or $0.04 per share.
Our operating results for the fourth quarter of 2007 included a $1.2 million pre-tax expense for equity-based compensation and benefits, compared to a $3.5 million pre-tax expense for the fourth quarter of 2006. These expenses relate in substantial part to the vesting of equity-based awards that were made in 2006 pursuant to the Equity Incentive Plan that our stockholders approved, and to expenses arising from the ESOP that we established in connection with our mutual-to-stock conversion in June of 2005. Net of tax, our equity-based compensation expenses totaled approximately $734,000, or $0.04 per share, for the fourth quarter of 2007, compared to $2.1 million, or $0.10 per share, for the fourth quarter of 2006.
Net interest income for the fourth quarter of 2007 was $13.0 million, compared to net interest income of $14.0 million for the fourth quarter of 2006, due in part to a $51.2 million, or 3.9%, decrease in average loans commensurate with our planned reduction of exposure to the construction, healthcare and residential lending segments, and the cumulative effect of scheduled maturities of higher-yielding investment securities during 2007. These influences were partially offset by the retirement of higher-cost deposits and borrowings during 2007. In addition, on a comparative basis, other factors affecting net interest income include the cumulative effects of our share repurchase program in 2007 and the fact that our recent investment in Bank-Owned Life Insurance produces non-interest income rather than interest income. Our net interest margin was 3.80% for the fourth quarter of 2007, compared to 3.74% for the fourth quarter of 2006. Our net interest rate spread for the fourth quarter of 2007 was 3.02%, compared to 2.91% for the fourth quarter of 2006.
Non-interest income for the fourth quarter of 2007 was $2.5 million, unchanged from the fourth quarter of 2006. Non-interest income for the fourth quarter of 2007 included $231,000 in earnings on Bank-Owned Life Insurance, compared to no such earnings for the same period in 2006. Deposit service charges and fees decreased by $107,000, or 10.5%, and other fee income decreased by $23,000, or 4.5%, compared to the same period in 2006. Insurance commissions and annuities income decreased $91,000, or 24.1%, to $287,000. Gain on the sale of loans totaled $34,000 in the fourth quarter of 2007, compared to a gain of $61,000 for the fourth quarter of 2006. We recorded no gain or loss on the sale of investment securities in the fourth quarter of 2007, compared to a net loss of $43,000 on the sale of investment securities for the fourth quarter of 2006. Mortgage loan servicing fees decreased by $23,000, or 10.1%. Operation expenses for real estate owned totaled $13,000 for the fourth quarter of 2007, compared to $1,000 in income for the same period in 2006. Other income decreased by $72,000, or 14.4%, to $428,000.
Non-interest expense for the fourth quarter of 2007 was $14.3 million, compared to $15.4 million for the fourth quarter of 2006, a decrease of $1.1 million, or 7.0%. This decrease was due in part to a decline in expense for equity-based compensation and benefits to $1.2 million for the fourth quarter of 2007, from $3.5 million for the fourth quarter of 2006. On a comparative basis, this decline was attributable in substantial part to differences in the timing of the recording of expense for equity-based awards that were predominantly made during the third quarter of 2006 and vest over a period of time. Non-interest expense for the fourth quarter of 2007 included a pre-tax charge of $1.2 million reflecting our proportionate share of Visa's estimated litigation obligations. Office occupancy and equipment expenses increased $199,000, or 14.1%, primarily due to a $94,000 increase in rental expense and the write-off of feasibility and design costs related to a possible remodeling project. Advertising and public relations expenses increased $77,000, or 31.7%. Data processing expenses decreased $7,000, or 0.8%. Other expenses decreased by $107,000, or 9.3% to $1.0 million, compared to $1.2 million in other expenses for the quarter ended December 31, 2006. Other expenses for the fourth quarter of 2007 included $150,000 of the total $250,000 fraud loss that we recorded in connection with claims that we settled with the bankruptcy trustee and our blanket bond carrier for defalcations committed by a third party loan servicing company. Other expenses for the fourth quarter of 2007 also reflected a $171,000 increase in the amount of loan expenses net of capitalized direct loan origination costs.
2007 Operating Results
We had net income of $7.2 million for the year ended December 31, 2007, compared to net income of $10.0 million for the year ended December 31, 2006. Among the factors affecting this decrease in net income was a $2.9 million decrease in net interest income that was due in part to various measures that we implemented in 2007 to preserve asset quality and protect our net interest margin in anticipation of increasingly challenging economic conditions, including the reduction of our exposure to various asset classes and borrowers and the repayment of wholesale borrowings with maturing securities. As a result of these measures and other factors, interest income from securities decreased $4.1 million due in part to a $117.0 million, or 57.4%, decrease in the average balance of securities available-for-sale to $86.9 million for the year ended December 31, 2007, from $203.9 million for the year ended December 31, 2006. This decrease in interest income from securities was partially offset by a $2.7 million decrease in interest expense on borrowings primarily due to a $78.5 million, or 42.8%, decrease in the average balance of borrowings to $104.8 million for the year ended December 31, 2007, from $183.3 million for the year ended December 31, 2006. In addition, net interest income was negatively impacted by a $2.3 million, or 0.2%, decrease in average loans commensurate with our planned reduction of exposure to the construction, healthcare and residential lending segments, the cumulative effects of our share repurchase program and the investment in 2007 in Bank-Owned Life Insurance, which produces non-interest income rather than interest income. The $2.9 million decrease in net interest income was partially offset by a $2.2 million decrease in compensation and benefits.
