Net Income increased to $6.2 Million or
$0.52 Per Diluted Share
Net Interest Margin Remains Strong at
4.17%
Board of Directors Declares Cash Dividend
Payable November 30, 2011
HIGHLIGHTS FROM THE THIRD QUARTER OF
2011
- Net Income and Net Income per Diluted Share
Growth: Net income increased to $6.2 million, or
$0.52 per diluted share, for the third quarter of 2011. This
represented a 79.3% increase in net income per diluted share
compared to $0.29 for the quarter ended June 30, 2011. Net
income per diluted share also increased 48.6% compared to $0.35 for
the quarter ended September 30, 2010.
- Net Interest Margin Strength: The net
interest margin totaled 4.17% for the third quarter of 2011
compared to 4.23% for the second quarter of 2011 and 3.64% for the
third quarter of 2010.
- Further Decrease in Non-Interest
Expense: Non-interest expense totaled $19.4 million
for the third quarter of 2011, which represents a decrease of $3.4
million or 14.8% compared to $22.8 million for the second quarter
of 2011.
- Asset Quality Strength: Non-performing
assets decreased to $32.9 million, or 1.30% of total assets, at
September 30, 2011. This represents a 20.4% decrease in
non-performing assets compared to $41.3 million or 1.64% at June
30, 2011.
Tower Bancorp, Inc. (Nasdaq:TOBC) (the "Company"), the parent
company of Graystone Tower Bank (the "Bank"), reported record net
income available to shareholders of $6.2 million or $0.52 per
diluted share for the third quarter of 2011, an increase of $2.7
million or $0.23 per diluted share when compared to the second
quarter of 2011 and an increase of $3.7 million or $0.17 per
diluted share when compared to the third quarter of 2010.
Operating (non-GAAP) income, that is net income recognized in
accordance with Generally Accepted Accounting Principles ("GAAP")
adjusted for merger-related expenses, restructuring charges,
and nonrecurring transactions, also totaled $6.2 million for the
quarter ended September 30, 2011. Operating (non-GAAP) income
increased $2.1 million when compared to the second quarter of 2011,
and $3.6 million when compared to the third quarter of 2010.
Board of Directors Declares $0.14 per Share Dividend,
Payable on November 30, 2011
Andrew Samuel, Chairman and CEO, reported that the Board of
Directors declared a quarterly cash dividend of $0.14 per share,
payable on November 30, 2011 to shareholders of record at the close
of business on November 15, 2011.
Review of Balance Sheet and Credit Quality
Total assets at September 30, 2011 totaled $2.5 billion,
representing an increase of $13.2 million or 0.5% from June 30,
2011. Total gross loans held for investment increased $24.4 million
or 1.2% from $2.04 billion at June 30, 2011 to $2.06 billion at
September 30, 2011. Total commercial loans increased $31.0 million
from June 30, 2011 to $1.58 billion at September 30, 2011,
representing an annualized growth rate of 8.0%. Total consumer
and other loans and residential mortgages held for investment
increased $6.0 million and decreased $12.8 million, respectively,
from June 30, 2011 to September 30, 2011. Loans held for sale,
representing agency-conforming residential mortgages originated for
sale, increased $14.4 million during the third quarter of 2011 to
$30.1 million at September 30, 2011.
The investment portfolio decreased $55.3 million or 26.4% from
June 30, 2011 to $153.9 million at September 30, 2011. The
investment portfolio represents approximately 6.1% of total assets
as of September 30, 2011. At September 30, 2011 liquid
assets (defined as cash and cash equivalents, loans held for sale,
and securities available for sale exclusive of securities pledged
as collateral or used in connection with customer repurchase
agreements) totaled approximately $233.8 million or 10.9% of total
deposits. This compares to $222.4 million, or 10.4%, of total
deposits, at June 30, 2011.
Total deposits were stable, increasing $6.6 million or 0.3%
during the third quarter of 2011. The Company's deposit mix
continued to be weighted heavily in lower cost demand, savings and
money market accounts, which comprised 60.1% and 61.7% of total
deposits at September 30, 2011 and June 30, 2011,
respectively. As of September 30, 2011, total non-reciprocal
brokered deposits represented 7.1% of total deposits. The average
cost of deposits increased by 3 basis points from 0.88% for the
quarter ended June 30, 2011 to 0.91% for the quarter ended
September 30, 2011. At September 30, 2011, the Company had a
weighted average cost of deposits of 1.03% exclusive of
amortization from purchase accounting adjustments compared to 1.01%
at June 30, 2011.
The provision for loan losses was $1.3 million during the third
quarter of 2011 compared to $1.5 million for the second quarter of
2011 and $1.6 million for the third quarter of 2010. The
allowance for loan losses at September 30, 2011 of $11.9 million is
generally unchanged from the balance at June 30, 2011. The
provision for loan losses for the third quarter of 2011 covered net
loan charge-offs of approximately $1.2 million. The annualized
rate of net charge-offs to average loans for the third quarter of
2011 and for the nine months ended September 30, 2011 were 0.24%,
and 0.42%, respectively.
At September 30, 2011, non-performing assets totaled $32.9
million, a decrease of $8.4 million or 20.4% in comparison to
the second quarter of 2011. Loans delinquent for greater than
ninety days and still accruing interest increased $1.5 million and
other real estate owned increased $0.8 million. During the
third quarter of 2011, non-accrual loans decreased by $10.7 million
to $22.8 million at September 30, 2011. Approximately $10.3
million of the decrease in non-accrual loans was attributable to a
single lending relationship. The loans attributable to this
relationship were previously restructured and have performed in
accordance with the revised terms. Acquired loans deemed to be
impaired at the time of purchase in accordance with Accounting
Standard Codification 310-30-30, previously known as Statement of
Position (SOP) 03-3, "Accounting for Certain Loans Acquired in a
Transfer," have been recorded at their fair value based on
anticipated future cash flows at the time of acquisition and are
considered to be performing loans as the Company expects to fully
collect the new carrying value (i.e. fair value) of the loans. For
these loans acquired through the Company's acquisition of First
Chester County Corporation (the "First Chester Merger"), the
Company recorded a reduction of $29.7 million to their carrying
value to record them at fair value at the time of acquisition. As
such, these loans have been excluded from non-performing assets for
all periods discussed.
The ratio of non-performing assets to total assets at September
30, 2011 declined to 1.30% from 1.64% at June 30, 2011.
Although the third quarter allowance for loan loss to non
performing loans of 41.6% is lower than the industry average,
nearly half of the loan portfolio has been marked to market through
purchase accounting in connection with the First National Bank of
Greencastle and First National Bank of Chester County
acquisitions. When including general credit fair value
adjustments recorded on the loan portfolio and the allowance for
loan loss, the adjusted (non-GAAP) allowance for loan losses to
non-performing loans is 96.6% at September 30, 2011.
GAAP requires that expected credit losses associated with loans
obtained in an acquisition be reflected at fair value as of each
respective acquisition date and prohibits the carryover of the
acquired entity's allowance for loan losses. Accordingly, the
Company's management believes that presentation of the adjusted
(non-GAAP) allowance for loan losses, consisting of the allowance
for loan losses plus the credit fair value adjustment on loans
purchased in merger transactions, is useful for investors to
understand the complete allowance that is recorded as a
representation of future expected losses over the Company's loan
portfolio. The details of this calculation and reconciliation
of GAAP and non-GAAP measures are provided in the Selected
Financial Data tables found later in this release.
