STATE COLLEGE, Pa., April 24 /PRNewswire-FirstCall/ -- Omega Financial
Corporation (Nasdaq: OMEF) reported net income of $5.343 million for the
first quarter of 2006, compared to $6.577 million in the first quarter of
last year, company officials said.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990921/OMFCLOGO)
Donita R. Koval, Omega's president and chief executive officer, said
the decline of $1.234 million or 18.8% was largely due to lower gains on
the sale of investments, other assets and the early extinguishment of debt,
all resulting from the balance sheet restructuring after the Sun Bancorp,
Inc. acquisition. In the first quarter of this year, gains on the sale of
investments and other assets totaled $119,000, while first quarter 2005
gains were $1.692 million.
"In last year's first quarter, we moved aggressively to sell
investments and assets acquired from Sun that did not fit our overall risk
profile," Koval said. "We took that action to solidify our balance sheet
for future growth, and naturally the gains we recorded contributed
significantly to our earnings for that period. With this year's investment
and asset sales activity at more normal levels, the difference is similarly
reflected in this quarter's results.
Koval said that despite the challenging interest rate environment the
company's net interest margin grew to 4.01% on a fully tax equivalent basis
compared to 3.81% in the first quarter of 2005. Net interest income
declined by 0.9% for the quarter, she said, noting that the decline was due
to a reduction in earning assets arising primarily from the balance sheet
restructuring. Excluding the previously mentioned gains, other income
increased $244,000 in the first quarter of 2006 compared to first quarter
2005. The company achieved growth in loan and deposit fees, as well as ATM
fees, debit card income and lease income. The company continued its focus
on cost control in its operations, holding the increase in expenses to
2.2%.
Looking at the company's performance in the first quarter of 2006
compared to the fourth quarter of 2005, Koval said that several
revenue-enhancement and cost-saving initiatives undertaken by Omega have
begun to contribute to results. Omega's earnings before tax, excluding
gains on sale of investments and bank assets, for the first quarter were
$621,000 or 10.2% higher than the company achieved on the same basis in the
final quarter of 2005. Wealth management fees increased $259,000 or 19.6%
compared to the fourth quarter. Late in 2005, Omega established a new
Wealth Management Division to more effectively market and deliver trust and
estate, financial planning and private banking services. In addition,
efficiencies from technology initiatives, such as virtual proof and branch
capture contributed to the $154,000 or 1% decrease in other expenses.
In per share data, net income for the first quarter of 2006 was $0.42
on a fully diluted basis, compared with $0.52 for the first quarter in
2005. Common share dividends declared remained unchanged from last year at
$0.31.
Koval also noted that management continues to monitor a large
commercial borrower who filed for bankruptcy protection in the first
quarter. Outstanding loans for this customer total $20 million all of which
were placed on non- accrual status in the first quarter.
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
2006 2005 % Change
Earnings:
Net income $5,343 $6,577 (18.8)%
Per share statistics: *
Diluted earnings $.42 $.52 (19.2)%
Dividends declared - common .31 .31 0.0
Book value - common 25.32 25.10 0.9
Book value - tangible 11.83 11.51 2.8
Market value - High 34.21 34.50 (0.8)
Low 27.88 29.40 (5.2)
Financial position at period end:
Assets $1,918,992 $2,004,159 (4.2)%
Net loans 1,185,191 1,265,365 (6.3)
Deposits 1,424,027 1,488,785 (4.3)
Shareholders' equity 318,900 316,433 0.8
Average Balances:
Assets $1,918,888 $2,048,010 (6.3)%
