T
|
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
£
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Florida
|
59-2273542
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
217
North Monroe Street, Tallahassee, Florida
|
32301
|
(Address
of principal executive office)
|
(Zip
Code)
|
Large
accelerated filer £
|
Accelerated
filer x
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
(Do
not check if smaller reporting
company)
|
PART
I – Financial Information
|
Page
|
|
Item
1.
|
Consolidated
Financial Statements (Unaudited)
|
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4
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||
5
|
||
6
|
||
7
|
||
8
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||
Item
2.
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17
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Item
3.
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33
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Item
4.
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33
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PART
II – Other Information
|
||
Item
1.
|
33
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|
Item
1A.
|
33
|
|
Item
2.
|
34
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Item
3.
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34
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|
Item
4.
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34
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Item
5.
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35
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Item
6.
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35
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|
36
|
|
§
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the
frequency and magnitude of foreclosure of our
loans;
|
|
§
|
the
effects of our lack of a diversified loan portfolio, including the risks
of geographic and industry
concentrations;
|
|
§
|
the
accuracy of our financial statement estimates and assumptions, including
the estimate for our loan loss
provision;
|
|
§
|
our
ability to integrate the business and operations of companies and banks
that we have acquired, and those we may acquire in the
future;
|
|
§
|
our
need and our ability to incur additional debt or equity
financing;
|
|
§
|
the
strength of the United States economy in general and the strength of the
local economies in which we conduct
operations;
|
|
§
|
the
effects of harsh weather conditions, including
hurricanes;
|
|
§
|
inflation,
interest rate, market and monetary
fluctuations;
|
|
§
|
effect
of changes in the stock market and other capital
markets;
|
|
§
|
legislative
or regulatory changes;
|
|
§
|
our
ability to comply with the extensive laws and regulations to which we are
subject;
|
|
§
|
the
willingness of clients to accept third-party products and services rather
than our products and services and vice
versa;
|
|
§
|
changes
in the securities and real estate
markets;
|
|
§
|
increased
competition and its effect on
pricing;
|
|
§
|
technological
changes;
|
|
§
|
changes
in monetary and fiscal policies of the U.S.
Government;
|
|
§
|
the
effects of security breaches and computer viruses that may affect our
computer systems;
|
|
§
|
changes
in consumer spending and saving
habits;
|
|
§
|
growth
and profitability of our noninterest
income;
|
|
§
|
changes
in accounting principles, policies, practices or
guidelines;
|
|
§
|
the
limited trading activity of our common
stock;
|
|
§
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the
concentration of ownership of our common
stock;
|
|
§
|
anti-takeover
provisions under federal and state law as well as our Articles of
Incorporation and our Bylaws;
|
|
§
|
other
risks described from time to time in our filings with the Securities and
Exchange Commission; and
|
|
§
|
our
ability to manage the risks involved in the