Net income for 2007 was also affected by a pre-tax non-interest expense of $1.2 million, which reflected our proportionate share of Visa's estimated litigation obligations. If Visa USA's initial public offering is completed as planned, our proportionate share of the proceeds of the initial offering is expected to offset or exceed the amount of this charge. Non-interest expense for 2007 also included a $250,000 fraud loss that we sustained, net of blanket bond and bankruptcy estate recoveries, due to defalcations by a third-party loan servicing company. In addition, net income for 2007 was affected by an $833,000 increase in our provision for loan losses and an $861,000 decrease in non-interest income predominantly due to a $600,000 decrease in deposit service charges and fees and a $300,000 decrease in insurance commissions and annuities income.
Dividends
On January 30, 2008, our Board of Directors declared a cash dividend of $0.07 per share payable on Friday, March 7, 2008 to stockholders of record on Wednesday, February 13, 2008. Total dividends paid in 2007 were $6.5 million.
Stock Repurchases
For the three months ended December 31, 2007, we repurchased 335,900 shares of our common stock at an aggregate cost of $5.3 million. As of December 31, 2007, we have purchased a total of 3,055,223 shares at an aggregate cost of $51.2 million under our authorization to purchase up to 3,605,384 shares.
Conference Call
BankFinancial's executive management will hold a conference call to discuss the contents of this news release, as well as business and financial highlights, on Thursday, February 21, 2008, at 9:30 a.m. CST. The telephone number for the conference call is 888-713-4211 and the participant passcode is 56958239. The conference call will also be available by webcast within the Stockholder Information section of our web site: www.bankfinancial.com.
About BankFinancial
BankFinancial Corporation is the holding company for BankFinancial F.S.B., a full-service, community-oriented bank providing financial services to individuals, families and businesses through our 18 full-service banking offices, located in Cook, DuPage, Lake and Will counties, Illinois. At December 31, 2007, BankFinancial Corporation had total assets of $1.481 billion, total loans of $1.254 billion, total deposits of $1.074 billion and stockholders' equity of $291 million. BankFinancial Corporation's common stock is listed on the Nasdaq Global Select Market under the symbol BFIN. Additional information may be found at the company's web site, www.bankfinancial.com.
Safe Harbor
Certain statements made in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this release, the words "may," "will," "should," "would," "anticipate," "estimate," "expect," "plan," "believe," "intend," and similar expressions identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following without limitation: general, regional, and local economic conditions and their effect on interest rates, the company and its customers; credit risks and risks from concentrations (geographic and by industry) within the loan portfolio; changes in regulations or accounting policies affecting financial institutions; the costs and effects of litigation and of unexpected or adverse outcomes of such litigation; technological changes; acquisitions and integration of acquired business; the failure of assumptions underlying the establishment of resources for loan losses and estimations of values of collateral and various financial assets and liabilities; the outcome of efforts to manage interest rate or liquidity risk; competition; and acts of war or terrorism. We undertake no obligation to release revisions to these forward-looking statements or to reflect events or conditions occurring after the date of this release.
BANKFINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in thousands; except per share) - (Unaudited)
December 31, December 31,
2007 2006
----------- -----------
ASSETS
Cash and due from other financial
institutions $ 28,279 $ 38,286
Interest-bearing deposits in other
financial institutions 669 29,051
----------- -----------
Cash and cash equivalents 28,948 67,337
Securities available-for-sale, at fair
value 77,049 117,853
Loans held-for-sale 173 298
Loans receivable, net of allowance for
loan losses:
December 31, 2007, $11,051; and December
31, 2006, $10,622 1,253,999 1,330,091
Stock in Federal Home Loan Bank, at cost 15,598 15,598
Premises and equipment, net 34,487 35,005
Accrued interest receivable 7,090 7,869
Goodwill 22,566 22,579
Core deposit intangible 7,769 9,648
BOLI 19,585 --
Other assets 13,280 7,020
----------- -----------
Total assets $ 1,480,544 $ 1,613,298
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits 1,073,650 1,129,585
Borrowings 96,433 138,148
Advance payments by borrowers taxes and
insurance 7,488 8,461
Accrued interest payable and other
liabilities 11,836 11,089
----------- -----------
Total liabilities 1,189,407 1,287,283
Commitments and contingent liabilities
Stockholders' equity
Preferred Stock, $0.01 par value,
25,000,000 shares authorized, none
issued or outstanding -- --
Common Stock, $0.01 par value, shares
authorized: 100,000,000; shares issued
at December 31, 2007, 22,244,277 and at
December 31, 2006, 24,304,950 222 243
Additional paid-in capital 198,449 227,741
Retained earnings, substantially
