STATE COLLEGE, Pa., Jan. 26 /PRNewswire-FirstCall/ -- Omega Financial
Corporation (Nasdaq: OMEF) reported 2005 net income of $22.875 million for a
34.39% increase over 2004. Donita R. Koval, Omega's president and chief
executive officer, said the company's diluted earnings per share rose 1.70% to
$1.81, while common share dividends declared rose 3.3% for the year.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990921/OMFCLOGO )
The Company's performance for 2005 was highlighted by the effective
integration of its merger with Sun Bancorp, which occurred in the fourth
quarter of 2004. While it is difficult to compare full year results because
of the merger, the Company's effective integration plan resulted in a
$7,843,000 or 11.39% reduction in non-interest expenses for 2005 compared to
proforma combined non-interest expenses for 2004. In addition, although the
challenging interest rate environment added significant pressures in 2005, the
tax equivalent net interest margin increased from 3.78% in the fourth quarter
2004 to 4.03% in the fourth quarter 2005.
Fourth quarter 2005 net income of $5,352,000 was $582,000 lower than the
net income of the fourth quarter 2004 due to a higher loan loss provision in
2005 and the inclusion of $1,066,000 of gains in the final quarter of 2004
related to the Sun merger. The loan loss provision increase of $890,000 in the
fourth quarter 2005 relates primarily to one large commercial borrower who is
experiencing cash flow problems. Omega has estimated and provided for all
known exposures for this credit, however, evaluations of the credit continue
and could result in changes to management's loan loss reserve estimates. Gains
on early extinguishment of debt and sale of loans and other assets decreased
$488,000 in the fourth quarter of 2005 compared to the same period in 2004,
while net interest income for the quarter declined $487,000, primarily due to
a decline in earning assets.
"We completed 2005 with several key initiatives underway that are designed
to enhance our performance in 2006 on both the revenue and expense side of our
operations," Koval said. "While we were naturally focused on implementing
merger cost savings, we also implemented innovations like Check 21 and virtual
proof, which should lead to significant savings in operating expenses. On the
revenue side, we are enhancing our Customer Relationship Management function
with the goal of increasing our customer focus and developing total banking
relationships that span all traditional lines of financial services."
Koval noted that Omega also introduced new products such as its Home
Equity VISA Card and Health Savings Accounts, opened a full-service financial
center at Bristol Court in State College, and consolidated its trust, asset
management, and financial planning services into Omega Wealth Management.
Quarterly and annual reports, a corporate profile, stock quotes and other
financial data can be accessed through the Omega web site at
http://www.omegafinancial.com. Financial statements and selected financial
highlights are summarized on the following pages.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except as indicated* )
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 % Change 2005 2004 % Change
Earnings:
Net income $5,352 $ 5,934 (9.8)% $22,875 $17,021 34.4%
Per share
statistics: *
Diluted
earnings $.42 $.47 (10.6)% $1.81 $1.78 1.7%
Dividends
declared
- common .31 .30 3.3 1.24 1.20 3.3
Book value
- common 25.28 25.07 0.8 25.28 25.07 0.8
Book value
- tangible 11.76 11.28 4.3 11.76 11.28 4.3
Market value
- High 30.94 36.75 (15.8) 34.50 38.75 (11.0)
Low 25.42 30.95 (17.9) 25.42 29.13 (12.7)
Financial position
at period end:
Assets $1,939,979 $2,082,571 (6.8)% $1,939,979 $2,082,571 (6.8)%
Net loans 1,199,109 1,312,606 (8.6) 1,199,109 1,312,606 (8.6)
Deposits 1,422,530 1,502,082 (5.3) 1,422,530 1,502,082 (5.3)
Shareholders'
equity 318,490 315,739 0.9 318,490 315,739 0.9
Average Balances:
Assets $1,950,473 $2,060,742 (5.4)% $1,997,706 $1,371,227 45.7%
Net loans 1,207,196 1,339,386 (9.9) 1,262,655 913,596 38.2
Deposits 1,431,788 1,532,995 (6.6) 1,485,048 1,065,230 39.4
Shareholders'
equity 321,995 255,565 26.0 320,782 191,512 67.5
Profitability ratios - annualized: *
Return on
average
assets 1.10% 1.15% (4.7)% 1.15% 1.24% (7.3)%
Return on
tangible
assets 1.20 1.25 (4.0) 1.25 1.26 (0.8)
Return on
average
stated
equity (1) 6.65 9.29 (28.4) 7.13 8.89 (19.8)
Return on
average
tangible
equity (2) 14.14 29.06 (51.3) 15.33 11.84 29.5
Net interest
margin -
fully tax
equivalent 4.03 3.78 6.6 3.92 3.92 0.0
Shares
outstanding
at period end: *
Common 12,599,508 12,593,524 0.0% 12,599,508 12,593,524 0.0%
(1) Average stated equity is equal to average shareholders' equity.