Review of Income Statement
Net income for the third quarter of 2011 equaled $6.2 million or
$0.52 per diluted share, which reflects an increase of $2.7 million
or $0.23 per diluted share as compared to the second quarter of
2011 and an increase of $3.7 million or $0.17 per diluted share
when compared to the third quarter of 2010. Operating
(non-GAAP) income for the third quarter of 2011 was also $6.2
million, an increase of $2.1 million when compared to the second
quarter of 2011 and $3.6 million when compared to the third quarter
of 2010.
Net interest income for the third quarter was $23.9 million
reflecting a decrease of $435 thousand as compared to the second
quarter of 2011. Net interest income for the third quarter of
2011 increased $10.5 million when compared to the third quarter of
2010. Net interest margin was 4.17% for the quarter ending
September 30, 2011. This reflects a decrease of 6 basis points
when compared to the second quarter of 2011 and an increase of 53
basis points when compared to the third quarter of
2010. Average investments decreased $19.3 million and
average loans decreased $3.0 million, when compared to the second
quarter of 2011, while the average rate received on interest
earning assets decreased by 2 basis points. The average
balance of interest-bearing liabilities for the third quarter of
2011 decreased by $21.9 million while the average rate paid
increased by 5 basis points compared to the second quarter of
2011. Exclusive of the amortization of purchase accounting
fair value adjustments, when comparing the third quarter 2011to the
second quarter of 2011, yield on interest earning assets would have
been down 6 basis points to 5.01%, the cost of interest bearing
liabilities would have been flat at 1.40%, and net interest margin
would have been down 3 basis points to 3.83%.
Noninterest income was $5.7 million for the third quarter of
2011, which represents an increase of $825 thousand or 17.0% when
compared to the second quarter of 2011. Gains on the sale of
investment securities were $884 thousand for the third quarter of
2011 as compared to $35 thousand in the second quarter of 2011 and
$249 thousand in the third quarter of 2010. Noninterest income
increased $2.7 million when compared to the third quarter of
2010. These increases are mostly the result of additional
revenue streams acquired through the First Chester Merger and gains
on the sale of securities recognized in the third quarter of
2011.
Noninterest expense was $19.4 million for the third quarter of
2011. When comparing the third quarter of 2011 to the second
quarter of 2011, non-interest expenses decreased $3.4 million or
14.9%. This is driven primarily by a reduction in salary and
benefit costs as the Company continued to realize cost savings
resulting from the First Chester Merger, and reductions in
professional service fees and merger related
expenses. Noninterest expense increased $8.4 million or 76.9%
when compared to the third quarter of 2010, primarily resulting
from expenses related to operating a significantly larger
organization in 2011 as compared to 2010.
Income tax expense for the third quarter of 2011 was $2.7
million, which resulted in an effective tax rate of 30.2%, compared
to 29.9% for the second quarter of 2011 and 33.6% for the third
quarter of 2010.
Residential Mortgage Segment
The Residential Mortgage Segment recognized a loss of $24
thousand during the third quarter of 2011. This compares to a
loss of $1.2 million during the second quarter of 2011. During
the first six months of 2011, the Company substantially
restructured the residential mortgage operations acquired in
connection with the First Chester Merger. As part of the
restructuring, the Company intentionally reduced the size of its
residential mortgage operations, which resulted in a decrease of
loans held for sale from $147.3 million at December 31, 2010 to
$30.1 million at September 30, 2011. The results of third quarter
of 2011 reflect a revenue stream and downsized infrastructure that
is predominantly limited to serving customers throughout the
Company's footprint.
Merger with Susquehanna Bancshares, Inc.
On June 20, 2011, the Company announced the signing of a
definitive agreement with Susquehanna Bancshares, Inc.
("Susquehanna") pursuant to which the Company will be acquired in a
stock and cash transaction valued at approximately $343.0 million
at the time of announcement. Under the terms of the merger
agreement, the Company's shareholders will have the option of
receiving either 3.4696 shares of Susquehanna common stock or
$28.00 in cash for each share of Tower common stock, with $88.0
million of the total consideration being paid in cash. The
final transaction value will be determined at the closing of the
acquisition based on the stock price of Susquehanna at that time.
The merger is anticipated to close in February 2012, subject to
shareholder and regulatory approvals and other customary closing
conditions.
Supplemental Information – Explanation of Non-GAAP
Financial Measures
This press release contains financial information determined by
methods other than in accordance with GAAP. These measures include
tangible assets, tangible common equity, operating income and
performance and capital ratios derived from the foregoing. Tangible
assets and tangible common equity are derived by reducing the
balance of assets and equity, respectively, by the amount of GAAP
reported goodwill and other intangible assets. Operating income is
calculated by adjusting net income available to common shareholders
for merger-related expenses, restructuring charges, and other
nonrecurring transactions that occurred during the period
presented, since such expenses are considered by management to be
"non-operating" in nature. The Company calculates the return on
average tangible equity by excluding the balance of intangible
assets and their related amortization expense from the calculation
of return on average equity. Management refers to tangible common
equity, tangible assets and related ratios and calculations derived
from the foregoing because it believes such measures are useful in
assessing the strength of the Company's capital position. The
Company believes the presentation of these non-GAAP financial
measures provide useful supplemental information that is essential
to an investor's proper understanding of the operating results of
the Company's core businesses. The Company's management uses these
non-GAAP financial measures in their analysis of the Company's
performance. These non-GAAP disclosures should not be viewed
as a substitute for financial measures determined in accordance
with GAAP, nor are they necessarily comparable to non-GAAP
performance measures that may be presented by other companies.
Reconciliations of GAAP to non-GAAP measures are included as tables
at the end of this release.
About Tower Bancorp, Inc.
Tower Bancorp, Inc. is the parent company of Graystone Tower
Bank, a full-service community bank operating 49 branch offices in
central and southeastern Pennsylvania and Maryland through three
divisions, Graystone Bank, Tower Bank, and 1N Bank. With total
assets of approximately $2.5 billion, Tower Bancorp's unparalleled
competitive advantage is its employees and a strong corporate
culture paired with a clear vision that provides customers with
uncompromising service and individualized solutions to every
financial need. Tower Bancorp's common stock is listed on the
NASDAQ Global Select Market under the symbol "TOBC." More
information about Tower Bancorp and its divisions can be found on
the internet at www.yourtowerbank.com, www.graystonebank.com,
1nbank.com and www.towerbancorp.com.
The Tower Bancorp, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7686
Safe Harbor for Forward-Looking Statements
This document contains "forward-looking" statements as defined
in the Private Securities Litigation Reform Act of 1995, which are
based on the Company's current expectations, estimates and
projections about future events. This includes statements regarding
the future performance of Susquehanna, the timing of the merger
transaction, the business plans and integration efforts once the
transaction is complete, and the impact of the transaction and
Susquehanna's acquisition of Abington Bancorp, Inc., on
Susquehanna's earnings, market share and capital position. These
statements are not historical facts or guarantees of future
performance, events or results. Such statements involve potential
risks and uncertainties, such as whether the merger will be
approved by the shareholders of Susquehanna and the Company or by
regulatory authorities, whether each of the other conditions to
closing set forth in the merger agreement will be met,
Susquehanna's ability to integrate the Company as planned and the
general effects of financial, economic, regulatory and political
conditions affecting the banking and financial services industries.
