EX-99.1 2 exhibit99172610.htm EXHIBIT 99.1 exhibit99172610.htm
Exhibit 99.1
500 12th Ave. South * Nampa, ID 83651
 
Contact:
Home Federal Bancorp, Inc.
Len E. Williams, President & CEO
Eric S. Nadeau, EVP, Treasurer & CFO
208-466-4634
www.myhomefed.com
 
HOME FEDERAL BANCORP, INC. ANNOUNCES THIRD QUARTER RESULTS

Nampa, ID (July 27, 2010) – Home Federal Bancorp, Inc. (the “Company”) (Nasdaq GSM: HOME), the parent company of Home Federal Bank (the “Bank”), today announced third quarter results for the fiscal year ending September 30, 2010.  For the quarter ended June 30, 2010, the Company reported a net loss of ($1.9 million), or ($0.12) per diluted share, compared to a net loss of ($1.2 million), or ($0.08) per diluted share, for the same period a year ago.  For the nine months ended June 30, 2010, the Company reported a net loss of ($3.9 million), or ($0.25) per diluted share, compared to a net loss of ($1.6 million), or $(0.10) per diluted share, for the same period last year.  Total assets increased $17.1 million, or 2.0%, from $852.1 million at March 31, 2010, to $869.2 million at June 30, 2010.

The following summarizes key activities of the Company during the quarter ended June 30, 2010:

§  
Deposits increased $20.0 million during the quarter as core deposits (checking, money market and savings accounts) increased $29.1 million
§  
Cash and cash equivalents continued to increase as a result of strong deposit growth and declining loan balances
§  
Gross loans declined $32.2 million from the linked quarter as quality loan demand remains weak
§  
Nonperforming assets decreased $3.4 million from the linked quarter to $60.6 million
§  
Provision for loan losses totaled $3.3 million while net charge-offs totaled $4.0 million. The Company also adjusted certain preliminary estimated fair values related to loans purchased in the August 7, 2009, acquisition of the failed Community First Bank (the “Acquisition”), resulting in a decrease in the allowance for loan losses and the indemnification receivable from the Federal Deposit Insurance Corporation (“FDIC”)
§  
Valuation adjustments on real estate owned totaled $418,000
§  
The Bank received $4.1 million in reimbursed losses from the FDIC on assets covered under the loss share agreement in connection with the Acquisition.

On August 7, 2009, the Company purchased certain assets and assumed certain liabilities of Community First Bank located in Prineville, Oregon in an FDIC-facilitated acquisition, which has been incorporated prospectively in the Company’s financial statements. Therefore, year over year results of operations may not be comparable.

Len E. Williams, the Company’s President and CEO, commented “We continue to execute our core deposit growth strategy. However, the stagnant economies of Southwestern Idaho and Central Oregon continue to challenge our lending and credit teams as loan balances decline and nonperforming assets remain at high levels. We intend on deploying a portion of our significant cash balance over the next couple of quarters into select high-quality securities. However, we remain cautious due to the extremely low yields on short and medium-term securities. We also have a stock repurchase plan in place that authorizes the repurchase of up to 834,900 shares of our common stock, and we evaluate that alternative.   Lastly, we will endure organizational change in the next quarter as we convert core applications systems in each region. We look forward to the integration of our Central Oregon customers into a common platform and to the benefits of a strong core services provider.”


 
 
 

Home Federal Bancorp, Inc.
July 27, 2010
Page 2 of 8


Results of operations

Total revenue for the quarter ended June 30, 2010, which consisted of net interest income before the provision for loan losses and noninterest income, increased $500,000, or 6%, to $8.8 million compared to $8.3 million for the same period of 2009. Total revenue for the quarter ended June 30, 2010, was unchanged from the second quarter of fiscal 2010. Total revenue for the nine months ended June 30, 2010, increased $2.1 million or 8% to $26.9 million, compared to $24.8 million for the same period of the prior year.

Net interest income. Net interest income before the provision for loan losses increased $215,000, or 4%, to $5.9 million for the quarter ended June 30, 2010, compared to $5.7 million for the same quarter of the prior year. Net interest income before provision for loan losses for the nine months ended June 30, 2010, increased $1.2 million or 7% to $18.6 million, from $17.4 million from the same period of the prior year. For both periods, the increase was attributable to the increase in earning assets. The Company’s cost of funds declined to 1.79% in the quarter ended June 30, 2010, compared to 2.54% in the year-ago period.

