ONEIDA, N.Y., April 24 /PRNewswire-FirstCall/ -- Oneida Financial Corp. , the parent company of The Oneida Savings Bank, has announced first quarter operating results. Net income for the three months ending March 31, 2007 was $748,000, or $0.10 basic earnings per share compared to $928,000, or $0.12 basic earnings per share, for the three months ended March 31, 2006. The decrease in net income was primarily due to an increase in non-interest expenses related to the acquisition of The National Bank of Vernon, completed on April 2, 2007, and the opening of a banking, insurance and retail center in the Griffiss Business and Technology Park in Rome, New York. The increase in non-interest expense during the quarter was partially offset by an increase in non-interest income and a decrease in the provision for taxes.
Total assets increased $28.8 million or 6.8%, to $455.0 million at March 31, 2007 from $426.2 million at March 31, 2006. The increase in total assets is primarily due to an increase in loans receivable and an increase in cash and cash equivalents, partially offset by decreases in investment and mortgage-backed securities. Loans receivable increased $9.1 million or 3.9% at March 31, 2007 as compared with March 31, 2006, after recording the sale of $16.5 million in fixed rate one-to-four family residential real estate loans sold during the twelve month period. Investment and mortgage-backed securities decreased $21.5 million to $105.9 million at March 31, 2007 from $127.4 million at March 31, 2006. Cash and cash equivalents increased to $31.4 million at March 31, 2007 as compared with $12.4 million at March 31, 2006. The increase in cash and cash equivalents was to provide for the cash consideration required for the acquisition of The Nation Bank of Vernon in a transaction valued at $11.3 million. The increase in cash and cash equivalents was supported by a $15.0 million or 4.9% increase in total deposits at March 31, 2007 compared with March 31, 2006. Borrowings increased at March 31, 2007 to $71.8 million from $63.4 million at March 31, 2006 as federal funds were purchased from The National Bank of Vernon in anticipation of the merger. Premises and equipment also increased $5.0 million from March 31, 2006 to March 31, 2007 as a result of the construction of a 26,000 square feet banking, insurance and retail center at the Griffiss Business and Technology Park in Rome, New York which opened for business on April 3, 2007.
Michael R. Kallet, President and Chief Executive Officer of Oneida Financial Corp., said, "The first quarter results of Oneida Financial Corp. are consistent with our expectations during a quarter with a pending bank acquisition and in a challenging interest rate environment. Although an inverted treasury yield curve has resulted in a slightly reduced level of net interest income we have minimized our margin compression as compared with many of our peers. In addition, the diversification of our business model has resulted in additional sources and volume of non-interest income." During the first quarter of 2007 commissions and fees from the sale of non-banking products increased 37.7% to $3.3 million for the quarter ended March 31, 2007. Kallet continued, "The Company remains focused on growing our traditional banking franchise, Oneida Savings Bank, and our other financial services businesses through our wholly-owned subsidiaries, the Bailey Haskell & LaLonde Agency and Benefit Consulting Group, Inc." Kallet concluded, "We believe the diversification of Oneida Financial Corp.'s sources of income will allow the Company to maintain its leadership position and financial performance record."
Net interest income decreased for the first quarter of 2007 to $3.1 million compared with $3.2 million for the first quarter of 2006. The decrease in net interest income primarily is due to a decrease in the net interest margin earned which was 3.34% for the three months ending March 31, 2007 as compared with 3.40% for the same period in 2006.
Interest income was $5.7 million for the first quarter of 2007; an increase of 6.9% as compared with interest income of $5.3 million during the same period in 2006. This increase in interest income during the three months ended March 31, 2007 resulted primarily from an increase in the yield of 48 basis points on interest earning assets, given the increase in short-term market interest rates during the past twelve month period. This increase in yield was partially offset by a decrease in the average balances of interest- earning assets during the current period.
Total interest expense increased to $2.6 million for the three months ended March 31, 2007. This is compared with interest expense of $2.2 million during the same 2006 period. The increase for the three months ended March 31, 2007 was due to an increase in the cost of interest-bearing liabilities of 52 basis points as well as an increase in the average balance of interest- bearing deposit accounts. Borrowed funds outstanding were $71.8 million at March 31, 2007, compared with $63.4 million in borrowings outstanding at March 31, 2006. Interest expense on deposits increased 38.0% during the first quarter of 2007 to $1.8 million as compared with the same period of 2006.