Accordingly, actual results may differ materially. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. For additional factors that may affect
future results, please see filings made by Susquehanna and the
Company with the Securities and Exchange Commission ("SEC"),
including their Annual Reports on Form 10-K for the year ended
December 31, 2010, and Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2011 and June 30, 2011.
Additional Information about the Merger and Where to
Find It
In connection with the proposed merger of the Company and
Susquehanna (the "Merger"), Susquehanna has filed with the
Securities and Exchange Commission (the "SEC") a registration
statement on Form S-4, which has been declared effective by the SEC
and includes a joint proxy statement/prospectus and other relevant
documents that have been distributed to the shareholders of the
Company and Susquehanna. Investors and security holders of
Susquehanna and the Company are encouraged to read the registration
statement and the joint proxy statement/prospectus relating to the
proposed transaction and any other relevant documents filed with
the SEC, as well as any amendments or supplements to those
documents, because they contain important information about the
Company, Susquehanna and the Merger. The joint proxy
statement/prospectus and other relevant materials, and any other
documents filed by Susquehanna or the Company with the SEC, may be
obtained free of charge at the SEC's Web site at
http://www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the SEC by the
Company by contacting Brent Smith, Tower Bancorp, Inc., 112 Market
Street, Harrisburg, PA 17101, telephone: 717-724-4666 or from
Tower's web site at http://www.towerbancorp.com. Investors and
security holders may obtain free copies of the documents filed with
the SEC by Susquehanna by contacting Abram G. Koser, Susquehanna
Bancshares, Inc., 26 North Cedar Street, Lititz, PA 17543,
telephone: 717-626-4721 or from Susquehanna's web site at
http://www.susquehanna.net.
Susquehanna, the Company and their respective directors,
executive officers and certain other members of management and
employees may be deemed "participants" in the solicitation of
proxies from shareholders of Susquehanna and the Company in favor
of the Merger. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
the shareholders of Susquehanna and the Company in connection with
the proposed Merger will be set forth in the joint proxy
statement/prospectus when it is filed with the SEC. You can find
information about the executive officers and directors of
Susquehanna in its Annual Report on Form 10-K for the year ended
December 31, 2010 and in its joint proxy statement/prospectus
filed with the SEC on March 18, 2011. You can find information
about the Company's executive officers and directors in its Annual
Report on Form 10-K for the year ended December 31, 2010 and
in its definitive proxy statement filed with the SEC on
April 8, 2011.
Investors and security holders are urged to read the joint proxy
statement/prospectus and the other relevant materials before making
any voting or investment decision with respect to the Merger.
Tower Bancorp, Inc. and
Subsidiary |
Consolidated Balance
Sheets |
September 30, 2011,
June 30, 2011, December 31, 2010 and September 30,
2010 |
(Amounts in thousands,
except share data) |
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Assets |
(unaudited) |
(unaudited) |
|
(unaudited) |
Cash and due from banks |
$ 116,418 |
$ 77,734 |
$ 219,741 |
$ 28,434 |
Federal funds sold |
14,547 |
17,738 |
28,738 |
17,831 |
Cash and cash equivalents |
130,965 |
95,472 |
248,479 |
46,265 |
Securities available for
sale |
153,919 |
209,209 |
102,695 |
145,428 |
Restricted investments |
12,629 |
13,283 |
14,696 |
6,254 |
Loans held for sale |
30,095 |
15,664 |
147,281 |
12,851 |
Loans, net of allowance for
loan losses of $11,925, $11,869, $14,053 and $12,717 |
2,052,300 |
2,027,998 |
2,058,191 |
1,308,820 |
Premises and equipment,
net |
52,808 |
54,235 |
56,388 |
29,555 |
Accrued interest
receivable |
6,956 |
7,150 |
7,856 |
5,220 |
Deferred tax asset, net |
15,369 |
15,401 |
19,526 |
1,488 |
Bank owned life insurance |
40,856 |
40,466 |
39,670 |
37,906 |
Goodwill |
18,305 |
17,996 |
16,750 |
11,935 |
Other intangible assets,
net |
6,333 |
6,697 |
7,493 |
2,871 |
Other real estate owned |
4,293 |
3,520 |
4,647 |
879 |
Other assets |
14,865 |
19,403 |
23,617 |
9,369 |
Total assets |
$ 2,539,693 |
$ 2,526,494 |
$ 2,747,289 |
$ 1,618,841 |
|
|
|
|
|
Liabilities and equity |
|
|
|
|
Liabilities |
|
|
|
|
Deposits: |
|
|
|
|
Non-interest bearing |
$ 292,619 |
$ 304,541 |
$ 301,210 |
$ 125,174 |
Interest bearing |
1,861,153 |
1,842,659 |
1,998,688 |
1,230,543 |
Total deposits |
2,153,772 |
2,147,200 |
2,299,898 |
1,355,717 |
Securities sold under
agreements to repurchase |
10,555 |
7,161 |
6,605 |
7,102 |
Short-term borrowings |
56 |
43 |
55,039 |
5,037 |
Long-term debt |
87,887 |
87,856 |
87,800 |
72,398 |
Accrued interest payable |
1,625 |
1,713 |
1,950 |
1,084 |
Other liabilities |
24,174 |
25,633 |
38,111 |
11,667 |
Total
liabilities |
2,278,069 |
2,269,606 |
2,489,403 |
1,453,005 |
Equity |
|
|
|
|
Common stock, no par value;
50,000,000 shares authorized; 12,110,545 issued and 12,007,187
outstanding at September 30, 2011, and June 30, 2011, 12,074,757
issued and 11,971,399 outstanding at December 31, 2010 and
7,287,158 issued and 7,183,800 outstanding at September 30,
2010. |