The Company’s net interest margin decreased 60 basis points to 2.93% for the quarter ended June 30, 2010, when compared to the quarter ended June 30, 2009, and was down 36 basis points from 3.29% in the linked quarter.  Net interest margin was reduced by the mix of interest-earning assets as we continued to increase our liquidity. In addition, the increase in nonperforming loans purchased in the Acquisition is reducing the average yield earned on the loan portfolio.

Provision for loan losses. A provision for loan losses of $3.3 million was recorded for the quarter ended June 30, 2010, compared to $3.5 million for the same period of the prior year. The provision recorded during the third quarter of fiscal 2010 was primarily a result of the continued signs of stress in the commercial real estate portfolio in the Idaho Region, including higher delinquencies, nonperforming loans and classified loans at June 30, 2010. The provision for loan losses was $6.4 million for the nine months ended June 30, 2010, compared to $8.1 million for the same period in 2009.

Noninterest income. Noninterest income increased $285,000, or 11%, to $2.9 million for the quarter ended June 30, 2010, compared to $2.6 million for the same quarter a year ago and $2.5 million for the linked quarter.  Service charges and fees increased $317,000 from the prior year quarter reflecting the increase in accounts assumed in the Acquisition. In connection with management’s continued identification and estimation of fair values of assets and liabilities assumed in the Acquisition, a net fair value adjustment of $278,000 was recorded in other income during the quarter ended June 30, 2010. These increases were offset by a decrease in gain on sale of loans from the prior year of $291,000 as residential loan volumes continue to be down significantly from the prior year, despite historically-low interest rates.

Noninterest income for the nine months ended June 30, 2010, increased $823,000, or 11%, to $8.2 million compared to $7.4 million for the same period of the prior year.  Service charges and fees increased $726,000 from the prior year period but were offset by a decline in gain on sale of loans, which decreased $580,000 from the prior year.  Accretable income related to the FDIC indemnification receivable of $328,000 was recorded in the nine months ended June 30, 2010.  In addition, rental income increased $131,000 from the same period in 2009 as a result of the increase in rental income from foreclosed properties.

Management expects newly effective overdraft and interchange income rules to have a significant impact on noninterest income in future quarters. Customers are now explicitly provided the opportunity to “opt-out” of using the Bank’s overdraft services on debit card and ATM transactions. While the Company is diligently educating customers on the new regulations there may be a large percentage of customers who choose to opt-out of this service, which could reduce noninterest income in the future.

Historically, the Bank relied on low-balance, high-transaction deposit accounts for funding, which resulted in a higher-than-peer ratio of nonsufficient fee income as a percentage of total revenue. In recent years, management has changed the Bank’s deposit aggregation strategy by focusing on higher-balance consumer, small business and commercial deposit relationships, which may result in less fee income, but more stable and low-cost funding
 
 
Home Federal Bancorp, Inc.
July 27, 2010
Page 3 of 8
 
sources. Additionally, the Bank offered a new interest-bearing checking account in 2009 that is designed to provide stable high-balance accounts with features intended to increase interchange income, which may offset some of the declines in nonsufficient fund fees.

Noninterest expense. Noninterest expense for the quarter ended June 30, 2010, increased $1.7 million, or 24%, to $8.7 million from $7.0 million for the comparable period a year earlier but declined $892,000 from the linked quarter. Noninterest expense for the nine months ended June 30, 2010, increased $7.7 million or 39% to $27.3 million from $19.6 million from the same period in 2009. Noninterest expense was higher compared to the same period in 2009 as a result of the Acquisition and the costs associated with maintaining two back offices.  The Bank will continue to operate separate back offices until a full conversion and integration to a new core application platform is completed, which is anticipated in the fourth quarter of fiscal 2010.

Management continues to review and address branch performance in order to improve profitability. During the quarter ended June 30, 2010, the Bank announced the intent to close its Walmart office in Nampa, Idaho, in July 2010. Accounts and customers will be relocated and referred to the Bank’s main office in downtown Nampa. After the closure of this office, two Walmart branches will remain in the Bank’s footprint.