Net loans 1,188,889 1,299,067 (8.5)
Deposits 1,407,864 1,497,084 (6.0)
Shareholders' equity 321,555 318,589 0.9
Non-Performing Loans at period end:
Non-accrual loans $24,352 $5,311 358.5%
Accruing loans past due 90 days or
more 2,955 1,399 111.2
Restructured loans -- 218 (100.0)
Profitability ratios - annualized: *
Return on average assets 1.11% 1.28% (13.3)%
Return on tangible assets 1.22 1.40 (12.9)
Return on average stated equity (1) 6.65 8.26 (19.5)
Return on average tangible equity (2) 14.12 14.44 (2.2)
Net interest margin - fully tax
equivalent 4.01 3.81 5.2
Shares outstanding at period end: *
Common 12,591,314 12,608,133 (0.1)
(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 FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except as indicated *)
1st Qtr 4th Qtr
2006 2005 % Change
Earnings:
Net income $5,343 $5,352 (0.2)%
Per share statistics: *
Diluted earnings $.42 $.42 -- %
Dividends declared - common .31 .31 0.0
Book value - common 25.32 25.28 0.2
Book value - tangible 11.83 11.76 0.6
Market value - High 34.21 30.94 10.6
Low 27.88 25.42 9.7
Financial position at period end:
Assets $1,918,992 $1,939,979 (1.1)%
Net loans 1,185,191 1,199,373 (1.2)
Deposits 1,424,027 1,422,530 0.1
Shareholders' equity 318,900 318,490 0.1
Average Balances:
Assets $1,918,888 $1,950,473 (1.6)%
Net loans 1,188,889 1,207,196 (1.5)
Deposits 1,407,864 1,431,788 (1.7)
Shareholders' equity 321,555 321,995 (0.1)
Non-Performing Loans at period end:
Non-accrual loans $24,352 $6,562 271.1%
Accruing loans past due 90 days or
more 2,955 2,616 13.0
Restructured loans -- -- --
Profitability ratios - annualized: *
Return on average assets 1.11% 1.10% 1.5%
Return on tangible assets 1.22 1.20 1.7
Return on average stated equity (1) 6.65 6.65 (0.0)
Return on average tangible equity
(2) 14.12 14.14 (0.1)
Net interest margin - fully tax
equivalent 4.01 4.03 (0.5)
Shares outstanding at period end: *
Common 12,591,314 12,599,508 (0.1)%
(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)
March 31, December 31,
Assets 2006 2005
Cash and due from banks $52,781 $56,194
Interest bearing deposits with other
banks 10,194 8,908
Federal funds sold 6,275 -
Trading securities 42 468
Investment securities available for sale 335,425 347,300
Other investments 4,884 6,055
Investment in unconsolidated subsidiary 1,625 1,625
Loans held for sale 146 264
Total portfolio loans 1,200,255 1,214,591
Less: Allowance for loan losses (15,210) (15,482)
Net portfolio loans 1,185,045 1,199,109
Premises and equipment, net 37,824 38,391
Other real estate owned 1,264 956
Bank-owned life insurance 75,751 75,144
Investment in limited partnerships 6,388 6,612
Core deposit intangibles 6,534 6,729
Other intangibles 2,462 2,529
Goodwill 160,997 161,004
Other assets 31,355 28,691
TOTAL ASSETS $1,918,992 $1,939,979
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $233,311 $236,683
Interest bearing 1,190,716 1,185,847
Total deposits 1,424,027 1,422,530
Short-term borrowings 76,367 90,153
ESOP debt 1,755 1,845
Junior subordinated debentures 56,567 56,692
Long-term debt 28,901 36,322
Other interest bearing liabilities 812 882
Other liabilities 11,663 13,065
TOTAL LIABILITIES 1,600,092 1,621,489
Shareholders' Equity
Common stock, par value $5.00 per share:
Authorized - 25,000,000 shares;
Issued -
12,745,729 shares at March 31, 2006;
12,670,323 shares at December 31, 2005; 63,745 63,368
Outstanding -
12,591,314 shares at March 31, 2006;
12,599,508 shares at December 31, 2005;
Capital surplus 101,428 99,874
Retained earnings 160,998 159,583
Accumulated other comprehensive
income (1,579) (1,226)
Unearned compensation related to ESOP
debt (1,060) (1,125)
Cost of common stock in treasury:
154,415 shares at March 31, 2006
70,815 shares at December 31, 2005 (4,632) (1,984)
TOTAL SHAREHOLDERS' EQUITY 318,900 318,490
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,918,992 $1,939,979
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Unaudited