-- |
-- |
-- |
-- |
Additional paid-in capital |
272,368 |
272,292 |
271,350 |
173,175 |
Accumulated deficit |
(9,311) |
(13,852) |
(10,868) |
(4,431) |
Accumulated other comprehensive
income |
2,595 |
2,155 |
251 |
1,143 |
Less: cost of treasury stock,
103,358 at September 30, 2011 June 30, 2011, December 31, 2010, and
September 30, 2010 |
(4,093) |
(4,093) |
(4,093) |
(4,093) |
Total stockholders'
equity |
261,559 |
256,502 |
256,640 |
165,794 |
Noncontrolling interests |
65 |
386 |
1,246 |
42 |
Total
equity |
261,624 |
256,888 |
257,886 |
165,836 |
Total liabilities and
equity |
$ 2,539,693 |
$ 2,526,494 |
$ 2,747,289 |
$ 1,618,841 |
|
Tower Bancorp, Inc. and
Subsidiary |
Consolidated Statements
of Operations |
Three Months Ended
September 30, 2011, June 30, 2011 and September 30, 2010 and Nine
Months Ended September 30, 2011 and 2010 |
(Amounts in thousands,
except share data) |
|
|
|
|
|
|
|
For the Three
Months Ended |
For the Nine
Months Ended |
|
September 30,
2011 |
June 30,
2011 |
September 30,
2010 |
September 30,
2011 |
September 30,
2010 |
Interest income |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Loans, including fees |
$ 29,065 |
$ 28,979 |
$ 17,852 |
$ 87,243 |
$ 51,632 |
Securities |
1,108 |
1,389 |
1,020 |
3,470 |
3,223 |
Federal funds sold and
other |
42 |
41 |
24 |
180 |
98 |
Total interest
income |
30,215 |
30,409 |
18,896 |
90,893 |
54,953 |
Interest expense |
|
|
|
|
|
Deposits |
4,959 |
4,800 |
4,492 |
14,275 |
13,645 |
Short-term borrowings |
69 |
65 |
177 |
323 |
482 |
Long-term debt |
1,288 |
1,210 |
856 |
3,658 |
2,503 |
Total interest
expense |
6,316 |
6,075 |
5,525 |
18,256 |
16,630 |
Net interest
income |
23,899 |
24,334 |
13,371 |
72,637 |
38,323 |
Provision for loan
losses |
1,300 |
1,500 |
1,600 |
4,450 |
4,950 |
Net interest income
after provision for loan losses |
22,599 |
22,834 |
11,771 |
68,187 |
33,373 |
Noninterest income |
|
|
|
|
|
Service charges on deposit
accounts |
1,130 |
1,128 |
832 |
3,367 |
2,377 |
Fiduciary fees and brokerage
commissions |
905 |
1,066 |
87 |
2,868 |
225 |
Other service charges,
commissions and fees |
1,003 |
950 |
493 |
2,857 |
1,563 |
Gain on sale of mortgage loans
originated for sale |
1,076 |
1,128 |
656 |
3,672 |
1,250 |
Impairment losses on securities
available for sale |
0 |
(63) |
(70) |
(63) |
(138) |
Income from bank owned life
insurance |
390 |
387 |
566 |
1,186 |
1,300 |
Other income |
1,179 |
262 |
414 |
1,966 |
772 |
Total noninterest
income |
5,683 |
4,858 |
2,978 |
15,853 |
7,349 |
Noninterest expenses |
|
|
|
|
|
Salaries and employee
benefits |
9,770 |
11,297 |
5,521 |
34,177 |
15,906 |
Occupancy and equipment |
4,031 |
3,952 |
1,805 |
12,353 |
5,236 |
Amortization of intangible
assets |
343 |
344 |
160 |
1,093 |
496 |
FDIC insurance premiums |
526 |
764 |
564 |
2,184 |
1,500 |
Advertising and promotion |
508 |
697 |
231 |
1,770 |
740 |
Data processing |
1,162 |
1,096 |
740 |
3,413 |
1,894 |
Communication |
298 |
364 |
278 |
1,377 |
771 |
Professional service fees |
700 |
961 |
385 |
2,862 |
1,197 |
Impairment on fixed assets |
-- |
-- |
-- |
-- |
920 |
Other operating expenses |
2,068 |
2,332 |
1,149 |
8,157 |
3,501 |
Restructuring charges |
61 |
414 |
-- |
1,635 |
-- |
Merger related expenses |
(92) |
538 |
117 |
693 |
304 |
Total noninterest
expenses |
19,375 |
22,759 |
10,950 |
69,714 |
32,465 |
Income before income
taxes |
8,907 |
4,933 |
3,799 |
14,326 |
8,257 |
Income tax expense |
2,686 |
1,476 |
1,275 |
4,308 |
2,647 |
Income |
6,221 |
3,457 |
2,524 |
10,018 |
5,610 |
Less: income from noncontrolling
interest |
2 |
(53) |
22 |
71 |
26 |
Net income |
$ 6,219 |
$ 3,510 |
$ 2,502 |
$ 9,947 |
$ 5,584 |
|
|
|
|
|
|
Per share data |
|
|
|
|
|
Net income per shares |
|
|
|
|
|
Basic |
$ 0.52 |
$ 0.29 |
$ 0.35 |
$ 0.83 |
$ 0.78 |
Diluted |
$ 0.52 |
$ 0.29 |
$ 0.35 |
$ 0.83 |
$ 0.78 |
Dividends declared |
$ 0.14 |
$ 0.28 |
$ 0.28 |
$ 0.70 |
$ 0.84 |
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
Basic |
12,007,187 |
11,996,283 |
7,144,685 |
11,993,204 |
7,134,611 |
Diluted |
12,016,724 |
11,999,772 |
7,144,721 |
11,999,215 |
7,137,508 |
|
|
Tower Bancorp, Inc. and
Subsidiary |
Yields on Average
Interest-Earning Assets and Interest-Bearing
Liabilities |
Three months ended
September 30, 2011 and 2010 |
(Amounts in thousands,
except for rate data) |
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30, |
|
2011 |
2010 |
|
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
|
(Amounts
Unaudited) |
Interest-earning assets: |
|
|
|
|
|
|
Federal funds sold and other (3) |
$ 6,255 |
$ 2 |
0.13% |
$ 16,801 |
$ 24 |
0.57% |
Investment securities (1) |
204,724 |
1,199 |
2.32% |
175,533 |
1,071 |
2.42% |
Loans |
2,069,430 |
29,065 |
5.57% |
1,270,993 |
17,852 |
5.57% |
Total interest-earning
assets |
2,280,409 |
30,266 |
5.27% |
1,463,327 |
18,947 |
5.14% |
Other assets |
254,878 |
|
|
137,532 |
|
|
Total assets |
$ 2,535,287 |
|
|
$ 1,600,859 |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Interest-bearing non-maturity deposits |
$ 1,012,046 |
1,409 |
0.55% |
$ 794,970 |
2,138 |
1.07% |
Time deposits |
848,526 |
3,550 |
1.66% |
423,415 |
2,354 |
2.21% |
Borrowings |
97,131 |
1,357 |
5.54% |
85,863 |
1,033 |
4.77% |
Total interest-bearing
liabilities |
1,957,703 |
6,316 |
1.28% |
1,304,248 |
5,525 |
1.68% |
Demand deposits |
294,520 |
|
|
116,974 |
|
|
Other liabilities |
23,937 |
|
|
13,738 |
|
|
Equity |
259,127 |
|
|
165,899 |
|
|
Total liabilities and
equity |
$ 2,535,287 |
