Midwest Banc Holdings, Inc. (the "Company") (NASDAQ:MBHI), the
holding company for Midwest Bank and Trust Company (the “Bank” or
“Midwest Bank”), reported results for the fourth quarter of 2009
and for the full year 2009. These results are unaudited as our
independent auditors are still in the process of completing their
audit of our financial statements for the year ended December 31,
2009.
“After my arrival in May 2009, we immediately began to work to
restructure and restore our capital. We have reduced costs
aggressively, optimized our balance sheet to preserve regulatory
capital, tightened underwriting standards, built a strong loan
workout area in anticipation of growth in problem loans, and
crafted and announced a credible Capital Plan. Our execution
philosophy has shunned denial. Instead, we embraced full
transparency in our communications with all stakeholders and the
reality of the state of the economy, depressed real estate
valuations and their impact on our loan book,” said Midwest CEO
Roberto R. Herencia.
“We have been working diligently to achieve our Capital Plan.
Its execution requires the restructuring of a complex capital
structure in order to attract new common equity or a merger partner
in the worst capital and economic environment in 75 years. We have
been undeterred in our pursuit of the Capital Plan with the support
of our people, customers and bank regulators. We are up to the
challenge, redoubling our efforts and proceeding vigorously.”
“On January 22, 2010, we announced the success of our exchange
offer, a critical component of our Capital Plan. An overwhelming 82
percent of the depositary shareholders of the Series A Preferred
tendered their shares. This successful exchange will now facilitate
the execution of the remaining building blocks of the plan: the
conversion of the U.S. Treasury’s TARP preferred equity investment
into common equity, the restructure of subordinated and senior debt
with our primary lender, and final discussions with potential
equity investors and merger partners.”
“I am proud to be part of this 50 year old community bank. Our
energy is aimed at completing the remaining elements of our Capital
Plan. Our vision is to build a new foundation for Midwest that will
support long term growth and profitability. We serve a large and
diverse group of communities that require our help, now more than
ever,” said Herencia. “Supporting our communities, its residents
and businesses, is top of mind for Midwest Bank. We are helping by
being responsible lenders, supporting customers who are able to
grow and create jobs and working with our troubled borrowers who
need assistance in order to get ahead. Post Capital Plan, we
envision being a more vibrant and willing lender in support of our
communities and their efforts to create jobs.”
The Company reported a net loss of $119.7 million for the fourth
quarter of 2009 compared to net income of $4.4 million in the
fourth quarter of 2008, and a net loss of $41.3 million for the
third quarter of 2009. On a per share basis, the net loss per share
for the quarter was $4.30, compared to net income per share of
$0.11 in the fourth quarter of 2008 and net loss per share of $1.52
in the third quarter of 2009. Results for the fourth quarter
include a $98.0 million provision for loan losses which, after
deducting $52.7 million of net loan charge-offs, increased the
allowance for loan losses to 5.6 percent of loans at December 31,
2009 from 3.4 percent at September 30, 2009. Fourth quarter results
also include a $14.0 million impairment charge for goodwill.
The Company recorded a net loss of $242.7 million for the year
ended December 31, 2009 compared to a net loss of $158.3 million
for 2008. On a per share basis, net loss per share for the year was
$8.89, compared to a net loss per share of $5.82 in 2008. The
provision for loan losses was $167.7 million for the year ended
December 31, 2009, an increase of $95.9 million or 133.7 percent
compared to the 2008 provision of $71.8 million. The full-year
provision for loan losses, combined with $83.3 million of net loan
charge-offs for 2009, resulted in an allowance for loan losses of
$128.8 million, or 5.6 percent of loans at December 31, 2009 versus
$44.4 million, or 1.8 percent of loans at December 31, 2008. The
2009 results include a $14.0 million impairment charge for
goodwill. The 2008 results included $82.1 million of pre-tax losses
on FHLMC and FNMA preferred stock and an $80.0 million impairment
charge for goodwill.
“In connection with the execution of the Capital Plan and with
the assistance of independent outside parties, management has
performed cumulative loan loss studies under various methodologies
and assumptions, including highly stressed scenarios, in order to
determine our capital needs. We have also found these studies to be
quite useful in assessing trends, managing, and planning for
problem loans. We continue to closely monitor our loan portfolio
and aggressively take action to resolve issues as they arise,” said
Herencia.
Capital Plan
Execution
- On July 28, 2009, the Company
announced that it had developed a detailed capital plan and
timeline for execution (the “Capital Plan”). The Capital Plan was
adopted in order to, among other things, improve the Company’s
common equity capital and raise additional capital to enable it to
better withstand and respond to adverse market conditions and serve
as a platform for future growth and profitability.
- On December 3, 2009, we launched
the exchange offer for our Series A preferred stock. The final
exchange ratio was set at 7.0886 shares of common stock for each
depositary share of the Series A Preferred. On January 21, 2010, we
accepted for exchange 1,414,941 depositary shares, representing
approximately 82 percent of the 1,725,000 depositary shares
outstanding prior to the exchange offer. The exchange offer
generated approximately $35.4 million of additional common
equity. The Company issued 10,029,946 shares of common stock for
the 1,414,941 shares tendered in the exchange.
- We are in advanced discussions
with the U.S. Treasury related to converting to common stock the
$84.8 million of outstanding preferred stock issued to the U.S.
Treasury under its Capital Purchase Program in 2008. The U.S.
Treasury previously delivered to us a letter expressing its
willingness to consent to such a transaction, and we are currently
in the final stages of negotiating the definitive terms of this
transaction.
- As previously announced, on
October 22, 2009, the Company entered into a Forbearance Agreement
with its senior lender effective through March 31, 2010. Management
believes that the Forbearance Agreement provides the Company
sufficient time to complete all major elements of the Capital Plan.
The Company is also in advanced negotiations with its senior lender
to restructure close to $80 million in subordinated and senior
debt.
- The Company is also pursuing, as
the final component of the Capital Plan, a new common equity raise,
the proceeds of which would be used for general corporate purposes,
including injecting capital into the Bank, or a merger with another
bank holding company.
“The thesis behind our Capital Plan is straightforward: Midwest
is capable of attracting new common equity investment because it
operates an attractive and scalable banking franchise, has a
capable new management team, and its sizable loan loss reserves and
tangible common equity, post restructuring under the Plan, are
sufficient to absorb cumulative loan losses in this cycle under an
adverse economic scenario,” Herencia said. “We have been able to
prove the first two premises of our thesis in our interactions with
potential investors and the progress to date of the Capital Plan.
We believe our negotiations with Treasury and our senior lender
will pave the way to facilitating a final decision by one of the
equity investors who has expressed serious interest in
Midwest.”
