TALLAHASSEE, Fla., April 20, 2009 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the first quarter of 2009 totaling $.7 million ($0.04 per diluted share) compared to a net loss of $1.7 million ($0.10 per diluted share) in the fourth quarter of 2008 and net income of $7.3 million ($0.42 per diluted share) for the first quarter of 2008. Earnings for the first quarter of 2008 included a $2.4 million pre-tax gain from the redemption of Visa shares related to their initial public offering and the reversal of $1.1 million (pre-tax) in litigation reserves related to certain Visa litigation.
"In a continuing tough operating environment, we grew our loan portfolio by $24 million or 1.2% and maintained our focus on prudently managing the net interest margin, despite historically low interest rates. Our margin at 5.16% was 43 basis points higher than a year ago, and better than the linked fourth quarter after adjusting for the recovery of interest income on the resolution of a problem loan late last year," said William G. Smith, Jr., Chairman, President and Chief Executive Officer of Capital City Bank Group.
"During the first quarter, the principal measures of our capital adequacy remained strong and better than a year ago. Even though we declined participation in TARP, our total capital ratio ranks in the top quartile of our peer group(1). At March 31, 2009, our risk based and tangible capital ratios were 14.40% and 7.63%, respectively.
"Nonperforming assets amounted to 6.39% of loans and other real estate at the end of the first quarter, compared to 5.48% at year-end 2008 and 2.14% at the end of the first quarter of 2008, which is indicative of the severity and persistence of economic weakness across our markets. Nonaccrual loans were up $13.3 million over year-end levels, mostly due to the addition of three large real estate loan relationships, including a student housing development and two single-family residential projects.
"We believe we are currently dedicating sufficient resources and talent to understand, monitor and eventually resolve our problem assets. Certainly we are in the grip of prolonged adverse economic conditions that have elevated credit quality and the resolution of problem loans to top-of-mind status among investors. But our execution of the fundamentals of profitable community banking -- basic lending, rational deposit gathering and good expense management -- continues to be both prudent and consistent," said Smith.
The Return on Average Assets was .11% and the Return on Average Equity was .94% for the first quarter of 2009. These metrics were 1.11% and 9.87% for the comparable quarter in 2008 and -.28% and -2.24% for the fourth quarter of 2008, respectively.
Discussion of Financial Condition
Average earning assets were $2.166 billion for the first quarter of 2009, an increase of $15.4 million, or 0.71% from the fourth quarter of 2008, and a decrease of $135.2 million, or 5.88% from the first quarter of 2008. The increase from the fourth quarter is primarily attributable to a $24.0 million increase in the loan portfolio, which was partially funded by a reduction of $6.4 million in short-term investments. Compared to the first quarter of 2008, the decrease in earning assets primarily reflects a reduction in short-term investments driven by the decline in client deposits (see discussion below), partially offset by a $54.5 million increase in average loans and a $6.5 million increase in investment securities. Our loan production began increasing during the second half of 2008 and this trend continues through the recent quarter due to the efforts of our bankers to reach clients who are interested in moving or expanding their banking relationships. Year over year, growth was primarily attributable to commercial real estate mortgages and home equity loans.
Nonperforming assets of $126.8 million increased from the linked fourth quarter by $18.9 million and from the first quarter of 2008 by $85.7 million. Nonaccrual loans increased $13.3 million and $74.8 million, respectively, from the same prior-year periods. A large portion of the increase in nonaccrual loans in the first quarter is due to the addition of three large real estate loan relationships, including a student housing development ($5.5 million) and two residential single-family developments ($5.8 million). Vacant residential land loans represented 48% of our nonaccrual balance at quarter end. In aggregate, a reserve equal to approximately 29% has been allocated to these land loans. Restructured loans totaled $5.2 million at the end of the first quarter reflecting an increase of $3.5 million over year-end and $3.2 million over first quarter 2008. Other real estate owned totaled $11.4 million at the end of the quarter compared to $9.2 million at year-end 2008 and $3.8 million at the end of the first quarter of 2008. Nonperforming assets represented 6.39% of loans and other real estate at the end of the first quarter compared to 5.48% at year-end 2008 and 2.14% at the end of the first quarter of 2008.
