TOWNSHIP OF WASHINGTON, N.J., April 25 /PRNewswire-FirstCall/ -- Oritani Financial Corp. (the "Company" or "OFC") , the holding company for Oritani Savings Bank (the "Bank") reported net income of $2.4 million or $0.06 per share, for the three months ended March 31, 2008, and $7.5 million or $0.19 per share, for the nine months ended March 31, 2008. This compares to a net loss of $1.1 million and net income of $3.3 million for the corresponding 2007 periods, respectively.
Kevin J. Lynch, the Company's Chairman, President and CEO, commented on recent developments. "It has been an eventful quarter for Oritani. The termination of our merger agreement has been embraced by our shareholders, and we are grateful for their support. We are now focusing our efforts on organic growth." Mr. Lynch continued, "As with other institutions, recent economic conditions have impacted Oritani's performance. Although spreads have improved over the most recent quarter and loan originations remained strong, there has been a marked increase in delinquencies. The majority of the delinquencies are confined to three borrowers. Management is working diligently to resolve these matters and I am confident that we will be able to minimize any negative impact."
Comparison of Operating Results for the Periods Ended March 31, 2008 and 2007
Net Income. Net income increased $3.5 million to $2.4 million for the quarter ended March 31, 2008, from a net loss of $1.1 million for the corresponding 2007 quarter. The results for the 2007 period were impacted by several non-recurring transactions, notably a $9.1 million contribution to the OritaniSavingsBank Charitable Foundation. The 2007 period was also positively impacted by a pre-tax gain of $514,000 regarding a previous transfer of the Company's former headquarters and the reinvestment of the proceeds related to the subscription stock offering, including oversubscriptions. Results for the 2008 quarter were negatively impacted by a $352,000 pre tax impairment charge related to three equity investments. Our annualized return on average assets was 0.71% and our annualized return on average equity was 3.36% for the quarter ended March 31, 2008.
Net income increased $4.2 million to $7.5 million for the nine months ended March 31, 2008, from net income of $3.3 million for the corresponding 2007 period. Our annualized return on average assets was 0.79% and our annualized return on average equity was 3.62% for the nine month period ended March 31, 2008, versus 0.38% and 2.46% for the nine month period ended March 31, 2007, respectively.
Total Interest Income. Total interest income increased by $553,000 or 3.1%, to $18.3 million for the three months ended March 31, 2008, from $17.8 million for the three months ended March 31, 2007. The largest increase occurred in interest on loans, which increased $2.7 million, or 23.9%, to $14.2 million for the three months ended March 31, 2008, from $11.4 million for the three months ended March 31, 2007. Over that same period, the average balance of loans increased $176.0 million while the yield on the portfolio decreased 5 basis points. Interest on mortgage-backed securities available for sale ("MBS AFS") increased by $1.1 million to $1.3 million for the three months ended March 31, 2008, from $178,000 for the three months ended March 31, 2007. The average balance of MBS AFS increased $85.6 million and the yield on the portfolio increased 15 basis points over that same period. The changes in the average balance and yield were primarily due to purchases that totaled $123.5 million during the twelve months ended March 31, 2008. All investment purchases that have occurred over that period were classified as available for sale in order to provide balance sheet management flexibility. Interest on mortgage-backed securities held to maturity ("MBS HTM") decreased by $535,000 to $1.8 million for the three months ended March 31, 2008, from $2.3 million for the three months ended March 31, 2007. The average balance of MBS HTM decreased $54.8 million and the yield on the portfolio decreased by 1 basis point over that same period. The decreased average balance was due to principal paydowns received on the portfolio that were reinvested in other interest-earning assets. Interest on federal funds sold and short term investments decreased by $2.9 million for the three months ended March 31, 2008, to $351,000 from $3.3 million for the three months ended March 31, 2007. The results for the 2007 period were boosted by the deployment of the funds received in the subscription offering. The average balance of this portfolio decreased $200.0 million and the yield decreased 223 basis points over the period. The portfolio primarily consists of overnight investments. The decrease in the yield is due to a decrease in the market yield for this type of investment.