Q4 Significant
Events
- As anticipated, on December 18,
2009, we formally entered into a written agreement (the
"Agreement") with the Federal Reserve Bank of Chicago and the
Illinois Department of Financial and Professional Regulation,
Division of Banking. The Agreement is consistent with the expected
regulatory actions that we previously disclosed, and we have
already completed many of the steps referenced in the Agreement. We
have been working diligently to address matters they have
identified and look forward to resolving them with the regulators
as quickly as possible.
- At December 31, 2009, the Bank
was undercapitalized according to regulatory standards with a 6.41
percent total risk-based capital ratio and a 3.41 percent Tier 1
leverage ratio. These ratios must be 8.00 percent and 4.00 percent,
respectively, for a bank to be considered adequately capitalized.
As a consequence of the Bank being undercapitalized, the Bank will,
among other things, be prohibited from renewing or accepting new
brokered deposits, making capital distributions to the Company, and
be subject to limits on asset growth and expansion. In July, we
announced our Capital Plan designed to strengthen our capital
position. As noted above, we made significant progress with the
exchange of over 82 percent of the depositary shares of our Series
A preferred into common, continued negotiations with the U.S.
Treasury and further discussions with potential outside investors
to invest additional equity capital into our Company.
- The level of the provision for
loan losses recognized was 186 percent of net charge-offs in the
fourth quarter and 215 percent in the third quarter. Management
believes we are recognizing losses in our portfolio through
charge-offs as credit developments warrant. The fact that our
provisions are still well over our charge-offs shows proactive
management in the recent difficult credit environment.
- The Company
determined activities in the fourth quarter including the
written agreement from the regulators and the decline in the
Bank's regulatory capital position to
undercapitalized constituted triggering events requiring
an interim goodwill impairment test. As a result of that test, the
Company recorded a $14.0 million goodwill impairment in the
quarter.
- Liquidity remains high at the
Bank. Liquid assets increased by $95.0 million during the quarter
to $419.5 million.
Loan Portfolio
Average total loans decreased $108.9 million during the fourth
quarter of 2009. From September 30, 2009 to December 31, 2009,
loans outstanding declined $133.8 million, with almost half of this
decline due to gross charge-offs of $53.3 million and transfers to
foreclosed properties of $8.7 million. The average yield on loans
was 5.01 percent in the fourth quarter, compared to 5.32 percent in
the third quarter, with 83 percent of all loans tied to prime
having interest rate floors in place and 79 percent of those loans
currently at their floors. Most of the decline in loan yield was
due to the increase in non-accrual loans.
The table below presents the loan portfolio, including the loan
balances, amounts and remaining percentage availability and total
loan commitments.
Loan Portfolio As of December 31, 2009 ($ in millions)
Total Total
Percent Loan Type Balance Availability
Commitment Availability Land $ 102.6 $ 7.2 $
109.8 6.6 percent Land Development, Residential 17.1 1.0 18.1 5.5
Land Development, Commercial 13.3 0.7 14.0 5.0 Land Development,
Teardown 7.6 - 7.6 - Condominium 64.8 8.6 73.4 11.7 Residential
Construction 52.6 4.5 57.1 7.9 Commercial Construction 27.4 0.9
28.3 3.2 Residential Non-Builder 6.5 0.7 7.2 9.7 Letters of Credit
- 0.8 0.8 100.0 Other 1.2 - 1.2 - Total
Const. & Land Development 293.1 24.4 317.5 7.7 1-4
Residential 68.5 0.1 68.6 0.1 1-4 ARM 37.0 -
37.0 - Total Residential 105.5 0.1 105.6 0.1 Home
Equity Fixed 17.6 - 17.6 - Home Equity Floating 201.6
86.7 288.3 30.1 Total Home Equity 219.2 86.7 305.9
28.3 CRE - Non-Owner Occupied 719.9 19.1 739.0 2.6 CRE -
Owner Occupied 521.4 5.8 527.2 1.1
Total CRE 1,241.3 24.9 1,266.2 2.0 Commercial &
Industrial 450.8 260.5 711.3 36.6 Agricultural 5.9 1.3 7.2
18.1 Consumer 5.5 1.9 7.4 25.7 Overdrafts,
Settlement, Miscellaneous (1.0 ) Total
Portfolio $ 2,320.3 $ 399.8 $ 2,721.1 14.7 percent
- Total construction and land
development loan commitments are 92.3 percent funded.
- Land and land development loans
represent 6.1 percent of the loan portfolio.
Asset Quality
In response to cumulative loan loss analyses performed in the
second quarter of 2009 by expert loan review parties and internal
staff, significant steps have been taken to improve the management
of asset quality and problem loans. Under the leadership of a new
Chief Risk Officer appointed in the fourth quarter of 2009, these
efforts have resulted in tighter loan underwriting criteria, credit
policy changes and a more disciplined loan approval and renewal
process. Progress has been made in a short period to create a
culture that rewards the early identification of problems, the
appropriate downgrade of loan risk ratings and the free flow and
timeliness of information shared between lending and credit risk
personnel.
Portfolio management practices have been enhanced through more
frequent and rigorous loan portfolio reviews for both performing
and non-performing assets. In addition, the measurement and
tracking of loan exceptions have been improved.
Importantly, the Bank has built a quality loan workout team over
the last two quarters composed of internal senior lending and loan
review personnel and outside workout experts with strong real
estate background. The Bank has successfully leveraged its workout
capacity by recruiting a third party, real estate workout expert
firm to assist with the management of the largest and most complex
real estate exposures. The creation and expansion of the workout
group, together with weekly problem loan reviews, has provided the
Bank with the ability to identify and manage problem loans at an
earlier point in the cycle than was previously the case. This group
provides the critical resources needed to restructure, collect, and
maximize recoveries of problem credits.
In the fourth quarter, we recorded a provision for credit losses
of $98.8 million and recognized net loan charge-offs totaling $52.7
million. Non-accrual loans increased $79.9 million, or 41 percent
during the fourth quarter to $273.8 million, representing 11.8
percent of loans.
The table below presents certain loan quality information,
including loan balance by type, amounts and percentage by past due
and non-accrual status, amount of specific reserve, and full year
gross charge-off amounts.