foregoing.
|
PART I.
|
FINANCIAL
INFORMATION
|
Item
1.
|
CONSOLIDATED
FINANCIAL STATEMENTS (Unaudited)
|
(Dollars In Thousands, Except Share
Data)
|
March 31, 2008
|
December 31, 2007
|
||||||
ASSETS
|
||||||||
Cash
and Due From Banks
|
$ | 97,525 | $ | 93,437 | ||||
Funds
Sold and Interest Bearing Deposits
|
241,202 | 166,260 | ||||||
Total
Cash and Cash Equivalents
|
338,727 | 259,697 | ||||||
Investment
Securities, Available-for-Sale
|
186,944 | 190,719 | ||||||
Loans,
Net of Unearned Interest
|
1,914,458 | 1,915,850 | ||||||
Allowance
for Loan Losses
|
(20,277 | ) | (18,066 | ) | ||||
Loans,
Net
|
1,894,181 | 1,897,784 | ||||||
Premises
and Equipment, Net
|
100,145 | 98,612 | ||||||
Goodwill
|
84,811 | 84,811 | ||||||
Other
Intangible Assets
|
12,299 | 13,757 | ||||||
Other
Assets
|
75,405 | 70,947 | ||||||
Total
Assets
|
$ | 2,692,512 | $ | 2,616,327 | ||||
LIABILITIES
|
||||||||
Deposits:
|
||||||||
Noninterest
Bearing Deposits
|
$ | 432,904 | $ | 432,659 | ||||
Interest
Bearing Deposits
|
1,759,701 | 1,709,685 | ||||||
Total
Deposits
|
2,192,605 | 2,142,344 | ||||||
Short-Term
Borrowings
|
61,781 | 53,131 | ||||||
Subordinated
Notes Payable
|
62,887 | 62,887 | ||||||
Other
Long-Term Borrowings
|
29,843 | 26,731 | ||||||
Other
Liabilities
|
47,723 | 38,559 | ||||||
Total
Liabilities
|
2,394,839 | 2,323,652 | ||||||
SHAREOWNERS'
EQUITY
|
||||||||
Preferred Stock, $.01 par value,
3,000,000 shares authorized; no shares
outstanding
|
- | - | ||||||
Common
Stock, $.01 par value, 90,000,000 shares authorized; 17,174,725 and
17,182,553 shares issued and outstanding at March 31, 2008 and December
31, 2007, respectively
|
172 | 172 | ||||||
Additional
Paid-In Capital
|
38,042 | 38,243 | ||||||
Retained
Earnings
|
264,538 | 260,325 | ||||||
Accumulated
Other Comprehensive Loss, Net of Tax
|
(5,079 | ) | (6,065 | ) | ||||
Total
Shareowners' Equity
|
297,673 | 292,675 | ||||||
Total
Liabilities and Shareowners' Equity
|
$ | 2,692,512 | $ | 2,616,327 |
(Dollars in Thousands, Except Per Share
Data)
|
2008
|
2007
|
||||||
INTEREST
INCOME
|
||||||||
Interest
and Fees on Loans
|
$ | 35,255 | $ | 39,053 | ||||
Investment
Securities:
|
||||||||
U.S.
Treasury
|
167 | 141 | ||||||
U.S.
Govt. Agencies
|
760 | 939 | ||||||
States
and Political Subdivisions
|
786 | 676 | ||||||
Other
Securities
|
181 | 184 | ||||||
Funds
Sold
|
1,574 | 521 | ||||||
Total
Interest Income
|
38,723 | 41,514 | ||||||
INTEREST
EXPENSE
|
||||||||
Deposits
|
10,481 | 11,000 | ||||||
Short-Term
Borrowings
|
521 | 761 | ||||||
Subordinated
Notes Payable
|
931 | 926 | ||||||
Other
Long-Term Borrowings
|
331 | 502 | ||||||
Total
Interest Expense
|
12,264 | 13,189 | ||||||
NET
INTEREST INCOME
|
26,459 | 28,325 | ||||||
Provision
for Loan Losses
|
4,142 | 1,237 | ||||||
Net
Interest Income After Provision For Loan Losses
|
22,317 | 27,088 | ||||||
NONINTEREST
INCOME
|
||||||||
Service
Charges on Deposit Accounts
|
6,765 | 6,045 | ||||||
Data
Processing
|
813 | 715 | ||||||
Asset
Management Fees
|
1,150 | 1,225 | ||||||
Securities
Transactions
|
65 | 7 | ||||||
Mortgage
Banking Revenues
|
494 | 679 | ||||||
Bank
Card Fees
|
3,961 | 3,487 | ||||||
Other
|
4,551 | 1,804 | ||||||
Total
Noninterest Income
|
17,799 | 13,962 | ||||||
NONINTEREST
EXPENSE
|
||||||||
Salaries
and Associate Benefits
|
15,604 | 15,719 | ||||||
Occupancy,
Net
|
2,362 | 2,236 | ||||||
Furniture
and Equipment
|
2,582 | 2,349 | ||||||
Intangible
Amortization
|
1,459 | 1,459 | ||||||
Other
|
7,791 | 8,799 | ||||||
Total
Noninterest Expense
|
29,798 | 30,562 | ||||||
INCOME
BEFORE INCOME TAXES
|
10,318 | 10,488 | ||||||
Income
Taxes
|
3,038 | 3,531 | ||||||
NET
INCOME
|
$ | 7,280 | $ | 6,957 | ||||
Basic
Net Income Per Share
|
$ | 0.42 | $ | 0.38 | ||||
Diluted
Net Income Per Share
|
$ | 0.42 | $ | 0.38 | ||||
Average
Basic Shares Outstanding
|
17,170,230 | 18,408,726 | ||||||
Average
Diluted Share Outstanding
|