Total interest income increased by $6.2 million, or 13.3%, to $53.1 million for the nine months ended March 31, 2008, from $46.9 million for the nine months ended March 31, 2007. The increase in total interest income is more pronounced in the nine month period comparison because the effect of the reinvestment of the proceeds related to the subscription stock offering primarily occurred during the quarter ended March 31, 2007. The largest increase in the nine month comparison of total interest income occurred in interest on loans, which increased $8.0 million, or 24.8%, to $40.4 million for the nine months ended March 31, 2008, from $32.4 million for the nine months ended March 31, 2007. Over that same period, the average balance of loans increased $149.7 million and the yield on the portfolio increased 14 basis points. Interest on securities available for sale increased by $865,000, to $1.4 million for the nine months ended March 31, 2008, from $553,000 for the nine months ended March 31, 2007. The average balance increased $23.2 million and the yield decreased 31 basis points over the period. Interest on mortgage-backed securities held to maturity decreased by $1.5 million, to $5.8 million for the nine months ended March 31, 2008, from $7.3 million for the nine months ended March 31, 2007. The average balance decreased $53.1 million and the yield increased 1 basis point over the period. The average balance decrease was due to paydowns in the portfolio as no new investment purchases of this type were made. Interest on MBS AFS increased by $2.6 million to $3.1 million for the nine months ended March 31, 2008, from $573,000 for the nine months ended March 31, 2007. The average balance of MBS AFS increased $63.7 million and the yield on the portfolio increased 36 basis points over that same period. Interest on federal funds sold and short term investments decreased by $3.8 million for the nine months ended March 31, 2008, to $1.4 million from $5.2 million for the nine months ended March 31, 2007. The average balance of this portfolio decreased $87.9 million and the yield decreased 90 basis points over the period.
Total Interest Expense. Total interest expense increased by $923,000, or 10.6%, to $9.6 million for the three months ended March 31, 2008, from $8.7 million for the three months ended March 31, 2007. Interest expense on deposits decreased by $333,000, or 5.3%, to $5.9 million for the three months ended March 31, 2008, from $6.3 million for the three months ended March 31, 2007. The average balance of interest bearing deposits decreased $135.4 million and the average cost of these funds increased 40 basis points over this period. The decrease in the average balance of deposits was impacted by the stock subscription offering. The stock subscription offering caused deposit balances to be inflated and cost of funds to be understated, particularly during the quarter ended March 31, 2007. The average balance of such funds for the quarter ended March 31, 2007 was $123.7 million and the interest rate paid on these funds was 1.00%. Market rates also affected the Company's cost of funds. On a linked quarter comparison, however, the Company's interest-bearing deposit balances increased while the costs decreased. The average balance of deposits increased $6.2 million for the quarter ended March 31, 2008 as compared to the quarter ended December 31, 2007; and the average cost decreased 20 basis points over this same period. Interest expense on borrowings increased by $1.3 million to $3.7 million for the three months ended March 31, 2008, from $2.4 million for the three months ended March 31, 2007. The average balance of borrowings increased $118.6 million and the cost decreased 3 basis points over these periods.
Total interest expense increased by $3.3 million, or 13.7%, to $27.7 million for the nine months ended March 31, 2008, from $24.3 million for the nine months ended March 31, 2007. The factors described above for the three month period also affected the nine month period. Interest expense on deposits increased by $960,000, or 5.5%, to $18.5 million for the nine months ended March 31, 2008, from $17.5 million for the nine months ended March 31, 2007. The average balance of interest bearing deposits decreased $70.9 million and the average cost of these funds increased 50 basis points over this period. Interest expense on borrowings increased by $2.4 million, or 34.8%, to $9.2 million for the nine months ended March 31, 2008, from $6.8 million for the nine months ended March 31, 2007. The average balance of borrowings increased $70.1 million and the cost increased 4 basis points over this period.
Net Interest Income Before Provision for Loan Losses. Net interest income decreased by $370,000, or 4.1%, to $8.7 million for the three months ended March 31, 2008, from $9.1 million for the three months ended March 31, 2007. The Company's net interest rate spread decreased to 2.06% for the three months ended March 31, 2008, from 2.40% for the three months ended March 31, 2007. The increased spread in the 2007 quarter is partially attributable to the proceeds related to the subscription stock offering. On a linked quarter comparison (quarter ended March 31, 2008 versus quarter ended December 31, 2007), the Company's net interest rate spread increased 4 basis points, from 2.02%.