Average total deposits were $1.946 billion for the first quarter, an increase of $11.5 million, or 0.6%, from the fourth quarter and a decrease of $191.5 million, or 8.9%, from the first quarter of 2008. On a linked quarter basis, the increase in deposits reflects higher public funds accounts, primarily in negotiated accounts and certificates of deposit, which have been partially offset by declining money market balances. The decline from the first quarter of 2008 reflects a lower level of NOW account balances (primarily public funds and legal settlement accounts), money market account balances and certificates of deposit balances.
We believe the decline in the public funds is partially attributable to certain public entity clients seeking higher yield. Compared to the first quarter of 2008, a majority of the decrease in deposits has been realized in the money market and certificates of deposit categories. The decrease in the money market accounts is due to lower balances maintained by both businesses and individuals, which we believe is attributable to lower rates and distressed economic conditions. We believe the decline in the certificate of deposit category reflects a combination of proceeds migrating to other deposit categories, as well as transferring to higher rate paying competitors. Despite the disruption in the market, we continue to pursue prudent pricing discipline and have chosen not to compete with higher rate paying competitors for these deposits.
We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) purchased position of $33.9 million during the first quarter of 2009 compared to an average net overnight funds purchased position of $18.0 million in the fourth quarter of 2008 and an average overnight funds sold position of $186.8 million in the first quarter of 2008. The unfavorable variance in the funds position primarily reflects a decline in deposit balances as discussed above, coupled with growth in the loan portfolio. During the first quarter of 2009, we repurchased approximately 146,000 shares of our common stock at a weighted average stock price of $10.65.
Discussion of Operating Results
Tax equivalent net interest income for the first quarter of 2009 was $27.6 million compared to $28.4 million for the fourth quarter of 2008 and $27.1 million for the first quarter of 2008. The decrease in the net interest income on a linked quarter basis is partially due to two less calendar days in the first quarter. Additionally, the fourth quarter of 2008 was favorably impacted by a $784,000 interest recovery attributable to the resolution of a problem loan, which we acquired in one of our bank acquisitions several years ago. Lower foregone interest on nonaccrual loans and an increase in loan fees partially offset the decline in net interest income.
The increase in the net interest margin compared to the first quarter of 2008 primarily reflects aggressive deposit repricing in response to the rate reductions initiated by the Federal Reserve, partially offset by higher foregone interest on nonaccrual loans, a reduction in loan fees and one less calendar day in the first quarter of 2009.
The net interest margin of 5.16% declined by 10 basis points over the linked quarter and improved 43 basis points over the first quarter of 2008. The interest recovery recorded on the resolution of a problem loan added 15 basis points to the margin in the fourth quarter of 2008. The improvement in the margin over the linked quarter (after adjusting for the interest recovery in the fourth quarter) is attributable to the aggressive deposit repricing and, relative to the first quarter of 2008, the improvement is primarily attributable to both deposit repricing and a favorable shift in the mix of deposits.
The provision for loan losses for the current quarter was $8.4 million compared to $12.5 million in the fourth quarter of 2008 and $4.1 million for the first quarter of 2008. The provision for the current quarter reflects a higher level of required reserves for impaired loans, primarily related to newly identified nonaccrual loans. An increase in loan loss factors and a higher level of internally identified problem loans also impacted the level of loan loss provision for the quarter. Net charge-offs in the first quarter totaled $5.2 million, or 1.08%, of average loans compared to $6.0 million, or 1.24% in the fourth quarter and $1.9 million, or .41% in the first quarter of 2008. At quarter-end, the allowance for loan losses was 2.04% of outstanding loans (net of overdrafts) and provided coverage of 35% of nonperforming loans.