17,178,358 | 18,419,616 |
(Dollars In Thousands, Except Share
Data)
|
Shares Outstanding
|
Common Stock
|
Additional Paid-In Capital
|
Retained Earnings
|
Accumulated Other Comprehensive Loss, Net of
Taxes
|
Total
|
||||||||||||||||||
Balance,
December 31, 2007
|
17,182,553 | $ | 172 | $ | 38,243 | $ | 260,325 | $ | (6,065 | ) | $ | 292,675 | ||||||||||||
Cumulative
Effect of Adoption of EITF 06-4
|
- | - | - | (30 | ) | - | (30 | ) | ||||||||||||||||
Comprehensive
Income:
|
||||||||||||||||||||||||
Net
Income
|
- | - | - | 7,280 | - | 7,280 | ||||||||||||||||||
Net Change in Unrealized Gain
On Available-for-Sale Securities
(net of tax)
|
- | - | - | - | 986 | 986 | ||||||||||||||||||
Total
Comprehensive Income
|
- | - | - | - | - | 8,266 | ||||||||||||||||||
Cash
Dividends ($.1850 per share)
|
- | - | - | (3,037 | ) | - | (3,037 | ) | ||||||||||||||||
Stock
Performance Plan Compensation
|
- | - | 45 | - | - | 45 | ||||||||||||||||||
Issuance
of Common Stock
|
17,172 | - | 488 | - | - | 488 | ||||||||||||||||||
Repurchase
of Common Stock
|
(25,000 | ) | - | (734 | ) | - | - | (734 | ) | |||||||||||||||
Balance,
March 31, 2008
|
17,174,725 | $ | 172 | $ | 38,042 | $ | 264,538 | $ | (5,079 | ) | $ | 297,673 |
(Dollars in Thousands)
|
2008
|
2007
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
Income
|
$ | 7,280 | $ | 6,957 | ||||
Adjustments to Reconcile Net
Income to Cash Provided by Operating
Activities:
|
||||||||
Provision
for Loan Losses
|
4,142 | 1,237 | ||||||
Depreciation
|
1,717 | 1,534 | ||||||
Net
Securities Amortization
|
112 | 92 | ||||||
Amortization
of Intangible Assets
|
1,459 | 1,459 | ||||||
Gain
on Securities Transactions
|
(65 | ) | (7 | ) | ||||
Origination
of Loans Held-for-Sale
|
(33,930 | ) | (43,084 | ) | ||||
Proceeds
From Sales of Loans Held-for-Sale
|
33,454 | 42,374 | ||||||
Net
Gain From Sales of Loans Held-for-Sale
|
(494 | ) | (679 | ) | ||||
Non-Cash
Compensation
|
157 | 63 | ||||||
Deferred
Income Taxes
|
1,493 | 1,152 | ||||||
Net
Increase in Other Assets
|
(797 | ) | (4,297 | ) | ||||
Net
Increase in Other Liabilities
|
6,575 | 11,084 | ||||||
Net
Cash Provided By Operating Activities
|
21,103 | 17,885 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Securities
Available-for-Sale:
|
||||||||
Purchases
|
(25,566 | ) | (10,715 | ) | ||||
Sales
|
1,998 | - | ||||||
Payments,
Maturities, and Calls
|
28,846 | 11,552 | ||||||
Net
(Increase) Decrease in Loans
|
(2,727 | ) | 33,060 | |||||
Purchase
of Premises & Equipment
|
(3,251 | ) | (4,102 | ) | ||||
Proceeds
From Sales of Premises & Equipment
|
- | 294 | ||||||
Net
Cash (Used In) Provided By Investing Activities
|
(700 | ) | 30,089 | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Net
Increase (Decrease) in Deposits
|
50,261 | (39,593 | ) | |||||
Net
Increase in Short-Term Borrowings
|
8,653 | 12,921 | ||||||
Increase
in Other Long-Term Borrowings
|
3,809 | 1,700 | ||||||
Repayment
of Other Long-Term Borrowings
|
(700 | ) | (1,911 | ) | ||||
Dividends
Paid
|
(3,173 | ) | (3,240 | ) | ||||
Repurchase
of Common Stock
|
(711 | ) | (9,783 | ) | ||||
Issuance
of Common Stock
|
488 | 433 | ||||||
Net
Cash Provided By (Used In) Financing Activities
|
58,627 | (39,473 | ) | |||||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
79,030 | 8,501 | ||||||
Cash
and Cash Equivalents at Beginning of Period
|
259,697 | 177,564 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 338,727 | $ | 186,065 | ||||
Supplemental
Disclosure:
|
||||||||
Interest
Paid on Deposits
|
$ | 10,756 | $ | 11,112 | ||||
Interest
Paid on Debt
|
$ | 1,775 | $ | 2,199 | ||||
Taxes
Paid
|
$ | 4,129 | $ | 3,229 | ||||
Loans
Transferred to Other Real Estate
|
$ | 3,886 | $ | 863 | ||||
Issuance
of Common Stock as Non-Cash Compensation
|
$ | 240 | $ | 1,158 |
March 31, 2008
|
||||||||||||||||
(Dollars in Thousands)
|
Amortized Cost
|
Unrealized Gains
|
Unrealized Losses
|
Market Value
|
||||||||||||
U.S.