Net interest income increased by $2.9 million, or 12.9%, to $25.4 million for the nine months ended March 31, 2008, from $22.5 million for the nine months ended March 31, 2007. The Company's net interest rate spread decreased to 2.06% for the nine months ended March 31, 2008, from 2.28% for the nine months ended March 31, 2007.
Provision for Loan Losses. The Company recorded provisions for loan losses of $750,000 for the three months ended March 31, 2008 as compared to $350,000 for the three months ended March 31, 2007. The Company also recorded provisions for loan losses of $2.1 million for the nine months ended March 31, 2008 as compared to $775,000 for the nine months ended March 31, 2007. The Company's allowance for loan losses is analyzed quarterly and many factors are considered. The primary reason for the provisions recorded was to address loan growth that occurred during the periods, particularly in the multifamily and commercial real estate loan portfolios. There were no recoveries or charge- offs in any of the periods. Delinquencies had been minimal; however, as detailed in the chart below, there was an increase in delinquencies as of March 31, 2008. The increase in delinquencies was a factor in the increase in the allowance for loan losses, which resulted in larger provisions in the March 31, 2008 periods.
Delinquency Totals 03/31/08 12/31/07 09/30/07 06/30/07 (in thousands) 30 - 59 days past due $24,189 $343 $1,553 $594 60 - 89 days past due 14,034 - - - 90 or more days past due 384 - 555 - Total $38,607 $343 $2,108 $594
There are three large loans in the 30-59 day category that comprise $22.6 million of the balance of that category. Two of these three loans are to the same borrower. Oritani is working with the borrowers and, at this time, expects that all three loans will be brought current shortly. Two of the loans that are in the 60-89 day category at March 31, 2008 total $13.8 million and are to the same borrower. The loans are secured by a condominium construction project and raw land with all building approvals. Oritani has an additional loan of $549,000 to this borrower that is current. The borrower is also experiencing difficulties with other lenders on unrelated projects. Oritani is presently negotiating a workout with this borrower whereby Oritani may advance additional funds which, if agreed upon, is expected to enhance Oritani's loan position. There are two loans in the greater than 90 day category at March 31, 2008. Both of these matters were resolved in April.
Other Income. Other income decreased by $921,000 to $791,000 for the three months ended March 31, 2008, from $1.7 million for the three months ended March 31, 2007. There were several non-recurring items contributing to this decrease. Results for the quarter ended March 31, 2007 were positively impacted by a $514,000 gain recognized on the previous sale of the Company's former headquarters in Hackensack, NJ. Results for the 2007 period were also positively impacted by the float earnings on the oversubscription funds returned to subscribers. This was the principle reason for the $161,000 decrease in the "other" portion of other income between the 2008 and 2007 quarters. In addition, results for the quarter ended March 31, 2008 were reduced due to the recognition of a $352,000 impairment charge taken regarding three equity securities in the Bank's securities AFS portfolio.
Other income decreased by $672,000, or 16.9%, to $3.3 million for the nine months ended March 31, 2008, from $4.0 million for the nine months ended March 31, 2007. The nine month periods were affected by the items described above for the three month periods. These items were partially offset in the nine month period by net increases in the real estate investment captions of net real estate operations and income from investments in real estate joint ventures. On a combined basis, these real estate captions increased by $284,000, or 17.4%, to $1.9 million for the nine months ended March 31, 2008, from $1.6 million for the nine months ended March 31, 2007. The income reported in these captions is dependent upon the operations of various properties and is subject to fluctuation.
Operating Expenses. Operating expenses decreased by $8.4 million to $4.8 million for the three months ended March 31, 2008, from $13.1 million for the three months ended March 31, 2007. The 2007 period included a $9.1 million contribution to the OritaniSavingsBank Charitable Foundation that was donated in conjunction with the initial stock offering. There was no such contribution in 2008. This decrease was partially offset by increases in the captions of compensation, payroll taxes and fringe benefits; and insurance, legal, audit and accounting. The compensation related caption increased $356,000, or 12.4%, over the periods. This increase was primarily due to increases in compensation, director fees and nonqualified benefit plans. The insurance related caption increased $254,000 over the periods. This increase is primarily due to increases in legal fees ($87,000), external audit fees ($113,000) and internal audit/consulting fees ($30,000). A portion of the increases in external audit fees and internal audit/consulting fees is due to the implementation and certification of controls related to compliance with Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX").
