STATE COLLEGE, Pa., Oct. 18 /PRNewswire-FirstCall/ -- Net income for
Omega Financial Corporation (Nasdaq: OMEF) rose by 6.8% to $5.942 million
in the third quarter of this year, compared to the same period last year,
company officials said. Per share diluted earnings increased by the same
percentage to $0.47.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990921/OMFCLOGO )
Donita R. Koval, Omega's president and chief executive officer,
attributed the increases to strong performances in managing the net
interest margin, continuing diligent cost controls and ongoing efforts to
grow non-interest income.
Koval stated the company's net interest margin for the quarter
increased 9 basis points to 4.08% from 3.99% on a fully tax-equivalent
basis. The company's Return on Average Tangible Assets was 1.37% and Return
on Average Tangible Equity 15.46%, representing an increase of 12.3% and
5.3%, respectively. Common share dividends declared for the period were
unchanged at $0.31.
For the year to date, Omega's net interest margin rose 17 basis points
to 4.05% from 3.88% in 2005, while net income declined to $16.6 million,
compared to $17.5 million in 2005. Koval said that one time gains from the
sales of assets and investments and the early extinguishment of debt in
2005 and 2006, combined with a loss on the disposal of discontinued
operations in 2006 were largely responsible for the difference. Excluding
those transactions, she said, results in an increase in year-to-date net
income just over 3%.
In non-interest income, the company recorded a 3.7% improvement in the
third quarter, excluding gains on the sales of assets and investments. The
increase was largely due to increases in service fees on loans and
deposits. For the year to date, non-interest income was up 4.5% excluding
gains on the sales of assets and investments and gains on the early
extinguishment of debt.
Koval stated Omega continued its expense control efforts, resulting in
a decrease of nearly 2.5% in the third quarter of 2006 versus the same
period last year. For the year to date, non-interest expenses were
contained to less than one percent increase.
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 relationship and has increased the amount of loan
loss allowance allocated to this borrower to $3.5 million as of September
30, 2006. Despite this increased allowance, no provision was necessary this
quarter due to a large recovery on a previously charged off loan and other
credit improvements.
In the third quarter, the Company completed 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 Sentry's related assets and
liabilities have been segregated as such on the consolidated balance
sheets. Additionally, the Company has 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 in
the September 30, 2006 consolidated balance sheet. One of the branch sales
was completed earlier this month and the other two are expected to close
before December 31, 2006. The branch sales are expected to result in a
pre-tax gain of approximately $2.3 million.
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 September 30,
2006 2005 % Change
Earnings:
Net income $5,942 $5,565 6.8%
Per share statistics: *
Diluted earnings $.47 $.44 6.8%
Dividends declared - common .31 .31 -
Book value - common 25.69 25.28 1.6
Book value - tangible 12.44 11.74 6.0
Market value - High 32.38 33.50 (3.3)
Low 28.12 26.55 5.9
Financial position at period end:
Assets $1,876,690 $1,971,830 (4.8)%
Net loans (1) 1,165,020 1,215,688 (4.2)
Deposits (1) 1,389,788 1,447,850 (4.0)
Shareholders' equity 322,974 318,540 1.4
Average Balances:
Assets $1,902,291 $1,989,655 (4.4)%
Net loans (1) 1,171,336 1,228,200 (4.6)
Deposits (1) 1,407,941 1,496,702 (5.9)
Shareholders' equity 322,902 322,500 0.1
Non-Performing Loans at period end:
Non-accrual loans $23,263 7,006 232.0%
Accruing loans past due 90 days or
more 2,943 2,452 20.0
Restructured loans - 215 (100.0)
Profitability ratios - annualized: *
Return on average assets 1.25% 1.12% 11.7%
Return on tangible assets 1.37 1.22 12.3
Return on average stated equity (2) 7.36 6.90 6.6
Return on average tangible equity (3) 15.46 14.68 5.3
Net interest margin - fully tax
equivalent 4.08 3.99 2.3
Shares outstanding at period end: *
Common 12,573,916 12,609,546 (0.3)
(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.
