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Yardville National Bancorp Reports Third Quarter Earnings
Thu, 10/25/2007 - 17:55 — Zangani
Yardville National Bancorp (Nasdaq: YANB - News) reported net income for the third quarter of $1.7 million, compared to $5.3 million earned for the same period of 2006, while diluted earnings per share for the quarter were $0.15, compared with $0.47 for the third quarter of 2006.
For the first nine months of 2007, YNB reported a decline in net income to $10.2 million, compared with $15.6 million for the same period in 2006. Diluted earnings per share for the nine months ended September 30, 2007 were $0.90, compared to $1.37 for the same period in 2006. The decline in earnings was due to a reduction in net interest income partly reflecting the current lending environment, higher non-interest expenses and a higher provision for loan losses. These were partially offset by lower income tax expense and higher non-interest income. Expenses associated with merger-related matters also contributed to the lower earnings result.
At September 30, 2007 total loans were $1.93 billion, a decrease of 3.0 percent from $2.00 billion at September 30, 2006. Non-performing assets were up $5.9 million to $26.3 million at September 30, 2007, compared to $20.3 million at September 30, 2006, though approximately $3.0 million less than the prior quarter. Total non-performing assets were 1.01 percent of total assets at September 30, 2007, compared with 0.68 percent of total assets at September 30, 2006. The allowance for loan losses to total loans was 1.41 percent of total loans, covering 104.2 percent of total non-performing loans at September 30, 2007. Net loan chargeoffs declined to $4.4 million for the first nine months of 2007 compared to $6.6 million for the same period last year.
During the third quarter, YNB opened branches in Cranbury, Middlesex County, and Lawrenceville, Mercer County. At September 30, 2007, YNB had total deposits of $1.95 billion, compared to $2.03 billion at September 30, 2006. The deposit decline was partially due to the planned run-off of non-core deposits.
At September 30, 2007, YNB's total risk-based capital was 13.1 percent, Tier 1 capital to risk-weighted assets was 11.9 percent, and Tier 1 capital to average assets was 10.4 percent. For 2007, YNB paid total cash dividends of $0.46 per share.
On October 19, 2007, YNB shareholders approved a proposal for the above- referenced merger with The PNC Financial Services Group, Inc. (NYSE: PNC - News). Regulatory approval has been received for the merger transaction and it is expected to close on October 26, 2007.
YNB had $2.59 billion in assets at September 30, 2007, with 35 branches serving individuals and businesses in Mercer, Hunterdon, Burlington, Middlesex, Somerset and Ocean counties in New Jersey and Bucks County in Pennsylvania.
Forward-looking Statements
This press release and other statements made from time to time by Yardville's management contain express and implied statements relating to Yardville's future financial condition, results of operations, plans, objectives, performance, and business, which are considered forward-looking statements. These may include statements that relate to, among other things, profitability, liquidity, adequacy of the allowance for loan losses, plans for growth, interest rate sensitivity, market risk, regulatory compliance, and financial and other goals. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our expectations may not be achieved. Actual results may differ materially from those expected or implied as a result of certain risks and uncertainties, including risks and uncertainties detailed from time to time in our filings with the SEC, as well as other risks and uncertainties detailed from time to time in statements made by our management. Yardville assumes no obligation to update or supplement forward-looking statements except as may be required by applicable law or regulation.
L.G. Zangani, LLC provides financial public relations services to the Company. As such, L.G. Zangani, LLC and/or its officers, agents and employees, receives remuneration for public relations and/or other services performed for the Company. This remuneration may take the form of cash, capital stock in the Company, or warrants and/or options to purchase stock in the Company.