Balance Sheet

Total assets increased $196.5 million, or 29%, to $869.2 million at June 30, 2010, compared to $672.7 million a year earlier primarily as a result of the Acquisition. Assets increased $17.1 million during the third quarter of fiscal year 2010 from $852.1 million at March 31, 2010.

Cash and Investments. Cash and amounts due from depository institutions increased to $170.2 million at June 30, 2010, from $50.0 million at September 30, 2009, and $26.8 million at June 30, 2009. The Company has increased its liquidity as a result of the very low interest rate environment, which makes medium-term investments unattractive, and to provide increased flexibility for potential acquisitions. In addition, deposit growth continues to be extremely strong.  The strong deposit growth combined with limited creditworthy lending opportunities resulted in a significant increase in cash balances.

Investments decreased $6.0 million, or 4%, to $163.7 million at June 30, 2010, compared to $169.7 million at June 30, 2009.  The decrease was attributable to regular principal repayments on mortgage-backed securities, offset partially by investment purchases.

Loans. Gross loans at June 30, 2010, increased $48.2 million or 11% to $475.6 million, compared to $427.4 million at June 30, 2009.  Gross loans purchased in the Acquisition totaled $98.1 million at June 30, 2010. The increase in loans as a result of the Acquisition was offset by lower balances in real estate loans in the Idaho Region when compared to the same period in 2009.

The loan portfolio in the Idaho Region declined $48.0 million at June 30, 2010, from June 30, 2009, with one-to-four family residential real estate loans declining $30.2 million from the prior year. This was consistent with management’s strategy to reduce the Bank’s exposure to loans secured by residential real estate. Real estate construction loans declined $10.8 million at June 30, 2010, compared to June 30, 2009.  Real estate construction loans have experienced high levels of losses over the past year as a result of declining real estate prices and excess housing inventory in the Idaho Region.

Asset Quality. The allowance for loan losses was $17.9 million, or 3.76%, of gross loans at June 30, 2010, compared to $28.7 million, or 5.32% of gross loans at September 30, 2009, and $8.3 million, or 1.93% of gross loans at June 30, 2009. The general allowance for loan losses allocated to loans covered under the loss share agreement with the FDIC in connection with the Acquisition totaled $3.2 million, or 3.30% of all covered loans. The allowance for loan losses allocated to the Idaho Region loan portfolio was $14.7 million, or 3.88% of the portfolio. Net charge-offs totaled $4.0 million during the quarter ended June 30, 2010.
 
 
Home Federal Bancorp, Inc.
July 27, 2010
Page 4 of 8
 
Since the Acquisition, the Company has continued to review preliminary estimates of fair values of loans purchased in the Acquisition. During this allocation period, management obtained information on additional loans that evidence credit impairment on the date of the Acquisition. Additionally, management updated the preliminary fair values of loans previously identified as purchased impaired loans on the date of acquisition. These adjustments reduced the preliminary estimated fair values of purchased impaired loans. Lastly, management updated preliminary estimated loss rates for loans acquired, which resulted in a reduction in the allowance for loan losses. The adjustment in the allowance for loan losses on purchased loans resulted in a reduction in the FDIC indemnification receivable due to lower loss estimates, which was offset somewhat by the reduction in estimated fair values of purchased impaired loans. The difference between the allowance for loan losses adjustment and the reduction in the FDIC indemnification receivable resulted in other income due to fair value adjustments of $278,000 during the quarter ended June 30, 2010. Should loans purchased in the Acquisition deteriorate further, the Company may be required to record a provision for loan losses and increase the allowance for loan losses in future periods.

Loans delinquent 30 to 89 days totaled $12.3 million at June 30, 2010, compared to $10.7 million at March 31, 2010, including $6.9 million and $4.4 million, respectively, of delinquent loans covered by the loss share agreement with the FDIC. Nonperforming assets, which include nonaccrual loans and real estate owned, totaled $60.6 million at June 30, 2010, compared to $56.9 million at September 30, 2009, and $25.1 million at June 30, 2009. Real estate owned and other repossessed assets decreased $6.1 million or 33% to $12.3 million compared to $18.4 million as of September 30, 2009.  Real estate owned and other repossessed assets was comprised of $6.9 million of land development and speculative one-to-four family construction projects, $3.4 million of commercial real estate, and $2.0 million of one-to-four family residential properties.