Loan Quality ($ in millions)
2009 As of December
31, 2009 Gross 30-89 Days Past Due
Non-Accrual Specific Charged- Loan Type
Balance ($) Percent ($) Percent
Reserve Off Land $ 102.6 $ 9.9 9.6 percent $
37.0 36.1 percent $ 11.9 $ 12.2 Land Development, Residential 17.1
- - 2.1 12.3 0.5 1.1 Land Development, Commercial 13.3 - - 1.3 9.8
- 1.5 Land Development, Teardown 7.6 - - 7.6 100.0 3.6 -
Condominium 64.8 - - 27.7 42.7 10.2 4.3 Residential Construction
52.6 0.5 1.0 20.1 38.2 6.1 10.0 Commercial Construction 27.4 - -
13.2 48.2 5.3 1.0 Residential Non-Builder 6.5 - - 1.0 15.4 0.5 -
Letters of Credit - - - - - - - Other 1.2 -
- - - - - Total Const. &
Land Development 293.1 10.4 3.5 110.0 37.5 38.1 30.1 1-4
Residential 68.5 1.5 2.2 12.6 18.4 1.8 0.6 1-4 ARM 37.0
2.4 6.5 - - - 1.9
Total Residential 105.5 3.9 3.7 12.6 11.9 1.8 2.5 Home
Equity Fixed 17.6 0.3 1.7 0.3 1.7 - 0.1 Home Equity Floating
201.6 2.7 1.3 - - -
1.4 Total Home Equity 219.2 3.0 1.4 0.3 0.1 - 1.5 CRE
- Non-Owner Occupied 719.9 13.8 1.9 110.5 15.3 21.9 18.7 CRE -
Owner Occupied 521.4 10.5 2.0
19.6 3.8 2.2 4.1 Total CRE 1,241.3 24.3 2.0
130.1 10.5 24.1 22.8 Commercial & Industrial 450.8 21.2
4.7 20.7 4.6 5.5 28.2 Agricultural 5.9 - - - - - -
Consumer 5.5 0.1 1.8 - - - 0.1 Overdrafts, Settlement,
Miscellaneous (1.0 ) - - - - - 0.3
Total Portfolio $ 2,320.3 $ 62.9 2.7 percent $
273.7 11.8 percent $ 69.5 $ 85.5
Non-accrual loans in the commercial real estate portfolio
increased $51.0 million or 64 percent from the third quarter. The
largest contributing sub-category within commercial real estate was
non-owner occupied which increased $53.8 million. Non-accrual owner
occupied commercial real estate loans decreased by $2.8 million due
to charge-offs and transfers to foreclosed properties.
Non-accrual loans in the construction and land development
portfolio increased $29.2 million or 36 percent from the third
quarter. The largest contributing sub-categories within
construction and land development were: condominium, which
increased $20.0 million; land, which increased $12.0 million; and
commercial construction, which increased $9.3 million. Other
non-accrual construction and land development sub-categories
decreased with the greatest decline in residential construction
loans, which decreased by $10.0 million, due to charge-offs and
transfers to foreclosed properties.
Credit Quality and the
Allowance for Loan Losses
The length and breadth of the economic downturn, including
record high unemployment and vacancy rates, is continuing to put
pressure on our borrowers, reducing both their ability to support
their borrowings from a cash flow perspective and the value of
property pledged as collateral for those borrowings in the case of
default. With a large concentration of our loan portfolio in
commercial real estate, the Company experienced continued
deterioration in its portfolio during the fourth quarter as both
delinquencies on our commercial real estate loans increased and
declines in related collateral values continued. In response, the
Company has strengthened credit quality oversight and fine tuned
probability and severity loss estimates.
Non-accrual loans increased $79.9 million or 41 percent in the
fourth quarter of 2009 to $273.8 million or 11.8 percent of loans,
from $193.9 million or 7.9 percent of loans at September 30, 2009.
Although non-accrual growth of $79.9 million during the fourth
quarter would appear to indicate a downward trend when compared to
the $98.9 million previous 2009 quarter increase, loans transferred
into non-accrual status were $140 million during the fourth quarter
of 2009 compared to $113 million the previous quarter. The larger
quarterly transfers into non-accrual status were partially offset
by increases in both charge-offs and transfers to foreclosed
properties. Fourth quarter gross charge-offs were $53.3 million
compared to $17.7 million in the third quarter and transfers to
foreclosed properties were $8.7 million in the fourth quarter
compared to $4.3 million in the previous quarter.
The allowance for loan losses at December 31, 2009 was $128.8
million or 5.6 percent of loans compared to $83.5 million and 3.4
percent of loans as of September 30, 2009. The allowance for loan
losses as a percent of loans and partial charge-offs was 8.98
percent at December 31, 2009 compared to 5.07 percent as of
September 30, 2009. The provision for loan losses (charge to
income) for the fourth quarter was $98.0 million compared to $36.7
million in the previous quarter. The increase in the allowance for
loan losses and $98.0 million provision for loan losses for the
fourth quarter were primarily driven by an increase in non-accrual
loans, and further deterioration in real estate collateral values
supporting these loans.
The provision is determined by estimating the period end
allowance for loan losses needed by examination of the current loan
portfolio, and then deducting the previous ending allowance balance
and net charge-offs during the current period.
In computing our allowance for loan losses, loans are segmented
into pools with similar characteristics (collateral) and the
allowance for these loans is estimated based upon Company
historical loss experience adjusted for additional risks due to
current portfolio characteristics including internal risk ratings,
collateral type and location, and uncertainties in our market.
Non-accrual loans with balances over $300,000 are removed from
the above pools and evaluated separately based upon estimated
collateral values and/or cash flows available for debt service.
Those estimated specific reserves are added to the estimates of
losses by pool to compute the entire allowance.
As a result of the large influx of loans moving into non-accrual
status during the fourth quarter, loans being evaluated for
specific reserves increased by $70.7 million or 37 percent in the
quarter and represented 11.3 percent of total loans at December 31,
2009, up from 7.8 percent at September 30, 2009. Specific reserves
for those loans were $69.5 million or 26.5 percent of their
respective loan balances as of December 31, 2009, compared to $59.4
million or 31.0 percent at the previous quarter end. The decrease
in the specific reserves as a percent of loans evaluated
individually from 31.0 percent to 26.5 percent was predominately
the result of charging-off amounts considered uncollectible rather
than improving collateral values or declining total loss estimates.
Adding previously recorded partial charge-offs on these separately
evaluated loans to their period end specific reserves indicates the
Company’s total loss estimates on those loans increased to 45
percent on December 31, 2009 from 35 percent as of September 30,
2009, primarily due to larger decreases in estimated collateral
values, especially in commercial real estate. Although ultimate
disposition of these specific credits cannot be predicted with
certainty, management believes the total loss estimate is
sufficient to capture the credit risk at this point in the credit
cycle.
Liquidity
The Bank’s overall liquidity position improved, partially due to
a $28.8 million reduction in the securities portfolio and a $68.9
million reduction in loans during the fourth quarter, net of gross
charge-offs and transfers to OREO. Liquid assets, including excess
reserves on deposit at the Federal Reserve Bank and unencumbered
securities, increased by $95.0 million during the quarter to $419.5
million. Total deposits increased by $14.9 million or 0.6 percent
compared to the third quarter.