restricted 113,802 113,128
Unearned Employee Stock Ownership Plan
shares (17,126) (18,105)
Accumulated other comprehensive income
(loss) (4,210) 3,008
----------- -----------
Total stockholders' equity 291,137 326,015
----------- -----------
Total liabilities and stockholders'
equity $ 1,480,544 $ 1,613,298
=========== ===========
BANKFINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands; except per share) - (Unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Interest and dividend
income
Loans, including
fees $ 20,809 $ 21,823 $ 85,601 $ 83,502
Securities 1,046 1,507 5,056 9,184
Other 70 537 1,296 1,400
----------- ----------- ----------- -----------
Total interest
income 21,925 23,867 91,953 94,086
Interest expense
Deposits 7,836 8,244 33,446 29,957
Borrowings 1,044 1,610 4,858 7,532
----------- ----------- ----------- -----------
Total interest
expense 8,880 9,854 38,304 37,489
----------- ----------- ----------- -----------
Net interest income 13,045 14,013 53,649 56,597
Provision (credit) for
loan losses 10 (537) 697 (136)
----------- ----------- ----------- -----------
Net interest income
after provision
(credit) for loan
losses 13,035 14,550 52,952 56,733
Noninterest income
Deposit service
charges and fees 915 1,022 3,606 4,198
Other fee income 484 507 1,939 1,916
Insurance commissions
and annuities income 287 378 1,007 1,321
Gain on sale of loans 34 61 126 246
Gain (loss) on sale
of securities -- (43) 399 101
Gain on disposition
of premises and
equipment (4) 1 9 395
Loan servicing fees 204 227 811 938
Amortization and
impairment of
servicing assets (64) (121) (396) (448)
Operations of real
estate owned (13) 1 (17) (45)
Earnings on BOLI 231 -- 585 --
Other 428 500 1,579 1,887
----------- ----------- ----------- -----------
Total noninterest
income 2,502 2,533 9,648 10,509
Noninterest expense
Compensation and
benefits 8,206 10,674 32,276 34,454
Office occupancy and
equipment 1,615 1,416 5,949 5,602
Advertising and
public relations 320 243 1,412 1,193
Data processing 848 855 3,241 3,341
Supplies, telephone,
and postage 572 560 2,109 2,100
Amortization of
intangibles 464 489 1,879 1,873
Visa settlement 1,240 -- 1,240 --
Other 1,046 1,153 4,376 3,807
----------- ----------- ----------- -----------
Total noninterest
expense 14,311 15,390 52,482 52,370
----------- ----------- ----------- -----------
Income before income
taxes 1,226 1,693 10,118 14,872
Income tax expense 297 486 2,963 4,826
----------- ----------- ----------- -----------
Net income $ 929 $ 1,207 $ 7,155 $ 10,046
=========== =========== =========== ===========
Basic earnings per
common share $ 0.05 $ 0.06 $ 0.35 $ 0.45
=========== =========== =========== ===========
Diluted earnings per
common share $ 0.05 $ 0.06 $ 0.35 $ 0.45
=========== =========== =========== ===========
Weighted average
common shares
outstanding 20,124,864 21,827,482 20,659,587 22,368,032
Diluted weighted
average common
shares outstanding 20,124,864 21,840,476 20,659,587 22,372,228
BANKFINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
Three Months Ended
December 31, 2007 and 2006
(Dollars in thousands) - (Unaudited)
Three months ended Three months ended
December 31, 2007 December 31, 2006
--------------------------- ---------------------------
Average Average
Outstanding Yield/ Outstanding Yield/
Balance Interest Rate(a) Balance Interest Rate(a)
---------- ---------- ----- ---------- ---------- -----
Interest-
earning
assets:
Loans $1,277,238 $ 20,809 6.46% $1,328,482 $ 21,823 6.52%
Securities
available-
for-sale 64,097 1,046 6.47 110,033 1,507 5.43
Stock in
FHLB 15,598 -- -- 18,299 148 3.21
Other
earning
assets 5,957 70 4.66 29,219 389 5.28
---------- ---------- ----- ---------- ---------- -----
Total
interest-
earning
assets 1,362,890 21,925 6.38 1,486,033 23,867 6.37
---------- ----------
Noninterest-
earning
assets 121,651 125,656
---------- ----------
Total
assets $1,484,541 $1,611,689
========== ==========
Interest-
bearing
liabilities:
Savings
deposits $ 98,778 195 0.78 $ 115,933 238 0.81
Money
market
deposits 257,024 2,531 3.91 258,870 2,781 4.26
NOW
deposits 294,328 1,666 2.25 257,143 1,333 2.06
Certificates
of
deposit 315,952 3,444 4.32 348,825 3,892 4.43
---------- ---------- ----- ---------- ---------- -----
Total
deposits 966,082 7,836 3.22 980,771 8,244 3.33
Borrowings 82,220 1,044 5.04 149,001 1,610 4.29
---------- ---------- ----- ---------- ---------- -----
Total
interest-
bearing
liabil-
ities 1,048,302 8,880 3.36 1,129,772 9,854 3.46
---------- ----------
Noninterest-
bearing
deposits 111,959 129,540
Other
liabil-
ities 22,369 26,367
---------- ----------
Total
liabil-
ities 1,182,630 1,285,679
Equity 301,911 326,010
---------- ----------
Total
liabil-
ities
and
equity $1,484,541 $1,611,689
========== ==========
Net
interest
income $ 13,045 $ 14,013
========== ==========
Net
interest
rate
spread (b) 3.02% 2.91%
Net
interest-
earning
assets
(c) $ 314,588 $ 356,261
========== ==========
Net
interest
margin (d) 3.80% 3.74%
Ratio of
interest-
earning
assets to
interest-
bearing
liabilities 130.01% 131.53%
(a) Annualized.
(b) Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of
average interest-bearing liabilities.
(c) Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(d) Net interest margin represents net interest income divided by
average total interest-earning assets.
BANKFINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST MARGIN
Years Ended December 31, 2007 and 2006
(Dollars in thousands) - (Unaudited)
Year ended Year ended
December 31, 2007 December 31, 2006
--------------------------- ---------------------------
Average Average
Outstanding Yield/ Outstanding Yield/
Balance Interest Rate Balance Interest Rate
---------- ---------- ----- ---------- ---------- -----
Interest-
earning
assets:
Loans $1,297,299 $ 85,601 6.60% $1,299,597 $ 83,502 6.43%
Securities
available-
for-sale 86,946 5,056 5.82 203,900 9,184 4.50
Stock in
FHLB 15,598 359 2.30 21,813 724 3.32
Other
earning
assets 18,245 937 5.14 12,713 676 5.32
---------- ---------- ----- ---------- ---------- -----
Total
interest-
earning
assets 1,418,088 91,953 6.48 1,538,023 94,086 6.12
---------- ----------
Noninterest
-earning
assets 114,668 102,220
---------- ----------
Total
assets $1,532,756 $1,640,243
========== ==========
Interest-
bearing
liabilities:
Savings
deposits $ 106,870 833 0.78 $ 123,413 1,019 0.83
Money
market
deposits 260,256 11,072 4.25 252,109 10,096 4.00
NOW
deposits 282,670 6,837 2.42 241,378 4,128 1.71
Certificates
of deposit 328,371 14,704 4.48 359,119 14,714 4.10
---------- ---------- ----- ---------- ---------- -----
Total
deposits 978,167 33,446 3.42 976,019 29,957 3.07
Borrowings 104,782 4,858 4.64 183,286 7,532 4.11
---------- ---------- ----- ---------- ---------- -----
Total
interest-
bearing
liabil-
ities 1,082,949 38,304 3.54 1,159,305 37,489 3.23
---------- ----------
Noninterest
-bearing
deposits 116,556 123,614
Other
liabil-
ities 21,831 25,110
---------- ----------
Total
liabil-
ities 1,221,336 1,308,029
Equity 311,420 332,214
---------- ----------
Total
liabil-
ities and
equity $1,532,756 $1,640,243
========== ==========
Net
interest
income $ 53,649 $ 56,597
========== ==========
Net
interest
rate
spread (a) 2.94% 2.89%
Net
interest-
earning
assets
(b) $ 335,139 $ 378,718
========== ==========
Net
interest
margin (c) 3.78% 3.68%
Ratio of
interest-
earning
assets to
interest-
bearing
liabilities 130.95% 132.67%
(a) Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of average
interest-bearing liabilities.
(b) Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(c) Net interest margin represents net interest income divided by
average total interest-earning assets.
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) - (Unaudited)
PERFORMANCE
MEASUREMENTS: 2007 2006
----------------------------------------- --------
IVQ IIIQ IIQ IQ IVQ
-------- -------- -------- -------- --------
Return on
assets (ratio
of net income
to average
total
assets) (a) 0.25% 0.59% 0.61% 0.42% 0.30%
Return on
equity (ratio
of net income
to average
equity) (a) 1.23 2.90 3.01 2.03 1.48
Net interest
rate
spread (a) 3.02 2.91 2.88 2.98 2.91
Net interest
margin (a) 3.80 3.76 3.74 3.84 3.74
Efficiency
ratio 92.05 77.38 80.79 81.66 93.01
Noninterest
expense to
average total
assets (a) 3.86 3.26 3.28 3.31 3.82
Average
interest-
earning
assets to
average
interest-
bearing
liabilities 130.01 130.11 131.30 132.31 131.53
Offices 18 18 18 18 18
Employees
(full time
equivalents) 425 416 418 425 438
-------------------------------------------------------------------
SUMMARY INCOME
STATEMENT: 2007 2006
----------------------------------------- --------
IVQ IIIQ IIQ IQ IVQ
-------- -------- -------- -------- --------
Total interest
income $ 21,925 $ 23,124 $ 23,111 $ 23,793 $ 23,867
Total interest
expense 8,880 9,899 9,760 9,765 9,854
-------- -------- -------- -------- --------
Net interest
income before
provision 13,045 13,225 13,351 14,028 14,013
Provision
(credit) for
loan losses 10 460 (354) 581 (537)
-------- -------- -------- -------- --------
Net interest
income 13,035 12,765 13,705 13,447 14,550
Noninterest
income 2,502 2,777 2,327 2,042 2,533
Noninterest
expense 14,311 12,383 12,666 13,122 15,390
-------- -------- -------- -------- --------
Income before
income tax 1,226 3,159 3,366 2,367 1,693
Income tax
expense 297 922 1,028 716 486
-------- -------- -------- -------- --------
Net income $ 929 $ 2,237 $ 2,338 $ 1,651 $ 1,207
======== ======== ======== ======== ========
Basic earnings
per common
share $ 0.05 $ 0.11 $ 0.11 $ 0.08 $ 0.06
======== ======== ======== ======== ========
Diluted
earnings per
common share $ 0.05 $ 0.11 $ 0.11 $ 0.08 $ 0.06
======== ======== ======== ======== ========
-------------------------------------------------------------------
NONINTEREST
INCOME AND
EXPENSE: 2007 2006
----------------------------------------- --------
IVQ IIIQ IIQ IQ IVQ
-------- -------- -------- -------- --------
Noninterest
Income:
Deposit
service
charges and
fees $ 915 $ 938 $ 918 $ 835 $ 1,022
Other fee
income 484 495 499 461 507
Insurance
commissions
and annuities
income 287 251 225 244 378
Gain on sales
of loans 34 43 1 48 61
Gain (loss)
on sales of
investment
securities -- 399 -- -- (43)
Gain (loss) on
disposition
of premises
and equipment (4) -- 7 6 1
Loan servicing
fee income 204 182 214 211 227
Amortization
and
impairment
of servicing
assets (64) (131) (106) (95) (121)
REO operations (13) (4) -- -- 1
Earnings on
bank-owned
life
insurance 231 219 135 -- --
Other 428 385 434 332 500
-------- -------- -------- -------- --------
Total
noninterest
income $ 2,502 $ 2,777 $ 2,327 $ 2,042 $ 2,533