Treasury
|
$ | 20,927 | $ | 287 | $ | - | $ | 21,214 | ||||||||
U.S.
Government Agencies
|
25,851 | 478 | - | 26,329 | ||||||||||||
States
and Political Subdivisions
|
92,896 | 649 | 27 | 93,518 | ||||||||||||
Mortgage-Backed
Securities
|
32,936 | 436 | 3 | 33,369 | ||||||||||||
Other
Securities(1)
|
12,425 | 89 | - | 12,514 | ||||||||||||
Total
Investment Securities
|
$ | 185,035 | $ | 1,939 | $ | 30 | $ | 186,944 |
December 31, 2007
|
||||||||||||||||
(Dollars in Thousands)
|
Amortized Cost
|
Unrealized Gains
|
Unrealized Losses
|
Market Value
|
||||||||||||
U.S.
Treasury
|
$ | 16,216 | $ | 97 | $ | - | $ | 16,313 | ||||||||
U.S.
Government Agencies
|
45,489 | 295 | 34 | 45,750 | ||||||||||||
States
and Political Subdivisions
|
90,014 | 164 | 177 | 90,001 | ||||||||||||
Mortgage-Backed
Securities
|
26,334 | 85 | 132 | 26,287 | ||||||||||||
Other
Securities(1)
|
12,307 | 61 | - | 12,368 | ||||||||||||
Total
Investment Securities
|
$ | 190,360 | $ | 702 | $ | 343 | $ | 190,719 |
(1)
|
Includes Federal Home Loan
Bank and Federal Reserve Bank stock recorded at cost of $6.6 million and $4.8 million, respectively at March 31, 2008 and
$6.5 million and
$4.8 million,
respectively at
December 31, 2007.
|
(Dollars in Thousands)
|
March 31, 2008
|
December 31, 2007
|
||||||
Commercial,
Financial and Agricultural
|
$ | 202,238 | $ | 208,864 | ||||
Real
Estate-Construction
|
152,060 | 142,248 | ||||||
Real
Estate-Commercial
|
624,826 | 634,920 | ||||||
Real
Estate-Residential
|
488,063 | 485,608 | ||||||
Real
Estate-Home Equity
|
197,093 | 192,428 | ||||||
Real
Estate-Loans Held-for-Sale
|
4,501 | 2,764 | ||||||
Consumer
|
245,677 | 249,018 | ||||||
Loans,
Net of Unearned Interest
|
$ | 1,914,458 | $ | 1,915,850 |
(Dollars in Thousands)
|
2008
|
2007
|
||||||
Balance,
Beginning of Period
|
$ | 18,066 | $ | 17,217 | ||||
Provision
for Loan Losses
|
4,142 | 1,237 | ||||||
Recoveries
on Loans Previously Charged-Off
|
749 | 476 | ||||||
Loans
Charged-Off
|
(2,680 | ) | (1,822 | ) | ||||
Balance,
End of Period
|
$ | 20,277 | $ | 17,108 |
March 31, 2008
|
December 31, 2007
|
|||||||||||||||
(Dollars in Thousands)
|
Balance
|
Valuation Allowance
|
Balance
|
Valuation Allowance
|
||||||||||||
Impaired
Loans:
|
||||||||||||||||
With
Related Valuation Allowance
|
$ | 27,875 | $ | 6,068 | $ | 21,615 | $ | 4,702 | ||||||||
Without
Related Valuation Allowance
|
18,236 | - | 15,019 | - |
March 31, 2008
|
December 31, 2007
|
|||||||||||||||
(Dollars in Thousands)
|