|
|
$ 1,600,859 |
|
|
Net interest spread |
|
|
3.99% |
|
|
3.46% |
Net interest income and interest rate margin
FTE |
|
$23,950 |
4.17% |
|
$13,422 |
3.64% |
Tax equivalent adjustment |
|
(91) |
|
|
(51) |
|
Net interest income |
|
$23,859 |
|
|
$13,371 |
|
Ratio of average interest-earning assets to
average interest-bearing liabilities |
116.5% |
|
|
112.2% |
|
|
|
|
|
|
|
|
|
(1) The average yields for
investment securities available for sale are reported on a fully
taxable-equivalent basis at a rate of 35% for 2011 and 34% for
2010. |
(2) Average loan balances include
non-accrual loans. |
(3) Amounts exclude cash balances
held at the Federal Reserve and any interest earned thereon. |
|
Tower Bancorp, Inc. and
Subsidiary |
Yields on Average
Interest-Earning Assets and Interest-Bearing
Liabilities |
For the Nine Months
Ended September 30, 2011 and 2010 |
(Amounts in thousands,
except for rate data) |
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30, |
|
2011 |
2010 |
|
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
|
(Amounts
Unaudited) |
Interest-earning assets: |
|
|
|
|
|
|
Federal funds sold and other (3) |
$ 15,821 |
$ 15 |
0.13% |
$ 20,010 |
$ 98 |
0.65% |
Investment securities (1) |
197,883 |
3,732 |
2.52% |
181,018 |
3,358 |
2.48% |
Loans |
2,093,762 |
87,243 |
5.57% |
1,202,259 |
51,632 |
5.74% |
Total interest-earning
assets |
2,307,466 |
90,990 |
5.27% |
1,403,287 |
55,088 |
5.25% |
Other assets |
291,716 |
|
|
150,828 |
|
|
Total assets |
$ 2,599,182 |
|
|
$ 1,554,115 |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
Interest-bearing non-maturity deposits |
$ 1,045,110 |
4,347 |
0.56% |
$ 749,017 |
6,470 |
1.15% |
Time deposits |
852,020 |
9,928 |
1.56% |
425,697 |
7,175 |
2.25% |
Borrowings |
104,281 |
3,981 |
5.10% |
85,691 |
2,985 |
4.66% |
Total interest-bearing liabilities |
2,001,411 |
18,256 |
1.22% |
1,260,405 |
16,630 |
1.76% |
Demand deposits |
310,712 |
|
|
114,534 |
|
|
Other liabilities |
30,515 |
|
|
14,138 |
|
|
Equity |
256,544 |
|
|
165,038 |
|
|
Total liabilities and
equity |
$ 2,599,182 |
|
|
$ 1,554,115 |
|
|
Net interest spread |
|
|
4.05% |
|
|
3.48% |
Net interest income and interest rate margin
FTE |
|
$ 72,734 |
4.21% |
|
$ 38,458 |
3.66% |
Tax equivalent adjustment |
|
(262) |
|
|
(135) |
|
Net interest income |
|
$ 72,472 |
|
|
$ 38,323 |
|
Ratio of average interest-earning assets to
average interest-bearing liabilities |
115.3% |
|
|
111.3% |
|
|
|
|
|
|
|
|
|
(1) The average yields for
investment securities available for sale are reported on a fully
taxable-equivalent basis at a rate of 35% for 2011 and 34% for
2010. |
(2) Average loan balances include
non-accrual loans. |
(3) Amounts exclude cash balances
held at the Federal Reserve and any interest earned thereon. |
Tower Bancorp, Inc. and
Subsidiary |
Selected Financial
Information |
(Dollars in thousands,
except share data and ratios) |
(Unaudited) |
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Selected Balance Sheet
Data: |
|
|
|
|
|
Loans held for investment |
|
$ 2,064,225 |
$ 2,039,867 |
$ 2,072,244 |
$ 1,321,537 |
Loans held for sale |
|
30,095 |
15,664 |
147,281 |
12,851 |
|
|
|
|
|
|
Allowance for loans losses |
|
$ 11,925 |
$ 11,869 |
$ 14,053 |
$ 12,717 |
Credit quality adjustment on loans purchased
(1) |
|
15,726 |
17,828 |
21,693 |
1,509 |
Adjusted (Non-GAAP) allowance for loan losses
(9) |
|
$ 27,651 |
$ 29,697 |
$ 35,746 |
$ 14,226 |
|
|
|
|
|
|
Total assets |
|
$ 2,539,693 |
$ 2,526,494 |
$ 2,747,289 |
$ 1,618,841 |
Total deposits |
|
2,153,772 |
2,147,200 |
2,299,898 |
1,355,717 |
Total borrowings and securities sold under
agreements to repurchase |
|
98,498 |
95,060 |
149,444 |
84,537 |
Total stockholders' equity |
|
261,559 |
256,502 |
256,640 |
165,794 |
Goodwill and other intangible assets |
|
24,638 |
24,693 |
24,243 |
14,806 |
Tangible equity - Non-GAAP (9) |
|
236,921 |
231,809 |
232,397 |
150,988 |
Tangible assets - Non-GAAP (9) |
|
2,515,055 |
2,501,801 |
2,723,046 |
1,604,035 |
|
|
|
|
|
|
Shares outstanding at period end |
|
12,007,187 |
12,007,187 |
11,971,399 |
7,183,800 |
|
|
|
|
|
|
|
For the Three
Months Ended |
For the Nine
Months Ended |
|
September 30,
2011 |
June 30,
2011 |
September 30,
2010 |
September 30,
2011 |
September 30,
2010 |
Selected Income Statement
Data: |
|
|
|
|
|
Interest income |
$ 30,215 |
$ 30,409 |
$ 18,896 |
$ 90,893 |
$ 54,953 |
Interest expense |
6,316 |
6,075 |
5,525 |
18,256 |
16,630 |
Net interest income |
23,899 |
24,334 |
13,371 |
72,637 |
38,323 |
Provision for loan losses |
1,300 |
1,500 |
1,600 |
4,450 |
4,950 |
Noninterest income |
5,683 |
4,858 |
2,978 |
15,853 |
7,349 |
Noninterest expense |
19,375 |
22,759 |
10,950 |
69,714 |
32,465 |
Net income before income taxes |
8,907 |
4,933 |
3,799 |
14,326 |
8,257 |
Income tax expense |
2,686 |
1,476 |
1,275 |
4,308 |
2,647 |
Less: Income from non-controlling
interest |
2 |
(53) |
22 |
71 |
26 |
Net income |
$ 6,219 |
$ 3,510 |
$ 2,502 |
$ 9,947 |
$ 5,584 |
|
|
|
|
|
|
Operating Income - Non-GAAP (9) |
$ 6,199 |
$ 4,129 |
$ 2,619 |
$ 11,460 |
$ 6,532 |
|
|
|
|
|
|
Per Share Data: |
|
|
|
|
|
Weighted average shares outstanding -
basic |
12,007,187 |
11,996,283 |
7,144,685 |
11,993,204 |
7,134,611 |
Weighted average shares outstanding -
diluted |
12,016,724 |
11,999,772 |
7,144,721 |
11,999,215 |
7,137,508 |
Book value per share |
$ 21.78 |
$ 21.36 |
$ 23.08 |
$ 21.78 |
$ 23.08 |
Tangible book value per share - Non-GAAP
(9) |
$ 19.73 |
$ 19.31 |
$ 21.02 |