======== ======== ======== ======== ========
Noninterest
Expense:
Compensation
and benefits $ 8,206 $ 7,773 $ 7,860 $ 8,437 $ 10,674
Office
occupancy and
equipment 1,615 1,428 1,399 1,507 1,416
Advertising 320 409 455 228 243
Data
processing 848 821 823 749 855
Supplies,
telephone and
postage 572 485 484 568 560
Amortization
of
intangibles 464 469 469 477 489
Visa
Settlement 1,240 -- -- -- --
Other 1,046 998 1,176 1,156 1,153
-------- -------- -------- -------- --------
Total
noninterest
expenses $ 14,311 $ 12,383 $ 12,666 $ 13,122 $ 15,390
======== ======== ======== ======== ========
-------------------------------------------------------------------
(a) Annualized
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) - (Unaudited)
SUMMARY
BALANCE SHEET: 2007 2006
------------------------------------------- ----------
IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
ASSETS:
Cash $ 28,279 $ 30,694 $ 32,071 $ 35,357 $ 38,286
Interest-
bearing
deposits and
short-term
investments 669 14,003 33,887 30,947 29,051
Securities
available for
sale, net 77,049 67,686 69,085 106,884 117,853
Loans held for
sale 173 2,031 620 143 298
Loans
receivable,
net 1,253,999 1,276,303 1,282,645 1,298,489 1,330,091
Federal Home
Loan Bank
stock 15,598 15,598 15,598 15,598 15,598
Premises and
equipment 34,487 34,171 34,437 34,571 35,005
Intangible
assets 30,335 30,799 31,268 31,750 32,227
BOLI 19,585 19,354 19,135 -- --
Other assets 20,370 14,157 13,182 13,382 14,889
---------- ---------- ---------- ---------- ----------
Total assets $1,480,544 $1,504,796 $1,531,928 $1,567,121 $1,613,298
========== ========== ========== ========== ==========
LIABILITIES
AND EQUITY:
Deposits $1,073,650 $1,098,541 $1,105,237 $1,105,846 $1,129,585
Borrowings 96,433 81,138 100,862 134,300 138,148
Other
liabilities 19,324 21,496 18,917 17,388 19,550
---------- ---------- ---------- ---------- ----------
Total
liabilities 1,189,407 1,201,175 1,225,016 1,257,534 1,287,283
Stockholders'
equity 291,137 303,621 306,912 309,587 326,015
---------- ---------- ---------- ---------- ----------
Total
liabilities
and
stockholders'
equity $1,480,544 $1,504,796 $1,531,928 $1,567,121 $1,613,298
========== ========== ========== ========== ==========
---------------------------------------------------------------------
CAPITAL RATIOS: 2007 2006
------------------------------------------- ----------
IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
BankFinancial
Corporation:
Equity to
total assets
(end of
period) 19.66% 20.18% 20.03% 19.76% 20.21%
Tangible
equity to
tangible
total assets
(end of
period) 17.95 18.51 18.37 18.10 18.58
BankFinancial
FSB:
Risk-based
total capital
ratio 16.74 19.07 20.26 20.64 20.09
Risk-based
tier 1
capital ratio 15.93 18.22 19.43 19.74 19.26
Tier 1
leverage
ratio 13.95 15.16 15.94 15.51 15.05
Stock
repurchases
- $ (000's) $ 5,273 $ 5,643 $ 3,780 $ 19,261 $ 3,960
Stock
repurchases
- shares 335,900 377,406 232,643 1,131,974 226,600
---------------------------------------------------------------------
COMMON STOCK
AND DIVIDENDS: 2007 2006
------------------------------------------- ----------
IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
Stock Prices:
Close $ 15.82 $ 15.82 $ 15.45 $ 16.27 $ 17.81
High 16.67 16.39 16.75 17.98 18.50
Low 14.54 13.01 15.45 16.10 17.23
Cash dividends
paid $ 0.07 $ 0.07 $ 0.07 $ 0.07 $ 0.06
---------------------------------------------------------------------
DEPOSITS: 2007 2006
------------------------------------------- ----------
IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
Non-interest-
bearing
demand $ 111,554 $ 111,772 $ 126,304 $ 122,422 $ 134,097
Interest-
bearing NOW 306,517 297,589 282,300 277,683 274,391
Money market 250,682 266,737 262,265 258,400 260,796
Savings 97,280 101,176 107,030 114,793 114,851
Certificates
of deposit -
Retail 305,610 314,450 317,946 321,444 323,957
Certificates
of deposit
- Wholesale 2,007 6,817 9,392 11,104 21,493
---------- ---------- ---------- ---------- ----------
Total
certificates
of deposit 307,617 321,267 327,338 332,548 345,450
---------- ---------- ---------- ---------- ----------
Total deposits $1,073,650 $1,098,541 $1,105,237 $1,105,846 $1,129,585
========== ========== ========== ========== ==========
---------------------------------------------------------------------
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) - (Unaudited)
2007 2006
------------------------------------------- ----------
LOANS: IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
One- to four-
family
residential
real estate $ 345,245 $ 373,830 $ 381,447 $ 391,759 $ 397,545
Multi-family
mortgage
loans 291,395 288,883 291,963 299,566 297,131
Nonresidential
real estate 325,885 326,368 321,943 314,275 320,729
Construction
and land
loans 64,483 61,482 68,024 68,742 85,222
Commercial
loans 83,233 80,358 84,410 90,103 89,346
Commercial
leases 144,841 145,761 134,217 134,327 139,164
Consumer
loans 3,506 4,009 4,697 3,531 4,045
Other loans
(including
municipal) 4,544 4,544 4,544 4,752 4,959
---------- ---------- ---------- ---------- ----------
Total loans 1,263,132 1,285,235 1,291,245 1,307,055 1,338,141
Loans in
process (168) (63) (87) 154 148
Net deferred
loan
origination
costs 2,086 2,211 2,266 2,402 2,424
Allowance for
loan losses (11,051) (11,080) (10,779) (11,122) (10,622)
