2008-07-23 15:05:00
Shore Bancshares Reports Second Quarter and First-Half Results
EASTON, Md., July 23 /EMWNews/ -- Shore Bancshares, Inc. (Nasdaq: SHBI) reported net income of $2.766 million or $0.33 per diluted share for the second quarter of 2008, compared to $3.372 million or $0.40 per diluted share for the first quarter of 2008 and $3.356 million or $0.40 per diluted share for the second quarter of 2007. Net income for the first half of 2008 was $6.1 million or $0.73 per diluted share, compared to $6.8 million or $0.81 per diluted share for the first half of 2007. "Having passed the halfway mark during a year that will surely prove among the most difficult for many community banks, we think our relative performance has been very good and our outlook remains quite positive as it relates to the stability and uniqueness of our markets as well as our growth prospects, our asset quality and our capital strength," said W. Moorhead Vermilye, president and chief executive officer of Shore Bancshares, Inc. "We are cautious, but upbeat and we see the glass as much more full than empty." "At June 30, our total stockholders' equity was $123 million, with average equity to average assets at 12.45% and average tangible equity to average tangible assets at 10.43%. Our capital ratios continue to be well in excess of regulatory minimums." "We believe our loan quality is excellent, especially given current economic conditions across the country and also closer to home in the mid-Atlantic region. We also believe the close proximity of our home markets on the Delmarva Peninsula to the major metro centers from New York down to the Norfolk-area tidewater complex gives us far more benefits than we tend to get credit for." "Our loan delinquencies and nonperforming assets remain at very low levels. We added $615 thousand to our provision for loan losses during the second quarter, due to economic conditions and to keep pace with overall loan growth, which was $33 million in new loans during the second quarter, as loans were up 4.1%. Our ratio of nonperforming assets to total assets stood at a very favorable 0.47% at June 30, 2008 and net charge-offs for the second quarter amounted to $259 thousand. All of these measures reflect continuing adherence to our traditional very conservative approach to originating loans and to the broader process of managing overall credit quality." "During the second quarter, the underlying strength of our markets and our position as the dominant independent local banking company on the Delmarva Peninsula combined to produce both very respectable loan growth, plus nearly $2 million in new noninterest (fee-based) income. The increase in fee-based revenue over the second quarter of 2007 was primarily the result of our acquisition of two insurance agencies during the fourth quarter of 2007. We think the acquisitions will bode well as we strive to diversify overall fee-based revenue sources to help stabilize the impact of volatile interest rates that impact the lending side of our business." "On a related note, we continued to fund our loan growth primarily through our own local core deposit-gathering activities. In a very competitive environment for deposits, we were able to hold the resulting decline in our net interest margin to 49 basis points during the second quarter versus a year ago (and a 25 basis point decline versus the linked first quarter of 2008). So the margin stood at 4.17% for the second quarter of 2008 and 4.30% for the first half of 2008, which we believe is better than decent, given the operating environment for community banks," said Vermilye. "From a strategic standpoint, we feel our company is well-positioned to take advantage of rising rates in the future. In the meantime, we plan to remain focused on strong underwriting and core business organic growth initiatives -- areas in which we traditionally excel." The Company's return on average assets for the second quarter of 2008 was 1.12%, compared to 1.38% and 1.43% for the quarters ended March 31, 2008 and June 30, 2007, respectively. The return on average stockholders' equity was 8.98% for the second quarter of 2008, compared