STATE COLLEGE, Pa., Oct. 22 /PRNewswire-FirstCall/ -- Third quarter
2007 net income rose just over 9% for Omega Financial Corporation (Nasdaq:
OMEF) compared to the prior year quarter, company officials said.
Donita R. Koval, Omega's president and chief executive officer, noted
that the $5.846 million in net income for the third quarter 2007 represents
an increase of $489,000 or 9.1% over the $5.357 million achieved during the
same period last year. For the year-to-date, net income rose to $16.392
million from $16.045 million, an increase of $347,000 or 2.12%.
"The strong performance we've turned in for the third quarter indicates
the soundness of our basic strategies of managing the net interest margin,
continuing diligent cost controls and ongoing efforts to grow non-interest
income," Koval said.
On a per-share basis, fully-diluted earnings for the third quarter 2007
were $0.46, an increase of 7.0% over the $0.43 of last year's third
quarter. The company's Return on Average Assets for the third quarter 2007
was 1.30% and Return on Equity was 7.06%, representing an increase of 15.3%
and 6.4%, respectively from last year's third quarter. Common share
dividends declared were $0.31 for the quarter, unchanged from 2006.
For the year to date period, fully-diluted earnings were $1.30 per
share, an increase of 2.4% from $1.27 in 2006. Return on Average Assets was
1.21% and Return on Average Equity was 6.62% compared to 1.12% and 6.64% in
2006.
The company's third quarter provision for loan loss dropped
significantly when compared to the same quarter in 2006, falling more than
77%. The large provision in the third quarter of 2006 related to one
commercial borrower who had filed for bankruptcy protection. For the year
to date period, the provision has increased by nearly 40%, as the company
provided for several problem loans during the first three quarters of 2007.
Despite slight increases in delinquencies and non-performing loans
since June 30, 2007, the allowance for loan losses remained steady at $12.8
million as several improving credits on the watchlist offset these negative
impacts. The company does not have any direct exposure in the sub-prime
lending markets, however, management is continuing to monitor economic
trends in the markets in which Omega has exposure.
The company's net interest margin (NIM) continued to grow, reflecting
Omega's disciplined approach in pricing both loans and deposits, Koval
said. For the third quarter of 2007, NIM was 4.20% compared to 4.08% in
2006 .The NIM grew by 13 basis points for the year to date period, rising
to 4.18% compared to 4.05% in 2006, all on a fully tax equivalent basis.
Net interest income decreased $388,000 or 2.52% in the third quarter
2007 versus the same period in 2006. For the year to date period, net
interest income decreased just over $1 million, or 2.18%. The decrease in
net interest income in 2007 can be attributed to declines in earning assets
and liabilities as well as the fact that the 2006 amounts included interest
income earned from the three branches that were sold in the final quarter
of the year. These branches contributed $257,000 in net interest income in
the third quarter of 2006 and $804,000 for year to date period in 2006.
Excluding gains on the sale of investments, loans or other assets, non-
interest income increased $630,000 or 9.7% for the third quarter 2007
compared to 2006. The increase was fueled by gains in service fees on
deposits and trust fees as well as receipt of $367,000 in interest received
on a tax refund. For the year to date, the increase was $1,125 million or
5.8%. The three branch locations sold in 2006, contributed $58,000 in
non-interest income in the third quarter of 2006 and $171,000 year to date
as of September 30, 2006.
The Company's continued focus on expense control in a variety of
operating areas was reflected in the decline in non-interest expense of
$170,000 or 1.17% and $1,620,000 or 3.64% for the quarter and year to date
periods, respectively. The three branch locations, which were sold in 2006
accounted for $149,000 in non-interest expense in the third quarter 2006
and $555,000 year to date through September 30, 2006.
"Our strategies of diversifying our revenue stream and maintaining
vigilance on costs continue to enhance our earnings," Koval observed.
