Oak Hill Financial Provides Guidance on Loan Loss Provision
21 Diciembre 2006 - 3:39PM
PR Newswire (US)
JACKSON, Ohio, Dec. 21 /PRNewswire/ -- Oak Hill Financial, Inc.
(NASDAQ:OAKF) announced today that its provision for loan loss
expense is expected to be $4.0 million for the quarter ended
December 31, 2006. The company estimates that this $4.0 million
expense will have an impact on the company's fourth quarter 2006
net earnings of $0.52 per diluted share. "We believe this is a
necessary step to building a stronger loan portfolio," said R.E.
Coffman, Jr., President and CEO of Oak Hill Financial. "We continue
to focus on improving our asset quality, and we remain committed to
taking aggressive measures to reduce our nonperforming and
classified loans." Following the current action, Oak Hill
Financial's non-performing assets/total assets and nonperforming
loans/total loans ratios stand at 1.51% and 1.35%, respectively.
These compare to the 2.01% nonperforming assets and 2.35%
nonperforming loans ratios at March 31, 2006, which were the peak
reported levels for these ratios. "Our goal is to get both the
non-performing asset and non-performing loan ratios below 1.00% by
the end of 2007," Coffman noted. "While we don't anticipate
charge-offs of the magnitude that we have in the fourth quarter, we
will likely have more loan sales and possibly more charge-offs, if
that's what it takes to reach our target." The projected increase
in the provision for loan loss expense for the fourth quarter is
the result of the sale or charge-off of various non- performing and
adversely classified loans. The largest charge-off is $2.0 million
on two commercial real estate loans totaling $7.0 million. These
credits were still marginally performing at September 30, 2006 but
had been adversely classified in the company's internal loan
grading system for several years. Further deterioration in these
loans during the fourth quarter led to the current action. The
company continues to pursue resolution of the remaining balance and
is working with the borrower to sell the property. In the interim,
the remaining $5.0 million in this relationship is on nonaccrual
status. In addition, the company sold $2.2 million of nonperforming
or adversely classified loans during the fourth quarter, the
largest of which was a $1.4 million commercial real estate loan.
The loan sales resulted in charge-offs totaling $474,000. The
remaining charge-offs taken in the fourth quarter involved various
commercial real estate, residential real estate, and consumer
loans, with the largest of these being a $400,000 charge-off on a
$1.0 million commercial real estate loan that is currently in
foreclosure. The charge-offs in the fourth quarter will also impact
the company's allowance for loan and lease losses (ALLL).
Consistent with generally accepted accounting principles and
regulatory guidelines, the company uses various formulas to
determine its ALLL. The methodology takes into consideration
charge-offs as well as the rated quality of the company's loans
based on loan review grades and the types and amounts of loans
comprising the portfolio, while allowing some discretion by
management to make adjustments based on near-term economic
conditions. Using this methodology, most of the loans involved in
the current charge-offs were already allocated specific amounts for
expected losses in the ALLL. As a result, management's analysis
indicates that an ALLL/total loans ratio of 1.25% is appropriate at
December 21, 2006. No further change in the ALLL ratio is
anticipated prior to year-end. Oak Hill Financial is a financial
holding company headquartered in Jackson, Ohio. Oak Hill Banks
operates 36 full-service banking offices and one bank loan
production office in 16 counties across southern and central Ohio.
A second subsidiary, Oak Hill Financial Insurance Agency, provides
group health plans, property and casualty insurance, benefits
administration, and other insurance services to private and
public-sector organizations throughout the same region. The company
also holds 49% of Oak Hill Title Agency, LLC, which provides title
services for commercial and residential real estate transactions.
Additional information about Oak Hill Financial can be found on the
company's website at http://www.oakf.com/. Forward-Looking
Statements Disclosure This release contains certain forward-looking
statements related to the future performance and condition of Oak
Hill Financial, Inc. These statements, which are subject to
numerous risks and uncertainties, are presented in good faith based
on the company's current condition and management's understanding,
expectations, and assumptions regarding its future prospects as of
the date of this release. Actual results could differ materially
from those projected or implied by the statements contained herein.
The factors that could affect the company's future results are set
forth in the periodic reports and registration statements filed by
the company with the Securities and Exchange Commission.
DATASOURCE: Oak Hill Financial, Inc. CONTACT: David G. Ratz,
Executive Vice President of Oak Hill Financial, Inc.,
+1-740-286-3283 Web site: http://www.oakf.com/
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