STATE COLLEGE, Pa., Aug. 1 /PRNewswire-FirstCall/ -- Omega Financial
Corporation (Nasdaq: OMEF) reported second quarter net income of $5.345
million, compared to $5.381 million for the same period last year, company
officials said. Diluted earnings per share for the quarter were $0.42.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990921/OMFCLOGO)
Donita R. Koval, Omega's president and chief executive officer, said
the company's net interest margin for the quarter rose to 4.09% on a fully
tax- equivalent basis from 3.90% in the same period last year in spite of a
flat yield curve and a challenging rate environment. She noted that the net
interest margin has also increased this quarter from the 4.01% recorded in
this year's first quarter, with net interest income rising by 1.71%.
In the non-interest income area service fees on loans and deposit
accounts contributed solid increases, while non-interest expenses decreased
less than one half of one percent when comparing this quarter to second
quarter 2005.
"The increase in the net interest margin comes at a time when all
financial institutions are challenged to simply maintain their margin,"
Koval said. "We continue to manage our balance sheet in order to achieve a
margin increase, and that strategy has paid off. At the same time, our
continued focus on expense control has aided our bottom line."
In year-to-date figures, net income for 2006 is $10.688 million,
compared to $11.958 million in 2005, while diluted earnings per share are
$0.85 compared to $0.95. Excluding gains on securities and early
extinguishment of debt in 2005's first six months results in net income
year-to-date essentially unchanged. Common share dividends declared were
$0.31 and $0.62 for the quarter and year to date, respectively, unchanged
from the same periods last year.
In the first quarter of 2006, approximately $20 million in loans for
one commercial borrower was placed on non-accrual status. Omega continues
to evaluate this credit and has increased the amount of loan loss allowance
allocated to this borrower to $3 million as of June 30, 2006. The remainder
of the Corporation's loan portfolio has shown improvement during the second
quarter in both non-accrual levels and delinquencies. As a result of this
improving trend, the provision for loan losses necessary to maintain the
allowance for loan losses at an adequate level was $100,000.
The company recently announced the sale of its Sentry Trust affiliate
which it acquired in the 2004 merger with Sun Bancorp. The results of
Sentry Trust are reflected as discontinued operations in the consolidated
statements of income and the related assets and liabilities of Sentry Trust
have been segregated as such on the consolidated balance sheets.
Additionally, on July 31, 2006, the Company agreed to sell three branch
locations as it continues refining its retail network in the wake of the
merger. The assets and liabilities of these branches are classified as held
for sale on the June 30, 2006 consolidated balance sheet. The branch sales
are expected to close before December 31, 2006 and result in a total
pre-tax gain of approximately $2.3 million.
In the second quarter, Omega Bank, the company's principal subsidiary
received a Pillars of the Community award from the Federal Home Loan Bank
of Pittsburgh (FHLB) for sustained and outstanding commitment to projects
that provide affordable housing and community and economic development.
Omega is the only financial institution in Central Pennsylvania to receive
the award this year and one of only four in Pennsylvania, Delaware and West
Virginia among 340 institutions eligible to compete for the designation.
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*)
Three Months Ended June 30,
2006 2005 % Change
Earnings:
Net income $5,345 $5,381 (0.7)%
Per share statistics: *
Diluted earnings $.42 $.43 (2.3)%
Dividends declared - common .31 .31 0.0
Book value - common 25.41 25.25 0.6
Book value - tangible 11.89 11.69 1.7
Market value - High 34.10 31.54 8.1
Low 28.19 27.05 4.2
Financial position at period end:
Assets $1,908,401 $1,993,745 (4.3)%
Net loans (1) 1,178,251 1,238,548 (4.9)
Deposits (1) 1,420,652 1,511,334 (6.0)
Shareholders' equity 318,819 318,329 0.2
Average Balances:
Assets $1,908,861 $2,003,840 (4.7)%
Net loans (1) 1,180,827 1,256,198 (6.0)
Deposits (1) 1,416,002 1,515,209 (6.5)
Shareholders' equity 321,768 319,986 0.6
Non-Performing Loans at period end:
Non-accrual loans $22,922 5,144 345.6%
Accruing loans past due 90 days or
more 2,769 3,525 (21.4)
Restructured loans - 218 (100.0)
Profitability ratios - annualized: *
Return on average assets 1.12% 1.07% 4.3%
Return on tangible assets 1.23 1.17 5.1
Return on average stated equity (2) 6.64 6.73 (1.2)
Return on average tangible equity (3) 14.06 14.47 (2.8)
Net interest margin - fully tax
equivalent 4.09 3.90 4.9
Shares outstanding at period end: *
Common 12,548,843 12,609,174 (0.5)
(1) Includes amounts classified as held for sale
(2) Average stated equity is equal to average shareholders' equity.