to 10.96% for the first quarter of 2008 and 11.69% for the second quarter of 2007. The Company's return on average assets for the first six months of 2008 was 1.25%, compared to 1.43% for the first six months of 2007. The return on average stockholders' equity was 10.02% for the first half of 2008, compared to 11.89% for the first half of 2007. At June 30, 2008, total assets were $1.019 billion, total deposits were $818.7 million, and total stockholders' equity was $123.0 million compared to $956.9 million, $765.9 million and $120.2 million, respectively, at December 31, 2007. The increase in total assets of approximately $62 million since December 31, 2007 related mainly to growth in loans, funded primarily by deposit growth. The growth in loans was $65.2 million during the first half of 2008, with period-end loans totaling $841.6 million at June 30, 2008. Review of Quarterly Financial Results Net interest income for the second quarter of 2008 was $9.6 million, a decrease of 4.0% from the first quarter of 2008 and a decrease of 6.0% from the same period last year. Lower yields on earning assets were the primary reason for the decreases. The Company's net interest margin was 4.17% for the second quarter of 2008, a decrease of 25 basis points when compared to the first quarter of 2008 and a decrease of 49 basis points when compared to the second quarter of 2007. The provision for credit losses was $615 thousand for the three months ended June 30, 2008. The comparable amounts were $462 thousand and $413 thousand for the three months ended March 31, 2008 and June 30, 2007, respectively. The increased provision for the second quarter of 2008 when compared to the first quarter of 2008 and the second quarter of 2007 reflected the continued growth in the loan portfolio and current economic conditions. Net charge-offs were $259 thousand for the second quarter of 2008, $87 thousand for the first quarter of 2008 and $34 thousand for the second quarter of 2007. Quarter-to-date annualized net charge-offs to average loans was 0.13% for the second quarter of 2008, 0.04% for the first quarter of 2008 and 0.02% for the second quarter of 2007. Nonperforming assets to total assets was 0.47% at June 30, 2008. The comparable nonperforming asset ratio was 0.34% at March 31, 2008 and 0.24% at June 30, 2007. The allowance for credit losses to period-end loans was 0.98% at both June 30, 2008 and March 31, 2008 and 0.94% at June 30, 2007. Management believes that the provision for credit losses and the resulting allowance were adequate at June 30, 2008. Noninterest income for the second quarter of 2008 increased $1.9 million when compared to the second quarter of 2007. The increase was primarily the result of the acquisition of two insurance agencies during the fourth quarter of 2007. Service charge income increased $135 thousand, insurance agency commissions increased $1.5 million and other noninterest income increased $250 thousand for the second quarter of 2008 when compared to the second quarter of 2007. Noninterest income decreased $308 thousand from the first quarter of 2008 due to a decrease in insurance agency commissions of $356 thousand. When compared to the first quarter of 2008 service charge income increased $46 thousand. Noninterest expense for the second quarter of 2008 increased $2.0 million when compared to the second quarter of 2007. The increase was primarily attributable to the operating expenses of the two insurance agencies acquired during the fourth quarter of 2007. Salaries and benefits increased $1.0 million and other noninterest expenses increased $885 thousand for the second quarter of 2008 when compared to the second quarter of 2007. Noninterest expense increased $138 thousand from the first quarter of 2008 primarily due to an increase in other noninterest expenses partially offset by a decrease in salaries and benefits. Review of Six-Month Financial Results Net interest income for the first six months of 2008 was $19.7 million, a decrease of 2.4% when compared to the first six months of 2007. The decrease was primarily the result of lower yields on earning assets. The net interest margin