---------- ---------- ---------- ---------- ----------
Loans, net $1,253,999 $1,276,303 $1,282,645 $1,298,489 $1,330,091
========== ========== ========== ========== ==========
---------------------------------------------------------------------
CREDIT QUALITY
RATIOS: 2007 2006
------------------------------------------- ----------
IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
Nonperforming
Loans and
Assets:
Nonperforming
loans $ 12,058 $ 9,557 $ 9,720 $ 8,759 $ 9,226
Real estate
owned 820 252 -- -- --
---------- ---------- ---------- ---------- ----------
Nonperforming
assets $ 12,878 $ 9,809 $ 9,720 $ 8,759 $ 9,226
========== ========== ========== ========== ==========
Asset Quality
Ratios:
Nonperforming
assets to
total assets 0.87% 0.65% 0.63% 0.56% 0.57%
Nonperforming
loans to
total loans 0.95 0.74 0.75 0.67 0.69
Allowance for
loan losses
to
nonperforming
loans 91.65 115.94 110.90 126.98 115.13
Allowance for
loan losses
to total
loans 0.87 0.86 0.83 0.85 0.79
Net charge-
off ratio
(a) 0.01 0.05 0.00 0.02 0.23
---------------------------------------------------------------------
ALLOWANCE FOR
LOAN LOSSES: 2007 2006
------------------------------------------- ----------
IVQ IIIQ IIQ IQ IVQ
---------- ---------- ---------- ---------- ----------
Beginning
balance $ 11,080 $ 10,779 $ 11,122 $ 10,622 $ 11,924
Provision
(credit) for
loan losses 10 460 (354) 581 (537)
Loans charged
off (46) (159) (3) (97) (767)
Recoveries 7 -- 14 16 2
---------- ---------- ---------- ---------- ----------
Ending
balance $ 11,051 $ 11,080 $ 10,779 $ 11,122 $ 10,622
========== ========== ========== ========== ==========
---------------------------------------------------------------------
(a) Annualized
BANKFINANCIAL CORPORATION
SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA
Latest Five Quarters
(Dollars in thousands; except per share) - (Unaudited)
SELECTED
AVERAGE
BALANCES: 2007 2006
----------------------------------------------- -----------
IVQ IIIQ IIQ IQ IVQ
----------- ----------- ----------- ----------- -----------
Average
total
assets $ 1,484,541 $ 1,518,670 $ 1,543,985 $ 1,584,765 $ 1,611,689
Average
earning
assets 1,362,890 1,397,286 1,432,238 1,481,465 1,486,033
Average
total
loans 1,277,238 1,291,593 1,297,583 1,323,345 1,328,482
Average
investment
securities 64,097 73,370 98,791 112,206 110,033
Average
FHLB
stock 15,598 15,598 15,598 15,598 18,299
Average
other
earning
assets 5,957 16,725 20,266 30,316 29,219
Average
interest-
bearing
deposits 966,082 986,113 978,601 981,956 980,771
Average
total
borrowings 82,220 87,782 112,209 137,715 149,001
Average
interest-
bearing
liabil-
ities 1,048,302 1,073,895 1,090,810 1,119,671 1,129,772
Average
total
stockhold-
ers'
equity 301,911 308,041 310,219 325,806 326,010
--------------------------------------------------------------------
SELECTED
YIELDS
AND COST
OF FUNDS
(a): 2007 2006
----------------------------------------------- -----------
IVQ IIIQ IIQ IQ IVQ
----------- ----------- ----------- ----------- -----------
Average
earning
assets 6.38% 6.57% 6.47% 6.51% 6.37%
Average
total
loans 6.46 6.67 6.60 6.66 6.52
Average
investment
securities 6.47 5.90 5.66 5.51 5.43
Average
FHLB
stock -- 2.77 2.75 3.72 3.21
Average
other
earning
assets 4.66 5.08 5.30 5.15 5.28
Average
interest-
bearing
deposits 3.22 3.55 3.48 3.42 3.33
Average
total
borrowings 5.04 4.81 4.51 4.38 4.29
Average
interest-
bearing
liabilities 3.36 3.66 3.59 3.54 3.46
Interest
rate
spread 3.02 2.91 2.88 2.98 2.91
Net
interest
margin 3.80 3.76 3.74 3.84 3.74
--------------------------------------------------------------------
EARNINGS
PER SHARE
COMPUTATIONS: 2007 2006
----------------------------------------------- -----------
IVQ IIIQ IIQ IQ IVQ
----------- ----------- ----------- ----------- -----------
Net
income $ 929 $ 2,237 $ 2,338 $ 1,651 $ 1,207
=========== =========== =========== =========== ===========
Average
common
shares
outstand-
ing 22,429,477 22,692,613 23,124,955 23,924,011 24,384,369
Less:
Unearned
ESOP
shares (1,728,813) (1,753,480) (1,777,881) (1,802,198) (1,826,679)
Less:
Unvested
restricted
stock (575,800) (619,385) (618,600) (637,882) (730,208)
----------- ----------- ----------- ----------- -----------
Weighted
average
common
shares
outstand-
ing 20,124,864 20,319,748 20,728,474 21,483,931 21,827,482
Plus:
Dilutive
common
shares
equiva-
lents -- 97,765 26,049 53,611 12,994
----------- ----------- ----------- ----------- -----------
Weighted
average
dilutive
shares
outstand-
ing 20,124,864 20,417,513 20,754,523 21,537,542 21,840,476
=========== =========== =========== =========== ===========
Number of
antidilutive
stock
options
excluded
from the
diluted
earnings
per share
calcula-
tion 1,597,400 1,576,200 1,557,500 1,301,000 1,301,000
Weighted
average
exercise
price of
anti-
dilutive
option
shares $ 17.40 $ 17.34 $ 17.36 $ 17.63 $ 17.63
Earnings
per
basic
share $ 0.05 $ 0.11 $ 0.11 $ 0.08 $ 0.06
=========== =========== =========== =========== ===========
Earnings
per
diluted
share $ 0.05 $ 0.11 $ 0.11 $ 0.08 $ 0.06
=========== =========== =========== =========== ===========
N.A. = Not Applicable
--------------------------------------------------------------------
(a) Annualized
BANKFINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES
The Company utilizes a number of different financial measures, both GAAP and non-GAAP, in making operating, budgeting and planning decisions for future periods. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. The Company believes that the use of the non-GAAP financial measures described below provides the Board of Directors and management, and may provide some investors, with a more complete understanding the Company's operating results and trends, and facilitate comparisons to historical and peer performance. The Company's non-GAAP financial measures should be considered supplemental in nature and should not be considered in isolation, or as superior to or a substitute for, financial measures that are prepared in accordance with GAAP. In addition, the Company's non-GAAP financial measures may differ from similar non-GAAP financial measures that are used by other companies, thus limiting their usefulness as a comparative tool.
Amortization of Intangibles Expense. The Company believes that the exclusion from its net income of expense for the amortization of the core deposit intangible assets resulting from its acquisition of Success Bancshares and University National Bank facilitates the comparison of the Company's operating results to the Company's historical performance and to the performance of other financial institutions with different acquisition histories. In addition, the level of amortization of core deposit intangible assets arising from an acquisition can vary significantly depending on the valuation methodology used and the interest rate environment that existed at the time of the acquisition.
Equity-based Compensation. The Company believes that the exclusion of equity-based compensation expense from its net income facilitates the comparison of the Company's operating results to the Company's historical performance, including the prior periods in which it operated as a mutual institution and had no stock outstanding. In addition, the Company believes that this non-GAAP measure facilitates the comparison of the Company's performance to the performance of other financial institutions that have different or more seasoned equity-based compensation plans, including plans pursuant to which stock option awards vested prior to the effective date of SFAS No. 123R.
Visa Settlement. The Company believes that the exclusion of this one-time litigation expense due to our proportionate share of Visa litigation charges from its net income facilitates the comparison of the Company's operating results to the Company's historical performance.
Core Return on Assets. The Company believes that adjusting the calculation of its return on assets to exclude the equity-based compensation expense, the amortization of intangibles expenses and the Visa settlement expense furthers the purposes described above. Thus, the Company calculates core return on assets by dividing net income for a period, adjusted to exclude these expenses, by its average assets for the period.
Core Return on Equity. The Company believes that adjusting the calculation of its return on equity to exclude the equity-based compensation expense, the amortization of intangibles expenses and the Visa settlement expense furthers the purposes described above. Thus, the Company calculates core return on equity by dividing average stockholders' equity for a period by net income, adjusted to exclude these expenses, for the period.
Core Dilutive Earnings per Share. The Company believes that adjusting the calculation of its dilutive earnings per share to exclude the equity-based compensation expense, the amortization of intangibles expenses and the Visa settlement expense furthers the purposes described above. Thus, the Company calculates core dilutive earnings per share by net income, adjusted to exclude these expenses, for the period by the weighted average dilutive common shares outstanding, for the period.
Core Noninterest Expense to Average Total Assets. The Company believes that adjusting the calculation of its noninterest expense to average total assets to exclude the equity-based compensation expense, the amortization of intangibles expenses and the Visa settlement expense furthers the purposes described above. Thus, the Company calculates noninterest expense to average total assets by dividing noninterest expense, adjusted to exclude these expenses, by average total assets for the period.
Core Efficiency Ratio. The Company believes that adjusting the calculation of its efficiency ratio to exclude the equity-based compensation expense, the amortization of intangibles expenses and the Visa settlement expense furthers the purposes described above. Thus, the Company calculates core efficiency ratio by dividing noninterest expense, adjusted to exclude these expenses, by the sum of net interest income and noninterest income.
There are inherent limitations associated with the use of each of the above non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and reflect the exclusion of items that are recurring and will be reflected in the Company's financial results in the future. The Company has further highlighted these and the other limitations described above by providing a reconciliation of the GAAP amounts that have been excluded from these non-GAAP financial measures.
BANKFINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands; except per share) - (Unaudited)
FOR THE QUARTERS
AND YEARS ENDED
DECEMBER 31, 2007 Three months ended Years ended
AND 2006 December 31, December 31,
---------------------- ----------------------
Core Operating 2007 2006 2007 2006
Income: ---------- ---------- ---------- ----------
Net Income $ 929 $ 1,207 $ 7,155 $ 10,046
Adjustments:
Equity-based
compensation and
benefits 1,219 3,542 5,084 5,377
Amortization of core
deposit intangible 464 489 1,879 1,873
Visa settlement 1,240 -- 1,240 --
Tax effect on
adjustments assuming
39.745% tax rate (1,162) (1,602) (3,260) (2,882)
---------- ---------- ---------- ----------
Core Operating Income $ 2,690 $ 3,636 $ 12,098 $ 14,414
========== ========== ========== ==========
Return on assets
(ratio of net income
to average total
assets) (a) 0.25% 0.30% 0.47% 0.61%
Core return on assets
(ratio of core
operating income to
average total
assets) (a) 0.72% 0.90% 0.79% 0.88%
Return on equity
(ratio of net income
to average equity)
(a) 1.23% 1.48% 2.30% 3.02%
Core return on equity
(ratio of core
operating income to
average equity) (a) 3.56% 4.46% 3.88% 4.34%
Dilutive earnings per
common share $ 0.05 $ 0.06 $ 0.35 $ 0.45
Core dilutive
earnings per common
share $ 0.13 $ 0.17 $ 0.59 $ 0.64
Core Noninterest
Expenses:
Noninterest Expenses $ 14,311 $ 15,390 $ 52,482 $ 52,370
Adjustments:
Equity-based
compensation and
benefits (1,219) (3,542) (5,084) (5,377)
Amortization of core
deposit intangible (464) (489) (1,879) (1,873)
Visa settlement (1,240) -- (1,240) --
---------- ---------- ---------- ----------
Core Noninterest
Expenses $ 11,388 $ 11,359 $ 44,279 $ 45,120
========== ========== ========== ==========
Noninterest expense
to average total
assets (a) 3.86% 3.82% 3.42% 3.19%
Core noninterest
expense to average
total assets (a) 3.07% 2.82% 2.89% 2.75%
Efficiency ratio
(ratio of
noninterest expense
to net interest
income plus
noninterest income) 92.05% 93.01% 82.91% 78.04%
Core efficiency ratio
(ratio of core
noninterest expense
to net interest
income plus
noninterest income) 73.25% 68.65% 69.95% 67.24%
---------------------------------------------------------------------
(a) Annualized
---------------------------------------------------------------------
FOR THE LATEST
FIVE QUARTERS 2007 2006
-------------------------------------- --------
IVQ IIIQ IIQ IQ IVQ
-------- -------- -------- -------- --------
Core Operating
Income:
Net Income $ 929 $ 2,237 $ 2,338 $ 1,651 $ 1,207
Adjustments:
Equity-based
compensation and
benefits 1,219 1,311 1,294 1,261 3,542
Amortization of
core deposit
intangible 464 469 469 476 489
Visa settlement 1,240 -- -- -- --
Tax effect on
adjustments
assuming 39.745%
tax rate (1,162) (707) (701) (690) (1,602)
-------- -------- -------- -------- --------
Core Operating
Income $ 2,690 $ 3,310 $ 3,400 $ 2,698 $ 3,636
======== ======== ======== ======== ========
Return on assets
(ratio of net
income to average
total assets) (a) 0.25% 0.59% 0.61% 0.42% 0.30%
Core return on
assets (ratio of
core operating
income to average
total assets) (a) 0.72% 0.87% 0.88% 0.68% 0.90%
Return on equity
(ratio of net
income to average
equity) (a) 1.23% 2.90% 3.01% 2.03% 1.48%
Core return on
equity (ratio of
core operating
income to average
equity) (a) 3.56% 4.30% 4.38% 3.31% 4.46%
Dilutive earnings
per common share $ 0.05 $ 0.11 $ 0.11 $ 0.08 $ 0.06
Core dilutive
earnings per
common share $ 0.13 $ 0.16 $ 0.16 $ 0.13 $ 0.17
Core Operating
Expenses:
Noninterest
Expenses $ 14,311 $ 12,383 $ 12,666 $ 13,122 $ 15,390
Adjustments:
Equity-based
compensation and
benefits (1,219) (1,311) (1,294) (1,261) (3,542)
Amortization of
core deposit
intangible (464) (469) (469) (476) (489)
Visa settlement (1,240) -- -- -- --
-------- -------- -------- -------- --------
Core Noninterest
Expenses $ 11,388 $ 10,603 $ 10,903 $ 11,385 $ 11,359
======== ======== ======== ======== ========
Noninterest expense
to average total
assets (a) 3.86% 3.26% 3.28% 3.31% 3.82%
Core noninterest
expense to average
total assets (a) 3.07% 2.79% 2.82% 2.87% 2.82%
Efficiency ratio
(ratio of
noninterest expense
to net interest
income plus
noninterest income) 92.05% 77.38% 80.79% 81.66% 93.01%
Core efficiency
ratio (ratio of
core noninterest
expense to net
interest income
plus noninterest
income) 73.25% 66.26% 69.54% 70.85% 68.65%
---------------------------------------------------------------------
(a) Annualized