(3) 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*)
Six Months Ended June 30,
2006 2005 % Change
Earnings:
Net income $10,688 $11,958 (10.6)%
Per share statistics: *
Diluted earnings $.85 $.95 (10.5)%
Dividends declared - common .62 .62 0.0
Book value - common 25.41 25.25 0.6
Book value - tangible 11.89 11.69 1.7
Market value - High 34.21 34.50 (0.8)
Low 27.88 27.05 3.1
Financial position at period end:
Assets $1,908,401 $1,993,745 (4.3)%
Net loans (1) 1,178,251 1,238,548 (4.9)
Deposits (1) 1,420,652 1,511,334 (6.0)
Shareholders' equity 318,819 318,329 0.2
Average Balances:
Assets $1,913,847 $2,025,803 (5.5)%
Net loans (1) 1,215,252 1,292,943 (6.0)
Deposits (1) 1,411,955 1,506,197 (6.3)
Shareholders' equity 321,662 319,292 0.7
Non-Performing Loans at period end:
Non-accrual loans $22,922 5,144 345.6%
Accruing loans past due 90 days or
more 2,769 3,525 (21.4)
Restructured loans - 218 (100.0)
Profitability ratios - annualized: *
Return on average assets 1.12% 1.18% (5.4)%
Return on tangible assets 1.23 1.29 (4.7)
Return on average stated equity (2) 6.65 7.49 (11.3)
Return on average tangible equity (3) 14.09 16.28 (13.5)
Net interest margin - fully tax
equivalent 4.04 3.84 5.2
Shares outstanding at period end: *
Common 12,548,843 12,609,174 (0.5)%
(1) Includes amounts classified as held for sale
(2) Average stated equity is equal to average shareholders' equity.
(3) 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)
June 30, December 31,
Assets 2006 2005
Cash and due from banks $55,460 $56,194
Interest bearing deposits with other banks 10,164 8,908
Federal funds sold 16,275 -
Trading securities 40 468
Investment securities available for sale 313,549 347,300
Other investments 12,013 6,055
Investment in unconsolidated subsidiary 1,625 1,625
Loans held for sale 292 264
Total portfolio loans 1,165,346 1,214,591
Less: Allowance for loan losses (14,625) (15,482)
Net portfolio loans 1,150,721 1,199,109
Premises and equipment, net 31,743 35,997
Other real estate owned 1,425 956
Bank-owned life insurance 76,304 75,144
Investment in limited partnerships 6,165 6,612
Core deposit intangibles 6,009 6,729
Other intangibles 1,139 1,193
Goodwill 159,184 159,191
Assets held for sale 31,749 -
Assets of discontinued operations 5,260 4,599
Other assets 29,284 29,635
TOTAL ASSETS $1,908,401 $1,939,979
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $238,406 $236,683
Interest bearing 1,145,457 1,185,847
Total deposits 1,383,863 1,422,530
Short-term borrowings 68,934 90,153
ESOP debt 1,665 1,845
Junior subordinated debentures 56,443 56,692
Long-term debt 28,565 36,322
Other interest bearing liabilities 825 882
Liabilities held for sale 36,762 -
Liabilities of discontinued operations 329 156
Other liabilities 12,196 12,909
TOTAL LIABILITIES 1,589,582 1,621,489
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 - 12,756,257 shares at June 30, 2006;
12,670,323 shares at December 31, 2005; 63,782 63,368
Outstanding - 12,551,842 shares at June 30, 2006;
12,599,508 shares at
December 31, 2005;
Capital surplus 101,605 99,874
Retained earnings 162,638 159,583
Accumulated other comprehensive income (2,034) (1,226)
Unearned compensation related to ESOP debt (994) (1,125)
Cost of common stock in treasury:
204,415 shares at June 30, 2006
70,815 shares at December 31, 2005 (6,178) (1,984)
TOTAL SHAREHOLDERS' EQUITY 318,819 318,490
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,908,401 $1,939,979
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Unaudited
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Interest Income:
Interest and fees on loans $20,372 $19,612 $40,209 $38,959
Interest and dividends on
investment securities 3,077 2,689 6,181 5,056
Other interest income 241 338 342 696
TOTAL INTEREST INCOME. 23,690 22,639 46,732 44,711
Interest Expense:
Interest on deposits 6,409 5,559 12,304 10,251
Interest on short-term
borrowings 663 438 1,434 928
Interest on long-term debt
and other interest bearing
liabilities 1,248 1,292 2,512 2,940
TOTAL INTEREST EXPENSE 8,320 7,289 16,250 14,119
NET INTEREST INCOME 15,370 15,350 30,482 30,592
Provision for loan losses 100 180 220 322
INCOME FROM CREDIT ACTIVITIES 15,270 15,170 30,262 30,270
Other Income:
Service fees on deposit
accounts 2,598 2,308 4,952 4,448
Service fees on loans 443 315 825 627
Earnings on bank-owned
life insurance 552 574 1,159 1,149
Trust fees 1,025 1,079 2,145 2,171
Investment and insurance
product sales 618 757 1,542 1,810
Gain on the early
extinguishment of debt - - - 1,043
Gain (loss) on sale of loans
and other assets 64 (39) 121 (378)
Net gains on the sale of
investment securities 176 549 238 1,537
Other 1,215 1,149 2,381 2,178
TOTAL OTHER INCOME 6,691 6,692 13,363 14,585
Other Expense:
Salaries and employee benefits 7,308 7,324 14,793 14,519
Net occupancy expense 1,083 1,029 2,188 2,102
Equipment expense 1,143 1,019 2,271 2,097
Data processing service 673 621 1,318 1,247
Pennsylvania shares tax 728 549 1,440 1,168
Amortization of intangible assets 222 234 443 357
Other 3,870 4,309 7,449 7,970
TOTAL OTHER EXPENSE 15,027 15,085 29,902 29,460
Income before income taxes
and discontinued operations 6,934 6,777 13,723 15,395
Income tax expense 1,568 1,343 3,051 3,383
Income from continuing
operations 5,366 5,434 10,672 12,012
Discontinued operations:
Income (Loss) from discontinued
operations, net of tax 125 (53) 162 (54)
Loss on disposal of discontinued
operations, net of tax (146) - (146) -
Income (Loss) from discontinued
operations (21) (53) 16 (54)
NET INCOME $5,345 $5,381 $10,688 $11,958
Net income per common share:
Basic $0.43 $0.43 $0.85 $0.95
Diluted $0.42 $0.43 $0.85 $0.95
Net income per common share
from continuing operations
Basic $0.43 $0.43 $0.85 $0.95
Diluted $0.43 $0.43 $0.85 $0.95
Net income per common share
from discontinued operations
Basic $0.00 $0.00 $0.00 $0.00
Diluted $0.00 $0.00 $0.00 $0.00
Weighted average shares
and equivalents:
Basic 12,572 12,607 12,579 12,601
Diluted 12,616 12,660 12,624 12,659
Dividends declared
per share:
Common 0.31 0.31 0.62 0.62
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED NET INTEREST INCOME ANALYSIS
2nd Quarter 2006 vs. 2nd Quarter 2005
(In thousands)
Second Qtr 2006 Second Qtr 2005
Average Income/ Average Income/
Balance Rate Expense Balance Rate Expense
INTEREST EARNING
ASSETS
Money Market
Investments
Interest Bearing
Deposits 11,158 4.13% 115 25,224 2.59% 163
Federal Funds Sold 10,237 4.94% 126 24,735 2.85% 176
Total Money Market
Investments 21,395 4.52% 241 49,959 2.72% 339