Contact: Kevin Tylus, President and COO, (609) 631-6196
Leonardo G. Zangani (908) 788-9660
YNB's website www.ynb.com
Investor Relations website www.zangani.com
Yardville National Bancorp
Summary of Financial Information
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per share
amounts) 2007 2006 2007 2006
Stock Information:
Weighted average shares
outstanding:
Basic 11,251 10,965 11,127 10,911
Diluted 11,504 11,345 11,440 11,314
Shares outstanding end of period 11,406 11,033
Earnings per share:
Basic $0.15 $0.49 $0.92 $1.43
Diluted 0.15 0.47 0.90 1.37
Dividends paid per share 0.115 0.115 0.345
Book value per share 17.16 17.51
Tangible book value per share 17.05 17.38
Closing price per share 33.63 35.66
Closing price to tangible book
value 197.24 % 205.18 %
Key Ratios:
Return on average assets 0.27 % 0.72 % 0.53 % 0.70 %
Return on average stockholders'
equity 3.58 11.46 7.16 11.47
Net interest margin 3.12 2.95 3.17 2.96
Net interest margin (tax
equivalent) (1) 3.21 3.02 3.26 3.03
Efficiency ratio 68.00 58.50 68.79 59.89
Equity-to-assets at period end 7.53 6.41
Tier 1 leverage ratio (2) 10.39 8.82
Asset Quality Data:
Net loan charge-offs $2,032 $2,835 $4,353 $6,598
Nonperforming assets as a
percentage of total assets 1.01 0.68 %
Allowance for loan losses at
period end as a percent of:
Total loans 1.41 1.12
Nonperforming loans 104.17 112.89
Nonperforming assets at period
end:
Nonperforming loans $26,266 $19,825
Other real estate - 502
Total nonperforming
assets $26,266 $20,327
(1) The net interest margin is equal to net interest income divided by
average interest earning assets. In order to make pre-tax income and
resultant yields on tax-exempt investments and loans on a basis
comparable to those on taxable investments and loans, a tax equivalent
adjustment is made to interest income. The tax equivalent adjustment
has been computed using the appropriate Federal income tax rate for
the period, and has the effect of increasing interest income by
$570,000 and $544,000 for the three month periods and $1,692,000 and
$1,614,000 for the nine months ended September 30, 2007 and 2006,
respectively.
(2) Tier 1 leverage ratio is Tier 1 capital to adjusted quarterly average
assets.
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per share
amounts) 2007 2006 2007 2006
INTEREST INCOME:
Interest and fees on loans $35,565 $38,062 $108,651 $110,790
Interest on deposits with banks 97 679 993 1,245
Interest on securities available for
sale 5,621 8,833 16,383 26,637
Interest on investment securities:
Taxable 16 22 52 71
Exempt from Federal income tax 1,137 1,044 3,304 3,079
Interest on Federal funds sold 136 241 476 521
Total Interest Income 42,572 48,881 129,859 142,343
INTEREST EXPENSE:
Interest on savings account deposits 7,182 7,061 21,443 20,182
Interest on certificates of deposit
of $100,000 or more 2,941 2,886 9,463 7,670
Interest on other time deposits 8,178 7,176 24,401 19,139
Interest on borrowed funds 3,751 9,177 10,981 27,873
Interest on subordinated debentures 1,412 1,411 4,203 4,077
Total Interest Expense 23,464 27,711 70,491 78,941
Net Interest Income 19,108 21,170 59,368 63,402
Less provision for loan losses 4,700 2,125 7,150 6,275
Net Interest Income After
Provision for Loan Losses 14,408 19,045 52,218 57,127
NON-INTEREST INCOME:
Service charges on deposit accounts 642 736 1,917 2,172
Securities gains, net 581 - 588 -
Income on bank owned life insurance 472 454 1,386 1,315
Other non-interest income 513 524 1,942 1,681
Total Non-Interest Income 2,208 1,714 5,833 5,168
NON-INTEREST EXPENSE:
Salaries and employee benefits 7,462 7,425 23,237 22,648
Occupancy expense, net 1,944 1,581 5,605 4,376
Equipment expense 770 794 2,450 2,446
Other non-interest expense 4,319 3,586 13,558 11,600
Total Non-Interest Expense 14,495 13,386 44,850 41,070
Income before income tax expense 2,121 7,373 13,201 21,225
Income tax expense 399 2,045 2,959 5,672
Net Income $1,722 $5,328 $10,242 $15,553
EARNINGS PER SHARE:
Basic $0.15 $0.49 $0.92 $1.43
Diluted 0.15 0.47 0.90 1.37
Weighted average shares outstanding:
Basic 11,251 10,965 11,127 10,911
Diluted 11,504 11,345 11,440 11,314
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
September 30, December 31,
(in thousands) 2007 2006 2006
Assets:
Cash and due from banks $28,252 $30,656 $30,355
Federal funds sold 13,400 26,465 3,265
Cash and Cash Equivalents 41,652 57,121 33,620
Interest bearing deposits with banks 23,750 67,544 32,358