Net Interest
Margin
Net interest margin decreased 9 basis points from 1.83 percent
in the third quarter to 1.74 percent in the fourth quarter. A
majority of this decline was attributable to average loan volume
decline and the impact of non-accrual loan interest reversals. Net
interest reversals related to the $79.9 million increase in
non-accrual loans and a decrease in interest income associated with
the $133.8 million decline in the loan portfolio contributed to the
$1.2 million decline in our net interest income. Our net interest
margin was positively impacted by an increase in yield on the
securities portfolio and the decline in cost of deposits.
Noninterest
Income
Noninterest income for fourth quarter 2009 declined to $2.8
million from $3.7 million in the third quarter 2009. The sale of an
investment in the third quarter also reduced noninterest income by
$0.4 million for the fourth quarter; there was a decrease in
securities gains of $0.2 million from the third quarter to the
fourth quarter.
Noninterest
Expense
Noninterest expense for fourth quarter 2009 was $24.5 million,
excluding a goodwill impairment charge of $14.0 million, compared
to $22.5 million in third quarter 2009. The increase in noninterest
expense of $2.0 million in the fourth quarter primarily reflects
the impact of higher FDIC expense of $1.8 million. Non-reimbursable
loan expenses related to impaired loans and insurance costs
increased $0.8 million in the fourth quarter. Partially offsetting
some of these costs was the impact of staff reductions and
suspension of the 401(k) match, which began in the third
quarter.
Financial
Results
- Diluted earnings (loss) per
share was ($4.30) for fourth quarter and ($8.89) for twelve months
ended Dec. 31, 2009
- Compared to ($1.52) for third
quarter 2009
- Compared to $0.11 for fourth
quarter 2008
- Compared to ($5.82) for twelve
months ended Dec. 31, 2008
- Net income (loss) was ($119.7)
million for fourth quarter and ($242.7) million for twelve months
ended Dec. 31, 2009
- Compared to ($41.3) million for
third quarter 2009
- Compared to $4.4 million for
fourth quarter 2008
- Compared to ($158.3) million for
twelve months ended Dec. 31, 2008
- Net interest margin was 1.74
percent for fourth quarter and 2.16 percent for twelve months ended
Dec. 31, 2009
- Compared to 1.83 percent for
third quarter 2009
- Compared to 2.51 percent for
fourth quarter 2008
- Compared to 2.75 percent for
twelve months ended Dec. 31, 2008
Loans and Loan Quality
- Loans in fourth quarter 2009
decreased
- $133.8 million compared to third
quarter 2009
- Annualized net charge-off rate
was 8.73 percent for fourth quarter 2009
- Compared to 2.71 percent for
third quarter 2009
- Compared to 2.39 percent for
fourth quarter 2008
- Non-accrual loans at Dec. 31,
2009 were $273.8 million or 11.80 percent of loans
- Compared to 7.90 percent at
Sept. 30, 2009
- Compared to 2.43 percent at Dec.
31, 2008
- Nonperforming assets at Dec. 31,
2009 were $312.4 million, or 13.31 percent of loan-related assets
- Compared to 8.91 percent at
Sept. 30, 2009
- Compared to 3.34 percent at Dec.
31, 2008
- Nonperforming assets at Dec. 31,
2009 were $312.4 million, or 9.09 percent of total assets
- Compared to 6.22 percent at
Sept. 30, 2009
- Compared to 2.36 percent at Dec.
31, 2008
- Allowance for loan losses at
Dec. 31, 2009 was 5.55 percent of loans
- Compared to 3.40 percent at
Sept. 30, 2009
- Compared to 1.77 percent at Dec.
31, 2008
- Allowance for loan losses to
non-accrual loans was 47 percent at Dec. 31, 2009
- Compared to 43 percent at Sept.
30, 2009
- Compared to 73 percent at Dec.
31, 2008
- Delinquencies 30-89 days were
2.71 percent of loans at Dec. 31, 2009
- Compared to 3.24 percent at
Sept. 30, 2009
- Compared to 1.03 percent at Dec.
31, 2008
Capital Ratios at the Bank as
of Dec. 31, 2009:
-- Tier 1 common risk-based
5.10
percent
-- Tier 1 risk-based 5.10 -- Total risk-based 6.41 -- Tier 1
leverage 3.41
Additional financial data is contained in the accompanying
statements, tables and schedules.
About Midwest
We are a half century old community bank with $3.4 billion in
assets at December 31, 2009. We have two principal operating
subsidiaries; Midwest Bank and Trust Company and Midwest Financial
and Investment Services, Inc. Midwest Bank has 26 locations serving
the diverse needs of both urban and suburban Chicagoland businesses
and consumers through its Commercial Banking, Wealth Management,
Corporate Trust and Retail Banking areas.
Forward-Looking
Statements
This press release contains certain "Forward-Looking Statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and should be reviewed in conjunction with the company's
Annual Report on Form 10-K, recent S-4 filings and other publicly
available information regarding the company, copies of which are
available from the company upon request. Such publicly available
information sets forth certain risks and uncertainties related to
the company's business which should be considered in evaluating
"Forward-Looking Statements."
Financial Highlights Midwest Banc Holdings, Inc.
(In thousands, except per share data and percentages)
Three Months Ended
Dec. 31, Sept. 30, June 30, March
31, Dec. 31,
2009
2009
2009
2009
2008
Income Statement Data: Net (loss) income $ (119,659 )
$
(41,267 )
$
(76,467 )
$
(5,320 )
$
4,429
Per Share Data: Basic and diluted (loss)
earnings (11) $ (4.30 )
$
(1.52 )
$
(2.78 )
$
(0.27 )
$
0.11 Cash dividends declared — — — — — Book value (2.39 ) 2.02 3.45
6.38 6.56 “If converted” book value(10) (0.78 ) 3.22 4.53 7.18 7.35
Tangible book value(1) (5.14 ) (1.25 ) 0.15 3.05 3.21 “If
converted” tangible book value(1)(10) (3.27 ) 0.26 1.53 4.16 4.31
Stock price at period end 0.36 0.71 0.75 1.01 1.40
Share
Data: Common shares outstanding – at period end 28,121 28,116
27,944 27,929 27,893 Basic - average 28,116 27,953 27,926 27,925
27,863 Diluted - average 28,116 27,953 27,926 27,925 27,863
Selected Financial Ratios: Return on average assets (13.39 )
percent (4.49 ) percent (8.38 ) percent (0.59 ) percent 0.49
percent Return on average equity (301.80 ) (78.30 ) (103.60 ) (7.12
) 7.17 Net interest margin (tax equivalent) 1.74 1.83 2.52 2.63
2.51 Efficiency ratio(2)(3) 198 98 97 84 103 Dividend payout ratio
(11) — — — — — Loans to deposits at period end 90 96 101 102 104
Loans to assets at period end 68 69 72 70 70 Equity to assets at
period end 1.64 5.09 6.15 8.11 8.57
Tangible equity to tangible assets
at period end(1)(4)
(0.62 ) 2.56 3.66 5.75 6.11
Full time equivalent
employees 416 420 497 542 536
Balance Sheet Data:
Total earning assets $ 3,343,911
$
3,392,458
$
3,382,725
$
3,339,448
$
3,195,408 Average earning assets 3,395,916 3,476,611 3,344,103
3,268,589 3,219,078 Average assets 3,544,702 3,650,053 3,660,670
3,648,873 3,590,313 Average loans 2,396,233 2,505,134 2,584,757
2,543,770 2,499,802 Average securities 603,607 639,588 669,494
688,334 668,830 Average deposits 2,579,616 2,630,148 2,529,526
2,474,262 2,478,948 Tangible shareholders’ equity(1) (20,777 )
88,413 127,272 208,098 212,289 Average equity 157,301 209,097
296,055 303,019 245,795 See footnotes at end of
statements, tables and schedules.