$ 19.73 |
$ 21.02 |
Basic earnings per share |
$ 0.52 |
$ 0.29 |
$ 0.35 |
$ 0.83 |
$ 0.78 |
Diluted earnings per share |
$ 0.52 |
$ 0.29 |
$ 0.35 |
$ 0.83 |
$ 0.78 |
|
|
|
|
|
|
Diluted operating income per share - Non-GAAP
(9) |
$ 0.52 |
$ 0.33 |
$ 0.37 |
$ 0.96 |
$ 0.91 |
|
|
|
|
|
|
|
For the Three
Months Ended |
For the Nine
Months Ended |
|
September 30,
2011 |
June 30,
2011 |
September 30,
2010 |
September 30,
2011 |
September 30,
2010 |
Performance Ratios: |
|
|
|
|
|
Return on average assets |
0.97% |
0.55% |
0.62% |
0.51% |
0.48% |
Return on average equity |
9.52% |
5.51% |
5.98% |
5.18% |
4.52% |
Return on average tangible equity (Non-GAAP)
(9) |
11.10% |
6.70% |
6.99% |
6.36% |
5.42% |
Net interest margin |
4.17% |
4.23% |
3.64% |
4.21% |
3.66% |
Efficiency ratio (2) |
65.50% |
77.96% |
67.32% |
78.78% |
71.28% |
Non-interest income to average assets |
0.89% |
0.76% |
0.76% |
0.82% |
0.65% |
Non-interest expenses to average assets |
3.03% |
3.55% |
2.74% |
3.59% |
2.81% |
|
|
|
|
|
|
Operating Performance Ratios
(Non-GAAP) (9): |
|
|
|
|
|
Return on average assets |
0.97% |
0.64% |
0.65% |
0.59% |
0.56% |
Return on average equity |
9.49% |
6.48% |
6.26% |
5.97% |
5.29% |
Return on average tangible equity
(Non-GAAP) |
11.07% |
7.77% |
7.30% |
7.24% |
6.14% |
Net interest margin |
4.17% |
4.23% |
3.64% |
4.21% |
3.66% |
Efficiency ratio (2) |
65.56% |
75.84% |
66.61% |
77.07% |
69.22% |
Noninterest income to average assets |
0.89% |
0.76% |
0.76% |
0.82% |
0.65% |
Noninterest expenses to average assets |
3.04% |
3.41% |
2.72% |
3.47% |
2.71% |
|
|
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Asset Quality Ratios: |
|
. |
|
|
|
Allowance for loan losses to total loans
(6) |
|
0.58% |
0.59% |
0.64% |
0.96% |
Adjusted (Non-GAAP) allowance for loan losses
to total loans (6) (8) |
|
1.36% |
1.49% |
1.66% |
1.07% |
Non-accrual loans to total loans (6) (7) |
|
1.12% |
1.68% |
0.82% |
1.04% |
Net charge-offs to average loans (3) |
|
0.24% |
0.92% |
0.71% |
0.16% |
Non-performing assets to total assets
(4) |
|
1.30% |
1.64% |
0.87% |
1.00% |
Non-performing loans to total loans (5)
(6) |
|
1.40% |
1.89% |
0.89% |
1.15% |
Allowance for loan losses to non-performing
loans (5) |
|
41.64% |
31.38% |
73.40% |
83.19% |
Adjusted (Non-GAAP) allowance for loan losses
to non-performing loans (5) (8) |
|
96.55% |
78.51% |
186.69% |
93.07% |
|
|
|
|
|
|
Capital Ratios: |
|
|
|
|
|
Total capital (to risk-weighted assets) |
|
13.48% |
13.53% |
13.24% |
13.20% |
Tier 1 capital (to risk-weighted assets) |
|
12.34% |
12.17% |
11.83% |
11.14% |
Tier 1 capital (to average assets) |
|
9.96% |
9.65% |
13.45% |
9.45% |
Tangible equity to tangible assets - Non-GAAP
(9) |
|
9.42% |
9.27% |
8.53% |
9.41% |
|
|
|
|
|
|
(1) The credit fair value
adjustment relates to the risk of credit loss related to the
non-impaired portfolio of purchased loans acquired through the
merger between Tower Bancorp. Inc. and Graystone Financial Corp and
loans acquired through the acquisition of First Chester County
Corporation. It does not include the credit fair value adjustment
of purchased impaired loans accounted for under ASC 310-30
(Statement of Position (SOP) 03-3). |
(2) Efficiency ratio is
calculated as total noninterest expense divided by the total of net
interest income and noninterest income. |
|
|
|
|
(3) Calculated as the annualized
net loans charged off during the quarter ended divided by the
average loans outstanding for the same quarter. |
|
|
|
(4) Non-performing assets equals
the sum of non-accrual loans, loans past due 90 days or greater
that are still accruing, and other real estate
owned. Purchased impaired loans accounted for under ASC 310-30
are excluded from non-performing assets. |
(5) Non-performing loans equals
the sum of non-accrual loans and loans past due 90 days or greater
that are still accruing. Purchased impaired loans accounted for
under ASC 310-30 are excluded from non-performing loans. |
(6) Total loans excludes
purchased impaired loans accounted for under ASC 310-30 acquired as
part of mergers and acquisitions. The total balance of these
loans, net of fair value mark, is $54.7 million as of September 30,
2011, $58.0 million as of June 30, 2011, $61.6 million as of
December 31, 2010, and $6.5 million as of September 30, 2010. |
(7) Non-accrual loans equals the
sum of loans that have been placed on non-accrual status. Purchased
impaired loans accounted for under ASC 310-30 are excluded
from non-accrual loans. |
|
|
|
|
|
(8) Adjusted (Non-GAAP) allowance
for loan losses includes the allowance for loan loss and the credit
fair value adjustment to the risk of credit loss related to the
non-impaired portfolio of purchased loans acquired through mergers
and acquisitions. |
(9) This measure is considered to
be a Non-GAAP measure. See the reconciliation of GAAP to
Non-GAAP measures in the tables at the end of this release. |
|
|
|
Tower Bancorp, Inc. and
Subsidiary |
Loan and Deposit
Detail |
(Dollars in
thousands) |
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010* |
September 30,
2010 |
Loan detail: |
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
Commercial: |
|
|
|
|
Industrial |
$ 1,080,084 |
$ 1,048,996 |
$ 1,073,666 |
$ 707,114 |
Real estate |
315,201 |
304,025 |
305,423 |
179,064 |
Construction |
184,466 |
195,741 |
183,729 |
138,863 |
Consumer: |
|
|
|
|
Home equity |
175,749 |
167,306 |
163,905 |
85,921 |
Other |
61,024 |
63,421 |
65,305 |
34,100 |
Residential mortgage |