Gross Amount
|
Accumulated Amortization
|
Gross Amount
|
Accumulated Amortization
|
||||||||||||
Core
Deposit Intangibles
|
$ | 47,176 | $ | 36,009 | $ | 47,176 | $ | 34,598 | ||||||||
Goodwill
|
84,811 | - | 84,811 | - | ||||||||||||
Customer
Relationship Intangible
|
1,867 | 736 | 1,867 | 688 | ||||||||||||
Total
Intangible Assets
|
$ | 133,854 | $ | 36,745 | $ | 133,854 | $ | 35,286 |
(Dollars in Thousands)
|
March 31, 2008
|
December 31, 2007
|
||||||
NOW
Accounts
|
$ | 800,128 | $ | 744,093 | ||||
Money
Market Accounts
|
381,474 | 386,619 | ||||||
Savings
Deposits
|
116,018 | 111,600 | ||||||
Other
Time Deposits
|
462,081 | 467,373 | ||||||
Total
Interest Bearing Deposits
|
$ | 1,759,701 | $ | 1,709,685 |
Options
|
Shares
|
Weighted-Average Exercise
Price
|
Weighted-Average Remaining
Term
|
Aggregate Intrinsic Value
|
||||||||||||
Outstanding
at January 1, 2008
|
60,384 | $ | 32.79 | 6.9 | $ | - | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Exercised
|
- | - | - | - | ||||||||||||
Forfeited
or expired
|
- | - | - | - | ||||||||||||
Outstanding
at March 31, 2008
|
60,384 | $ | 32.79 | 6.6 | $ | - | ||||||||||
Exercisable
at March 31, 2008
|
60,384 | $ | 32.79 | 6.6 | $ | - |
Three Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Dividend
yield
|
2.8 | % | 2.0 | % | ||||
Expected
volatility
|
39.0 | % | 24.0 | % | ||||
Risk-free
interest rate
|
3.1 | % | 4.9 | % | ||||
Expected
life (in years)
|
0.5 | 0.5 |
Three Months Ended March 31,
|
||||||||
(Dollars in Thousands)
|
2008
|
2007
|
||||||
Discount
Rate
|
6.25 | % | 6.00 | % | ||||
Long-Term
Rate of Return on Assets
|
8.00 | % | 8.00 | % | ||||
Service
Cost
|
$ | 1,279 | $ | 1,350 | ||||
Interest
Cost
|
1,063 | 1,025 | ||||||
Expected
Return on Plan Assets
|
(1,253 | ) | (1,300 | ) | ||||
Prior
Service Cost Amortization
|
75 | 100 | ||||||
Net
Loss Amortization
|
280 | 250 | ||||||
Net
Periodic Benefit Cost
|
$ | 1,444 | $ | 1,425 |
Three Months Ended March 31,
|
||||||||
(Dollars in Thousands)
|
2008
|
2007
|
||||||
Discount
Rate
|
6.25 | % | 6.00 | |||||
Service
Cost
|
$ | 22 | $ | 25 | ||||
Interest
Cost
|
56 | 63 | ||||||
Prior
Service Cost Amortization
|
2 | 3 | ||||||
Net
Loss Amortization
|
1 | 18 | ||||||
Net
Periodic Benefit Cost
|
$ | 81 | $ | 109 |
(Dollars in Millions)
|
Amount
|
|||
Commitments
to Extend Credit(1)
|
$ | 429 | ||
Standby
Letters of Credit
|
$ | 17 |
(1)
|
Commitments include unfunded
loans, revolving lines of credit, and other unused
commitments.