The following table summarizes nonperforming loans and real estate owned at June 30, 2010, and March 31, 2010:
 
 
 
June 30, 2010    
  
March 31, 2010     
  
Quarterly Change
  
(in thousands)
Covered
Assets
  
Legacy(1)
Portfolio
  
 
 Total
  
Covered
Assets
  
Legacy(1)
Portfolio
  
Total
Portfolio
  
Covered
Assets
  
Legacy(1)
Portfolio
  
 
 Total
  
Acquisition and
   development
$ 7,936
  
$3,378
  
$11,314
  
$ 7,382
  
$1,641
  
$9,023
  
$    554
  
$1,737
  
$2,291
  
One-to-four family
    construction
347
  
446
  
793
  
740
  
828
  
1,568
  
(393
 ) 
(382
 ) 
(775
 ) 
Commercial real
    estate
15,049
  
8,907
  
23,956
  
16,163
  
9,993
  
26,156
  
(1,114
 ) 
(1,086
 ) 
(2,200
 ) 
One-to-four family
     residential
2,244
  
5,879
  
8,123
  
3,413
  
7,546
  
10,959
  
(1,169
 ) 
(1,667
 ) 
(2,836
 ) 
Other
2,105
  
1,985
  
4,090
  
2,689
  
50
  
2,739
  
(584
 ) 
1,935
  
1,351
  
  Total
        nonperforming
        loans
27,681
  
20,595
  
48,276
  
30,387
  
20,058
  
50,445
  
(2,706
 ) 
537
  
(2,169
 ) 
Real estate owned
      and other
      repossessed assets
6,291
  
6,016
  
12,307
  
5,547
  
8,017
  
13,564
  
744
  
(2,001
 ) 
(1,257
 ) 
Total nonperforming
      assets
$33,972
  
$26,611
  
$60,583
  
$35,934
  
$28,075
  
$64,009
  
$(1,962
 ) 
$(1,464
 ) 
$(3,426
 ) 

_________________________
(1)  
Assets included within the Idaho Region

Deposits and borrowings. Deposits increased $198.9 million, or 53%, to $574.9 million at June 30, 2010, compared to $376.0 million at June 30, 2009, primarily as a result of the Acquisition.  Deposits in the Central Oregon Region totaled $157.5 million at June 30, 2010, compared to $143.5 million on the date of the Acquisition. Core deposits (defined as checking, savings and money market accounts) in the Central Oregon Region totaled $98.0 million at June 30, 2010, compared to $68.0 million on the date of the Acquisition, highlighting the execution of the retail banking division’s goal to increase core deposits.  Total deposits increased $20.0 million from the linked quarter including an increase of $29.1 million in core deposits and a decrease of $9.1 million in certificates of deposit.
 
 
Home Federal Bancorp, Inc.
July 27, 2010
Page 5 of 8
 
FHLB advances and other borrowings decreased $15.4 million, or 17%, to $73.5 million at June 30, 2010, compared to $88.9 million at June 30, 2009.  The decrease resulted from maturing FHLB advances being repaid with excess liquidity.

Equity. Stockholders’ equity increased $7.1 million, or 4%, to $205.8 million at June 30, 2010, compared to $198.7 million at June 30, 2009. The extraordinary gain of $15.6 million associated with the Acquisition was the most significant factor in the increase in stockholders’ equity, which occurred in the quarter ended September 30, 2009.  The gain was offset by dividends of $3.4 million and a loss from operations of $9.0 million for the twelve months ended June 30, 2010.

About the Company
 
Home Federal Bancorp, Inc., is headquartered in Nampa, Idaho, and is the parent company of Home Federal Bank, a community bank originally organized in 1920. The Company serves the Treasure Valley region of Southwestern Idaho and the Tri-County Region of Central Oregon through 22 full-service banking offices and one commercial loan center. The Company's common stock is traded on the NASDAQ Global Select Market under the symbol "HOME." The Company's stock is also included in the Russell 2000 Index. For more information, visit the Company web site at www.myhomefed.com.