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,
2007 2006 % Change
Earnings:
Net income $5,846 $5,357 9.1%
Per share statistics: *
Diluted earnings $.46 $.43 7.0%
Dividends declared - common .31 .31 -
Book value - common 26.22 25.64 2.3
Book value - tangible 13.10 12.39 5.8
Market value - High 29.74 32.38 (8.2)
Low 20.97 28.12 (25.4)
Financial position at period end:
Assets $1,782,381 $1,876,105 (5.0)%
Net loans 1,114,169 1,136,362 (2.0)
Deposits 1,292,494 1,355,125 (4.6)
Shareholders' equity 331,205 322,389 2.7
Average Balances:
Assets $1,800,447 $1,902,284 (5.4)%
Net loans 1,120,763 1,171,326 (4.3)
Deposits 1,306,812 1,407,941 (7.2)
Shareholders' equity 331,132 322,896 2.6
Non-Performing Loans at period end:
Non-accrual loans $22,019 $23,263 (5.3)%
Accruing loans past due 90 days or
more 2,494 2,943 (15.3)
Profitability ratios - annualized: *
Return on average assets 1.30% 1.13% 15.3%
Return on tangible assets 1.43 1.24 15.3
Return on average stated equity (1) 7.06 6.64 6.4
Return on average tangible
equity (2) 14.13 13.94 1.4
Net interest margin - fully tax
equivalent 4.20 4.08 2.9
Shares outstanding at period end: *
Common 12,632,627 12,573,916 0.5%
Nine Months Ended September 30,
2007 2006 % Change
Earnings:
Net income $16,392 $16,045 2.2%
Per share statistics: *
Diluted earnings $1.30 $1.27 2.4%
Dividends declared - common .93 .93 -
Book value - common 26.22 25.64 2.3
Book value - tangible 13.10 12.39 5.8
Market value - High 34.49 34.21 0.8
Low 20.97 27.88 (24.8)
Financial position at period end:
Assets $1,782,381 $1,876,105 (5.0)%
Net loans 1,114,169 1,136,362 (2.0)
Deposits 1,292,494 1,355,125 (4.6)
Shareholders' equity 331,205 322,389 2.7
Average Balances:
Assets $1,801,188 $1,909,950 (5.7)%
Net loans 1,129,082 1,180,283 (4.3)
Deposits 1,305,168 1,410,603 (7.5)
Shareholders' equity 330,274 322,078 2.5
Non-Performing Loans at period end:
Non-accrual loans $22,019 $23,263 (5.3)%
Accruing loans past due 90 days or
more 2,494 2,943 (15.3)
Profitability ratios - annualized: *
Return on average assets 1.21% 1.12% 8.3%
Return on tangible assets 1.34 1.23 8.9
Return on average stated equity (1) 6.62 6.64 (0.3)
Return on average tangible
equity (2) 13.29 14.04 (5.3)
Net interest margin - fully tax
equivalent 4.18 4.05 3.2
Shares outstanding at period end: *
Common 12,632,627 12,573,916 0.5%
(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)
September 30, December 31,
2007 2006
Assets
Cash and due from banks 51,904 56,225
Interest bearing deposits with other
banks 11,163 12,073
Federal funds sold 17,760 -
Trading securities 60 48
Investment securities available for
sale 274,871 291,807
Other investments 12,104 12,087
Investment in unconsolidated
subsidiary 1,625 1,625
Loans held for sale - 204
Total portfolio loans 1,126,974 1,152,188
Less: Allowance for loan losses (12,805) (17,344)
Net portfolio loans 1,114,169 1,134,844
Premises and equipment, net 29,428 30,861
Other real estate owned 945 512
Bank-owned life insurance 75,156 76,341
Investment in limited partnerships 5,202 5,763
Core deposit intangibles 5,089 5,641
Other intangibles 1,003 1,085
Goodwill 159,567 159,387
Other assets 22,335 27,315
TOTAL ASSETS $1,782,381 $1,815,614
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $237,436 $232,335
Interest bearing 1,055,058 1,093,428
Total deposits 1,292,494 1,325,763