Operating expenses decreased by $7.5 million to $13.9 million for the nine months ended March 31, 2008, from $21.4 million for the nine months ended March 31, 2007. The primary reason for the decrease is due to the $9.1 million charitable contribution that occurred in the 2007 period. The decrease was partially offset by an increase in compensation, payroll taxes and fringe benefits. This caption increased by $1.1 million to $9.8 million for the nine months ended March 31, 2008, from $8.7 million for the nine months ended March 31, 2007. This increase was primarily comprised of a $636,000 increase in compensation, $514,000 in costs associated with the ESOP, a $255,000 increase in nonqualified benefit plans, a $103,000 increase in employee insurance expenses and a $45,000 increase in directors' fees; partially reduced by a decrease in pension cost of $498,000.
Income Tax Expense. Income tax expense for the three months ended March 31, 2008 was $1.6 million, due to pre-tax income of $4.0 million, resulting in an effective tax rate of 41.1%. For the three months ended March 31, 2007, income tax benefit was $1.5 million, due to a pre-tax loss of $2.7 million, resulting in an effective tax rate of 57.8%. Income tax expense for the nine months ended March 31, 2008, was $5.2 million, due to pre-tax income of $12.8 million, resulting in an effective tax rate of 41.0%. For the nine months ended March 31, 2007, income tax expense was $1.0 million, due to pre-tax income of $4.3 million, resulting in an effective tax rate of 23.2%. Various factors contribute to differences between pre-tax book income and taxable income. The contribution to OritaniSavingsBank Charitable Foundation created a substantial difference between pre-tax book income and taxable income. The tax deduction generated by this contribution was much larger than the associated book expense, and caused the unusual effective rates in the 2007 periods.
Comparison of Financial Condition at March 31, 2008 and June 30, 2007
Total Assets. Total assets increased $211.6 million, or 17.7%, to $1.41 billion at March 31, 2008, from $1.19 billion at June 30, 2007. The increases were primarily in the captions of loans and MBS AFS, and were primarily funded through increased borrowings and redeployment of funds from the MBS HTM portfolio.
Cash and Cash Equivalents. Cash and cash equivalents (which include fed funds and short term investments) increased $22.0 million to $85.5 million at March 31, 2008, from $63.5 million at June 30, 2007. The Company had a high balance in this category at March 31, 2008 as liquid assets were accumulated in preparation for the cash requirements associated with the anticipated merger with Greater Community Bancorp ("GCB") as well as the loan pipeline. While the funds will no longer be needed for the merger, they will be deployed in loans shortly as the committed loan total at March 31, 2008 was $65.3 million and there were an additional $39.9 million in loans that were in the process of being underwritten.
Net Loans. Loans, net increased $151.8 million, or 20.0%, to $910.4 million at March 31, 2008, from $758.5 million at June 30, 2007. The Company continued its emphasis on loan originations, particularly multifamily and commercial real estate loans. Loan originations for the nine months ended March 31, 2008 totaled $230.7 million.
Securities Available for Sale. Securities available for sale decreased $7.1 million, or 20.0%, to $28.4 million at March 31, 2008 from $35.4 million at June 30, 2007. This decrease was due to security maturities and calls, partially offset by purchases during the period.
Mortgage-Backed Securities Held to Maturity. Mortgage-backed securities held to maturity decreased $39.1 million, or 18.0%, to $178.3 million at March 31, 2008 from $217.4 million at June 30, 2007. This decrease was due to principal repayments received on this portfolio.
Mortgage-Backed Securities Available for Sale. Mortgage-backed securities available for sale increased $75.5 million to $114.3 million at March 31, 2008 from $38.8 million at June 30, 2007. This increase was due to purchases of $109.2 million during the period partially offset by principal repayments received on this portfolio.