Noninterest income for the first quarter increased $731,000, or 5.5%, over the fourth quarter of 2008 and declined $3.8 million, or 21.1%, from the first quarter of 2008. Compared to the fourth quarter, the increase is primarily due to higher mortgage banking fees and bank card fees. The increase in mortgage banking fees reflects an 82% increase in secondary market loan production over the prior quarter, primarily driven by homeowner refinancings. The higher level of bank card fees is primarily due to fee adjustments implemented during the first quarter of 2009. Compared to the first quarter of 2008, the decline is due to a $2.4 million gain from the redemption of Visa shares, which was recognized in the first quarter of 2008, and a lower level of merchant fees attributable to the sale of a portion of the merchant services portfolio, which occurred in third quarter of 2008.
Noninterest expense increased $1.3 million, or 4.0%, from the fourth quarter of 2008 and $2.5 million, or 8.3%, from the first quarter of 2008. Compared to the fourth quarter, the increase was due to higher compensation expense of $1.7 million, primarily reflective of an increase in pension plan expense ($904,000) and associate salary expense ($649,000). The increase in pension cost is primarily due to a decline in the value of pension assets during 2008. The increase in associate salary expense reflects annual merit raises, but more significantly a higher accrual for performance incentives, which is typical in the first quarter as incentive plan expense is reset to its par level and then subsequently adjusted throughout the year based on actual performance. Compared to the first quarter of 2008, the impact of a one-time entry of $1.1 million to reverse a portion of our Visa litigation accrual, the reversal of $577,000 in accrued expense for our 2011 Incentive Plan (terminated in the first quarter of 2008), and higher FDIC insurance premiums of approximately $700,000 drove the increase. Higher pension plan expense of $1.0 million also contributed to the year over year variance.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.5 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 68 banking offices and 80 ATMs in Florida, Georgia and Alabama. Since 2005, the Company has been named as a Dividend Achiever by Mergent, Inc., a leading provider of information on publicly traded companies. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the frequency and magnitude of foreclosure of the Company's loans; the effects of the Company's lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company's financial statement estimates and assumptions, including the estimate for the Company's loan loss provision; the Company's ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; and the Company's ability to manage the risks involved in the foregoing. Additional factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and the Company's other filings with the SEC, which are available at the SEC's internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.
(1) Publicly traded $1-$5 billion Banks (Source: SNL-Southeastern Commercial Banks - 12/31/2008)
EARNINGS HIGHLIGHTS --------------------------------------------------------------------- Three Months Ended ---------------------------- (Dollars in thousands, except per share Mar 31, Dec 31, Mar 31, data) 2009 2008 2008 --------------------------------------------------------------------- EARNINGS Net Income $ 650 $(1,703) 7,280 Diluted Earnings Per Common Share $ 0.04 $ (0.10) 0.42 --------------------------------------------------------------------- PERFORMANCE Return on Average Equity 0.94% -2.24% 9.87% Return on Average Assets 0.11% -0.28% 1.11% Net Interest Margin 5.16% 5.26% 4.73% Noninterest Income as % of Operating Revenue 34.22% 32.42% 40.22% Efficiency Ratio 75.07% 71.21% 