247,337 |
260,099 |
280,154 |
176,555 |
Total
loans |
2,063,861 |
2,039,588 |
2,072,182 |
1,321,617 |
Deferred costs (fees) |
364 |
279 |
62 |
(80) |
Allowance for loan losses |
(11,925) |
(11,869) |
(14,053) |
(12,717) |
Net loans |
$ 2,052,300 |
$ 2,027,998 |
$ 2,058,191 |
$ 1,308,820 |
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Deposit detail: |
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
Noninterest bearing transaction accounts |
$ 292,619 |
$ 304,541 |
$ 301,210 |
$ 125,174 |
Interest checking accounts |
346,759 |
332,621 |
305,701 |
124,106 |
Money market accounts |
501,651 |
526,025 |
651,760 |
604,151 |
Savings accounts |
152,889 |
161,481 |
160,305 |
70,138 |
Time deposits |
859,855 |
822,532 |
880,922 |
432,148 |
Total
deposits |
$ 2,153,773 |
$ 2,147,200 |
$ 2,299,898 |
$ 1,355,717 |
|
|
|
|
|
* Amounts have been reclassified
in order to be comparable to the amounts disclosed as of September
30, 2011, and June 30, 2011 |
|
|
Tower Bancorp, Inc. and
Subsidiary |
Non-Performing Assets
Detail |
(Dollars in
thousands) |
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Non-accrual loans |
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
Commercial: |
|
|
|
|
Industrial |
$ 13,654 |
$ 24,172 |
$ 6,320 |
$ 4,697 |
Real estate |
2,488 |
2,191 |
2,426 |
1,643 |
Construction |
2,367 |
2,524 |
6,011 |
5,235 |
Consumer: |
|
|
|
|
Home equity |
220 |
218 |
115 |
54 |
Other |
232 |
370 |
66 |
70 |
Residential mortgage |
3,842 |
4,050 |
2,784 |
2,058 |
Total non-accrual
loans |
22,803 |
33,525 |
17,722 |
13,757 |
Accruing loans greater than 90 days
past due |
|
|
|
|
Commercial: |
|
|
|
|
Industrial |
2,771 |
2,781 |
-- |
-- |
Real estate |
-- |
-- |
5 |
-- |
Construction |
-- |
-- |
-- |
-- |
Consumer: |
|
|
|
|
Home equity |
226 |
89 |
351 |
293 |
Other |
569 |
183 |
251 |
264 |
Residential mortgage |
2,271 |
1,250 |
818 |
972 |
Total accruing loans
greater than 90 days past due |
5,837 |
4,303 |
1,425 |
1,529 |
Non-performing
loans |
28,640 |
37,828 |
19,147 |
15,286 |
|
|
|
|
|
Other real estate owned |
4,293 |
3,520 |
4,647 |
879 |
Non-performing
assets |
$ 32,933 |
$ 41,348 |
$ 23,794 |
$ 16,165 |
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
|
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
Accruing loans 30 to 89 days past due |
$ 20,291 |
$ 18,219 |
$ 30,865 |
$ 11,388 |
Accruing loans greater than 90 days past
due |
5,837 |
4,303 |
1,425 |
1,528 |
Non-accrual loans |
22,803 |
33,525 |
17,722 |
13,757 |
Total
delinquencies |
$ 48,931 |
$ 56,047 |
$ 50,012 |
$ 26,673 |
|
Tower Bancorp, Inc. and
Subsidiary |
Allowance for Loan
Losses Quarterly Rollforward |
(Dollars in
thousands) |
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Balance, beginning of quarter |
$ 11,869 |
$ 15,116 |
$ 12,717 |
$ 11,619 |
Provision for loan losses |
1,300 |
1,500 |
4,100 |
1,600 |
Charge-offs |
|
|
|
|
Commercial: |
|
|
|
|
Industrial |
(502) |
(409) |
(1,460) |
(113) |
Real estate |
-- |
-- |
(574) |
-- |
Construction |
-- |
(4,250) |
(431) |
-- |
Consumer: |
|
|
|
|
Home equity |
-- |
-- |
(55) |
(65) |
Other |
(437) |
(38) |
-- |
(62) |
Residential mortgage |
(323) |
(81) |
(255) |
(271) |
Total charge-offs |
(1,262) |
(4,778) |
(2,775) |
(511) |
|
|
|
|
|
Recoveries |
|
|
|
|
Commercial: |
|
|
|
|
Industrial |
18 |
14 |
7 |
6 |
Real estate |
-- |
-- |
-- |
-- |
Construction |
-- |
-- |
-- |
-- |
Consumer: |
|
|
|
|
Home equity |
-- |
8 |
-- |
-- |
Other |
-- |
9 |
3 |
1 |
Residential mortgage |
-- |
-- |
1 |
2 |
Total recoveries |
18 |
31 |
11 |
9 |
Net charge-offs |
(1,244) |
(4,747) |
(2,764) |
(502) |
Balance, end of quarter |
$ 11,925 |
$ 11,869 |
$ 14,053 |
$ 12,717 |
|
Tower Bancorp, Inc. and
Subsidiary |
Condensed Statement of
Operations by Segment |
(Dollars in
thousands) |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended September 30, 2011 |
|
Banking
Segment |
Residential Mortgage
Segment |
Elimination |
Total |
Interest income |
$ 29,823 |
$ 547 |
$ (155) |
$ 30,215 |
Interest expense |
6,310 |
161 |
(155) |
6,316 |
Net interest
income |
23,513 |
386 |
-- |
23,899 |
Provision for loan losses |
1,300 |
-- |
-- |
1,300 |
Noninterest income |
4,597 |
1,086 |
-- |
5,683 |
Noninterest expense |
17,910 |
1,496 |
-- |
19,406 |
Merger related expenses and restructuring
charges |
(46) |
15 |
-- |
(31) |
Net income (loss)
before income taxes |
8,946 |
(39) |
-- |
8,907 |
Income tax expense (benefit) |
2,704 |
(18) |
|
2,686 |
Net income (loss)
including noncontrolling interest |
6,243 |
(22) |
-- |
6,221 |
Less: Income from non-controlling
interest |
-- |
2 |
-- |
2 |
Net income
(loss) |
$ 6,243 |
$ (24) |
$ -- |
$ 6,219 |
|
|
|
|
|
|
Nine Months Ended
September 30, 2011 |
|
Banking
Segment |
Residential Mortgage
Segment |
Elimination |
Total |
Interest income |
$ 89,401 |
$ 2,353 |
$ (861) |
$ 90,893 |
Interest expense |
18,186 |
931 |
(861) |
18,256 |
Net interest
income |
71,215 |
1,422 |
-- |
72,637 |
Provision for loan losses |
4,450 |
-- |
-- |
4,450 |
Noninterest income |
12,154 |
3,699 |
-- |
15,853 |
Noninterest expense |
56,891 |
10,495 |
-- |
67,386 |
Merger related expenses and restructuring
charges |
1,624 |
704 |
-- |
2,328 |
Net income (loss)
before income taxes |
20,404 |
(6,078) |
-- |
14,326 |
Income tax expense (benefit) |
6,134 |
(1,826) |
-- |
4,308 |
Net income (loss)
including noncontrolling interest |
14,270 |
(4,252) |
-- |
10,018 |
Less: Income from non-controlling
interest |
4 |
67 |
-- |
71 |
Net income