|
(Dollars in Thousands)
|
Level 1 Inputs
|
Level 2 Inputs
|
Level 3 Inputs
|
Total Fair
Value
|
||||||||||||
Securities
Available for Sale
|
$ | 71,713 | $ | 102,717 | $ | 1,089 | $ | 175,519 |
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||
(Dollars in Thousands, Except Per Share
Data)
|
First
|
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
||||||||||||||||||||||||
Summary
of Operations:
|
||||||||||||||||||||||||||||||||
Interest
Income
|
$ | 38,723 | $ | 40,786 | $ | 41,299 | $ | 41,724 | $ | 41,514 | $ | 42,600 | $ | 42,512 | $ | 41,369 | ||||||||||||||||
Interest
Expense
|
12,264 | 13,241 | 13,389 | 13,263 | 13,189 | 13,003 | 12,289 | 11,182 | ||||||||||||||||||||||||
Net
Interest Income
|
26,459 | 27,545 | 27,910 | 28,461 | 28,325 | 29,597 | 30,223 | 30,187 | ||||||||||||||||||||||||
Provision
for Loan Losses
|
4,142 | 1,699 | 1,552 | 1,675 | 1,237 | 460 | 711 | 121 | ||||||||||||||||||||||||
Net
Interest Income After Provision for Loan Losses
|
22,317 | 25,846 | 26,358 | 26,786 | 27,088 | 29,137 | 29,512 | 30,066 | ||||||||||||||||||||||||
Noninterest
Income
|
17,799 | 15,823 | 14,431 | 15,084 | 13,962 | 14,385 | 14,144 | 14,003 | ||||||||||||||||||||||||
Noninterest
Expense
|
29,798 | 31,614 | 29,919 | 29,897 | 30,562 | 29,984 | 30,422 | 31,070 | ||||||||||||||||||||||||
Income
Before Provision for Income Taxes
|
10,318 | 10,055 | 10,870 | 11,973 | 10,488 | 13,538 | 13,234 | 12,999 | ||||||||||||||||||||||||
Provision
for Income Taxes
|
3,038 | 2,391 | 3,699 | 4,082 | 3,531 | 4,688 | 4,554 | 4,684 | ||||||||||||||||||||||||
Net
Income
|
$ | 7,280 | $ | 7,664 | $ | 7,171 | $ | 7,891 | $ | 6,957 | $ | 8,850 | $ | 8,680 | $ | 8,315 | ||||||||||||||||
Net
Interest Income (FTE)
|
$ | 27,077 | $ | 28,196 | $ | 28,517 | $ | 29,050 | $ | 28,898 | $ | 30,152 | $ | 30,745 | $ | 30,591 | ||||||||||||||||
Per
Common Share:
|
||||||||||||||||||||||||||||||||
Net
Income Basic
|
$ | 0.42 | $ | 0.44 | $ | 0.41 | $ | 0.43 | $ | 0.38 | $ | 0.48 | $ | 0.47 | $ | 0.44 | ||||||||||||||||
Net
Income Diluted
|
0.42 | 0.44 | 0.41 | 0.43 | 0.38 | 0.48 | 0.47 | 0.44 | ||||||||||||||||||||||||
Dividends
Declared
|
0.1850 | 0.1850 | .175 | .175 | .175 | .175 | .163 | .163 | ||||||||||||||||||||||||
Diluted
Book Value
|
17.33 | 17.03 | 16.95 | 16.87 | 16.97 | 17.01 | 17.18 | 16.81 | ||||||||||||||||||||||||
Market
Price:
|
||||||||||||||||||||||||||||||||
High
|
29.99 | 34.00 | 36.40 | 33.69 | 35.91 | 35.98 | 33.25 | 35.39 | ||||||||||||||||||||||||
Low
|
24.76 | 24.60 | 27.69 | 29.12 | 29.79 | 30.14 | 29.87 | 29.51 | ||||||||||||||||||||||||
Close
|
29.00 | 28.22 | 31.20 | 31.34 | 33.30 | 35.30 | 31.10 | 30.20 | ||||||||||||||||||||||||
Selected
Average Balances:
|
||||||||||||||||||||||||||||||||
Loans
|
$ | 1,909,574 | $ | 1,908,069 | $ | 1,907,235 | $ | 1,944,969 | $ | 1,980,224 | $ | 2,003,719 | $ | 2,025,112 | $ | 2,040,656 | ||||||||||||||||
Earning
Assets
|
2,301,463 | 2,191,230 | 2,144,737 | 2,187,236 | 2,211,560 | 2,238,066 | 2,241,158 | 2,278,817 | ||||||||||||||||||||||||
Assets
|
2,646,474 | 2,519,682 | 2,467,703 | 2,511,252 | 2,530,790 | 2,557,357 | 2,560,155 | 2,603,090 | ||||||||||||||||||||||||
Deposits
|
2,148,874 | 2,016,736 | 1,954,160 | 1,987,418 | 2,003,726 | 2,028,453 | 2,023,523 | 2,047,755 | ||||||||||||||||||||||||
Shareowners’
Equity
|