declined 26 basis points from 4.56% for the first half of 2007 to 4.30% for the first half of 2008. The provisions for credit losses for the six months ended June 30, 2008 and 2007 were $1.1 million and $655 thousand, respectively. Net charge-offs were $346 thousand and $70 thousand for the six months ended June 30, 2008 and 2007, respectively. The increased provision in 2008 reflected the overall growth of the loan portfolio as well as current economic conditions. Year-to-date annualized net charge-offs to average loans was 0.09% for the first half of 2008 and 0.02% for the first half of 2007. Noninterest income for the six months ended June 30, 2008 totaled $10.7 million, an increase of $3.8 million when compared to the same period in 2007. The increase was primarily due to the acquisition of the two insurance agencies during the fourth quarter of 2007. Service charge income increased $317 thousand, insurance agency commissions increased $3.0 million and other noninterest income increased $494 thousand for the first half of 2008 when compared to the first half of 2007. Noninterest expense for the six months ended June 30, 2008 was $19.3 million, an increase of $3.7 million when compared to the same period in 2007. The increase was primarily attributable to the operating expenses of the two insurance agencies acquired during the fourth quarter of 2007. Salaries and benefits increased $2.1 million and other noninterest expenses increased $1.5 million for the first half of 2008 when compared to the first half of 2007. Shore Bancshares Information Shore Bancshares, Inc. is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland's Eastern Shore. It is the parent company of three banks, The Talbot Bank of Easton, Maryland, The Centreville National Bank of Maryland, and The Felton Bank; three insurance producer firms, The Avon-Dixon Agency, LLC, Elliott Wilson Insurance, LLC and Jack Martin and Associates, Inc; a wholesale insurance company, TSGIA, Inc; two insurance premium finance companies, Mubell Finance, LLC and ESFS, Inc; a registered investment adviser firm, Wye Financial Services, LLC; and a mortgage broker subsidiary, Wye Mortgage Group, LLC. Forward-Looking Statements This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but statements about management's beliefs, plans and objectives. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled "Risk Factors."
Shore Bancshares, Inc. Financial Highlights (Dollars in thousands, except per share data) For the Three Months For the Six Months Ended June 30, Ended June 30, 2008 2007 %Change 2008 2007 %Change PROFITABILITY FOR THE PERIOD Net interest income $9,632 $10,242 (6.0)% $19,662 $20,147 (2.4)% Provision for credit losses 615 413 48.9 1,077 655 64.4 Noninterest income 5,194 3,261 59.3 10,696 6,909 54.8 Noninterest expense 9,729 7,747 25.6 19,320 15,638 23.5 Income before income taxes 4,482 5,343 (16.1) 9,961 10,763 (7.5) Income tax expense 1,716 1,987 (13.6) 3,823 4,004 (4.5) Net income $2,766 $3,356 (17.6) $6,138 $6,759 (9.2) Return on average assets 1.12% 1.43% (21.7)% 1.25% 1.43% (12.6)% Return on average equity 8.98 11.69 (23.2) 10.02 11.89 (15.7) Net interest margin 4.17 4.66 (10.5) 4.30 4.56 (5.7) Efficiency ratio - GAAP based 65.62 57.37 14.4 63.64 57.80 10.1 PER SHARE DATA Basic net income $0.33 $0.40 (17.5)% $0.73 $0.81 (9.9)% Diluted net income 0.33 0.40 (17.5) 0.73 0.81 (9.9) Dividends paid 0.16 0.16 - 0.32 0.32 - Book value at period end 14.65 13.72 6.8 Tangible book value at period end 12.01 12.12 (0.9) Market value at period end 18.72 25.85 (27.6) Market range: High 26.47 29.15 (9.2) 26.47 30.76 (13.9) Low 18.52 23.98 (22.8) 18.52 23.54 (21.3) AT PERIOD END Loans $841,600 $731,211 15.1% Securities 91,842 126,305 (27.3) Assets 1,019,463 940,763 8.4 Deposits 818,656 764,728 7.1 Stockholders' equity 123,038 114,930 7.1 CAPITAL AND CREDIT QUALITY RATIOS Average equity to average assets 12.41% 12.21% 12.45% 12.04% Annualized net charge-offs to average loans 0.13 0.02 0.09 0.02 Allowance for credit losses to period-end loans 0.98 0.94 Nonperforming assets to total assets 0.47 0.24 Shore Bancshares, Inc. Consolidated Balance Sheets (Dollars