Non-interest income was $4.2 million during the first quarter of 2007 compared with $3.4 million for the same 2006 period. The increase in non- interest income was primarily due to a $906,000 or 37.7% increase in commissions and fees on the sale of non-banking products through the Company's subsidiaries for the three months ended March 31, 2007 as compared with the same period during 2006. The Company completed the acquisition of Benefit Consulting Group in June 2006; therefore, the activities of this subsidiary were not reported in the first quarter of 2006.
Non-interest expense was $6.3 million for the three months ended March 31, 2007 compared with $5.3 million for the three months ended March 31, 2006. The increase in non-interest expense is primarily the result of operating expenses associated with our insurance agency and consulting subsidiaries. In addition, the increase in equipment and other operating expenses are associated with the acquisition of the National Bank of Vernon and the completion of our banking, insurance and retail center at the Griffiss Business and Technology Park in Rome, New York. There was no provision for possible loan losses made during first quarter of 2007 as compared with $80,000 in provisions during the 2006 period. The Company continues to monitor the adequacy of the allowance for loan losses given the risk assessment of the loan portfolio and current economic conditions. The decrease in net loan charge-offs and the decrease in non-performing assets supports the reduction in the provision for loan losses during the first quarter of 2007. The ratio of the loan loss allowance to loans receivable is 0.85% at March 31, 2007 compared with a ratio of 0.88% at March 31, 2006. The level in the allowance as a percentage of loans reflects improvement in various credit factors, including the reduction in non-performing assets.
Stockholders' equity was $58.4 million, or 12.8% of assets at March 31, 2007 compared with $54.3 million, or 12.7% of assets, at March 31, 2006. The increase in stockholders' equity was primarily a result of valuation adjustments made for the Company's available for sale investment and mortgage- backed securities as well as the contribution of net earnings for the trailing twelve month period. In addition, stockholders' equity was reduced through the payment of cash dividends.
This release may contain certain forward-looking statements, which are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products, and services.
All financial information provided at and for the quarter ended March 31, 2007 and all quarterly data is unaudited. Selected financial ratios have been annualized where appropriate. Operating data is presented in thousands of dollars, except for per share amounts.
At At At At At
Selected Financial
Data Mar 31, Dec 31, Sept 30, June 30, Mar 31,
(in thousands except
per share data) 2007 2006 2006 2006 2006
(unaudited)(audited)(unaudited)(unaudited)(unaudited)
Total Assets $455,024 $442,937 $434,232 $436,822 $426,231
Loans receivable,
net 244,101 247,441 246,601 244,752 234,998
Mortgage-backed
securities 27,815 29,081 26,385 27,145 28,792
Investment
securities 78,055 85,717 88,902 93,075 98,598
Goodwill and other
intangibles 19,914 19,870 19,963 20,031 14,979
Interest bearing
deposits 267,307 260,173 251,088 255,247 254,528
Non-interest
bearing deposits 52,487 53,097 51,946 52,097 50,273
Borrowings 71,830 65,400 69,800 68,930 63,400
Shareholders'
Equity 58,422 58,400 55,811 54,454 54,327
Book value
per share
(end of period) $7.60 $7.62 $7.31 $7.13 $7.12
Tangible value
per share
(end of period) $5.01 $5.03 $4.70 $4.51 $5.16
Selected Financial Ratios
Non-Performing
Assets to Total
Assets
(end of period) 0.01% 0.01% 0.01% 0.03% 0.05%
Allowance for Loan
Losses to Loans