Nine Months Ended September 30,
2006 2005 % Change
Earnings:
Net income $16,630 $17,523 (5.1)%
Per share statistics: *
Diluted earnings $1.32 $1.38 (4.3)%
Dividends declared - common .93 .93 -
Book value - common 25.69 25.28 1.6
Book value - tangible 12.44 11.74 6.0
Market value - High 34.21 34.50 (0.8)
Low 27.88 32.22 (13.5)
Financial position at period end:
Assets $1,876,690 $1,971,830 (4.8)%
Net loans (1) 1,165,020 1,215,471 (4.2)
Deposits (1) 1,389,788 1,447,850 (4.0)
Shareholders' equity 322,974 318,540 1.4
Average Balances:
Assets $1,909,952 $2,013,623 (5.1)%
Net loans (1) 1,180,286 1,260,896 (6.4)
Deposits (1) 1,410,603 1,502,997 (6.1)
Shareholders' equity 322,080 320,372 0.5
Non-Performing Loans at period end:
Non-accrual loans $23,263 7,006 232.0%
Accruing loans past due 90 days or
more 2,943 2,452 20.0
Restructured loans - 215 (100.0)
Profitability ratios - annualized: *
Return on average assets 1.16% 1.16% 0.1%
Return on tangible assets 1.27 1.27 -
Return on average stated equity (2) 6.88 7.29 (5.6)
Return on average tangible equity (3) 14.55 15.73 (7.5)
Net interest margin - fully tax
equivalent 4.05 3.88 4.4
Shares outstanding at period end: *
Common 12,573,916 12,609,546 (0.3)%
(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)
September 30, December 31,
Assets 2006 2005
Cash and due from banks $52,733 $56,194
Interest bearing deposits with other
banks 11,664 8,908
Federal funds sold 7,150 -
Trading securities 43 468
Investment securities available for
sale 315,175 347,300
Other investments 11,885 6,055
Investment in unconsolidated
subsidiary 1,625 1,625
Loans held for sale - 264
Total portfolio loans 1,152,089 1,214,591
Less: Allowance for loan losses (14,827) (15,482)
Net portfolio loans 1,137,262 1,199,109
Premises and equipment, net 31,420 35,997
Other real estate owned 525 956
Bank-owned life insurance 75,706 75,144
Investment in limited partnerships 5,964 6,612
Core deposit intangibles 5,825 6,729
Other intangibles 1,112 1,193
Goodwill 159,387 159,191
Assets held for sale 32,122 -
Assets of discontinued operations - 4,599
Other assets 27,092 29,635
TOTAL ASSETS $1,876,690 $1,939,979
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $236,783 $236,683
Interest bearing 1,118,342 1,185,847
Total deposits 1,355,125 1,422,530
Short-term borrowings 62,708 90,153
ESOP debt 1,574 1,845
Junior subordinated debentures 56,318 56,692
Long-term debt 28,224 36,322
Other interest bearing liabilities 815 882
Liabilities held for sale 34,690 -
Liabilities of discontinued
operations - 156
Other liabilities 14,262 12,909
TOTAL LIABILITIES 1,553,716 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 - 12,774,585 shares at
September 30, 2006;
12,670,323 shares at
December 31, 2005; 63,889 63,368
Outstanding - 12,573,916 shares at
September 30, 2006;
12,599,508 shares at
December 31, 2005;
Capital surplus 102,030 99,874
Retained earnings 164,711 159,583
Accumulated other comprehensive
income (550) (1,226)
Unearned compensation related to ESOP
debt (928) (1,125)
Cost of common stock in treasury:
204,415 shares at September 30,
2006
70,815 shares at December 31, 2005 (6,178) (1,984)
TOTAL SHAREHOLDERS' EQUITY 322,974 318,490
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,876,690 $1,939,979
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Unaudited
Three Months Nine Months
Ended Ended