(loss) |
$ 14,266 |
$ (4,319) |
$ -- |
$ 9,947 |
|
Tower Bancorp, Inc. and
Subsidiary |
Reconciliation of GAAP
to Non-GAAP Measures |
(Dollars in thousands,
except share data and ratios) |
(Unaudited) |
|
|
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Reconciliation of Non-GAAP Balance
Sheet Data: |
|
|
|
|
|
Total assets - GAAP |
|
$ 2,539,693 |
$ 2,526,494 |
$ 2,747,289 |
$ 1,618,841 |
Less: Goodwill and other intangible
assets |
|
24,638 |
24,693 |
24,243 |
14,806 |
Total tangible assets - Non-GAAP |
|
$ 2,515,055 |
$ 2,501,801 |
$ 2,723,046 |
$ 1,604,035 |
|
|
|
|
|
|
Total Stockholders' equity - GAAP |
|
$ 261,559 |
$ 256,502 |
$ 256,640 |
$ 165,794 |
Less: Goodwill and other intangible
assets |
|
24,638 |
24,693 |
24,243 |
14,806 |
Tangible equity - Non-GAAP |
|
$ 236,921 |
$ 231,809 |
$ 232,397 |
$ 150,988 |
|
|
|
|
|
|
|
For the Three
Months Ended |
For the Nine
Months Ended |
|
September 30,
2011 |
June 30, 2011 |
September 30,
2010 |
September 30,
2011 |
September 30,
2010 |
Reconciliation of Non-GAAP Income
Statement Data: |
|
|
|
|
|
Net income - GAAP |
$ 6,219 |
$ 3,510 |
$ 2,502 |
$ 9,947 |
$ 5,584 |
Plus: Merger related expenses |
(92) |
538 |
117 |
693 |
304 |
Plus: Restructuring charges |
61 |
414 |
-- |
1,635 |
-- |
Plus: Impairment of fixed assets |
-- |
-- |
-- |
-- |
920 |
Less: Tax effect of adjustments |
11 |
(333) |
-- |
(815) |
(276) |
Operating income - Non-GAAP |
$ 6,199 |
$ 4,129 |
$ 2,619 |
$ 11,460 |
$ 6,532 |
|
|
|
|
|
|
Per Share Data: |
|
|
|
|
|
Book value per share - GAAP |
$ 21.78 |
$ 21.36 |
$ 23.08 |
$ 21.78 |
$ 23.08 |
Per share effect of intangible assets |
(2.05) |
(2.05) |
(2.06) |
(2.05) |
(2.06) |
Tangible book value per share - Non-GAAP |
$ 19.73 |
$ 19.31 |
$ 21.02 |
$ 19.73 |
$ 21.02 |
|
|
|
|
|
|
Diluted earnings per share - GAAP |
$ 0.52 |
$ 0.29 |
$ 0.35 |
$ 0.83 |
$ 0.78 |
Plus: Per share impact of merger related
expenses |
(0.01) |
0.04 |
0.02 |
0.06 |
0.04 |
Plus: Per share impact of restructuring
charges |
0.01 |
0.03 |
-- |
0.14 |
-- |
Plus: Per share impact of impairment on
fixed assets |
-- |
-- |
-- |
-- |
0.13 |
Less: Per share impact of tax effect of
adjustments |
-- |
(0.03) |
-- |
(0.07) |
(0.04) |
Diluted operating income per share -
Non-GAAP |
$ 0.52 |
$ 0.33 |
$ 0.37 |
$ 0.96 |
$ 0.91 |
|
|
|
|
|
|
Tower Bancorp, Inc. and
Subsidiary |
Reconciliation of GAAP
to Non-GAAP Measures |
(Dollars in thousands,
except share data and ratios) |
(Unaudited) |
|
|
|
|
|
|
|
For the Three
Months Ended |
For the Nine
Months Ended |
|
September 30,
2011 |
June 30,
2011 |
September 30,
2010 |
September 30,
2011 |
September 30,
2010 |
Performance Ratios: |
|
|
|
|
|
Return on average assets - GAAP |
0.97% |
0.55% |
0.62% |
0.51% |
0.48% |
Effect of Non-GAAP adjustments to net (loss)
income |
0.00% |
0.09% |
0.03% |
0.08% |
0.08% |
Operating return on average assets -
Non-GAAP |
0.97% |
0.64% |
0.65% |
0.59% |
0.56% |
|
|
|
|
|
|
Return on average equity - GAAP |
9.52% |
5.51% |
5.98% |
5.18% |
4.52% |
Effect of Non-GAAP adjustments to net (loss)
income |
-0.03% |
0.97% |
0.28% |
0.79% |
0.77% |
Operating return on average equity -
Non-GAAP |
9.49% |
6.48% |
6.26% |
5.97% |
5.29% |
|
|
|
|
|
|
Return on average equity - GAAP |
9.52% |
5.51% |
5.98% |
5.18% |
4.52% |
Effect of goodwill and other intangible
assets |
1.58% |
1.19% |
1.01% |
1.18% |
0.90% |
Return on average tangible equity - Non
-GAAP |
11.10% |
6.70% |
6.99% |
6.36% |
5.42% |
|
|
|
|
|
|
Return on average tangible equity - Non
-GAAP |
11.10% |
6.70% |
6.99% |
6.36% |
5.42% |
Effect of Non-GAAP adjustments to net (loss)
income |
-0.03% |
1.07% |
0.31% |
0.88% |
0.72% |
Operating return on average tangible equity -
Non-GAAP |
11.07% |
7.77% |
7.30% |
7.24% |
6.14% |
|
|
|
|
|
|
Efficiency ratio - GAAP |
65.50% |
77.96% |
67.32% |
78.78% |
71.28% |
Effect of Non-GAAP adjustments to net (loss)
income |
0.06% |
-2.12% |
-0.71% |
-1.71% |
-2.06% |
Operating efficiency ratio - Non-GAAP |
65.56% |
75.84% |
66.61% |
77.07% |
69.22% |
|
|
|
|
|
|
Non-interest expenses to average assets -
GAAP |
3.03% |
3.55% |
2.74% |
3.59% |
2.81% |
Effect of Non-GAAP adjustments to net (loss)
income |
0.01% |
-0.14% |
-0.02% |
-0.12% |
-0.10% |
Operating non-interest expenses to average
assets - Non-GAAP |
3.04% |
3.41% |
2.72% |
3.47% |
2.71% |
|
|
|
|
|
|
|
|
September 30,
2011 |
June 30,
2011 |
December 31,
2010 |
September 30,
2010 |
Asset Quality Ratios |
|
|
|
|
|
Allowance for loan loss to total loans -
GAAP |
|
0.58% |
0.59% |
0.64% |
0.96% |
Effect of Non-GAAP adjustment |
|
0.78% |
0.90% |
1.02% |
0.11% |
Adjusted (non-GAAP) allowance for loan loss
to total loans |
|
1.36% |
1.49% |
1.66% |
1.07% |
|
|
|
|
|
|
Allowance for loan loss to non performing
loans - GAAP |
|
41.64% |
31.38% |
73.40% |
83.19% |
Effect of Non-GAAP adjustment |
|
54.91% |
47.13% |
113.29% |
9.88% |
Adjusted (non-GAAP) allowance for loan loss
to non-performing loans |
|
96.55% |
78.51% |
186.69% |
93.07% |
|
|
|
|
|
|
|
|
September 30,
2011 |
June 30, 2011 |
December 31,
2010 |
September 30,
2010 |
Capital Ratios: |
|
|
|
|
|
Total equity to total assets -
GAAP |
|
10.30% |
10.15% |
9.34% |
10.24% |
Effect of intangible assets |
|
-0.88% |
-0.88% |
-0.81% |
-0.83% |
Tangible common equity to tangible assets
-Non-GAAP |
|
9.42% |
9.27% |
8.53% |
9.41% |
CONTACT: Media Contact:
Andrew Samuel
717.724.2800
Investor Relations Contact:
Brent Smith
717.724.4666
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