Three Months Ended
March 31,
2006 2005
Interest Income:
Interest and fees on loans $19,837 $19,347
Interest and dividends on investment
securities 3,104 2,367
Other interest income 101 358
TOTAL INTEREST INCOME 23,042 22,072
Interest Expense:
Interest on deposits 5,895 4,692
Interest on short-term borrowings 771 490
Interest on long-term debt and
other interest bearing liabilities 1,264 1,648
TOTAL INTEREST EXPENSE 7,930 6,830
NET INTEREST INCOME 15,112 15,242
Provision for loan losses 120 142
INCOME FROM CREDIT ACTIVITIES 14,992 15,100
Other Income:
Service fees on deposit accounts 2,354 2,140
Service fees on loans 382 312
Earnings on bank-owned life insurance 607 575
Trust fees 1,583 1,666
Investment and insurance product sales 946 1,072
Gain on the early extinguishment of debt - 1,043
(Loss) Gain on sale of loans and other assets 57 (339)
Net gains on the sale of investment securities 62 988
Other 1,166 1,029
TOTAL OTHER INCOME 7,157 8,486
Other Expense:
Salaries and employee benefits 7,754 7,551
Net occupancy expense 1,110 1,111
Equipment expense 1,139 1,089
Data processing service 645 626
Pennsylvania shares tax 733 619
Amortization of intangible assets 261 163
Other 3,659 3,810
TOTAL OTHER EXPENSE 15,301 14,969
Income before taxes 6,848 8,617
Income tax expense 1,505 2,040
NET INCOME $5,343 $6,577
Net income per common share:
Basic $.42 $.52
Diluted $.42 $.52
Weighted average shares and equivalents:
Basic 12,586 12,596
Diluted 12,634 12,659
Dividends declared per share:
Common $.31 $.31
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Unaudited
Qtr 1 Qtr 4
2006 2005
Interest Income:
Interest and fees on loans $19,837 $20,061
Interest and dividends on investment
securities 3,104 3,200
Other interest income 101 53
TOTAL INTEREST INCOME 23,042 23,314
Interest Expense:
Interest on deposits 5,895 5,686
Interest on short-term borrowings 771 832
Interest on long-term debt and
other interest bearing liabilities 1,264 1,327
TOTAL INTEREST EXPENSE 7,930 7,845
NET INTEREST INCOME 15,112 15,469
Provision (credit) for loan losses 120 590
INCOME FROM CREDIT ACTIVITIES 14,992 14,879
Other Income:
Service fees on deposit accounts 2,354 2,487
Service fees on loans 382 391
Earnings on bank-owned life insurance 607 579
Trust fees 1,583 1,324
Investment and insurance product sales 946 663
Gain on sale of loans and other assets 57 3
Net gains on the sale of investment securities 62 656
Other 1,166 1,240
TOTAL OTHER INCOME 7,157 7,343
Other Expense:
Salaries and employee benefits 7,754 7,563
Net occupancy expense 1,110 1,107
Equipment expense 1,139 1,084
Data processing service 645 642
Pennsylvania shares tax 733 589
Amortization of intangible assets 261 274
Other 3,659 4,196
TOTAL OTHER EXPENSE 15,301 15,455
Income before taxes 6,848 6,767
Income tax expense 1,505 1,415
NET INCOME $5,343 $5,352
Net income per common share:
Basic $0.42 $0.43
Diluted $0.42 $0.42
Weighted average shares and
equivalents:
Basic 12,586 12,586
Diluted 12,634 12,624
Dividends declared per share:
Common $.31 $.31
Omega Financial Corporation
Consolidated Net Interest Income Analysis
First Quarter 2006 vs. First Quarter 2005
(In thousands)
First Quarter 2006
Average Income/
Balance Rate Expense
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits 9,200 3.09% 70
Federal Funds Sold 2,736 4.60% 31
Total Money Market Investments 11,936 3.43% 101
Investment Securities
U.S. Treasuries and Agencies 282,200 3.64% 2,535
State and Municipals-Tax Free 52,148 2.90% 378
Corporate Securities 1,111 7.92% 22
Stock 13,772 4.04% 139
Investment in Subsidiaries 1,625 7.38% 30
Total Investment Securities 350,856 3.58% 3,104
Loans
Commercial Loans 270,088 7.23% 4,814
Tax Free Commercial Loans 19,551 4.75% 229
Real Estate Loans 716,955 6.49% 11,640
Tax Free Real Estate Loans 40,200 4.11% 413
Personal Loans and Leases 157,487 7.06% 2,741
Total Loans 1,204,281 6.62% 19,837
Total Earning Assets 1,567,073 5.92% 23,042