September 30, September 30,
2006 2005 2006 2005
Interest Income:
Interest and fees on loans $20,621 $19,887 $60,830 $58,846
Interest and dividends on investment
securities 3,043 2,975 9,224 8,031
Other interest income 516 288 858 984
TOTAL INTEREST INCOME. 24,180 23,150 70,912 67,861
Interest Expense:
Interest on deposits 6,824 5,754 19,128 16,005
Interest on short-term borrowings 708 576 2,142 1,504
Interest on long-term debt and
other interest bearing liabilities 1,259 1,211 3,771 4,151
TOTAL INTEREST EXPENSE 8,791 7,541 25,041 21,660
NET INTEREST INCOME 15,389 15,609 45,871 46,201
Provision for loan losses 290 220 612
INCOME FROM CREDIT ACTIVITIES 15,389 15,319 45,651 45,589
Other Income:
Service fees on deposit accounts 2,594 2,409 7,546 6,857
Service fees on loans 445 362 1,270 989
Earnings on bank-owned life insurance 620 571 1,779 1,720
Trust fees 919 1,017 3,064 3,188
Investment and insurance product sales 668 619 2,210 2,429
Gain on the early extinguishment of
debt - - - 1,043
Gain (loss) on sale of loans and other
assets 112 (1) 233 (379)
Net gains on the sale of investment
securities 577 134 815 1,671
Other 1,226 1,263 3,607 3,441
TOTAL OTHER INCOME 7,161 6,374 20,524 20,959
Other Expense:
Salaries and employee benefits 7,397 7,527 22,189 22,046
Net occupancy expense 1,019 1,002 3,207 3,105
Equipment expense 1,111 1,028 3,382 3,124
Data processing service 683 632 2,001 1,879
Pennsylvania shares tax 598 107 2,038 1,275
Amortization of intangible assets 221 234 664 591
Other 3,517 4,384 10,967 12,354
TOTAL OTHER EXPENSE 14,546 14,914 44,448 44,374
Income before income taxes and
discontinued operations 8,004 6,779 21,727 22,174
Income tax expense 1,953 1,388 5,004 4,771
Income from continuing operations 6,051 5,391 16,723 17,403
Discontinued operations:
Income from discontinued operations,
net of tax 284 174 446 120
Loss on disposal of discontinued
operations, net of tax (393) - (539) -
Income (Loss) from discontinued
operations (109) 174 (93) 120
NET INCOME $5,942 $5,565 $16,630 $17,523
Net income per common share:
Basic $0.47 $0.44 $1.32 $1.39
Diluted $0.47 $0.44 $1.32 1.38
Net income per common share from
continuing operations
Basic $0.48 $0.43 $1.33 $1.38
Diluted $0.48 $0.43 $1.33 $1.37
Net income per common share from
discontinued operations
Basic -$0.01 $0.01 -$0.01 $0.01
Diluted -$0.01 $0.01 -$0.01 $0.01
Weighted average shares and
equivalents:
Basic 12,560 12,616 12,573 12,606
Diluted 12,592 12,666 12,615 12,658
Dividends declared per share:
Common 0.31 0.31 0.93 0.93
Omega Financial Corporation
Consolidated Net Interest Income Analysis
3rd Quarter 2006 vs. 3rd Quarter 2005
(In thousands)
Third Quarter 2006
Average Income/
Balance Rate Expense
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits 19,627 3.96% 196
Federal Funds Sold 24,033 5.28% 320
Total Money Market Investments 43,660 4.69% 516
Investment Securities
U.S. Treasuries and Agencies 271,150 3.77% 2,580
State and Municipals-Tax Free 26,803 2.25% 151
Corporate Securities 21,573 5.79% 312
Total Investment Securities 319,526 3.78% 3,043
Loans
Commercial Loans 256,460 7.49% 4,840
Tax Free Commercial Loans 18,615 4.77% 224
Real Estate Loans 685,903 6.88% 11,798
Tax Free Real Estate Loans 40,487 4.41% 446
Personal Loans and Leases 184,790 7.11% 3,313
Total Loans 1,186,255 6.93% 20,621
Total Earning Assets 1,549,441 6.22% 24,180