Financial
Highlights Midwest Banc Holdings, Inc. (In thousands,
except per share data and percentages)
Twelve Months Ended Dec. 31, Dec. 31,
2009
2008
Income Statement Data: Net loss $ (242,713 ) $ (158,273 )
Per Share Data: Basic and diluted loss $ (8.89 ) $
(5.82 ) Cash dividends declared — 0.26
Share Data:
Common shares outstanding – at period end 28,121 27,893 Basic -
average 27,982 27,854 Diluted - average 27,982 27,854
Selected Financial Ratios: Return on average assets (6.69 )
percent
(4.32 ) percent Return on average equity (100.76 ) (46.65 ) Net
interest margin (tax equivalent) 2.16 2.75 Efficiency ratio(2)(3)
113 144 Dividend payout ratio — N/M
Full time equivalent
employees 416 536
Balance Sheet Data: Total
earning assets $ 3,343,911 $ 3,195,408 Average earning assets
3,371,942 3,258,393 Average assets 3,625,855 3,661,209 Average
loans 2,507,063 2,483,070 Average securities 649,995 728,028
Average deposits 2,553,886 2,422,651 Tangible shareholders’
equity(1) (20,777 ) 212,289 Average equity 240,880 339,261
N/M - Not meaningful. See footnotes at end of statements,
tables and schedules.
Statement of Income Midwest
Banc Holdings, Inc. (In thousands, except per share data and
percentages) Three Months Ended
Dec. 31, Sept. 30, June 30, March 31,
Dec. 31,
2009
2009
2009
2009
2008
Interest Income Loans $ 29,989 $ 33,294 $ 35,348 $ 34,549 $ 35,558
Securities Taxable 2,099 1,488 4,663 6,940 7,381 Exempt from
federal income taxes 1 29 406 550 551 Dividends from FRB and FHLB
stock 160 160 170 190 190 Short-term investments
196
164 75
37 54 Total interest income
32,445 35,135
40,662 42,266
43,734 Interest Expense Deposits 9,928
11,385 12,210 13,685 15,524
Federal funds purchased and FRB
discount window advances
— — 20 29 14 Securities sold under repurchase agreements 3,264
3,264 3,229 3,205 3,264 Advances from the FHLB 3,066 3,065 3,035
3,029 3,126 Junior subordinated debentures 439 497 615 739 911
Revolving note payable 159 158 88 43 204 Term note payable 673 679
266 282 616 Subordinated debt
144
145 144 152
243 Total interest expense
17,673 19,193
19,607 21,164
23,902 Net interest income 14,772 15,942
21,055 21,102 19,832
Provision for credit losses
(13)
98,750 37,450
20,750 13,253
20,275
Net interest income after
provision for credit losses
(83,978 ) (21,508 ) 305 7,849 (443 ) Noninterest Income
Service charges on deposit accounts 1,841 2,013 1,953 1,894 1,908
Gains on securities transactions 161 386 4,251 — — Impairment loss
on securities — — (740 ) — — Insurance and brokerage commissions
220 268 338 320 333 Trust fees 306 337 296 282 241 Increase in CSV
of life insurance — — 490 842 875 Gain on sale of property — — — —
— Other
307 653
707 5 375
Total noninterest income
2,835
3,657 7,295
3,343 3,732
Noninterest Expense Salaries and employee benefits 8,616 8,948
11,859 11,083 13,819 Occupancy and equipment 3,275 3,175 3,356
3,245 3,511 Professional services 2,680 2,838 1,890 2,102 3,240
Marketing 111 201 339 688 842 Foreclosed properties 3,420 3,098 450
345 66 Amortization of intangible assets 573 573 573 573 590 Merger
related charges — — — — — Loss on extinguishment of debt — — — — —
Goodwill impairment charge 14,000 — — — — FDIC insurance 3,310
1,550 3,261 1,175 504 Other
2,552
2,067 2,692
2,297 2,831 Total
noninterest expense
38,537 22,450
24,420 21,508
25,403 Loss before income taxes (119,680
) (40,301 ) (16,820 ) (10,316 ) (22,114 ) Provision (benefit) for
income taxes
(21 ) 966
59,647 (4,996
) (26,543 ) Net (Loss)
Income $
(119,659 ) $
(41,267 ) $
(76,467
) $
(5,320 ) $
4,429 Net (loss) income available to
common shareholders (11) $ (121,014 ) $ (42,556 ) $ (77,757 ) $
(7,443 ) $ 3,138 Basic and diluted (loss) earnings per share
(11) $
(4.30 ) $
(1.52
) $
(2.78 ) $
(0.27 ) $
0.11 Cash
dividends declared per share $
— $
— $
— $
—
$
— Top line revenue (5) $ 17,607
$ 19,599 $ 28,350 $ 24,445 $ 23,564 Noninterest income to top line
revenue 16
percent
19
percent
26
percent
14
percent
16
percent
See footnotes at end of statements, tables and
schedules.