Federal Home Loan Bank of New York ("FHLB-NY") Stock. FHLB-NY stock increased $8.7 million, or 81.7%, to $19.3 million at March 31, 2008, from $10.6 million at June 30, 2007. Additional purchases of this stock were required due to additional advances obtained from FHLB-NY.
Deposits. Deposits increased $7.5 million, or 1.1%, to $703.3 million at March 31, 2008, from $695.8 million at June 30, 2007. On a linked quarter comparison, deposits increased $16.1 million, or 2.3%, from $687.2 million at December 31, 2007.
Borrowings. Borrowings increased $192.9 million, or 98.1%, to $389.5 million at March 31, 2008, from $196.7 million at June 30, 2007. Borrowings have been utilized by the Company to fund asset growth as deposit growth has been limited.
Stockholders' equity. Stockholders' equity increased $10.9 million, or 4.0%, to $283.4 million at March 31, 2008, from $272.6 million at June 30, 2007. The increase was due to net income for the nine month period augmented by an increase of $900,000 to retained income as a result of the adoption of Financial Interpretation Number 48 on July 1, 2007, as well as an increase in the value of securities classified as available for sale and amortizations related to the ESOP stock.
Termination of merger
On March 19, 2008, the Company and GCB entered into a Mutual Termination Agreement terminating the agreement and plan of merger by and between GCB and the Company dated November 13, 2007. Under the Mutual Termination Agreement, GCB paid $700,000 to the Company. These funds were intended to offset the Company's estimated costs associated with the merger. Actual costs associated with the merger exceeded the estimated costs by $55,000. This excess was primarily related to legal fees and expensed as of March 31, 2008. The charge was included in Other Expenses and is a contributing factor to the increase in insurance, legal, audit and accounting expenses at March 31, 2008.
Special Meeting of Stockholders
On April 22, 2008 the Company held a Special Meeting of stockholders. At that Special Meeting, the stockholders approved the Oritani Financial Corp. 2007 Equity Incentive Plan.
About the Company
Oritani Financial Corp. is the holding company for Oritani Savings Bank, a savings bank offering a full range of retail and commercial loan and deposit products. Oritani Savings Bank is dedicated to providing exceptional personal service to their individual and business customers. The Bank currently operates its main office and 18 full service branches in the New Jersey Counties of Bergen, Hudson and Passaic. For additional information about Oritani Savings Bank, please visit http://www.oritani.com/.
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.
The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Oritani Financial Corp. Township of Washington, New Jersey Consolidated Balance Sheets March 31, 2008 and June 30, 2007 (in thousands, except share data) March 31, June 30, Assets 2008 2007 (unaudited) Cash on hand and in banks $6,753 $7,823 Federal funds sold and short term investments 78,723 55,703 Cash and cash equivalents 85,476 63,526 Loans, net 910,390 758,542 Securities held to maturity, estimated market value of $3,029 and $5,347 at March 31, 2008 and June 30, 2007, respectively 3,000 5,415 Securities available for sale, at market value 28,365 35,443 Mortgage-backed securities held to maturity, estimated market value of $177,732 and $210,505 at March 31, 2008 and June 30, 2007, respectively 178,324 217,406 Mortgage-backed securities available for sale, at market value 114,260 38,793 Bank Owned Life Insurance (at cash surrender value) 26,152 25,365 Federal Home Loan Bank of New York stock, at cost 19,297 10,619 Accrued interest receivable 6,069 4,973 Investments in real estate joint ventures, net 5,793 6,200 Real estate held for investment 2,890 2,492 Office properties and equipment, net 8,473 8,361 Other assets 17,546 17,308 $1,406,035 $1,194,443 Liabilities Deposits $703,253 $695,757 Borrowings 389,512 196,661 Advance payments by borrowers for taxes and insurance 6,337 5,684 Accrued taxes payable 1,806 1,463 Official checks outstanding 2,036 5,050 Other liabilities 19,663 17,258 Total liabilities 1,122,607 921,873 Stockholders' Equity Preferred stock, $0.01 par value; 10,000,000 shares authorized-none issued or outstanding - - Common stock, $0.01 par value; 80,000,000 shares authorized; 40,552,162 issued and outstanding at March 31, 2008 and June 30, 2007. 