Forward-Looking Statements:
 
Statements in this news release regarding future events, performance or results are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”) and are made pursuant to the safe harbors of the PSLRA.  These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company’s mission and vision.  These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties.  Actual results could be materially different from those expressed or implied by the forward-looking statements. Factors that could cause results to differ include but are not limited to: general economic and banking business conditions, competitive conditions between banks and non-bank financial service providers, interest rate fluctuations, the credit risk of lending activities, including changes in the level and trend of loan delinquencies and write-offs; results of examinations by our banking regulators, regulatory and accounting changes, risks related to construction and development lending, commercial and small business banking, our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames, and other risks.  Additional factors that could cause actual results to differ materially are disclosed in Home Federal Bancorp, Inc.'s recent filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended September 30, 2009, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  Forward-looking statements are accurate only as of the date released, and we do not undertake any responsibility to update or revise any forward-looking statements to reflect subsequent events or circumstances.
 


 
 
 
Home Federal Bancorp, Inc.
July 27, 2010
Page 6 of 8


HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) (Unaudited)
  
June 30,
 2010
    
September 30,
 2009
    
June 30,
 2009
  
                   
ASSETS
                  
 
                        
   Cash and amounts due from depository institutions
   $   161,735     $   46,783     $   26,778  
Federal funds sold
     8,500       3,170       -  
        Cash and cash equivalents
     170,235       49,953       26,778  
Investments available for sale, at fair value
     163,650       169,320       169,716  
FHLB stock, at cost
     10,326       10,326       9,591  
    Loans receivable, net of allowance for loan losses of $17,872,
          $28,735, and $8,266
      456,879        510,629        418,198  
Loans held for sale
     2,494       862       5,064  
Accrued interest receivable
     2,330       2,781       2,209  
Property and equipment, net
     27,122       20,462       17,057  
Bank owned life insurance
     12,330       12,014       11,906  
Real estate and other property owned
     12,308       18,391       8,614  
FDIC indemnification receivable, net
     7,607       30,038       -  
Deferred income tax asset, net
     -       -       1,853  
Other assets
     3,941       3,123       1,757  
TOTAL ASSETS
   $ 869,222     $ 827,899     $ 672,743  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
                         
LIABILITIES
                        
Deposit accounts:
                        
Noninterest-bearing demand deposits
   $ 70,718     $ 68,156     $ 39,931  
Interest-bearing demand deposits
     225,128       176,049       131,202  
Savings deposits
     51,304       41,756       35,880  
Certificates of deposit
     227,729       228,897       168,983  
    Total deposit accounts
     574,879       514,858       375,996  
Advances by borrowers for taxes and insurance
     518       1,132       589  
Interest payable
     560       553       370  
Deferred compensation
     5,395       5,260       5,219  
FHLB advances and other borrowings
     73,536       84,737       88,891  
Deferred income tax liability, net
     2,714       5,571       -  
Other liabilities
     5,788       6,123       3,030  
   Total liabilities
     663,390       618,234       474,095  
STOCKHOLDERS’ EQUITY
                        
Serial preferred stock, $.01 par value; 10,000,000 authorized;
                        
issued and outstanding, none
     -       -       -  
Common stock, $.01 par value; 90,000,000 authorized;
                        
issued and outstanding:
                        
          June 30, 2010 - 17,460,311 issued; 16,687,760 outstanding
     167       167       167  
          Sept. 30, 2009 - 17,445,311 issued; 16,698,168 outstanding
                        
          June 30, 2009 - 17,445,311 issued; 16,698,168 outstanding
                        
Additional paid-in capital
     152,272       150,782       150,391  
Retained earnings
     58,019       64,483       55,643  
Unearned shares issued to ESOP
     (8,917 )     (9,699 )     (9,926 )
Accumulated other comprehensive income
     4,291       3,932       2,373  
Total stockholders’ equity
     205,832       209,665       198,648  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 869,222     $ 827,899     $ 672,743  


 
 
 