Statement of Income Midwest Banc
Holdings, Inc. (In thousands, except per share data and
percentages) Twelve Months
Ended Dec. 31, Dec. 31, Increase
Increase
2009
2008
(Decrease)
(Decrease)
Interest Income Loans $ 133,180 $ 151,120 $ (17,940 ) (11.9 )
percent Securities Taxable 15,190 33,157 (17,967 ) (54.2 ) Exempt
from federal income taxes 986 2,316 (1,330 ) (57.4 ) Dividends from
FRB and FHLB stock 680 741 (61 ) (8.2 ) Short-term investments
472 327 145
44.3 Total interest income
150,508
187,661 (37,153 )
(19.8 ) Interest Expense Deposits 47,208 66,025 (18,817 )
(28.5 )
Federal funds purchased and FRB
discount window advances
49 2,064 (2,015 ) (97.6 ) Securities sold under repurchase
agreements 12,962 13,262 (300 ) (2.3 ) Advances from the FHLB
12,195 11,824 371 3.1 Junior subordinated debentures 2,290 3,696
(1,406 ) (38.0 ) Revolving note payable 448 474 (26 ) (5.5 ) Term
note payable 1,900 2,643 (743 ) (28.1 ) Subordinated debt
585 707 (122
) (17.3 ) Total interest expense
77,637
100,695 (23,058
) (22.9 ) Net interest income 72,871 86,966
(14,095 ) (16.2 ) Provision for credit losses(13)
170,203 72,642
97,561 134.3
Net interest income after
provision for credit losses
(97,332 ) 14,324 (111,656 ) (779.5 ) Noninterest Income
Service charges on deposit accounts 7,701 7,742 (41 ) (0.5 ) Gains
(losses) on securities transactions 4,798 (16,596 ) 21,394 (128.9 )
Impairment loss on securities (740 ) (65,387 ) 64,647 (98.9 )
Losses on sales of loans — (75 ) 75 (100.0 ) Insurance and
brokerage commissions 1,146 2,024 (878 ) (43.4 ) Trust fees 1,221
1,623 (402 ) (24.8 ) Increase in CSV of life insurance 1,332 3,509
(2,177 ) (62.0 ) Gain on sale of property — 15,196 (15,196 ) (100.0
) Other
1,672 1,368
304 22.2 Total noninterest income (loss)
17,130 (50,596 )
67,726 (133.9 ) Noninterest Expense
Salaries and employee benefits 40,506 50,389 (9,883 ) (19.6 )
Occupancy and equipment 13,051 12,714 337 2.7 Professional services
9,510 8,590 920 10.7 Marketing 1,339 2,706 (1,367 ) (50.5 )
Foreclosed properties 7,313 332 6,981 2,102.7 Amortization of
intangible assets 2,292 2,361 (69 ) (2.9 ) Merger related charges —
271 (271 ) (100.0 ) Loss on extinguishment of debt — 7,121 (7,121 )
(100.0 ) Goodwill impairment charge 14,000 80,000 (80,000 ) (100.0
) FDIC insurance 9,296 2,603 6,693 257.1 Other
9,608
9,987 (379 )
(3.8 ) Total noninterest expense
106,915
177,074 (84,159 )
(47.5 ) Loss before income taxes (187,117 ) (213,346 )
40,229 (18.9 ) Provision (benefit) for income taxes
55,596 (55,073 )
110,669 (200.9 ) Net Loss $
(242,713 ) $
(158,273
) $
(70,440 ) 44.5 percent
Net loss available to common shareholders $ (248,770 ) $
(162,001 ) $ (86,769 ) 53.6 percent Basic and diluted loss
per share $
(8.89 ) $
(5.82
) $
(3.07 ) 52.7 percent
Cash dividends declared per share $
— $
0.26 $
(0.26 ) (100.0
) percent Top line revenue (5) $ 90,001 $ 36,370 $ 53,631
147.5 percent Noninterest income to top line revenue 19
percent
N/M N/M - Not meaningful. See footnotes at end of
statements, tables and schedules.
Balance Sheet
Midwest Banc Holdings, Inc.
(In thousands, unless
otherwise noted)
Dec. 31, Sept. 30, June 30, March 31,
Dec. 31,
2009
2009
2009
2009
2008
Assets Cash $ 27,644 $ 32,278 $ 36,965 $ 56,516 $ 61,330
Short-term investments 414,466 295,162 160,538 1,762 1,735
Securities available-for-sale 581,474 615,543 633,282 685,858
621,949 Securities held-to-maturity
-
- - 29,082
30,267 Total securities 581,474 615,543
633,282 714,940 652,216 Federal Reserve and FHLB stock, at
cost 27,652 27,652 29,648 31,698 31,698 Loans 2,320,319
2,454,101 2,559,257 2,591,048 2,509,759 Allowance for loan losses
(128,800 ) (83,506
) (63,893 )
(53,011 ) (44,432
) Net loans 2,191,519 2,370,595 2,495,364 2,538,037
2,465,327 Cash value of life insurance — — — 85,517 84,675
Premises and equipment 39,769 40,589 40,795 38,528 38,313
Foreclosed properties 26,917 20,980 19,588 18,534 12,018 Goodwill
and other intangibles 77,253 91,826 92,399 92,972 93,546 Other
48,851 49,505
60,620 134,560
129,354 Total assets $
3,435,545
$
3,544,130 $
3,569,199
$
3,713,064 $
3,570,212
Liabilities and Shareholders' Equity
Liabilities Deposits Noninterest-bearing $ 349,796 $ 330,901
$ 336,347 $ 343,422 $ 334,495 Interest-bearing
2,220,315 2,224,288
2,202,143 2,200,583
2,078,296 Total deposits 2,570,111 2,555,189
2,538,490 2,544,005 2,412,791 Federal funds purchased &
FRB discount window — — — 55,000 — Securities sold under repurchase
agreements 297,650 297,650 297,650 297,650 297,650 FHLB advances
340,000 340,000 340,000 340,000 380,000 Junior subordinated
debentures 60,828 60,828 60,824 60,807 60,791 Revolving note
payable 8,600 8,600 8,600 8,600 8,600 Term note payable 55,000
55,000 55,000 55,000 55,000 Subordinated debt
15,000
15,000 15,000
15,000 15,000 Total
borrowings 777,078 777,078 777,074 832,057 817,041 Other
31,880 31,624
33,964 35,932
34,546 Total liabilities
3,379,069
3,363,891 3,349,528
3,411,994 3,264,378
Shareholders’ Equity Preferred equity 123,670 123,436
123,206 122,976 122,748 Common equity