Securities available for sale 401,142 707,239 402,641
Investment securities 102,919 95,509 96,072
Loans 1,934,903 1,995,003 1,972,881
Less: Allowance for loan losses (27,360) (22,380) (24,563)
Loans, net 1,907,543 1,972,623 1,948,318
Bank premises and equipment, net 12,645 11,697 12,067
Other real estate owned - 502 385
Bank owned life insurance 51,037 49,168 49,651
Other assets 51,482 42,250 45,619
Total Assets $2,592,170 $3,003,653 $2,620,731
Liabilities and Stockholders' Equity:
Deposits
Non-interest bearing $181,656 $216,746 $197,126
Interest bearing 1,765,307 1,815,459 1,806,157
Total Deposits 1,946,963 2,032,205 2,003,283
Borrowed funds
Securities sold under agreements to
repurchase 10,000 10,000 10,000
Federal Home Loan Bank advances 343,000 674,000 324,000
Subordinated debentures 62,892 62,892 62,892
Obligation for Employee Stock
Ownership Plan (ESOP) 1,125 1,828 1,688
Other 1,953 1,221 1,593
Total Borrowed Funds 418,970 749,941 400,173
Other liabilities 31,112 29,111 31,181
Total Liabilities $2,397,045 $2,811,257 $2,434,637
Stockholders' equity:
Common stock: no par value 115,365 107,682 108,728
Surplus 2,205 2,205 2,205
Undivided profits 91,165 97,659 86,100
Treasury stock, at cost (3,160) (3,160) (3,160)
Unallocated ESOP shares (1,125) (1,828) (1,688)
Accumulated other comprehensive loss (9,325) (10,162) (6,091)
Total Stockholders' Equity 195,125 192,396 186,094
Total Liabilities and
Stockholders' Equity $2,592,170 $3,003,653 $2,620,731
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Three Months Ended
September 30, 2007
Average
Average Yield /
(in thousands) Balance Interest Cost
INTEREST EARNING ASSETS:
Interest bearing deposits with banks $14,593 $97 2.66 %
Federal funds sold 10,808 136 5.03
Securities 508,861 6,774 5.32
Loans (1) 1,914,303 35,565 7.43
Total interest earning assets $2,448,565 $42,572 6.95 %
NON-INTEREST EARNING ASSETS:
Cash and due from banks $30,289
Allowance for loan losses (25,128)
Premises and equipment, net 12,769
Other assets 85,720
Total non-interest earning
assets 103,650
Total assets $2,552,215
INTEREST BEARING LIABILITIES:
Deposits:
Savings, money markets, and
interest bearing demand $895,285 $7,182 3.21 %
Certificates of deposit of
$100,000 or more 232,763 2,941 5.05
Other time deposits 651,416 8,178 5.02
Total interest bearing deposits 1,779,464 18,301 4.11
Borrowed funds 313,537 3,751 4.79
Subordinated debentures 62,892 1,412 8.98
Total interest bearing
liabilities $2,155,893 $23,464 4.35 %
NON-INTEREST BEARING LIABILITIES:
Demand deposits $185,626
Other liabilities 18,363
Stockholders' equity 192,333
Total non-interest bearing
liabilities and stockholders'
equity $396,322
Total liabilities and stockholders'
equity $2,552,215
Interest rate spread (2) 2.60 %
Net interest income and margin (3) $19,108 3.12 %
Net interest income and margin (tax
equivalent basis)(4) $19,678 3.21 %
Three Months Ended
September 30, 2006
Average
Average Yield /
(in thousands) Balance Interest Cost
INTEREST EARNING ASSETS:
Interest bearing deposits with banks $48,451 $679 5.61 %
Federal funds sold 18,250 241 5.28
Securities 799,020 9,899 4.96
Loans (1) 2,006,680 38,062 7.59
Total interest earning assets $2,872,401 $48,881 6.81 %
NON-INTEREST EARNING ASSETS:
Cash and due from banks $32,730
Allowance for loan losses (23,450)
Premises and equipment, net 11,811
Other assets 79,990
Total non-interest earning
assets 101,081
Total assets $2,973,482
INTEREST BEARING LIABILITIES:
Deposits:
Savings, money markets, and
interest bearing demand $936,087 $7,061 3.02 %
Certificates of deposit of
$100,000 or more 252,200 2,886 4.58
Other time deposits 619,723 7,176 4.63
Total interest bearing deposits 1,808,010 17,123 3.79
Borrowed funds 689,532 9,177 5.32
Subordinated debentures 62,892 1,411 8.97
Total interest bearing
liabilities $2,560,434 $27,711 4.33 %
NON-INTEREST BEARING LIABILITIES:
Demand deposits $212,068
Other liabilities 15,031
Stockholders' equity 185,949
Total non-interest bearing
liabilities and
stockholders' equity $413,048
Total liabilities and stockholders'
equity $2,973,482
Interest rate spread (2) 2.48 %
Net interest income and margin (3) $21,170 2.95 %
Net interest income and margin (tax
equivalent basis)(4) $21,714 3.02 %
(1) Loan origination fees are considered an adjustment to interest income.
For the purpose of calculating loan yields, average loan balances
include nonaccrual balances with no related interest income.