Home Federal Bancorp, Inc.
July 27, 2010
Page 7 of 8



HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data) (Unaudited)
  
Three Months Ended
 June 30,
    
Nine Months Ended
 June 30,
  
   
2010
    
2009
    
2010
    
2009
  
Interest and dividend income:
                        
Loan interest
   $ 6,918     $ 6,418     $ 21,054     $ 20,337  
Mortgage-backed security interest
     1,479       1,983       4,831       6,311  
Other interest and dividends
     104       9       240       20  
Total interest and dividend income
     8,501       8,410       26,125       26,668  
Interest expense:
                                
Deposits
     1,781       1,629       5,129       5,389  
    FHLB      FHLB advances and other borrowings
     792       1,068       2,385       3,861  
Total interest expense
     2,573       2,697       7,514       9,250  
Net interest income
     5,928       5,713       18,611       17,418  
Provision for loan losses
     3,300       3,450       6,375       8,085  
Net interest income after provision for loan losses
     2,628       2,263       12,236       9,333  
Noninterest income:
                                
Service charges and fees
     2,325       2,008       6,735       6,009  
Gain on sale of loans
     125       416       433       1,013  
    Increase in cash surrender value of life insurance
      105        107        316        317  
Other
     341       80       756       78  
Total noninterest income
     2,896       2,611       8,240       7,417  
Noninterest expense:
                                
Compensation and benefits
     4,660       3,594       13,966       10,948  
Occupancy and equipment
     979       804       3,023       2,303  
Data processing
     929       654       2,526       1,773  
Advertising
     233       211       775       656  
Postage and supplies
     173       126       516       409  
Professional services
     391       236       1,375       870  
Insurance and taxes
     423       783       1,461       1,244  
Provision for real estate owned
     418       367       2,509       528  
Other
     462       239       1,160       888  
Total noninterest expense
     8,668       7,014       27,311       19,619  
Loss before income taxes
     (3,144 )     (2,140 )     (6,835 )     (2,869 )
Income tax benefit
     (1,203 )     (894 )     (2,654 )     (1,298 )
           Loss before extraordinary item
     (1,941 )     (1,246 )     (4,181 )     (1,571 )
Extraordinary gain on acquisition, less income tax of $195
     -       -       305       -  
           Net loss
   $ (1,941 )   $ (1,246 )   $ (3,876 )   $ (1,571 )
                                 
Loss per common share before extraordinary item:
                                
Basic
   $ (0.12 )   $ (0.08 )   $ (0.27 )   $ (0.10 )
Diluted
     (0.12 )     (0.08 )     (0.27 )     (0.10 )
Earnings per common share of extraordinary item:
                                
            Basic
     n/a       n/a     $ 0.02       n/a  
            Diluted
     n/a       n/a       0.02       n/a  
Loss per common share after extraordinary item:
                                
Basic
   $ (0.12 )   $ (0.08 )   $ (0.25 )   $ (0.10 )
Diluted
     (0.12 )     (0.08 )     (0.25 )     (0.10 )
Weighted average number of shares outstanding:
                                
Basic
     15,543,199       15,352,714       15,491,203       15,742,102  
Diluted
     15,543,199       15,352,714       15,491,203       15,742,102  
                                 
Dividends declared per share:
   $ 0.055     $ 0.055     $ 0.165     $ 0.165  

 
 
 
Home Federal Bancorp, Inc.
July 27, 2010
Page 8 of 8 


HOME FEDERAL BANCORP, INC. AND SUBSIDIARY
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands, except share and per share data) (Unaudited)
  
   
At or For the Quarter Ended
  
   
2010
    
2009
  
   
June 30
    
March 31
    
December 31
    
September 30
    
June 30
  
SELECTED PERFORMANCE RATIOS
                              
Return (loss) on average assets (1)
     (0.90 )%     (0.79 )%     (0.15 )%     4.94 %     (0.72 )%
Return (loss) on average equity (1)
     (3.74 )     (3.11 )     (0.59 )     19.41       (2.48 )
Net interest margin (1)
     2.93       3.29       3.37       3.53       3.53  
Efficiency ratio (2)
     98.23       109.00       98.13       112.59       84.26  
                                         