in thousands, except per share data) June 30, June 30, 2008 2008 compared compared to to June 30, Dec. 31, June 30, Dec. 31, June 30, 2008 2007 2007 2007 2007 ASSETS Cash and due from banks $19,532 $17,198 $16,743 13.6% 16.7% Interest-bearing deposits with other banks 343 3,036 15,553 (88.7) (97.8) Federal funds sold 23,111 6,646 15,226 247.7 51.8 Investments available-for-sale (at fair value) 80,721 97,137 112,353 (16.9) (28.2) Investments held-to-maturity 11,121 12,896 13,952 (13.8) (20.3) Loans 841,600 776,350 731,211 8.4 15.1 Less: allowance for credit losses (8,282) (7,551) (6,885) 9.7 20.3 Loans, net 833,318 768,799 724,326 8.4 15.0 Premises and equipment, net 14,465 15,617 15,965 (7.4) (9.4) Accrued interest receivable 4,843 5,008 5,065 (3.3) (4.4) Goodwill 15,954 15,954 11,939 - 33.6 Other intangible assets, net 6,179 6,436 1,421 (4.0) 334.8 Other real estate owned - 176 313 (100.0) (100.0) Other assets 9,876 8,008 7,907 23.3 24.9 Total assets $1,019,463 $956,911 $940,763 6.5 8.4 LIABILITIES Noninterest-bearing deposits $109,718 $104,081 $110,305 5.4 (0.5) Interest-bearing deposits 708,938 661,814 654,423 7.1 8.3 Total deposits 818,656 765,895 764,728 6.9 7.1 Short-term borrowings 58,263 47,694 27,560 22.2 111.4 Long-term debt 8,485 12,485 27,000 (32.0) (68.6) Accrued interest payable and other liabilities 11,021 10,602 6,545 4.0 68.4 Total liabilities 896,425 836,676 825,833 7.1 8.5 STOCKHOLDERS' EQUITY Common stock, par value $0.01; authorized 35,000,000 shares 84 84 84 - - Additional paid in capital 29,663 29,539 29,487 0.4 0.6 Retained earnings 93,498 90,365 86,356 3.5 8.3 Accumulated other comprehensive income (loss) (207) 247 (997) (183.8) 79.2 Total stockholders' equity 123,038 120,235 114,930 2.3 7.1 Total liabilities and stockholders' equity $1,019,463 $956,911 $940,763 6.5 8.4 Period-end shares outstanding 8,400 8,381 8,379 0.2 0.3 Book value per share $14.65 $14.35 $13.72 2.1 6.8 Shore Bancshares, Inc. Consolidated Statements of Income (Dollars in thousands, except per share data) For the Three Months For the Six Months Ended June 30, Ended June 30, 2008 2007 % Change 2008 2007 % Change INTEREST INCOME Interest and fees on loans $13,961 $14,210 (1.8)% $28,521 $27,834 2.5% Interest and dividends on investment securities: Taxable 945 1,291 (26.8) 2,025 2,575 (21.4) Tax-exempt 109 135 (19.3) 232 259 (10.4) Interest on federal funds sold 83 290 (71.4) 205 810 (74.7) Interest on deposits with other banks 29 329 (91.2) 67 667 (90.0) Total interest income 15,127 16,255 (6.9) 31,050 32,145 (3.4) INTEREST EXPENSE Interest on deposits 4,997 5,402 (7.5) 10,340 10,770 (4.0) Interest on short-term borrowings 316 276 14.5 682 559 22.0 Interest on long-term debt 182 335 (45.7) 366 669 (45.3) Total interest expense 5,495 6,013 (8.6) 11,388 11,998 (5.1) NET INTEREST INCOME 9,632 10,242 (6.0) 19,662 20,147 (2.4) Provision for credit losses 615 413 48.9 1,077 655 64.4 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 9,017 9,829 (8.3) 18,585 19,492 (4.7) NONINTEREST INCOME Service charges on deposit accounts 917 782 17.3 1,788 1,471 21.5 Investment securities gains (losses) - 1 (100.0) - 1 (100.0) Insurance agency commissions 3,111 1,562 99.2 6,578 3,601 82.7 Other noninterest income 1,166 916 27.3 2,330 1,836 26.9 Total noninterest income 5,194 3,261 59.3 10,696 6,909 54.8 NONINTEREST EXPENSE Salaries and employee benefits 5,759 4,715 22.1 11,743 9,648 21.7 Occupancy expense 537 474 13.3 1,036 984 5.3 Furniture and equipment expense 298 348 (14.4) 584 670 (12.8) Data processing 440 467 (5.8) 910 899 1.2 Directors' fees 130 128 1.6 295 291 1.4 Amortization of intangible assets 129 64 101.6 258 147 75.5 Other noninterest expenses 2,436 1,551 57.1 4,494 2,999 49.8 Total noninterest expense 9,729 7,747 25.6 19,320 15,638 23.5 Income before income taxes 4,482 5,343 (16.1) 9,961 10,763 (7.5) Income tax expense 1,716 1,987 (13.6) 3,823 4,004 (4.5) NET INCOME $2,766 $3,356 (17.6) $6,138 $6,759 (9.2) Weighted average shares outstanding - basic 8,381 8,378 0.0 8,379 8,380 (0.0) Weighted average shares outstanding - diluted 8,388 8,393 (0.1) 8,387 8,395 (0.1) Basic net income per share $0.33 $0.40 (17.5) $0.73 $0.81 (9.9) Diluted net income per share 0.33 0.40 (17.5) 0.73 0.81 (9.9) Dividends paid per share 0.16 0.16 - 0.32 0.32 - Shore Bancshares, Inc. Financial Highlights By Quarter (Dollars in thousands, except per share data) 2nd quarter 1st quarter 2008 2008 (2Q 08) (1Q 08) PROFITABILITY FOR THE PERIOD Net interest income $9,632 $10,030 Provision for credit losses 615 462 Noninterest income 5,194 5,502 Noninterest expense 9,729 9,591 Income before income taxes 4,482 5,479 Income tax expense 1,716 2,107 Net income $2,766 $3,372 Return on average assets 1.12% 1.38% Return on average equity 8.98 10.96 Net interest margin 4.17 4.42 Efficiency ratio - GAAP based 65.62 61.75 PER SHARE DATA Basic net income $0.33 $0.40 Diluted net income 0.33 0.40 Dividends paid 0.16 0.16 Book value at period end 14.65 14.62 Tangible book value at period end 12.01 11.96 Market value at period end 18.72 21.45 Market range: High 26.47 23.40 Low 18.52 20.00 AT PERIOD END Loans $841,600 $808,583 Securities 91,842 99,062 Assets 1,019,463 1,003,836 Deposits 818,656 808,917 Stockholders' equity 123,038 122,699 CAPITAL AND CREDIT QUALITY RATIOS Average equity to average assets 12.41% 12.56% Annualized net charge-offs to average loans 0.13 0.04 Allowance for credit losses to period-end loans 0.98 0.98 Nonperforming assets to total assets 0.47 0.34 4th quarter 3rd quarter 2nd quarter 2007 2007 2007 (4Q 07) (3Q 07) (2Q 07) PROFITABILITY FOR THE PERIOD Net interest income $10,426 $10,463 $10,242 Provision for credit losses 465 604 413 Noninterest income 4,715 3,055 3,261 Noninterest expense 9,302 7,599 7,747 Income before income taxes 5,374 5,315 5,343 Income tax expense 2,034 1,964 1,987 Net income $3,340 $3,351 $3,356 Return on average assets 1.40% 1.42% 1.43% Return on average equity 11.78 11.51 11.69 Net interest margin 4.70 4.74 4.66 Efficiency ratio - GAAP based 61.44 56.21 57.37 PER SHARE DATA Basic net income $0.40 $0.40 $0.40 Diluted net income 0.40 0.40 0.40 Dividends paid 0.16 0.16 0.16 Book value at period end 14.35 14.05 13.72 Tangible book value at period end 11.68 12.46 12.12 Market value at period end 21.95 24.14 25.85 Market range: High 24.72 27.05 29.15 Low 20.00 20.52 23.98 AT PERIOD END Loans $776,350 $750,457 $731,211 Securities 110,033 122,773 126,305 Assets 956,911 939,877 940,763 Deposits 765,895 760,123 764,728 Stockholders' equity 120,235 117,736 114,930 CAPITAL AND CREDIT QUALITY RATIOS Average equity to average assets 11.91% 12.30% 12.21% Annualized net charge-offs to average loans 0.06 0.06 0.02 Allowance for credit losses to period-end loans 0.97 0.96 0.94 Nonperforming assets to total assets 0.39 0.47 0.24 2Q 08 2Q 08 compared to compared to 1Q 08 2Q 07 PROFITABILITY FOR THE PERIOD Net interest income (4.0)% (6.0)% Provision for credit losses 33.1 48.9 Noninterest income (5.6) 59.3 Noninterest expense 1.4 25.6 Income before income taxes (18.2) (16.1) Income tax expense (18.6) (13.6) Net income (18.0) (17.6) Return on average assets (18.8)% (21.7)% Return on average equity (18.1) (23.2) Net interest margin (5.7) (10.5) Efficiency ratio - GAAP based 6.3 14.4 PER SHARE DATA Basic net income (17.5)% (17.5)% Diluted net income (17.5) (17.5) Dividends paid - - Book value at period end 0.2 6.8 Tangible book value at period end 0.4 (0.9) Market value at period end (12.7) (27.6) Market range: High 13.1 (9.2) Low (7.4) (22.8) AT PERIOD END Loans 4.1% 15.1% Securities (7.3) (27.3) Assets 1.6 8.4 Deposits 1.2 7.1 Stockholders' equity 0.3 7.1 CAPITAL AND CREDIT QUALITY RATIOS Average equity to average assets Annualized net charge-offs to average loans Allowance for credit losses to period-end loans Nonperforming assets to total assets Shore Bancshares, Inc. Consolidated Statements of Income By Quarter (Dollars in thousands, except per share data) 2Q 08 1Q 08 INTEREST INCOME Interest and fees on loans $13,961 $14,560 Interest and dividends on investment securities: Taxable 945 1,080 Tax-exempt 109 123 Interest on federal funds sold 83 122 Interest on deposits with other banks 29 38 Total interest income 15,127 15,923 INTEREST EXPENSE Interest on deposits 4,997 5,343 Interest on short-term borrowings 316 366 