(2) Average tangible equity represents average shareholders' equity less
average intangibles and goodwill.
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31, December 31,
Assets 2005 2004
Cash and due from banks $56,194 $47,877
Interest bearing deposits with other banks 8,908 31,122
Federal funds sold - 36,350
Trading account assets 468 -
Investment securities available for sale 353,355 327,979
Investment in unconsolidated subsidiary 1,625 1,625
Loans available for sale 264 22,515
Total portfolio loans 1,214,591 1,305,735
Less: Allowance for loan losses (15,482) (15,644)
Net portfolio loans 1,199,109 1,290,091
Premises and equipment, net 38,391 35,509
Other real estate owned 956 3,082
Bank-owned life insurance 75,144 72,845
Investment in limited partnerships 6,612 8,605
Core deposit intangibles 6,729 13,927
Other intangibles 2,529 2,799
Goodwill 161,004 156,959
Other assets 28,691 31,286
TOTAL ASSETS $1,939,979 $2,082,571
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $236,683 $228,408
Interest bearing 1,185,847 1,273,674
Total deposits 1,422,530 1,502,082
Short-term borrowings 90,153 90,259
ESOP debt 1,845 2,192
Junior subordinated debentures 56,692 57,190
Long-term debt 36,322 99,579
Other interest bearing liabilities 882 854
Other liabilities 13,065 14,676
TOTAL LIABILITIES 1,621,489 1,766,832
Shareholders' Equity
Preferred stock, par value $5.00 per share:
Authorized - 5,000,000 shares, none issued
Common stock, par value $5.00 per share:
Authorized - 25,000,000 shares;
Issued -
12,670,323 shares at December 31, 2005;
12,593,524 shares at December 31, 2004;
Outstanding-
12,599,508 shares at December 31, 2005;
12,593,524 shares at December 31, 2004 63,368 62,968
Capital surplus 99,874 98,370
Retained earnings 159,583 152,249
Accumulated other comprehensive income (loss) (1,226) 3,526
Unearned compensation related to ESOP debt (1,125) (1,374)
Cost of common stock in treasury: 70,815 shares
at December 31, 2005 (1,984) -
TOTAL SHAREHOLDERS' EQUITY 318,490 315,739
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,939,979 $2,082,571
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Unaudited
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Interest Income:
Interest and fees on
loans $20,061 $20,278 $78,907 $53,396
Interest and dividends
on investment
securities 3,200 3,032 11,231 8,418
Other interest income 53 252 1,037 557
TOTAL INTEREST INCOME 23,314 23,562 91,175 62,371
Interest Expense:
Interest on deposits 5,686 4,891 21,691 12,964
Interest on short-term
borrowings 832 1,003 2,336 1,302
Interest on long-term
debt and other interest
bearing liabilities 1,327 1,712 5,478 2,400
TOTAL INTEREST EXPENSE 7,845 7,606 29,505 16,666
NET INTEREST INCOME 15,469 15,956 61,670 45,705
Provision (credit) for
loan losses 590 (300) 1,202 (300)
INCOME FROM CREDIT
ACTIVITIES 14,879 16,256 60,468 46,005
Other Income:
Service fees on deposit
accounts 2,487 2,508 9,344 7,076
Service fees on loans 391 668 1,380 1,547
Earnings on bank-owned
life insurance 579 578 2,299 1,581
Trust fees 1,324 1,438 6,007 4,027
Investment and
insurance product sales 663 860 3,163 1,786
Gain on the early
extinguishment of debt - 570 1,043 570
(Loss) Gain on sale of
loans and other assets 3 (115) (376) (102)
Net gains on the sale
of investment securities 656 692 2,327 963
Other 1,240 1,267 4,681 2,958
TOTAL OTHER INCOME 7,343 8,466 29,868 20,406
Other Expense:
Salaries and employee
benefits 7,563 8,193 30,555 22,888
Net occupancy expense 1,107 1,057 4,230 2,790
Equipment expense 1,084 1,109 4,244 3,246
Data processing service 642 547 2,521 1,839
Pennsylvania shares tax 589 562 1,864 1,705
Amortization of
intangible assets 274 394 779 402
Other 4,196 4,884 17,086 11,198
TOTAL OTHER EXPENSE 15,455 16,746 61,279 44,068
Income before taxes 6,767 7,976 29,057 22,343
Income tax expense 1,415 2,042 6,182 5,322
NET INCOME $5,352 $5,934 $22,875 $17,021