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest 322,413 0.65% 514
Money Market Deposits 89,348 1.40% 309
Savings Deposits 202,170 0.55% 274
CD'S, $100,000 and Over 95,338 3.88% 911
Other Time Deposits 469,770 3.36% 3,887
Total Interest Bearing Deposits 1,179,039 2.03% 5,895
Short-Term Borrowings 85,173 3.67% 771
Long-Term Debt 89,302 5.63% 1,256
Other Interest Bearing Liabilities 870 3.68% 8
Demand Deposits 228,825
Cash (50,441)
Other 34,305
Total Funding Sources 1,567,073 2.05% 7,930
Net Int Spread - Net Int Income 3.87% 15,112
Net Int Spread - Tax Equivalent 4.01%
Net Int Income - Tax Equivalent 15,661
Tax Rate 35%
Omega Financial Corporation
Consolidated Net Interest Income Analysis
First Quarter 2006 vs. First Quarter 2005
(In thousands)
First Quarter 2005
Average Income/
Balance Rate Expense
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits 34,222 2.22% 187
Federal Funds Sold 28,759 2.41% 171
Total Money Market Investments 62,981 2.31% 358
Investment Securities
U.S. Treasuries and Agencies 208,488 3.16% 1,622
State and Municipals-Tax Free 75,957 2.87% 545
Corporate Securities 1,612 7.69% 31
Stock 17,381 3.20% 139
Investment in Subsidiaries 1,625 7.38% 30
Total Investment Securities 305,063 3.13% 2,367
Loans
Commercial Loans 249,825 6.01% 3,702
Tax Free Commercial Loans 22,179 4.75% 260
Real Estate Loans 814,619 5.83% 11,863
Tax Free Real Estate Loans 38,638 5.00% 483
Personal Loans and Leases 189,351 6.51% 3,039
Total Loans 1,314,612 5.92% 19,347
Total Earning Assets 1,682,656 5.28% 22,072
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest 373,599 0.56% 520
Money Market Deposits 107,122 1.35% 356
Savings Deposits 219,320 0.54% 291
CD'S, $100,000 and Over 100,663 3.26% 809
Other Time Deposits 472,495 2.33% 2,716
Total Interest Bearing Deposits 1,273,199 1.49% 4,692
Short-Term Borrowings 77,959 7.04% 1,354
Long-Term Debt 136,930 2.28% 779
Other Interest Bearing Liabilities 848 2.36% 5
Demand Deposits 223,885
Cash (52,085)
Other 21,920
Total Funding Sources 1,682,656 1.64% 6,830
Net Int Spread - Net Int Income 3.64% 15,242
Net Int Spread - Tax Equivalent 3.81%
Net Int Income - Tax Equivalent 15,936
Tax Rate 35%
Omega Financial Corporation
Consolidated Net Interest Income Analysis
First Quarter 2006 vs. First Quarter 2005
(In thousands)
Increase(Decrease)
Due To Due To Net
Volume Rate Change
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits (172) 55 (117)
Federal Funds Sold (225) 85 (140)
Total Money Market Investments (397) 140 (257)
Investment Securities
U.S. Treasuries and Agencies 639 274 913
State and Municipals-Tax Free (173) 6 (167)
Corporate Securities (10) 1 (9)
Stock (32) 32 --
Investment in Subsidiaries -- -- --
Total Investment Securities 424 313 737
Loans
Commercial Loans 318 795 1,112
Tax Free Commercial Loans (31) (0) (31)
Real Estate Loans (1,479) 1,255 (223)
Tax Free Real Estate Loans 18 (89) (70)
Personal Loans and Leases (540) 242 (298)
Total Loans (1,714) 2,204 490
Total Earning Assets (1,687) 2,657 970
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest (79) 73 (6)
Money Market Deposits (60) 13 (47)
Savings Deposits (23) 6 (17)
CD'S, $100,000 and Over (45) 147 102
Other Time Deposits (16) 1,187 1,171
Total Interest Bearing Deposits (222) 1,425 1,203
Short-Term Borrowings 115 (698) (583)
Long-Term Debt (347) 824 477
Other Interest Bearing Liabilities 0 3 3
Demand Deposits
Cash
Other
Total Funding Sources (454) 1,555 1,100
Net Int Spread - Net Int Income (1,232) 1,102 (130)
Net Int Spread - Tax Equivalent
Net Int Income - Tax Equivalent (275)
Tax Rate
SOURCE Omega Financial Corporation
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http://www.omegafinancial.com/
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CONTACT:
Teresa Ciambotti, SVP, Director of Investor
Relations of Omega Financial Corporation, +1-814-231-6401
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