STATE COLLEGE, Pa., April 23 /PRNewswire-FirstCall/ -- First quarter
earnings for Omega Financial Corporation (Nasdaq: OMEF) were up 4.5% over
the same period last year, company officials announced.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990921/OMFCLOGO )
The company reported net income of $5.583 million for the first three
months of 2007, compared to $5.343 million, an increase of $240,000, said
Donita R. Koval, OFC's president and chief executive officer. Koval noted
that the strong results, driven by continued cost control across the
organization, came in spite of an increase in the loan loss provision of
$490,000 compared to the first quarter of 2006.
The increase in the provision is due primarily to changes in the risk
profile of one large commercial customer that filed for bankruptcy
protection in 2006. Omega increased the amount of allowance for loan losses
allocated to this borrower by $904,000 in the first quarter to a total of
$6.2 million as of March 31, 2007 from $5.3 million at December 31, 2006.
Omega has estimated and provided for known exposures related to this
credit; however, evaluations of the credit continue based on changes in the
bankruptcy proceedings. The total impact on earnings in the first quarter
of 2007 for this credit, including the added provisions of $904,000, lost
interest of $284,000, and other related expenses, was $775,000 after tax,
which negatively affected earnings by 12% or $0.06 per diluted share.
On a per share basis, diluted earnings were up 4.8%, rising to $0.44
from $0.42. Per share earnings were also 25.7% higher than those recorded
for the fourth quarter of 2006. Common share dividends declared were
unchanged from the fourth quarter of 2006 at $0.31.
Net interest margin on a fully taxable equivalent basis rose by 18
basis points in the quarter to 4.19% compared to the same period in 2006.
Koval explained that the increase was achieved despite a continued
challenging rate environment and flat yield curve. The margin for the
quarter also represents an increase of five basis points over the fourth
quarter of last year.
Although first quarter net interest income declined by 1.3%, when
compared to the first quarter of 2006, last year's same-period results
included net interest income from three branches that were sold in the
fourth quarter of 2006 as Omega realigned its geographic footprint. Net
interest income on a comparable basis rose by $92,000 or 0.62%.
Excluding gains on the sale of assets, other income increased $124,000
or 1.9%. The branches sold in 2006 contributed $51,000 in non-interest
income in the first quarter of 2006.
The Company's continued focus on expense control in a variety of
operating areas resulted in a decline in other expense of $825,000 or 5.6%.
The three branches locations sold in 2006 accounted for $216,000 of this
decrease.
"We are pleased that these solid results have reaffirmed our strategy
to become increasingly customer-focused," Koval said. She added, "Omega is
starting to see earnings momentum from the benefits of the 20 plus new
products and services developed in 2006." Among these initiatives is
Omega's DEPOSIT PRO, which allows business customers to bring the bank
right into their office, along with the company's new "Bank to Business"
initiative which has shown great promise in fee income derived from Omega's
cash management division. Omega's other new venture, Omega Financial
Mortgage Solutions, has grown rapidly in the first few months of operation.
This new undertaking features a number of cutting edge mortgage products
including their signature, HOME ONE, which allows the customer to break
ground on construction loans within 21 days of application.
In other company developments, Omega Bank was named to US Banker's list
of top 200 mid-tier banks ranked by three-year average return on equity
(ROE). Omega ranked 10th among banks in Pennsylvania. During the quarter,
Omega Financial was also added to NASDAQ's Dividend Achievers Index
effective with the market open on Feb 1. The NASDAQ Dividend Achievers
Index was launched in February of 2006 and is designed to offer a unique
approach for NASDAQ investors seeking a long-term portfolio of higher
risk-adjusted returns. Members of this index are typically companies with
strong cash reserves, solid balance sheets and a proven record of
consistent earnings growth.
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.