63.15% --------------------------------------------------------------------- CAPITAL ADEQUACY Tier 1 Capital Ratio 13.09% 13.34% 12.94% Total Capital Ratio 14.40% 14.69% 14.01% Tangible Capital Ratio 7.63% 7.76% 7.73% Leverage Ratio 11.25% 11.51% 10.50% Equity to Assets 11.02% 11.20% 11.06% --------------------------------------------------------------------- ASSET QUALITY Allowance as % of Non-Performing Loans 34.82% 37.52% 54.32% Allowance as a % of Loans 2.04% 1.89% 1.06% Net Charge-Offs as % of Average Loans 1.08% 1.24% 0.41% Nonperforming Assets as % of Loans and ORE 6.39% 5.48% 2.14% --------------------------------------------------------------------- STOCK PERFORMANCE High $ 27.31 $ 33.32 $ 29.99 Low $ 9.50 $ 21.06 $ 24.76 Close $ 11.46 $ 27.24 $ 29.00 Average Daily Trading Volume 75,117 43,379 31,827 --------------------------------------------------------------------- CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF INCOME Unaudited --------------------------------------------------------------------- (Dollars in 2009 2008 2008 2008 2008 thousands, except First Fourth Third Second First per share data) Quarter Quarter Quarter Quarter Quarter --------------------------------------------------------------------- INTEREST INCOME Interest and Fees on Loans $ 29,537 $ 31,570 $ 32,435 $ 33,422 $ 35,255 Investment Securities 1,513 1,627 1,744 1,810 1,894 Funds Sold 3 32 475 1,028 1,574 --------------------------------------------------------------------- Total Interest Income 31,053 33,229 34,654 36,260 38,723 --------------------------------------------------------------------- INTEREST EXPENSE Deposits 2,495 3,848 5,815 7,162 10,481 Short-Term Borrowings 68 110 230 296 521 Subordinated Notes Payable 927 937 936 931 931 Other Long-Term Borrowings 568 587 488 396 331 --------------------------------------------------------------------- Total Interest Expense 4,058 5,482 7,469 8,785 12,264 --------------------------------------------------------------------- Net Interest Income 26,995 27,747 27,185 27,475 26,459 Provision for Loan Losses 8,410 12,497 10,425 5,432 4,142 --------------------------------------------------------------------- Net Interest Income after Provision for Loan Losses 18,585 15,250 16,760 22,043 22,317 --------------------------------------------------------------------- NONINTEREST INCOME Service Charges on Deposit Accounts 6,698 6,807 7,110 7,060 6,765 Data Processing Fees 870 937 873 812 813 Asset Management Fees 970 935 1,025 1,125 1,150 Retail Brokerage Fees 493 630 565 735 469 Gain on Sale of Investment Securities -- 3 27 30 65 Mortgage Banking Revenues 584 292 331 506 494 Merchant Fees 958 650 616 2,074 2,208 Interchange Fees 1,056 1,007 1,073 1,076 1,009 Gain on Sale of Portion of Merchant Services Portfolio -- -- 6,250 -- -- ATM/Debit Card Fees 863 744 742 758 744 Other 1,550 1,306 1,600 1,542 4,082 --------------------------------------------------------------------- Total Noninterest Income 14,042 13,311 20,212 15,718 17,799 --------------------------------------------------------------------- NONINTEREST EXPENSE Salaries and Associate Benefits 17,237 15,492 15,417 15,318 15,604 Occupancy, Net 2,345 2,503 2,373 2,491 2,362 Furniture and Equipment 2,338 2,368 2,369 2,583 2,582 Intangible Amortization 1,011 1,308 1,459 1,459 1,459 Other 9,326 9,331 8,298 8,905 7,791 --------------------------------------------------------------------- Total Noninterest Expense 32,257 31,002 29,916 30,756 29,798 --------------------------------------------------------------------- OPERATING PROFIT 370 (2,441) 7,056 7,005 10,318 Provision for Income Taxes (280) (738) 2,218 2,195 3,038 --------------------------------------------------------------------- NET INCOME $ 650 $ (1,703) $ 4,838 $ 4,810 $ 7,280 --------------------------------------------------------------------- PER SHARE DATA Basic Earnings $ 0.04 $ (0.10) $ 0.29 $ 