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest 308,275 0.80% 620
Money Market Accounts 83,756 1.51% 318
Savings Accounts 196,299 0.55% 272
CD'S, $100,000 and Over 98,731 4.19% 1,042
Other Time Deposits 478,506 3.79% 4,572
Total Interest Bearing Deposits 1,165,567 2.32% 6,824
Other Borrowed Funds-Short Term 71,891 3.91% 708
Long Term Debt 84,774 5.90% 1,250
Other Interest Bearing Liabilities 819 4.40% 9
Demand Deposits 242,375
Cash (50,363)
Other 34,378
Total Funding Sources 1,549,441 2.25% 8,791
Net Int Spread - Net Int Income 3.97% 15,389
Net Int Spread-Tax Equivalent 4.08%
Tax Equivalent Net Int Income 15,831
Third Quarter 2005
Average Income/
Balance Rate Expense
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits 20,513 2.88% 149
Federal Funds Sold 16,966 3.25% 139
Total Money Market Investments 37,479 3.05% 288
Investment Securities
U.S. Treasuries and Agencies 263,072 3.46% 2,293
State and Municipals-Tax Free 65,391 2.91% 475
Corporate Securities 16,388 4.95% 203
Total Investment Securities 344,851 3.43% 2,971
Loans
Commercial Loans 264,151 6.68% 4,445
Tax Free Commercial Loans 19,860 4.85% 243
Real Estate Loans 762,124 6.28% 11,961
Tax Free Real Estate Loans 39,352 4.14% 407
Personal Loans and Leases 157,933 7.11% 2,831
Total Loans 1,243,420 6.38% 19,887
Total Earning Assets 1,625,750 5.68% 23,146
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest 372,511 0.81% 764
Money Market Accounts 106,391 1.42% 381
Savings Accounts 219,285 0.55% 304
CD'S, $100,000 and Over 93,893 3.52% 832
Other Time Deposits 467,897 2.94% 3,473
Total Interest Bearing Deposits 1,259,977 1.81% 5,754
Other Borrowed Funds-Short Term 71,336 3.20% 576
Long Term Debt 83,630 5.76% 1,205
Other Interest Bearing Liabilities 847 2.83% 6
Demand Deposits 236,725
Cash (54,547)
Other 27,782
Total Funding Sources 1,625,750 1.84% 7,541
Net Int Spread - Net Int Income 3.84% 15,605
Net Int Spread-Tax Equivalent 3.99%
Tax Equivalent Net Int Income 16,211
Increase/(Decrease)
Due To Due To Net
Volume Rate Change
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits (7) 54 47
Federal Funds Sold 72 109 181
Total Money Market Investments 66 162 228
Investment Securities
U.S. Treasuries and Agencies 73 214 287
State and Municipals-Tax Free (234) (90) (324)
Corporate Securities 71 38 109
Total Investment Securities (90) 162 72
Loans
Commercial Loans (132) 527 395
Tax Free Commercial Loans (15) (4) (19)
Real Estate Loans (1,262) 1,099 (163)
Tax Free Real Estate Loans 12 27 39
Personal Loans and Leases 482 - 482
Total Loans (916) 1,650 734
Total Earning Assets (940) 1,974 1,034
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest (134) (10) (144)
Money Market Accounts (86) 23 (63)
Savings Accounts (32) - (32)
CD'S, $100,000 and Over 45 165 210
Other Time Deposits 80 1,019 1,099
Total Interest Bearing Deposits (128) 1,198 1,070
Other Borrowed Funds-Short Term 5 128 132
Long Term Debt 16 29 45
Other Interest Bearing Liabilities (0) 3 3
Demand Deposits
Cash
Other
Total Funding Sources (107) 1,357 1,250
Net Int Spread - Net Int Income (833) 617 (216)
Net Int Spread-Tax Equivalent
Tax Equivalent Net Int Income
SOURCE Omega Financial Corporation
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CONTACT:
Teresa Ciambotti, SVP, Director of Investor
Relations of Omega Financial Corporation, +1-814-231-6401
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