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except as indicated*)
1st Qtr 1st Qtr % 1st Qtr 4th Qtr %
2007 2006 Change 2007 2006 Change
Earnings:
Net income $5,583 $5,343 4.5% $5,583 $4,386 27.3%
Per share
statistics: *
Diluted
earnings $.44 $.42 4.8% $.44 $.35 25.7%
Dividends
declared -
common .31 .31 - .31 .31 -
Book value -
common 25.92 25.33 2.3 25.92 25.76 0.6
Book value -
tangible 12.79 11.73 9.0 12.79 12.61 1.4
Market value -
High 34.49 34.21 0.8 34.49 33.50 3.0
Low 27.14 27.88 (2.7) 27.14 29.48 (7.9)
Financial position
at period end:
Assets $1,803,555 $1,918,992 (6.0)% $1,803,555 $1,815,818 (0.7)%
Net loans 1,132,991 1,185,191 (4.4) 1,132,991 1,135,048 (0.2)
Deposits 1,309,805 1,424,027 (8.0) 1,309,805 1,325,763 (1.2)
Shareholders'
equity 327,717 318,900 2.8 327,717 325,211 0.8
Average Balances:
Assets $1,802,015 $1,918,888 (6.1)% $1,802,015 $1,846,561 (2.4)%
Net loans 1,132,564 1,188,889 (4.7) 1,132,563 1,147,555 (1.3)
Deposits 1,302,265 1,407,864 (7.5) 1,302,265 1,359,209 (4.2)
Shareholders'
equity 329,301 321,555 2.4 329,301 327,203 0.6
Non-Performing
Loans at period
end:
Non-accrual
loans $21,168 $24,352 (13.1)% $21,168 $21,001 0.8%
Accruing loans
past due 90
days or more 5,796 2,955 96.1 5,796 2,327 149.1
Profitability
ratios - annualized: *
Return on average
assets 1.24% 1.11% 11.3% 1.24% 0.95% 30.4%
Return on tangible
assets 1.37 1.22 12.3 1.37 1.04 31.7
Return on average
stated equity(1) 6.78 6.65 2.0 6.78 5.36 26.5
Return on average
tangible
equity(2) 13.68 14.12 (3.1) 13.68 10.91 25.4
Net interest
margin - fully
tax equivalent 4.19 4.01 4.5 4.19 4.14 1.2
Shares outstanding
at period end: *
Common 12,645,736 12,591,314 0.4% 12,645,736 12,622,802 0.2%
(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)
(unaudited)
March 31, December 31,
2007 2006
Assets
Cash and due from banks 49,798 56,225
Interest bearing deposits with other banks 10,695 12,073
Federal funds sold 11,400 -
Trading securities 51 48
Investment securities available for sale 278,437 291,807
Other investments 12,152 12,087
Investment in unconsolidated subsidiary 1,625 1,625
Loans held for sale - 204
Total portfolio loans 1,150,670 1,152,188
Less: Allowance for loan losses (17,679) (17,344)
Net portfolio loans 1,132,991 1,134,844
Premises and equipment, net 30,324 30,861
Other real estate owned 548 512
Bank-owned life insurance 76,981 76,341
Investment in limited partnerships 5,606 5,763
Core deposit intangibles 5,457 5,641
Other intangibles 1,057 1,085
Goodwill 159,408 159,387
Other assets 27,025 27,315
TOTAL ASSETS $1,803,555 $1,815,818
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $230,482 $232,335
Interest bearing 1,079,323 1,093,428
Total deposits 1,309,805 1,325,763
Short-term borrowings 64,006 65,712
ESOP debt 1,385 1,481
Junior subordinated debentures 56,069 56,193
Long-term debt 32,524 27,877
Other interest bearing liabilities 853 858
Other liabilities 11,196 12,723
TOTAL LIABILITIES 1,475,838 1,490,607
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 -
12,860,632 shares at March 31, 2007;
12,823,471 shares at December 31, 2006 64,298 64,133
Outstanding -
12,645,736 shares at March 31, 2007;
12,622,802 shares at December 31, 2006
Capital surplus 103,888 103,149
Retained earnings 166,332 164,653
Accumulated other comprehensive income 454 313
Unearned compensation related to ESOP debt (788) (859)
Cost of common stock in treasury:
214,896 shares at March 31, 2007;
200,669 shares at December 31, 2006 (6,467) (6,178)
TOTAL SHAREHOLDERS' EQUITY 327,717 325,211
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,803,555 $1,815,818
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
(Unaudited)
Three Months Ended
March 31,
2007 2006
Interest Income:
Interest and fees on loans $19,823 $19,837
Interest and dividends on investment
securities 3,345 3,104
Other interest income 172 101
TOTAL INTEREST INCOME. 23,340 23,042
Interest Expense:
Interest on deposits 6,452 5,895
Interest on short-term borrowings 723 771
Interest on long-term debt and
other interest bearing liabilities 1,241 1,264