Short-term borrowings 62,880 65,712
ESOP debt 1,189 1,481
Junior subordinated debentures 55,820 56,193
Long-term debt 26,803 27,877
Other interest bearing liabilities 864 858
Other liabilities 11,126 12,723
TOTAL LIABILITIES 1,451,176 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 -
12,867,243 shares at September 30,
2007;
12,823,471 shares at December 31,
2006 64,352 64,133
Outstanding -
12,632,627 shares at September 30,
2007;
12,622,802 shares at December 31,
2006
Capital surplus 104,078 103,149
Retained earnings 169,321 164,653
Accumulated other comprehensive
income 1,234 313
Unearned compensation related to ESOP
debt (642) (859)
Cost of common stock in treasury:
234,616 shares at September 30,
2007;
200,669 shares at December 31,
2006 (7,138) (6,178)
TOTAL SHAREHOLDERS' EQUITY 331,205 325,211
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,782,381 $1,815,818
OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Interest Income:
Interest and fees on loans $19,877 $20,621 $59,600 $60,830
Interest and dividends on
investment securities 3,433 3,043 10,260 9,224
Other interest income 459 516 772 858
TOTAL INTEREST INCOME 23,769 24,180 70,632 70,912
Interest Expense:
Interest on deposits 6,882 6,824 19,981 19,128
Interest on short-term borrowings 620 708 2,019 2,142
Interest on long-term debt and
other interest bearing
liabilities 1,266 1,259 3,763 3,771
TOTAL INTEREST EXPENSE 8,768 8,791 25,763 25,041
NET INTEREST INCOME 15,001 15,389 44,869 45,871
Provision for loan losses 205 900 1,560 1,120
INCOME FROM CREDIT ACTIVITIES 14,796 14,489 43,309 44,751
Other Income:
Service fees on deposit accounts 2,640 2,594 7,691 7,546
Service fees on loans 350 445 1,107 1,270
Earnings on bank-owned life
insurance 643 620 1,929 1,779
Trust fees 1,063 919 3,257 3,064
Investment and insurance product
sales 687 668 2,239 2,210
Gain (loss) on sale of loans and
other assets (25) 112 5 233
Net gains on the sale of
investment securities 153 577 491 815
Other 1,719 1,226 4,378 3,607
TOTAL OTHER INCOME 7,230 7,161 21,097 20,524
Other Expense:
Salaries and employee benefits 7,233 7,396 21,332 22,189
Net occupancy expense 995 1,019 3,146 3,207
Equipment expense 1,155 1,111 3,485 3,382
Data processing service 607 683 1,816 2,001
Pennsylvania shares tax 661 598 2,233 2,038
Amortization of intangible assets 211 221 634 664
Other 3,514 3,518 10,182 10,967
TOTAL OTHER EXPENSE 14,376 14,546 42,828 44,448
Income before income taxes and
discontinued operations 7,650 7,104 21,578 20,827
Income tax expense 1,804 1,638 5,186 4,689
Income from continuing operations 5,846 5,466 16,392 16,138
Discontinued operations:
Income from discontinued
operations, net of tax - 284 - 446
Loss on disposal of discontinued
operations, net of tax - (393) - (539)
Loss from discontinued operations - (109) - (93)
NET INCOME $5,846 $5,357 $16,392 $16,045
Net income per common share
Basic $0.46 $0.43 $1.30 $1.28
Diluted $0.46 $0.43 $1.30 $1.27
Net income per common share from
continuing operations
Basic $0.46 $0.44 $1.30 $1.28
Diluted $0.46 $0.43 $1.30 $1.28
Net income per common share from
discontinued operations
Basic $- $- $- $-
Diluted $- $- $- $-
Weighted average shares and
equivalents
Basic 12,625 12,560 12,628 12,573
Diluted 12,638 12,592 12,644 12,615
Dividends declared per share
Common $0.31 $0.31 $0.93 $0.93
Omega Financial Corporation