0.28 $ 0.42 Diluted Earnings $ 0.04 $ (0.10) $ 0.29 $ 0.28 $ 0.42 Cash Dividends 0.190 0.190 0.185 0.185 0.185 AVERAGE SHARES Basic 17,109 17,126 17,124 17,146 17,170 Diluted 17,131 17,135 17,128 17,147 17,178 --------------------------------------------------------------------- CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF FINANCIAL CONDITION Unaudited ---------------------------------------------------------------------- (Dollars in thousands, 2009 2008 2008 2008 2008 except per First Fourth Third Second First share data) Quarter Quarter Quarter Quarter Quarter ---------------------------------------------------------------------- ASSETS Cash and Due From Banks $ 81,317 $ 88,143 $ 71,062 $ 108,672 $ 97,525 Funds Sold and Interest Bearing Deposits 4,241 6,806 27,419 192,786 241,202 ---------------------------------------------------------------------- Total Cash and Cash Equivalents 85,558 94,949 98,481 301,458 338,727 Investment Securities, Available-for- Sale 195,767 191,569 193,978 185,971 186,944 Loans, Net of Unearned Interest Commercial, Financial, & Agricultural 202,038 206,230 189,676 196,075 202,238 Real Estate - Construction 154,102 141,973 148,160 150,907 152,060 Real Estate - Commercial 673,066 656,959 639,443 622,282 624,826 Real Estate - Residential 464,358 468,399 473,962 481,397 482,058 Real Estate - Home Equity 223,505 218,500 212,118 205,536 197,093 Consumer 243,280 246,973 252,743 244,071 238,663 Other Loans 8,068 15,838 7,378 9,436 10,506 Overdrafts 3,195 2,925 3,749 7,111 7,014 ---------------------------------------------------------------------- Total Loans, Net of Unearned Interest 1,971,612 1,957,797 1,927,229 1,916,815 1,914,458 Allowance for Loan Losses (40,172) (37,004) (30,544) (22,518) (20,277) ---------------------------------------------------------------------- Loans, Net 1,931,440 1,920,793 1,896,685 1,894,297 1,894,181 Premises and Equipment, Net 107,259 106,433 104,806 102,559 100,145 Intangible Assets 91,872 92,883 94,192 95,651 97,109 Other Assets 87,483 82,072 66,308 69,479 75,406 ---------------------------------------------------------------------- Total Other Assets 286,614 281,388 265,306 267,689 272,660 ---------------------------------------------------------------------- Total Assets $2,499,379 $2,488,699 $2,454,450 $2,649,415 $2,692,512 ---------------------------------------------------------------------- LIABILITIES Deposits: Noninterest Bearing Deposits $ 413,608 $ 419,696 $ 382,878 $ 416,992 $ 432,904 NOW Accounts 726,069 758,976 698,509 814,380 800,128 Money Market Accounts 312,541 324,646 368,453 387,011 381,474 Regular Savings Accounts 121,245 115,261 116,858 118,307 116,018 Certificates of Deposit 416,326 373,595 396,086 426,236 462,081 ---------------------------------------------------------------------- Total Deposits 1,989,789 1,992,174 1,962,784 2,162,926 2,192,605 Short-Term Borrowings 68,193 62,044 47,069 51,783 61,781 Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887 Other Long-Term Borrowings 53,448 51,470 53,074 36,857 29,843 Other Liabilities 49,518 41,294 29,841 38,382 47,723 ---------------------------------------------------------------------- Total Liabilities 2,223,835 2,209,869 2,155,655 2,352,835 2,394,839 ---------------------------------------------------------------------- SHAREOWNERS' EQUITY Common Stock 170 171 171 171 172 Additional Paid-In Capital 35,841 36,783 36,681 36,382 38,042 Retained Earnings 260,287 262,890 267,853 266,171 264,538 Accumulated Other Comprehensive Loss, Net of Tax (20,754) (21,014) (5,910) (6,144) (5,079) ---------------------------------------------------------------------- Total Shareowners' Equity 275,544 278,830 298,795 296,580 297,673 ---------------------------------------------------------------------- Total Liabilities and Shareowners' Equity $2,499,379 $2,488,699 $2,454,450 $2,649,415 $2,692,512 ---------------------------------------------------------------------- OTHER BALANCE SHEET DATA Earning Assets $2,171,620 $2,156,172 $2,148,626 $2,295,572 $2,342,604 Intangible Assets Goodwill 84,811 84,811 84,811 84,811 84,811 Deposit Base 6,121 7,084 8,345 9,756 11,167 Other 940 988 1,036 1,084 1,131 Interest Bearing Liabilities 1,760,709 1,748,879 1,742,936 1,897,461 1,914,212 ---------------------------------------------------------------------- Book Value Per Diluted Share $ 16.18 $ 16.27 $ 17.45 $ 17.33 $ 17.33 Tangible Book Value Per Diluted Share 10.80 10.85 11.94 11.74 11.67 ---------------------------------------------------------------------- Actual Basic Shares Outstanding 17,010 17,127 17,125 17,111 17,175 Actual Diluted Shares Outstanding 17,031 17,136 17,129 17,112 17,183 ---------------------------------------------------------------------- CAPITAL CITY BANK GROUP, INC. ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS Unaudited ---------------------------------------------------------------------- 2009 2008 2008 2008 2008 (Dollars in First Fourth Third Second First thousands) Quarter Quarter Quarter Quarter Quarter ---------------------------------------------------------------------- ALLOWANCE FOR LOAN LOSSES Balance at Beginning of Period $ 37,004 $ 30,544 $ 22,518 $ 20,277 $ 18,066 Provision for Loan Losses 8,410 12,497 10,425 5,432 4,142 Net Charge-Offs 5,242 6,037 2,399 3,191 1,931 ---------------------------------------------------------------------- Balance at End of Period $ 40,172 $ 37,004 $ 30,544 $ 22,518 $ 20,277 ---------------------------------------------------------------------- As a % of Loans 2.04% 1.89% 1.59% 1.18% 1.06% As a % of Nonperforming Loans 34.82% 37.52% 48.55% 51.80% 54.32% As a % of Nonperforming Assets 31.69% 34.31% 45.10% 47.12% 49.34% ---------------------------------------------------------------------- CHARGE-OFFS Commercial, Financial and Agricultural $ 857 $ 331 $ 275 $ 407 $ 636 Real Estate - Construction 320 1,774 77 158 $ 572 Real Estate - Commercial 1,002 293 (35) 1,115 126 Real Estate - Residential 1,975 2,264 797 817 176 Consumer 2,117 1,993 1,797 1,232 1,170 ---------------------------------------------------------------------- Total Charge-Offs $ 6,271 $ 6,655 $ 2,911 $ 3,729 $ 2,680 ---------------------------------------------------------------------- RECOVERIES Commercial, Financial and Agricultural $ 74 $ 68 $ 68 $ 55 $ 139 Real Estate - Construction 385 -- 4 -- -- Real Estate - Commercial -- -- 1 13 1 Real Estate - Residential 58 128 6 24 3 Consumer 512 422 433 446 606 ---------------------------------------------------------------------- Total Recoveries $ 1,029 $ 618 $ 512 $ 538 $ 749 ---------------------------------------------------------------------- NET CHARGE-OFFS $ 5,242 $ 6,037 $ 2,399 $ 3,191 $ 1,931 ---------------------------------------------------------------------- Net Charge-Offs as a % of Average Loans(1) 1.08% 1.24% 0.50% 0.67% 0.41% ---------------------------------------------------------------------- RISK ELEMENT ASSETS Nonaccruing Loans $110,200 $ 96,876 $ 61,509 $ 41,738 $ 35,352 Restructured Loans 5,157 1,744 1,403 1,733 1,980 ---------------------------------------------------------------------- Total Nonperforming Loans 115,357 98,620 62,912 43,471 37,332 Other Real Estate 11,425 9,222 4,813 4,322 3,768 ---------------------------------------------------------------------- Total Nonperforming Assets $126,782 $107,842 $ 67,725 $ 47,793 $ 41,100 ---------------------------------------------------------------------- Past Due Loans 90 Days or More $ -- $ 88 $ 50 $ 896 $ 842 ---------------------------------------------------------------------- Nonperforming Loans as a % of Loans 5.85% 5.04% 3.26% 2.27% 1.95% Nonperforming Assets as a % of Loans and Other Real Estate 6.39% 5.48% 3.51% 2.49% 2.14% Nonperforming Assets as a % of Capital(2) 40.16% 34.15% 20.56% 14.98% 12.93% ---------------------------------------------------------------------- (1) Annualized (2) Capital includes allowance for loan losses AVERAGE BALANCE AND INTEREST RATES(1) Unaudited ---------------------------------------------------------------------- First Quarter 2009 Fourth Quarter 2008 --------------------------- --------------------------- (Dollars in Average Average Average Average thousands) Balance Interest Rate Balance Interest Rate ---------------------------------------------------------------------- ASSETS: Loans, Net of Unearned Interest $1,964,086 29,724 6.14% $1,940,083 31,772 6.52% Investment Securities Taxable Investment Securities 90,927 776 3.43% 90,296 813 3.59% Tax-Exempt Investment Securities 101,108 1,133 4.48% 103,817 1,252 4.82% ---------------------------------------------------------------------- Total Investment Securities 192,035 1,909 3.98% 194,113 2,065 4.25% Funds Sold 10,116 3 0.13% 16,645 32 0.74% ---------------------------------------------------------------------- Total Earning Assets 2,166,237 $31,636 5.92% 2,150,841 $33,869 6.27% =============== =============== Cash and Due From Banks 76,826 76,027 Allowance for Loan Losses (38,007) (30,347) Other Assets 281,869 266,797 -------------------------- ----------- Total Assets $2,486,925 $2,463,318 ========================== =========== LIABILITIES: Interest Bearing Deposits NOW Accounts $ 719,265 $ 225 0.13% $ 684,246 $ 636 0.37% Money Market Accounts 321,562 190 0.24% 360,940 716 0.79% Savings Accounts 118,142 14 0.05% 117,311 28 0.09% Time Deposits 392,006 2,066 2.14% 379,266 2,468 2.59% ---------------------------------------------------------------------- Total Interest Bearing Deposits 1,550,975 2,495 0.65% 1,541,763 3,848 0.99% Short-Term Borrowings 85,318 68 0.32% 69,079 110 0.62% Subordinated Notes Payable 62,887 927 5.89% 62,887 937 5.83% Other Long-Term Borrowings 53,221 568 4.33% 53,261 587 4.39% ---------------------------------------------------------------------- Total Interest Bearing Liabilities 1,752,401 $ 4,058 0.94% 1,726,990 $ 5,482 1.26% =============== =============== Noninterest Bearing Deposits 406,380 404,103 Other Liabilities 46,510 29,998 -------------------------- ----------- Total Liabilities 2,205,291 2,161,091 SHAREOWNERS' EQUITY: $ 281,634 $ 302,227 -------------------------- ----------- Total Liabilities and Shareowners' Equity $2,486,925 $2,463,318 ========================== =========== Interest Rate Spread $27,578 4.98% $28,387 5.01% ========================================== =============== Interest Income and Rate Earned(1) $31,636 5.92% $33,869 6.27% Interest Expense and Rate Paid(2) 4,058 0.76% 5,482 1.01% ------------------------------------------ --------------- Net Interest Margin $27,578 5.16% $28,387 5.26% ========================================== =============== Third Quarter 2008 Second Quarter 2008 --------------------------- --------------------------- (Dollars in Average Average Average Average thousands) Balance Interest Rate Balance Interest Rate ---------------------------------------------------------------------- ASSETS: Loans, Net of Unearned Interest $1,915,008 32,622 6.78% $1,908,802 33,610 7.08% Investment Securities Taxable Investment Securities 93,723 940 3.99% 93,814 1,028 4.38% Tax-Exempt Investment Securities 98,966 1,234 4.99% 94,371 1,200 5.09% ---------------------------------------------------------------------- Total Investment Securities 192,689 2,174 4.50% 188,185 2,228 4.73% Funds Sold 99,973 475 1.86% 206,984 1,028 1.96% ---------------------------------------------------------------------- Total Earning Assets 2,207,670 $35,271 6.36% 2,303,971 $36,866 6.43% =============== =============== Cash and Due From Banks 77,309 82,182 Allowance for Loan Losses (22,851) (20,558) Other Assets 266,510 269,176 -------------------------- ----------- Total Assets $2,528,638 $2,634,771 ========================== =========== LIABILITIES: Interest Bearing Deposits NOW Accounts $ 727,754 $ 1,443 0.79% $ 788,237 $ 1,935 0.99% Money Market Accounts 369,544 1,118 1.20% 376,996 1,210 1.29% Savings Accounts 117,970 30 0.10% 117,182 29 0.10% Time Deposits 410,101 3,224 3.13% 443,006 3,988 3.62% ---------------------------------------------------------------------- Total Interest Bearing Deposits 1,625,369 5,815 1.42% 1,725,421 7,162 1.67% Short-Term Borrowings 51,738 230 1.76% 55,830 296 2.13% Subordinated Notes Payable 62,887 936 5.83% 62,887 931 5.86% Other Long-Term Borrowings 43,237 488 4.48% 34,612 396 4.60% ---------------------------------------------------------------------- Total Interest Bearing Liabilities 1,783,231 $ 7,469 1.67% 1,878,750 $ 8,785 1.88% =============== =============== Noninterest Bearing Deposits 405,314 415,125 Other Liabilities 36,498 40,006 -------------------------- ----------- Total Liabilities 2,225,043 2,333,881 SHAREOWNERS' EQUITY: $ 303,595 $ 300,890 -------------------------- ----------- Total Liabilities and Shareowners' Equity $2,528,638 $2,634,771 ========================== =========== Interest Rate Spread $27,802 4.69% $28,081 4.55% ========================================== =============== Interest Income and Rate Earned(1) $35,271 6.36% $36,866 6.43% Interest Expense and Rate Paid(2) 7,469 1.35% 8,785 1.53% ------------------------------------------ --------------- Net Interest Margin $27,802 5.01% $28,081 4.90% ========================================== =============== First Quarter 2008 --------------------------- Average Average (Dollars in thousands) Balance Interest Rate ---------------------------------------------------------------------- ASSETS: Loans, Net of Unearned Interest $1,909,574 35,453 7.47% Investment Securities Taxable Investment Securities 94,786 1,108 4.67% Tax-Exempt Investment Securities 90,790 1,207 5.32% ---------------------------------------------------------------------- Total Investment Securities 185,576 2,315 4.99% Funds Sold 206,313 1,574 3.02% ---------------------------------------------------------------------- Total Earning Assets 2,301,463 $39,342 6.87% =============== Cash and Due From Banks 94,247 Allowance for Loan Losses (18,227) Other Assets 268,991 ------------------------------------------------------ Total Assets $2,646,474 ====================================================== LIABILITIES: Interest Bearing Deposits NOW Accounts $ 773,891 $ 3,440 1.79% Money Market Accounts 389,828 2,198 2.27% Savings Accounts 113,163 34 0.12% Time Deposits 467,280 4,809 4.14% ---------------------------------------------------------------------- Total Interest Bearing Deposits 1,744,162 10,481 2.42% Short-Term Borrowings 68,095 521 3.06% Subordinated Notes Payable 62,887 931 5.96% Other Long-Term Borrowings 27,644 331 4.82% ---------------------------------------------------------------------- Total Interest Bearing Liabilities 1,902,788 $12,264 2.59% =============== Noninterest Bearing Deposits 404,712 Other Liabilities 42,170 ------------------------------------------------------ Total Liabilities 2,349,670 SHAREOWNERS' EQUITY: $ 296,804 ------------------------------------------------------ Total Liabilities and Shareowners' Equity $2,646,474 ===================================================== Interest Rate Spread $27,078 4.28% ====================================================================== Interest Income and Rate Earned(1) $39,342 6.87% Interest Expense and Rate Paid(2) 12,264 2.14% ---------------------------------------------------------------------- Net Interest Margin $27,078 4.73% ====================================================================== (1) Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate. (2) Rate calculated based on average earning assets.