TOTAL INTEREST EXPENSE 8,416 7,930
NET INTEREST INCOME 14,924 15,112
Provision for loan losses 610 120
INCOME FROM CREDIT ACTIVITIES 14,314 14,992
Other Income:
Service fees on deposit accounts 2,397 2,354
Service fees on loans 327 382
Earnings on bank-owned life insurance 640 607
Trust fees 1,093 1,120
Investment and insurance product sales 851 923
Gain (loss) on sale of loans and other assets 78 57
Net gains on the sale of investment securities 375 62
Other 1,368 1,166
TOTAL OTHER INCOME 7,129 6,671
Other Expense:
Salaries and employee benefits 7,217 7,484
Net occupancy expense 1,055 1,105
Equipment expense 1,135 1,128
Data processing service 610 645
Pennsylvania shares tax 786 712
Amortization of intangible assets 211 221
Other 3,034 3,579
TOTAL OTHER EXPENSE 14,048 14,874
Income before income taxes and
discontinued operations 7,395 6,789
Income tax expense 1,812 1,483
Income from continuing operations 5,583 5,306
Discontinued operations:
Income from discontinued operations,
net of tax - 37
NET INCOME $5,583 $5,343
Net income per common share
Basic $0.44 $0.42
Diluted $0.44 $0.42
Net income per common share from
continuing operations
Basic $0.44 $0.42
Diluted $0.44 $0.42
Net income per common share from
discontinued operations
Basic $ - $ -
Diluted $ - $ -
Weighted average shares and equivalents
Basic 12,642 12,586
Diluted 12,665 12,634
Dividends declared per share
Common $0.31 $0.31
Omega Financial Corporation
Consolidated Net Interest Income Analysis
First Quarter 2007 vs. First Quarter 2006
(In thousands)
Increase/
First Quarter 2007 First Quarter 2006 (Decrease)
Due Net
Average Income/ Average Income/ Due To To Cha-
Balance Rate Expense Balance Rate Expense Volume Rate nge
INTEREST EARNING
ASSETS
Money Market
Investments
Interest Bearing
Deposits 11,584 4.13% 118 9,200 3.09% 70 21 27 48
Federal Funds
Sold 4,104 5.34% 54 2,736 4.60% 31 17 6 23
Total Money
Market
Investments 15,688 4.45% 172 11,936 3.43% 101 38 33 71
Investment Securities
U.S. Treasuries
and
Agencies 273,045 4.43% 2,980 282,200 3.64% 2,535 (85) 530 445
State and
Municipals-
Tax Free 1,495 2.94% 11 52,148 2.90% 378 (372) 5(367)
Corporate
Securities 4,050 6.62% 67 1,111 7.92% 22 49 (4) 45
Stock 19,513 5.27% 257 13,772 4.04% 139 68 50 118
Investment in
Subsidiaries 1,625 7.38% 30 1,625 7.38% 30 - - -
Total
Investment
Securities 299,728 4.52% 3,345 350,856 3.58% 3,104 (340) 581 241
Loans
Commercial
Loans 246,952 7.58% 4,613 270,088 7.23% 4,814 (426) 225(201)
Tax Free
Commercial
Loans 17,614 4.86% 211 19,551 4.75% 229 (23) 5 (18)
Real Estate
Loans 653,047 6.80% 11,104 716,955 6.49% 11,640 (1,063) 527(536)
Tax Free
Real Estate
Loans 39,911 4.30% 429 40,200 4.11% 413 (3) 19 16
Personal
Loans and
Leases 192,324 7.31% 3,466 157,487 7.06% 2,741 625 100 725
Total
Loans 1,149,848 6.94% 19,823 1,204,281 6.62% 19,837 (890) 876 (14)
Total
Earning
Assets 1,465,264 6.42% 23,340 1,567,073 5.92% 23,042 (1,192) 1,490 298
FUNDING SOURCES
Interest
Bearing
Liabilities
Checking with
Interest 293,568 0.79% 569 322,413 0.65% 514 (49) 104 55
Money Market
Deposits 74,069 1.51% 275 89,348 1.40% 309 (57) 23 (34)
Savings
Deposits 177,791 0.55% 241 202,170 0.55% 274 (33) - (33)
CD'S,
$100,000
and Over 91,136 4.32% 970 95,338 3.88% 911 (41) 100 59
Other Time
Deposits 442,046 4.03% 4,397 469,770 3.36% 3,887 (238) 748 510
Total
Interest
Bearing
Deposits 1,078,610 2.43% 6,452 1,179,039 2.03% 5,895 (418) 975 557
Short-Term
Borrowings 69,207 4.24% 723 85,173 3.67% 771 (157) 109 (48)
Long-Term
Debt 87,662 5.62% 1,232 89,302 5.63% 1,256 (22) (2)(24)
Other Interest
Bearing
Liabilities 857 4.20% 9 870 3.68% 8 - 1 1
Demand
Deposits 223,655 228,825
Cash (48,054) (50,441)
Other 53,327 34,305
Total
Funding
Sources 1,465,264 2.33% 8,416 1,567,073 2.05% 7,930 (597) 1,083 486
Net Int
Spread -
Net Int
Income 4.09% 14,924 3.87% 15,112 (594) 406(188)
Net Int
Spread -
Tax
Equivalent 4.19% 4.01%
Net Int
Income -
Tax
Equivalent 15,275 15,661 (386)
Tax Rate 35.00% 35.00%
SOURCE Omega Financial Corporation
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