Consolidated Net Interest Income Analysis
Third Quarter 2007 vs. Third Quarter 2006
(In thousands)
Third Quarter 2007
Average Income/
Balance Rate Expense
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits 20,232 4.31% 220
Federal Funds Sold 18,472 5.13% 239
Total Money Market Investments 38,704 4.71% 459
Investment Securities
U.S. Treasuries and Agencies 263,460 4.62% 3,065
State and Municipals-Tax Free 995 3.22% 8
Corporate Securities & Stock 26,392 5.46% 360
Total Investment Securities 290,847 4.69% 3,433
Loans
Commercial Loans 226,979 7.76% 4,439
Tax Free Commercial Loans 16,836 4.93% 209
Real Estate Loans 644,965 6.77% 10,915
Tax Free Real Estate Loans 38,048 4.34% 413
Personal Loans and Leases 206,661 7.49% 3,902
Total Loans 1,133,489 7.01% 19,878
Total Earning Assets 1,463,040 6.49% 23,770
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest 295,529 0.76% 568
Money Market Deposits 68,573 1.49% 258
Savings Deposits 176,658 0.55% 245
CD'S, $100,000 and Over 88,868 4.48% 1,003
Other Time Deposits 444,530 4.29% 4,808
Total Interest Bearing Deposits 1,074,158 2.54% 6,882
Short-Term Borrowings 66,120 3.73% 621
Long-Term Debt 82,865 6.07% 1,257
Other Interest Bearing Liabilities 868 4.15% 9
Demand Deposits 232,654
Cash (47,190)
Other 53,565
Total Funding Sources 1,463,040 2.38% 8,769
Net Int Spread - Net Int Income 4.11% 15,001
Net Int Spread - Tax Equivalent 4.20%
Net Int Income - Tax Equivalent 15,340
Tax Rate 35%
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 4.74% 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 & Stock 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 Deposits 83,756 1.51% 318
Savings Deposits 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
Short-Term Borrowings 71,891 3.95% 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%
Net Int Income - Tax Equivalent 15,831
Tax Rate 35%
Increase/(Decrease)
Due To Due To Net
Volume Rate Change
INTEREST EARNING ASSETS
Money Market Investments
Interest Bearing Deposits 6 18 24
Federal Funds Sold (72) (9) (81)
Total Money Market Investments (66) 9 (57)
Investment Securities
U.S. Treasuries and Agencies (74) 559 485
State and Municipals-Tax Free (189) 46 (143)
Corporate Securities & Stock 67 (19) 48
Total Investment Securities (196) 586 390
Loans
Commercial Loans (568) 167 (401)
Tax Free Commercial Loans (22) 7 (15)
Real Estate Loans (696) (187) (883)
Tax Free Real Estate Loans (26) (7) (33)
Personal Loans and Leases 406 183 589
Total Loans (907) 164 (743)
Total Earning Assets (1,169) 759 (410)
FUNDING SOURCES
Interest Bearing Liabilities
Checking with Interest (24) (29) (52)
Money Market Deposits (56) (4) (60)
Savings Deposits (27) 0 (27)
CD'S, $100,000 and Over (107) 68 (39)
Other Time Deposits (335) 571 236
Total Interest Bearing Deposits (549) 607 58
Short-Term Borrowings (51) (36) (87)
Long-Term Debt (29) 36 7
Other Interest Bearing Liabilities 1 (1) 0
Demand Deposits
Cash
Other
Total Funding Sources (628) 606 (22)
Net Int Spread - Net Int Income (541) 153 (388)
Net Int Spread - Tax Equivalent
Net Int Income - Tax Equivalent
Tax Rate
SOURCE Omega Financial Corporation
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Related links:
http://www.omegafinancial.com
CONTACT:
Teresa Ciambotti, SVP, Director of Investor
Relations, +1-814-231-6401
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