Interest on long-term debt 182 184 Total interest expense 5,495 5,893 NET INTEREST INCOME 9,632 10,030 Provision for credit losses 615 462 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 9,017 9,568 NONINTEREST INCOME Service charges on deposit accounts 917 871 Investment securities gains (losses) - - Insurance agency commissions 3,111 3,467 Other noninterest income 1,166 1,164 Total noninterest income 5,194 5,502 NONINTEREST EXPENSE Salaries and employee benefits 5,759 5,984 Occupancy expense 537 499 Furniture and equipment expense 298 286 Data processing 440 470 Directors' fees 130 165 Amortization of intangible assets 129 129 Other noninterest expenses 2,436 2,058 Total noninterest expense 9,729 9,591 Income before income taxes 4,482 5,479 Income tax expense 1,716 2,107 NET INCOME $2,766 $3,372 Weighted average shares outstanding - basic 8,381 8,391 Weighted average shares outstanding - diluted 8,388 8,400 Basic net income per share $0.33 $0.40 Diluted net income per share 0.33 0.40 Dividends paid per share 0.16 0.16 4Q 07 3Q 07 2Q 07 INTEREST INCOME Interest and fees on loans $14,958 $14,732 $14,210 Interest and dividends on investment securities: Taxable 1,205 1,325 1,291 Tax-exempt 124 128 135 Interest on federal funds sold 120 178 290 Interest on deposits with other banks 46 180 329 Total interest income 16,453 16,543 16,255 INTEREST EXPENSE Interest on deposits 5,430 5,493 5,402 Interest on short-term borrowings 426 279 276 Interest on long-term debt 171 308 335 Total interest expense 6,027 6,080 6,013 NET INTEREST INCOME 10,426 10,463 10,242 Provision for credit losses 465 604 413 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 9,961 9,859 9,829 NONINTEREST INCOME Service charges on deposit accounts 952 949 782 Investment securities gains (losses) 4 - 1 Insurance agency commissions 2,694 1,403 1,562 Other noninterest income 1,065 703 916 Total noninterest income 4,715 3,055 3,261 NONINTEREST EXPENSE Salaries and employee benefits 5,520 4,823 4,715 Occupancy expense 518 460 474 Furniture and equipment expense 324 318 348 Data processing 467 454 467 Directors' fees 178 136 128 Amortization of intangible assets 130 56 64 Other noninterest expenses 2,165 1,352 1,551 Total noninterest expense 9,302 7,599 7,747 Income before income taxes 5,374 5,315 5,343 Income tax expense 2,034 1,964 1,987 NET INCOME $3,340 $3,351 $3,356 Weighted average shares outstanding - basic 8,380 8,380 8,378 Weighted average shares outstanding - diluted 8,391 8,392 8,393 Basic net income per share $0.40 $0.40 $0.40 Diluted net income per share 0.40 0.40 0.40 Dividends paid per share 0.16 0.16 0.16 2Q 08 2Q 08 compared to compared to 1Q 08 2Q 07 INTEREST INCOME Interest and fees on loans (4.1)% (1.8)% Interest and dividends on investment securities: Taxable (12.5) (26.8) Tax-exempt (11.4) (19.3) Interest on federal funds sold (32.0) (71.4) Interest on deposits with other banks (23.7) (91.2) Total interest income (5.0) (6.9) INTEREST EXPENSE Interest on deposits (6.5) (7.5) Interest on short-term borrowings (13.7) 14.5 Interest on long-term debt (1.1) (45.7) Total interest expense (6.8) (8.6) NET INTEREST INCOME (4.0) (6.0) Provision for credit losses 33.1 48.9 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES (5.8) (8.3) NONINTEREST INCOME Service charges on deposit accounts 5.3 17.3 Investment securities gains (losses) - (100.0) Insurance agency commissions (10.3) 99.2 Other noninterest income 0.2 27.3 Total noninterest income (5.6) 59.3 NONINTEREST EXPENSE Salaries and employee benefits (3.8) 22.1 Occupancy expense 7.6 13.3 Furniture and equipment expense 4.2 (14.4) Data processing (6.4) (5.8) Directors' fees (21.2) 1.6 Amortization of intangible assets - 101.6 Other noninterest expenses 18.4 57.1 Total noninterest expense 1.4 25.6 Income before income taxes (18.2) (16.1) Income tax expense (18.6) (13.6) NET INCOME (18.0) (17.6) Weighted average shares outstanding - basic (0.1) 0.0 Weighted average shares outstanding - diluted (0.1) (0.1) Basic net income per share (17.5) (17.5) Diluted net income per share (17.5) (17.5) Dividends paid per share - -
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