296,804 | 299,342 | 301,536 | 309,352 | 316,484 | 323,903 | 318,041 | 315,794 | ||||||||||||||||||||||||
Common
Equivalent Shares:
|
||||||||||||||||||||||||||||||||
Basic
|
17,170 | 17,444 | 17,709 | 18,089 | 18,409 | 18,525 | 18,530 | 18,633 | ||||||||||||||||||||||||
Diluted
|
17,178 | 17,445 | 17,719 | 18,089 | 18,420 | 18,569 | 18,565 | 18,653 | ||||||||||||||||||||||||
Ratios:
|
||||||||||||||||||||||||||||||||
ROA
|
1.11 | % | 1.21 | % | 1.15 | % | 1.26 | % | 1.11 | % | 1.37 | % | 1.35 | % | 1.28 | % | ||||||||||||||||
ROE
|
9.87 | % | 10.16 | % | 9.44 | % | 10.23 | % | 8.91 | % | 10.84 | % | 10.83 | % | 10.56 | % | ||||||||||||||||
Net
Interest Margin (FTE)
|
4.73 | % | 5.10 | % | 5.27 | % | 5.33 | % | 5.29 | % | 5.35 | % | 5.45 | % | 5.38 | % | ||||||||||||||||
Efficiency
Ratio
|
63.15 | % | 68.51 | % | 66.27 | % | 64.44 | % | 67.90 | % | 63.99 | % | 64.35 | % | 66.23 | % |
Item 2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three Months Ended
March 31,
|
||||||||
2008
|
2007
|
|||||||
Efficiency
ratio
|
66.40 | % | 71.31 | % | ||||
Effect
of intangible amortization expense
|
(3.25 | )% | (3.41 | )% | ||||
Operating
efficiency ratio
|
63.15 | % | 67.90 | % |
Three Months Ended
March 31,
|
||||||||
2008
|
2007
|
|||||||
Net
noninterest expense as a percent of average assets
|
1.82 | % | 2.66 | % | ||||
Effect
of intangible amortization expense
|
(0.22 | )% | (0.23 | )% | ||||
Operating
net noninterest expense as a percent of average assets
|
1.60 | % | 2.43 | % |
|
·
|
Earnings
for the first quarter of 2008 totaled $7.3 million ($0.42 per diluted
share) compared to $7.0 million ($0.38 per diluted share) for the first
quarter of 2007. Earnings for the first quarter included two
Visa Inc. related transactions totaling $2.3 million (after-tax), or $0.13
per diluted share.
|
|
·
|
Tax
equivalent net interest income declined $1.8 million, or 6.3%, from the
first quarter of 2007 due to net interest margin compression attributable
primarily to an increase in foregone interest related to the increase in
our level of nonperforming loans.
|
|
·
|
Noninterest
income increased $3.8 million, or 27.5%, over the first quarter of 2007
due primarily to a $2.4 million gain from the redemption of Visa Inc.
shares. Deposit fees and bank card fees also posted strong
gains.
|
|
·
|
Noninterest
expense decreased $764,000, or 2.5%, from the first quarter of 2007
including the $1.1 million reversal of reserve for the Visa Inc.
litigation.
|
|
·
|
Credit
quality deteriorated as reflected by a higher loan loss provision for the
quarter. The allowance for loan losses continues to be
adequately funded at 1.06% of total
loans.
|
|
·
|
Well-capitalized
with a risk based capital ratio of
14.01%.
|
Three Months Ended March 31,
|
||||||||
(Dollars in Thousands)
|
2008
|
2007
|
||||||
Interest
Income
|
$ | 38,723 | $ | 41,514 | ||||
Taxable
Equivalent Adjustment(1)
|
619 | 573 | ||||||
Interest
Income (FTE)
|
39,342 | 42,087 | ||||||
Interest
Expense
|
12,264 | 13,189 | ||||||
Net
Interest Income (FTE)
|
27,078 | 28,898 | ||||||
Provision
for Loan Losses
|
4,142 | 1,237 | ||||||
Taxable
Equivalent Adjustment
|
619 | 573 | ||||||
Net
Interest Income After Provision
|
22,317 | 27,088 | ||||||
Noninterest
Income
|
17,799 | 13,962 | ||||||
Noninterest
Expense
|
29,798 | 30,562 | ||||||
Income
Before Income Taxes
|