130 130 Additional paid-in capital 127,933 127,710 Unallocated common stock held by the employee stock ownership plan (14,903) (15,499) Retained income 169,733 161,300 Accumulated other comprehensive income (loss), net of tax 535 (1,071) Total stockholders' equity 283,428 272,570 $1,406,035 $1,194,443 Oritani Financial Corp. Township of Washington, New Jersey Consolidated Statements of Income Three and Nine Months Ended March 31, 2008 and 2007 (unaudited) Three months ended Nine months ended March 31 March 31 2008 2007 2008 2007 Interest income: (in thousands, except per share data) Interest on mortgage loans $14,173 $11,439 $40,417 $32,397 Interest on securities held to maturity 349 281 934 801 Interest on securities available for sale 373 260 1,418 553 Interest on mortgage-backed securities held to maturity 1,787 2,322 5,766 7,294 Interest on mortgage-backed securities available for sale 1,285 178 3,147 573 Interest on federal funds sold and short term investments 351 3,285 1,401 5,233 Total interest income 18,318 17,765 53,083 46,851 Interest expense: Deposits and stock subscription proceeds 5,943 6,276 18,464 17,504 Borrowings 3,651 2,395 9,213 6,837 Total interest expense 9,594 8,671 27,677 24,341 Net interest income before provision for loan losses 8,724 9,094 25,406 22,510 Provision for loan losses 750 350 2,050 775 Net interest income 7,974 8,744 23,356 21,735 Other income: Service charges 292 261 836 794 Real estate operations, net 272 170 1,036 703 Income from investments in real estate joint ventures 281 327 879 928 Bank-owned life insurance 264 245 787 728 Net gain on sale of assets - 514 - 514 Net loss on the write down of securities (352) - (352) - Other income 34 195 108 299 Total other income 791 1,712 3,294 3,966 Operating expenses: Compensation, payroll taxes and fringe benefits 3,231 2,875 9,815 8,667 Advertising 128 125 376 375 Office occupancy and equipment expense 435 360 1,223 1,134 Data processing service fees 268 263 792 774 Federal insurance premiums 25 23 72 68 Telephone, Stationary, Postage and Supplies 114 104 313 289 Insurance, Legal, Audit and Accounting 395 141 805 505 Contribution to charitable foundation - 9,110 - 9,110 Other expenses 155 133 495 462 Total operating expenses 4,751 13,134 13,891 21,384 Income(loss) before income tax expense(benefit) 4,014 (2,678) 12,759 4,317 Income tax expense(benefit) 1,649 (1,548) 5,226 999 Net income(loss) $2,365 $(1,130) $7,533 $3,318 Basic income per common share $0.06 n/a $0.19 n/a Average Balance Sheet and Yield/Rate Information For the Three Months Ended (unaudited) March 31, 2008 Average Interest Average Outstanding Earned/ Yield/ Balance Paid Rate (Dollars in thousands) Interest-earning assets: Loans $885,223 $14,173 6.40% Securities available for sale 31,419 373 4.75% Securities held to maturity 20,075 349 6.95% Mortgage backed securities available for sale 99,854 1,285 5.15% Mortgage backed securities held to maturity 185,414 1,787 3.86% Federal funds sold and short term investments 44,737 351 3.14% Total interest-earning assets 1,266,722 18,318 5.78% Non-interest-earning assets 73,147 Total assets $1,339,869 Interest-bearing liabilities: Savings deposits & stock subscription proceeds 149,229 587 1.57% Money market 48,793 439 3.60% NOW accounts 73,862 203 1.10% Time deposits 418,681 4,714 4.50% Total deposits 690,565 5,943 3.44% Borrowings 340,138 3,651 4.29% Total interest-bearing liabilities 1,030,703 9,594 3.72% Non-interest-bearing liabilities 27,751 Total liabilities 1,058,454 Stockholders' equity 281,415 Total liabilities and stockholders' equity $1,339,869 Net interest income $8,724 Net interest rate spread (1) 2.06% Net interest-earning assets (2) $236,019 Net interest margin (3) 2.75% Average