(67,194
) 56,803 96,465
178,094 183,086
Total shareholders' equity
56,476
180,239 219,671
301,070 305,834 Total
liabilities and shareholders' equity $
3,435,545
$
3,544,130 $
3,569,199
$
3,713,064 $
3,570,212
Loan Portfolio Composition – Source of
Repayment
Dec. 31, 2009
Dec. 31, 2008
Percent of Percent of
($ in millions)
Total
($ in millions)
Total
Commercial $ 972 42 $ 1,090 43 Construction 293 13 366 15
Commercial real estate 726 31 730 29 Consumer 225 10 201 8
Residential mortgage
105 4
123 5 Total loans, gross
excluding deferred fees $
2,321
100 $
2,510
100 Net Interest Margin
Midwest Banc Holdings, Inc. (In thousands, except
percentages)
For the Three Months Ended
Dec. 31, 2009
Sept. 30, 2009
Dec. 31, 2008
Average Average Average Average
Average Average
Balance
Rate
Balance
Rate
Balance
Rate
Interest-Earning Assets: Short-term investments $ 368,424
0.21 percent $ 303,890 0.22 percent $ 18,748 1.15 percent
Securities: Taxable(6) 603,533 1.39 637,198 0.93 610,160 4.84
Exempt from federal income taxes(6)
74 5.41
2,390 4.85
58,670 5.78
Total securities 603,607 1.39 639,588 0.95 668,830 4.92 FRB and
FHLB stock 27,652 2.31 27,999 2.29 31,698 2.40 Loans (7)(8)(9)
2,396,233 5.01
2,505,134
5.32
2,499,802 5.70 Total interest-earning
assets $ 3,395,916 3.82 percent $ 3,476,611 4.04 percent $
3,219,078 5.48
percent
Noninterest-Earning Assets: Cash $ 35,439 $ 34,903 $
63,352 Premises and equipment 40,412 40,705 38,208 Allowance for
loan losses (88,657 ) (67,605 ) (41,522 ) Other
161,592 165,439
311,197 Total noninterest-earning assets
148,786 173,442
371,235 Total assets $
3,544,702
$
3,650,053 $
3,590,313
Interest-Bearing Liabilities: Deposits:
Interest-bearing demand deposits $ 177,039 0.40 percent $ 179,094
0.46 percent $ 176,803 0.72 percent Money-market demand and savings
accounts 342,499 0.82 344,203 0.80 334,217 0.94 Time deposits
1,717,023 2.11
1,765,654
2.38
1,637,302 3.52 Total interest-bearing
deposits 2,236,561 1.78 2,288,951 1.99 2,148,322 2.89 Borrowings:
Fed funds purch & repurchase agreements 297,687 4.39 297,693
4.39 305,242 4.30 FHLB advances 340,000 3.61 340,000 3.61 380,000
3.29 Junior subordinated debentures 60,828 2.89 60,827 3.27 60,783
6.00 Revolving note payable 8,600 7.40 8,600 7.35 17,470 4.67 Term
note payable 55,000 4.89 55,000 4.94 55,000 4.48 Subordinated debt
15,000 3.84
15,000 3.87
15,000 6.48 Total borrowings
777,115 3.99
777,120 4.02
833,495 4.02 Total interest-bearing liabilities
$ 3,013,676 2.35 percent $ 3,066,071 2.50 percent $ 2,981,817 3.21
percent
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits $ 343,055 $ 341,197 $ 330,626
Other liabilities
30,670 33,688
32,075 Total noninterest-bearing
liabilities
373,725 374,885
362,701 Shareholders’ equity
157,301 209,097
245,795 Total liabilities and shareholders’
equity $
3,544,702 $
3,650,053
$
3,590,313 Net interest
margin (tax equivalent)(6)(9) 1.74 percent
1.83 percent 2.51 percent
See footnotes at end of statements, tables and schedules.
Net Interest Margin Midwest Banc Holdings, Inc.
(In thousands, except percentages)
For the Twelve Months Ended
Dec. 31, 2009
Dec. 31, 2008
Average Average Average Average
Balance
Rate
Balance
Rate
Interest-Earning Assets: Short-term investments $ 185,487
0.25 percent $ 17,320 1.89 percent Securities: Taxable(6) 624,215
2.43 667,324 5.14 Exempt from federal income taxes(6)
25,780 3.82
60,704 5.87
Total securities 649,995 2.49 728,028 5.20 FRB and FHLB stock
29,397 2.31 29,975 2.47 Loans (7)(8)(9)
2,507,063
5.31
2,483,070 6.10 Total
interest-earning assets $ 3,371,942 4.46 percent $ 3,258,393 5.84
percent
Noninterest-Earning Assets: Cash $ 45,724 $
57,303 Premises and equipment 39,663 39,018 Allowance for loan
losses (65,366 ) (28,093 ) Other
233,892
334,588 Total noninterest-earning assets
253,913 402,816 Total
assets $
3,625,855 $
3,661,209
Interest-Bearing Liabilities: Deposits:
Interest-bearing demand deposits $ 176,930 0.49 percent $ 200,869
0.98 percent Money-market demand and savings accounts 349,278 0.82
384,496 1.30 Time deposits
1,690,432 2.57
1,511,182 3.91 Total interest-bearing deposits
2,216,640 2.13 2,096,547 3.15 Borrowings: Fed funds purch &
repurchase agreements 312,052 4.17 390,399 3.93 FHLB advances
346,329 3.52 335,039 3.53 Junior subordinated debentures 60,818
3.77 60,758 6.08 Revolving note payable 8,600 5.21 10,550 4.49 Term
note payable 55,000 3.45 58,689 4.50 Subordinated debt
15,000 3.90
11,311 6.25
Total borrowings
797,799 3.81
866,746 4.00 Total interest-bearing liabilities
$ 3,014,439 2.58 percent $ 2,963,293 3.40 percent
Noninterest-Bearing Liabilities: Noninterest-bearing demand
deposits $ 337,246 $ 326,104 Other liabilities
33,290
32,551 Total noninterest-bearing
liabilities
370,536 358,655
Shareholders’ equity
240,880
339,261 Total liabilities and shareholders’
equity $
3,625,855 $
3,661,209
Net interest margin (tax equivalent)(6)(9)
2.16 percent 2.75 percent
See footnotes at end of statements, tables and schedules.
Credit Risk Management Midwest Banc Holdings, Inc.