PER SHARE DATA
                                        
Diluted loss per share before extr. item
   $ (0.12 )   $ (0.12 )   $ (0.02 )   $ (0.36 )   $ (0.08 )
Diluted earnings per share of extr. item
     -       0.02       -       0.98       -  
Diluted earnings (loss) per share after extr. item
     (0.12 )     (0.10 )     (0.02 )     0.63       (0.08 )
Book value per outstanding share
     12.33       12.41       12.48       12.56       11.90  
Cash dividends declared per share
     0.055       0.055       0.055       0.055       0.055  
Average number of diluted shares outstanding(3)
     15,543,199       15,481,827       15,447,705       15,381,657       15,352,714  
                                         
ASSET QUALITY
                                        
Allowance for loan losses
   $ 17,872     $ 27,779     $ 28,141     $ 28,735     $ 8,266  
Nonperforming loans
     48,275       50,445       48,039       38,492       16,462  
Nonperforming assets
     60,583       64,009       62,821       56,883       25,076  
Nonperforming covered assets(4)
     33,972       35,934       37,173       34,224       --  
Total covered assets(4)
     102,516       115,286       126,310       133,882       --  
                                         
Allowance for loan losses to non-performing loans
     37.02 %     55.07 %     58.58 %     74.65 %     50.21 %
Allowance for loan losses to gross loans
     3.76       5.47       5.34       5.32       1.93  
  Allowance - covered losses to covered loans
     3.30       14.32       13.40       13.30       --  
  Allowance - uncovered losses to uncovered loans
     3.88       3.03       2.98       2.90       1.93  
Nonperforming loans to gross loans
     10.15       9.94       9.12       7.13       3.85  
Nonperforming assets to total assets
     6.97       7.51       7.64       6.87       3.73  
Nonperforming loans to gross loans not covered(5)
     5.43       5.04       4.14       2.84       3.85  
Nonperforming assets to total assets not covered(5)
     3.47       3.81       3.66       3.26       3.73  
                                         
FINANCIAL CONDITION DATA
                                        
Average interest-earning assets
   $ 808,792     $ 767,364     $ 756,308     $ 728,515     $ 647,499  
Average interest-bearing liabilities
     576,113       539,603       527,438       503,636       441,036  
Net average earning assets
     232,679       227,761       228,870       224,879       206,463  
Average interest-earning assets to average
     interest-bearing liabilities
     140.39 %     142.21 %     143.39 %     144.65 %     146.81 %
Stockholders’ equity to assets
     23.68       24.30       25.34       25.32       29.53  
                                         
STATEMENT OF INCOME DATA
                                        
Interest income
   $ 8,501     $ 8,738     $ 8,886     $ 9,159     $ 8,410  
Interest expense
     2,573       2,436       2,505       2,727       2,697  
Net interest income
     5,928       6,302       6,381       6,432       5,713  
Provision for loan losses
     3,300       2,375       700       8,000       3,450  
Noninterest income
     2,896       2,469       2,875       1,874       2,611  
Noninterest expense
     8,668       9,560       9,083       9,352       7,014  
Net loss before taxes
     (3,144 )     (3,164 )     (527 )     (9,046 )     (2,140 )
Income tax benefit
     (1,203 )     (1,233 )     (218 )     (3,452 )     (894 )
    Net loss before extraordinary item
   $ (1,941 )   $ (1,931 )   $ (309 )   $ (5,594 )   $ (1,246 )
                                         
Extraordinary gain, net of tax
     -       305       -       15,291       -  
    Net income (loss)
   $ (1,941 )   $ (1,626 )   $ (309 )   $ 9,697     $ (1,246 )
                                         
Total revenue (6)
   $ 8,824     $ 8,771     $ 9,256     $ 8,306     $ 8,324  

(1)  
 Amounts are annualized.
(2)  
 Noninterest expense divided by net interest income plus noninterest income.
(3)  
Amounts calculated exclude ESOP shares not committed to be released and unvested restricted shares.
(4)  
Loans and other real estate owned covered by a loss share agreement with the FDIC.
(5)  
Ratio excludes loans and real estate owned covered by a loss share agreement with the FDIC.
(6)  
Net interest income plus noninterest income.