of interest-earning assets to interest-bearing liabilities 1.23X March 31, 2007 Average Interest Average Outstanding Earned/ Yield/ Balance Paid Rate (Dollars in thousands) Interest-earning assets: Loans $709,215 $11,439 6.45% Securities available for sale 19,182 260 5.42% Securities held to maturity 17,676 281 6.36% Mortgage backed securities available for sale 14,229 178 5.00% Mortgage backed securities held to maturity 240,214 2,322 3.87% Federal funds sold and short term investments 244,699 3,285 5.37% Total interest-earning assets 1,245,215 17,765 5.71% Non-interest-earning assets 60,603 Total assets $1,305,818 Interest-bearing liabilities: Savings deposits & stock subscription proceeds 286,778 914 1.27% Money market 40,561 329 3.24% NOW accounts 70,737 204 1.15% Time deposits 427,894 4,829 4.51% Total deposits 825,970 6,276 3.04% Borrowings 221,543 2,395 4.32% Total interest-bearing liabilities 1,047,513 8,671 3.31% Non-interest-bearing liabilities 22,659 Total liabilities 1,070,172 Stockholders' equity 235,646 Total liabilities and stockholders' equity $1,305,818 Net interest income $9,094 Net interest rate spread (1) 2.40% Net interest-earning assets (2) $197,702 Net interest margin (3) 2.92% Average of interest-earning assets to interest-bearing liabilities 1.19X (1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest- bearing liabilities. (2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. Average Balance Sheet and Yield/Rate Information For the Nine Months Ended March 31, 2008 Average Interest Average Outstanding Earned/ Yield/ Balance Paid Rate (Dollars in thousands) Interest-earning assets: Loans $829,967 $40,417 6.49% Securities available for sale 36,641 1,418 5.16% Securities held to maturity 18,753 934 6.64% Mortgage backed securities available for sale 79,163 3,147 5.30% Mortgage backed securities held to maturity 199,225 5,766 3.86% Federal funds sold and short term investments 41,622 1,401 4.49% Total interest-earning assets 1,205,371 53,083 5.87% Non-interest-earning assets 69,018 Total assets $1,274,389 Interest-bearing liabilities: Savings deposits & stock subscription proceeds 152,576 1,885 1.65% Money market 44,128 1,317 3.98% NOW accounts 73,662 640 1.16% Time deposits 419,109 14,622 4.65% Total deposits 689,475 18,464 3.57% Borrowings 280,181 9,213 4.38% Total interest-bearing liabilities 969,656 27,677 3.81% Non-interest-bearing liabilities 27,025 Total liabilities 996,681 Stockholders' equity 277,708 Total liabilities and stockholder's equity $1,274,389 Net interest income $25,406 Net interest rate spread (1) 2.06% Net interest-earning assets (2) $235,715 Net interest margin (3) 2.81% Average of interest-earning assets to interest-bearing liabilities 1.24X March 31, 2007 Average Interest Average Outstanding Earned/ Yield/ Balance Paid Rate (Dollars in thousands) Interest-earning assets: Loans $680,284 $32,397 6.35% Securities available for sale 13,468 553 5.47% Securities held to maturity 19,873 801 5.37% Mortgage backed securities available for sale 15,468 573 4.94% Mortgage backed securities held to maturity 252,323 7,294 3.85% Federal funds sold and short term investments 129,524 5,233 5.39% Total interest-earning assets 1,110,940 46,851 5.62% Non-interest-earning assets 61,640 Total assets $1,172,580 Interest-bearing liabilities: Savings deposits & stock subscription proceeds 236,161 2,446 1.38% Money market 32,633 843 3.44% NOW accounts 73,289 648 1.18% Time deposits 418,280 13,567 4.32% Total deposits 760,363 17,504 3.07% Borrowings 210,052 6,837 4.34% Total interest-bearing liabilities 970,415 24,341 3.34% Non-interest-bearing liabilities 22,582 Total liabilities 992,997 Stockholders' equity 179,583 Total liabilities and stockholder's equity $1,172,580 Net interest income $22,510 Net interest rate spread (1) 2.28% Net interest-earning assets (2) $140,525 Net interest margin (3) 2.70% Average of interest-earning assets to interest-bearing liabilities 1.14X (1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest- bearing liabilities. (2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets.