(2) The interest rate spread is the difference between the average yield
on interest earning assets and average rate paid on interest bearing
liabilities.
(3) The net interest margin is equal to net interest income divided by
average interest earning assets.
(4) In order to make pre-tax income and resultant yields on tax-exempt
investments and loans on a basis comparable to those on taxable
investments and loans, a tax equivalent adjustment is made to interest
income. The tax equivalent adjustment has been computed using the
appropriate Federal income tax rate for the period and has the effect
of increasing interest income by $570,000 and $544,000 for the three
month periods ended September 30, 2007 and 2006, respectively.
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Nine Months Ended
September 30, 2007
Average
Average Yield /
(in thousands) Balance Interest Cost
INTEREST EARNING ASSETS:
Interest bearing deposits with banks $25,548 $993 5.18 %
Federal funds sold 14,567 476 4.36
Securities 502,032 19,739 5.24
Loans (1) 1,952,928 108,651 7.42
Total interest earning assets $2,495,075 $129,859 6.94 %
NON-INTEREST EARNING ASSETS:
Cash and due from banks $30,754
Allowance for loan losses (24,858)
Premises and equipment, net 12,477
Other assets 84,117
Total non-interest earning assets 102,490
Total assets $2,597,565
INTEREST BEARING LIABILITIES:
Deposits:
Savings, money markets, and
interest bearing demand $902,460 $21,443 3.17 %
Certificates of deposit of
$100,000 or more 252,883 9,463 4.99
Other time deposits 659,916 24,401 4.93
Total interest bearing deposits 1,815,259 55,307 4.06
Borrowed funds 321,505 10,981 4.55
Subordinated debentures 62,892 4,203 8.91
Total interest bearing
liabilities $2,199,656 $70,491 4.27 %
NON-INTEREST BEARING LIABILITIES:
Demand deposits $187,605
Other liabilities 19,634
Stockholders' equity 190,670
Total non-interest bearing
liabilities and stockholders'
equity $397,909
Total liabilities and stockholders'
equity $2,597,565
Interest rate spread (2) 2.67 %
Net interest income and margin (3) $59,368 3.17 %
Net interest income and margin (tax
equivalent basis)(4) $61,060 3.26 %
Nine Months Ended
September 30, 2006
Average
Average Yield /
(in thousands) Balance Interest Cost
INTEREST EARNING ASSETS:
Interest bearing deposits with banks $31,366 $1,245 5.29 %
Federal funds sold 14,068 521 4.94
Securities 809,409 29,787 4.91
Loans (1) 2,002,629 110,790 7.38
Total interest earning assets $2,857,472 $142,343 6.64 %
NON-INTEREST EARNING ASSETS:
Cash and due from banks $34,635
Allowance for loan losses (23,165)
Premises and equipment, net 11,716
Other assets 78,102
Total non-interest earning
assets 101,288
Total assets $2,958,760
INTEREST BEARING LIABILITIES:
Deposits:
Savings, money markets, and
interest bearing demand $952,150 $20,182 2.83 %
Certificates of deposit of
$100,000 or more 243,014 7,670 4.21
Other time deposits 587,183 19,139 4.35
Total interest bearing deposits 1,782,347 46,991 3.52
Borrowed funds 707,701 27,873 5.25
Subordinated debentures 62,892 4,077 8.64
Total interest bearing
liabilities $2,552,940 $78,941 4.12 %
NON-INTEREST BEARING LIABILITIES:
Demand deposits $210,741
Other liabilities 14,255
Stockholders' equity 180,824
Total non-interest bearing
liabilities and
stockholders' equity $405,820
Total liabilities and stockholders'
equity $2,958,760
Interest rate spread (2) 2.52 %
Net interest income and margin (3) $63,402 2.96 %
Net interest income and margin (tax
equivalent basis)(4) $65,016 3.03 %
(1) Loan origination fees are considered an adjustment to interest income.
For the purpose of calculating loan yields, average loan balances
include nonaccrual balances with no related interest income.
(2) The interest rate spread is the difference between the average yield
on interest earning assets and average rate paid on interest bearing
liabilities.
(3) The net interest margin is equal to net interest income divided by
average interest earning assets.
(4) In order to make pre-tax income and resultant yields on tax-exempt
investments and loans on a basis comparable to those on taxable
investments and loans, a tax equivalent adjustment is made to interest
income. The tax equivalent adjustment has been computed using the
appropriate Federal income tax rate for the period and has the effect
of increasing interest income by $1,692,000 and $1,614,000 for the
nine month periods ended September 30, 2007 and 2006, respectively.
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