Net income per common
share:
Basic $.43 $.47 $1.82 $1.79
Diluted $.42 $.47 $1.81 $1.78
Weighted average shares
and equivalents:
Basic 12,586 12,531 12,601 9,484
Diluted 12,624 12,627 12,645 9,570
Dividends declared per
share:
Common $.31 $.30 $1.24 $1.20
Omega Financial Corporation
Consolidated Net Interest Income Analysis
Fourth Quarter 2005 vs. Fourth Quarter 2004
(In thousands)
Fourth Qtr-05 Fourth Qtr-04
Average Income/ Average Income/
Balance Rate Expense Balance Rate Expense
INTEREST EARNING
ASSETS
Money Market
Investments
Interest Bearing
Deposits 6,902 3.05% 53 45,869 1.70% 196
Federal Funds Sold 18 11,988 1.86% 56
BA's and Commercial
Paper
Total Money Market
Investments 6,920 3.04% 53 57,857 1.73% 252
Investment Securities
U.S. Treasuries and
Agencies 285,866 3.56% 2,567 174,902 4.86% 2,136
State and Municipals-
Tax Free 58,316 2.95% 430 84,272 2.83% 596
Corporate Securities 16,915 4.78% 202 96,182 1.25% 301
Total Investment
Securities 361,097 3.52% 3,199 355,356 3.40% 3,033
Loans
Commercial Loans 268,637 7.09% 4,804 269,215 5.78% 3,909
Rate Swaps(Notional
Balance)
Tax Free Commercial
Loans 19,690 4.84% 240 18,317 5.97% 275
Real Estate Loans 736,583 6.37% 11,738 818,172 5.79% 11,851
Tax Free Real Estate
Loans 38,957 4.16% 405 37,272 7.04% 656
Personal Loans and
Leases 158,436 7.20% 2,875 217,931 6.44% 3,526
Total Loans 1,222,303 6.54% 20,062 1,360,907 5.93% 20,217
Total Earning Assets 1,590,320 5.84% 23,314 1,774,120 5.29% 23,502
FUNDING SOURCES
Interest Bearing
Liabilities
Checking with
Interest 331,951 0.62% 516 380,382 0.46% 444
Money Market Accounts 98,761 1.41% 351 118,591 0.96% 286
Savings Accounts 208,061 0.55% 288 220,856 0.46% 254
CD'S, $100,000 and
Over 93,342 3.65% 859 85,729 3.94% 849
Other Time Deposits 463,403 3.14% 3,672 494,173 2.46% 3,057
Total Interest
Bearing Deposits 1,195,518 1.89% 5,686 1,299,731 1.50% 4,890
Other Borrowed Funds-
Short Term 88,840 3.72% 833 70,944 1.50% 268
Long Term Debt 92,999 5.67% 1,318 184,339 5.17% 2,384
Other Interest
Bearing Liabilities 847 4.25% 9 818 1.96% 4
Demand Deposits 236,269 233,264
Cash (53,639) (45,869)
Other 29,486 30,893
Total Funding Sources 1,590,320 1.96% 7,846 1,774,120 1.70% 7,546
Net Int Spread - Net
Int Income 3.88% 15,468 3.59% 15,956
Net Int Spread-Tax
Equivalent 4.03% 3.78%
Tax Equivalent Net
Int Income 16,047 16,778
Omega Financial Corporation
Consolidated Net Interest Income Analysis
Fourth Quarter 2005 vs. Fourth Quarter 2004
(In thousands)
Increase/(Decrease)
Due To Due To Net
Volume Rate Change
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits (234.8) 91.8 (143)
Federal Funds Sold (28.0) (28.0) (56)
BA's and Commercial Paper
Total Money Market Investments (262.8) 63.8 (199)
Investment Securities
U.S. Treasuries and Agencies 1,107.2 (676.2) 431
State and Municipals-Tax Free (190.4) 24.4 (166)
Corporate Securities (405.9) 306.9 (99)
Total Investment Securities 510.9 (344.9) 166
Loans
Commercial Loans (8.2) 903.2 895
Rate Swaps(Notional Balance)
Tax Free Commercial Loans 19.6 (54.6) (35)
Real Estate Loans (1,246.5) 1,133.5 (113)
Tax Free Real Estate Loans 28.7 (279.7) (251)
Personal Loans and Leases (1,035.9) 384.9 (651)
Total Loans (2,242.3) 2,087.3 (155)
Total Earning Assets (1,994.2) 1,806.2 (188)
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest (62.7) 134.7 72
Money Market Accounts (53.5) 118.5 65
Savings Accounts (15.1) 49.1 34
CD'S, $100,000 and Over 73.8 (63.8) 10
Other Time Deposits (197.5) 812.5 615
Total Interest Bearing Deposits (255.0) 1,051.0 796
Other Borrowed Funds-Short Term 82.3 482.7 565
Long Term Debt (1,277.5) 211.5 (1,066)
Other Interest Bearing Liabilities 0.1 4.9 5
Demand Deposits
Cash
Other
Total Funding Sources (1,450.1) 1,750.1 300
Net Int Spread - Net Int Income (544.1) 56.1 (488)
Net Int Spread-Tax Equivalent
Tax Equivalent Net Int Income
SOURCE Omega Financial Corporation
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