(In thousands, except percentages) Three
Months Ended Dec. 31, Sept. 30, June
30, March 31, Dec. 31,
2009
2009
2009
2009
2008
Loan Quality Nonaccrual loans (12) $ 273,823 $
193,877 $ 95,023 $ 80,332 $ 61,104 Troubled debt restructuring
11,635 5,763 11,006
11,006 11,006 Nonperforming loans 285,458
199,640 106,029 91,338 72,110 Foreclosed properties
26,917 20,980 19,588
18,534 12,018 Nonperforming assets
$
312,375 $
220,620 $
125,617 $
109,872 $
84,128
Specific allowance on nonperforming loans $ 69,494 $ 38,779
$ 13,997 $ 11,578 $ 4,546 Partial chargeoffs taken on nonperforming
loans
87,482 43,050 34,427
32,431 42,058
Total specific allowance and
partial charge-offs taken on nonperforming loans
$
156,976 $
81,829 $
48,424
$
44,009 $
46,604 90+ days past
due and accruing $ — $ — $ — $ — $ — Loans $
2,320,319 $ 2,454,101 $ 2,559,257 $ 2,591,048 $ 2,509,759
Loan-related assets $ 2,347,236 $ 2,475,081 $ 2,578,845 $ 2,609,582
$ 2,521,777 Nonaccrual loans to loans 11.80 percent 7.90
percent 3.71 percent 3.10 percent 2.43 percent Nonperforming
assets to loan-related assets 13.31 percent 8.91 percent 4.87
percent 4.21 percent 3.34 percent Nonperforming assets to
total assets 9.09 percent 6.22 percent 3.52 percent 2.96 percent
2.36 percent
Allowance for Loan Losses Beginning
balance $ 83,506 $ 63,893 $ 53,011 $ 44,432 $ 39,428 Provision for
loan losses (13) 98,000 36,700 20,000 13,000 20,000 Net charge-offs
(recoveries)
52,706 17,087
9,118 4,421 14,996 Ending
balance $
128,800 $
83,506 $
63,893 $
53,011 $
44,432
Net charge-offs to average loans 8.73 percent 2.71 percent
1.41 percent 0.70 percent 2.39 percent Delinquencies 30 – 89
days to loans 2.71 percent 3.24 percent 2.18 percent 1.48 percent
1.03 percent Allowance for loan losses to Loans at period
end 5.55 percent 3.40 percent 2.50 percent 2.05 percent 1.77
percent Loans at period end and partial charge-offs 8.98 percent
5.07 percent 3.79 percent 3.26 percent 3.39 percent Nonaccrual
loans 47 percent 43 percent 67 percent 66 percent 73 percent
Nonaccrual loans including partial charge-offs taken 60 percent 53
percent 76 percent 76 percent 84 percent
Specific allowance and partial
chargeoffs taken as a percentage of nonperforming loans, plus
partial charge-off taken
42.09 percent 33.72 percent 34.48 percent 35.56 percent 40.82
percent
Footnotes Midwest Banc Holdings, Inc.
(In thousands)
(1) Shareholders’ equity less goodwill and net core deposit
intangible and other intangibles. Dec. 31, Sept. 30, June
30, March 31, Dec. 31,
2009
2009
2009
2009
2008
Shareholders’ equity $ 56,476 $ 180,239 $ 219,671 $ 301,070
$ 305,834 Core deposit intangible & other intangibles, net
(12,391 ) (12,964 ) (13,537 ) (14,110 ) (14,683 ) Goodwill
(64,862 ) (78,862
) (78,862 )
(78,862 ) (78,862
) Tangible shareholders’ equity $
(20,777
) $
88,413 $
127,272
$
208,098 $
212,289
(2) Excludes net gains or losses on securities transactions.
(3)
Noninterest expense less
amortization and foreclosed properties expenses divided by the sum
of net interest income (tax equivalent) plus noninterest
income.
(4) Total assets less goodwill and net core deposit
intangible and other intangibles. Dec. 31, Sept. 30, June
30, March 31, Dec. 31,
2009
2009
2009
2009
2008
Total assets $ 3,435,545 $ 3,544,130 $ 3,569,199 $ 3,713,064
$ 3,570,212 Core deposit intangible & other intangibles, net
(12,391 ) (12,964 ) (13,537 ) (14,110 ) (14,683 ) Goodwill
(64,862 ) (78,862
) (78,862 )
(78,862 ) (78,862
) Tangible assets $
3,358,292 $
3,452,304 $
3,476,800 $
3,620,092 $
3,476,667
(5) Includes net interest income and noninterest income.
(6)
Adjusted for 35 percent tax rate
and for the dividends-received deduction where applicable, except
for the 2009 periods as a result of the Company's current tax
position.
(7) Nonaccrual loans are included in the average balance;
however, these loans are not earning any interest. (8)
Includes loan fees. (9) Reconciliation of reported net
interest income to tax equivalent net interest income. Three
Months Ended Dec. 31, Sept. 30, Dec. 31,
2009
2009
2008
Net interest income $ 14,772 $ 15,942 $ 19,832 Tax
equivalent adjustment to net interest income
—
— 363 Net
interest income, tax equivalent basis $
14,772
$
15,942 $
20,195
Twelve Months Ended Dec. 31, Dec. 31,
2009
2008
Net interest income $ 72,871 $ 86,966 Tax equivalent
adjustment to net interest income
—
2,621 Net interest income, tax equivalent basis
$
72,871 $
89,587
(10) Reconciliation of common equity to shareholders’ equity.
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2009
2009
2009
2009
2008
Preferred equity $ 123,670 $ 123,436 $ 123,206 $ 122,976 $
122,748 Common equity
(67,194 )
56,803 96,465
178,094 183,086
Shareholders’ equity $
56,476 $
180,239 $
219,671 $
301,070 $
305,834
Reconciliation of tangible common equity to tangible shareholders’
equity. Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2009
2009
2009
2009
2008
Preferred equity $ 123,670 $ 123,436 $ 123,206 $ 122,976 $
122,748 Tangible common equity
(144,447 )
(35,023 ) 4,066
85,122 89,541 Tangible
shareholders’ equity $
(20,777 ) $
88,413 $
127,272 $
208,098 $
212,289
Reconciliation of common shares outstanding at period end to “if
converted” shares outstanding. Dec. 31, Sept. 30, June 30,
March 31, Dec. 31,
2009
2009
2009
2009
2008
Common shares outstanding 28,121 28,116 27,944 27,929 27,893
Resulting common shares if preferred shares were converted
2,875 2,875
2,875 2,875
2,875 “If converted” shares outstanding
30,996 30,991
30,819 30,804
30,768 (11)
Prior periods with earnings were
re-stated as required by ASC 260-10-55, which was effective on
January 1, 2009, to allocate earnings available to common
shareholders to restricted shares of common stock that are
considered participating securities.
(12) Includes troubled debt restructuring loans of $9.7
million and $11.5 million at December 31, 2009 and September 30,
2009, respectively. (13) The provision for credit losses
includes the provision for loan losses and the provision for
unfunded commitment losses as follows. Three Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2009
2009
2009
2009
2008
Provision for loan losses $ 98,000 $ 36,700 $ 20,000 $
13,000 $ 20,000 Provision for unfunded commitments losses
750 750 750
253 275 Provision
for credit losses $
98,750 $
37,450 $
20,750 $
13,253 $
20,275
Twelve Months Ended Dec. 31, Dec. 31,
2009
2008
Provision for loan losses $ 167,700 $ 71,765 Provision for
unfunded commitments losses
2,503
877 Provision for credit losses $
170,203 $
72,642
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