Investment Securities
U.S. Treasuries
and Agencies 279,381 3.64% 2,537 234,197 3.38% 1,973
State and
Municipals-
Tax Free 39,609 2.63% 260 66,337 2.82% 467
Corporate
Securities 19,201 5.83% 280 15,756 6.32% 249
Total Investment
Securities 338,191 3.65% 3,077 316,290 3.41% 2,689
Loans
Commercial Loans 265,236 7.31% 4,835 258,485 6.37% 4,107
Tax Free
Commercial Loans 19,315 4.76% 229 21,655 4.78% 258
Real Estate Loans 706,380 6.73% 11,892 791,630 6.08% 12,037
Tax Free Real
Estate Loans 40,507 4.30% 435 39,894 4.08% 407
Personal Loans
and Leases 164,415 7.27% 2,981 159,848 7.03% 2,802
Total Loans 1,195,853 6.82% 20,372 1,271,512 6.18% 19,611
Total Earning
Assets 1,555,439 6.10% 23,690 1,637,761 5.54% 22,639
FUNDING SOURCES
Interest Bearing
Liabilities
Checking with
Interest 314,395 0.73% 572 383,600 0.73% 694
Money Market
Accounts 88,131 1.50% 330 107,690 1.42% 381
Savings Accounts 200,977 0.55% 275 221,124 0.55% 303
CD'S, $100,000
and Over 97,755 4.04% 984 99,424 3.41% 846
Other Time
Deposits 476,046 3.58% 4,248 475,872 2.81% 3,335
Total Interest
Bearing Deposits 1,177,304 2.18% 6,409 1,287,710 1.73% 5,559
Other Borrowed
Funds - Short
Term 71,576 3.71% 662 59,301 2.96% 438
Long Term Debt 85,236 5.82% 1,240 94,479 5.44% 1,286
Other Interest
Bearing
Liabilities 806 4.47% 9 843 2.85% 6
Demand Deposits 238,698 227,500
Cash (50,685) (54,221)
Other 32,504 22,149
Total Funding
Sources 1,555,439 2.14% 8,320 1,637,761 1.78% 7,289
Net Int Spread -
Net Int Income 3.96% 15,370 3.75% 15,350
Net Int Spread-Tax
Equivalent 4.09% 3.90%
Tax Equivalent Net
Int Income 15,868 15,960
CONSOLIDATED NET INTEREST INCOME ANALYSIS
2nd Quarter 2006 vs. 2nd Quarter 2005
(In thousands)
Increase/(Decrease)
Due To Due To Net
Volume Rate Change
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits (117.1) 69.1 (48)
Federal Funds Sold (136.7) 86.7 (50)
Total Money Market Investments (253.8) 155.8 (98)
Investment Securities
U.S. Treasuries and Agencies 401.8 162.2 564
State and Municipals-Tax Free (177.3) (29.7) (207)
Corporate Securities 51.3 (20.3) 31
Total Investment Securities 275.8 112.2 388
Loans
Commercial Loans 109.6 618.4 728
Tax Free Commercial Loans (27.7) (1.3) (29)
Real Estate Loans (1,362.3) 1,217.3 (145)
Tax Free Real Estate Loans 6.3 21.7 28
Personal Loans and Leases 81.3 97.7 179
Total Loans (1,192.8) 1,953.8 761
Total Earning Assets (1,170.7) 2,221.7 1,051
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest (125.9) 3.9 (122)
Money Market Accounts (72.3) 21.3 (51)
Savings Accounts (27.6) (0.4) (28)
CD'S, $100,000 and Over (14.4) 152.4 138
Other Time Deposits 1.2 911.8 913
Total Interest Bearing Deposits (238.9) 1,088.9 850
Other Borrowed Funds-Short Term 101.0 123.0 224
Long Term Debt (130.9) 84.9 (46)
Other Interest Bearing
Liabilities (0.3) 3.3 3
Demand Deposits
Cash
Other
Total Funding Sources (269.1) 1,300.1 1,031
Net Int Spread - Net Int Income (901.6) 921.6 20
Net Int Spread-Tax Equivalent
Tax Equivalent Net Int Income
SOURCE Omega Financial Corporation
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Related links:
http://www.omegafinancial.com/
CONTACT:
Teresa Ciambotti, SVP, Director of Investor
Relations of Omega Financial Corporation, +1-814-231-6401
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