10,318 | 10,488 | ||||||
Income
Taxes
|
3,038 | 3,531 | ||||||
Net
Income
|
$ | 7,280 | $ | 6,957 | ||||
Basic
Net Income Per Share
|
$ | 0.42 | $ | 0.38 | ||||
Diluted
Net Income Per Share
|
$ | 0.42 | $ | 0.38 | ||||
Return
on Average Assets(2)
|
1.11 | % | 1.11 | % | ||||
Return
on Average Equity(2)
|
9.87 | % | 8.91 | % |
(1)
|
Computed using a statutory tax
rate of 35%
|
(2)
|
Annualized
|
Three Months Ended March 31,
|
||||||||
(Dollars in Thousands)
|
2008
|
2007
|
||||||
CHARGE-OFFS
|
||||||||
Commercial,
Financial and Agricultural
|
$ | 636 | $ | 560 | ||||
Real
Estate – Construction
|
572 | 108 | ||||||
Real
Estate – Commercial
|
126 | 326 | ||||||
Real
Estate – Residential
|
176 | 67 | ||||||
Consumer
|
1,170 | 761 | ||||||
Total
Charge-offs
|
2,680 | 1,822 | ||||||
RECOVERIES
|
||||||||
Commercial,
Financial and Agricultural
|
139 | 36 | ||||||
Real
Estate – Construction
|
- | - | ||||||
Real
Estate – Commercial
|
1 | 5 | ||||||
Real
Estate – Residential
|
3 | 3 | ||||||
Consumer
|
606 | 432 | ||||||
Total
Recoveries
|
749 | 476 | ||||||
Net
Charge-offs
|
$ | 1,931 | $ | 1,346 | ||||
Net
Charge-offs (Annualized) as a
|
||||||||
Percent
of Average Loans Outstanding,
|
||||||||
Net
of Unearned Interest
|
0.41 | % | 0.28 | % |
Three Months
Ended March 31,
|
||||||||
(Dollars in Thousands)
|
2008
|
2007
|
||||||
Noninterest
Income:
|
||||||||
Service
Charges on Deposit Accounts
|
$ | 6,765 | $ | 6,045 | ||||
Data
Processing
|
813 | 715 | ||||||
Asset
Management Fees
|
1,150 | 1,225 | ||||||
Retail
Brokerage Fees
|
469 | 462 | ||||||
Investment
Security Gain
|
65 | 7 | ||||||
Mortgage
Banking Revenues
|
494 | 679 | ||||||
Merchant
Service Fees(1)
|
2,208 | 1,936 | ||||||
Interchange
Fees(1)
|
1,009 | 910 | ||||||
ATM/Debit
Card Fees(1)
|
744 | 641 | ||||||
Other
|
4,082 | 1,342 | ||||||
Total
Noninterest Income
|
$ | 17,799 | $ | 13,962 |
Three Months Ended March 31,
|
||||||||
(Dollars in Thousands)
|
2008
|
2007
|
||||||
Noninterest
Expense:
|
||||||||
Salaries
|
$ | 13,003 | $ | 12,343 | ||||
Associate
Benefits
|
2,601 | 3,376 | ||||||
Total
Compensation
|
15,604 | 15,719 | ||||||
Premises
|
2,362 | 2,236 | ||||||
Equipment
|
2,582 | 2,349 | ||||||
Total
Occupancy
|
4,944 | 4,585 | ||||||
Legal
Fees
|
503 | 507 | ||||||
Professional
Fees
|
871 | 992 | ||||||
Processing
Services
|
461 | 382 | ||||||
Advertising
|
779 | 864 | ||||||
Travel
and Entertainment
|
333 | 345 | ||||||
Printing
and Supplies
|
515 | 514 | ||||||
Telephone
|
593 | 547 | ||||||
Postage
|
430 | 340 | ||||||
Intangible
Amortization
|
1,459 | 1,459 | ||||||
Interchange
Fees
|
1,849 | 1,668 | ||||||
Commission
Fees
|
402 | 224 | ||||||
Courier
Service
|
127 | 277 | ||||||
Miscellaneous
|
928 | 2,139 | ||||||
Total
Other
|
9,250 | 10,258 | ||||||
Total
Noninterest Expense
|
$ | 29,798 | $ | 30,562 |
Changes in Interest Rates
|
+300 | bp | +200 | bp | +100 | bp | -100 | bp | -200 | bp | ||||||||||
Policy
Limit
|
10.0 | % | 7.5 | % | 5.0 | % | -5.0 | % | -7.5 | % | ||||||||||
March
31, 2008
|
1.3 | % | 3.9 | % | 3.1 | % | -2.2 | % | -6.7 | % | ||||||||||
December
31, 2007
|
1.4 | % | 4.1 | % | 3.5 | % | -3.5 | % | -7.2 | % |
Changes in Interest Rates
|
+300 | bp | +200 | bp | +100 | bp | -100 | bp | -200 | bp | ||||||||||
Policy
Limit
|
12.5 | % | 10.0 | % | 7.5 | % | -7.5 | % | -10.0 | % | ||||||||||
March
31, 2008
|