Receivable, net 0.85% 0.84% 0.85% 0.85% 0.88%
Average Equity to
Average Assets 13.18% 12.58% 12.52% 12.66% 12.42%
Quarter Ended Year to Date
Selected Operating Data March 31, March 31, Dec 31, Dec 31,
(in thousands except
per share data) 2007 2006 2006 2005
(unaudited) (unaudited) (audited) (audited)
Interest income:
Interest and fees
on loans $4,218 $3,805 $16,165 $14,197
Interest and dividends
on investments 1,332 1,527 5,918 6,766
Interest on fed funds 166 13 178 49
Total interest income 5,716 5,345 22,261 21,012
Interest expense:
Interest on deposits 1,798 1,303 5,964 4,546
Interest on borrowings 830 854 3,482 3,141
Total interest expense 2,628 2,157 9,446 7,687
Net interest income 3,088 3,188 12,815 13,325
Provision for loan losses 0 80 280 360
Net interest income after
provision for loan losses 3,088 3,108 12,535 12,965
Other income:
Net investment gains 1 31 308 275
Service charges on
deposit accts 551 539 2,362 2,145
Commissions and fees on sales
of non-banking products 3,312 2,406 12,661 8,163
Other revenue from operations 384 448 1,648 1,309
Total non-interest income 4,248 3,424 16,979 11,892
Other expense
Salaries and employee
benefits 4,117 3,374 15,491 12,413
Equipment and net occupancy 1,001 885 3,647 3,315
Intangible amortization 88 32 383 113
Other costs of operations 1,125 1,005 4,269 3,768
Total non-interest expense 6,331 5,296 23,790 19,609
Income before income taxes 1,005 1,236 5,724 5,248
Income tax provision 257 308 1,526 1,390
Net income $748 $928 $4,198 $3,858
Net income per common
share ( EPS - Basic ) $0.10 $0.12 $0.55 $0.51
Net income per common
share ( EPS - Diluted) $0.10 $0.12 $0.54 $0.50
Cash Dividends Paid $0.24 $0.22 $0.45 $0.41
Return on Average Assets 0.68% 0.86% 0.96% 0.89%
Return on Average Equity 5.13% 6.92% 7.67% 7.30%
Return on Average
Tangible Equity 7.77% 9.50% 11.26% 9.85%
Net Interest Margin 3.34% 3.40% 3.45% 3.50%
First Fourth Third Second First
Selected Operating Data Quarter Quarter Quarter Quarter Quarter
(in thousands except
per share data) 2007 2006 2006 2006 2006
(unaudited)
Interest income:
Interest and fees
on loans $4,218 $4,136 $4,197 $4,027 $3,805
Interest and dividends
on investments 1,332 1,458 1,446 1,487 1,527
Interest on fed funds 166 137 13 15 13
Total interest income 5,716 5,731 5,656 5,529 5,345
Interest expense:
Interest on deposits 1,798 1,736 1,534 1,391 1,303
Interest on borrowings 830 817 908 903 854
Total interest expense 2,628 2,553 2,442 2,294 2,157
Net interest income 3,088 3,178 3,214 3,235 3,188
Provision for
loan losses 0 40 80 80 80
Net interest income
after provision for
loan losses 3,088 3,138 3,134 3,155 3,108
Other income:
Net investment
gains (losses) 1 310 ( 24) ( 9) 31
Service charges
on deposit accts 551 633 605 585 539
Commissions and fees
on sales of non-banking
products 3,312 3,369 2,944 3,942 2,406
Other revenue from
operations 384 525 350 325 448
Total non-interest
income 4,248 4,837 3,875 4,843 3,424
Other expense:
Salaries and employee
benefits 4,117 4,033 3,773 4,311 3,374
Equipment and net
occupancy 1,001 866 933 963 885
Intangible amortization 88 96 96 159 32
Other costs of
operations 1,125 1,006 1,094 1,164 1,005
Total non-interest
expense 6,331 6,001 5,896 6,597 5,296
Income before
income taxes 1,005 1,974 1,113 1,401 1,236
Income tax provision 257 566 298 354 308
Net income $748 $1,408 $815 $1,047 $928
Net income per common
share ( EPS - Basic ) $0.10 $0.18 $0.11 $0.14 $0.12
Net income per common
share ( EPS - Diluted ) $0.10 $0.17 $0.11 $0.14 $0.12
Cash Dividends Paid $0.24 $0.00 $0.23 $0.00 $0.22
Return on Average Assets 0.68% 1.28% 0.75% 0.97% 0.86%
Return on Average Equity 5.13% 10.03% 5.98% 7.66% 6.92%
Return on Average
Tangible Equity 7.77% 15.55% 9.44% 10.67% 9.50%
Net Interest Margin 3.34% 3.42% 3.48% 3.49% 3.40%
