Earning Assets Climb 56% During Last 12 months; Net Interest Margin Held Steady
NAPLES, Fla., Jan. 25 /PRNewswire-FirstCall/ -- Bank of Florida Corp. (NASDAQ:BOFL), an $883 million-asset multi-bank holding company based in Naples, Florida, today reported net income for 2006 of $2.3 million or $0.28 per diluted share. Pretax income was $3.9 million, 3.4 times 2005's results. Fourth quarter net income reached $677,000, or $0.07 per diluted share. On a pretax basis, fourth quarter earnings were $1.2 million, nearly twice the $616,000 experienced in the fourth quarter of 2005. Pretax income for the fourth quarter was $65,000 better than that experienced in the third quarter of 2006. Excluding the impact of one time charges in the fourth quarter, such as expenses related to management reorganization changes and for establishing a separate banking charter for our Palm Beach county location, pre-tax income would have been approximately $230,000 higher, which would have brought the fourth quarter to $1.4 million and full year pre-tax income to $4.2 million.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061221/CLTH099LOGO ) Michael L. McMullan, Bank of Florida Corp.'s President and CEO, stated, "This was another incredible year for our growing company. We have fully absorbed and have already begun to grow our first acquisition, Bristol Bank, which closed in late August and firmly positions us in Miami-Dade County. We have met our cost saving, revenue and growth goals from this acquisition, ending the year with $100 million in assets and hitting our overall earnings targets starting in November. In addition, we have now begun intensive preparation for the closing on our second acquisition, Old Florida Bankshares, which will further expand Bank of Florida--Southwest in Collier and Lee counties and bring our consolidated assets well over the $1 billion threshold." McMullan added, "Our Company's balance sheet continued to grow in 2006 with a strong emphasis on credit quality and loan growth, resulting in earning assets, which the Company defines as any asset that earns interest, reaching $839 million, $300 million or 56% greater than one year ago. Fourth quarter pretax earnings are up 95% over the same period last year, despite absorbing certain unusual costs this quarter related to management reorganization and work on establishing a separate banking charter for our Palm Beach county banking location. Finally, in December the Company's shareholders overwhelmingly approved the change of our name to Bank of Florida Corporation, which more readily identifies our Company with the name of its affiliates and further emphasizes the enormous strength of our franchise to investors." Specific performance factors for the year and fourth quarter are below.
- Loans climbed $297 million or 61% for the year. Excluding the Bristol acquisition, loans increased $230 million or 43%. In the fourth quarter, loans rose $55 million to $784 million, 32% more growth than in fourth quarter 2005 and the fourth consecutive quarter of loan growth exceeding $50 million. Construction lending on commercial properties comprised the bulk of the fourth quarter's growth.
- Average core deposits, which exclude CDs, rose $101 million or 38% in 2006 vs. 2005. For the quarter, average core deposits increased $30 million or nearly 8% over third quarter 2006, despite intense competition for business operating accounts and money market accounts.
- Net interest income from loans and investments increased almost 63% for 2006, and in the fourth quarter rose 11% over third quarter 2006. In the face of rigorous loan and deposit pricing, our net interest margin for the year averaged 4.48%, 37 basis points greater than in 2005. For the fourth quarter, our margin remained nearly unchanged at 4.44% compared to third quarter 2006 and fourth quarter 2005.
- Asset quality continued to be excellent throughout 2006, with nonperforming loans at 0.09% of loans outstanding at year end. In addition, the allowance for loan losses was 11.6 times the level of nonperforming loans. Our delinquent loan ratio of 0.22% at quarter end was well within the Company's historic norms. There were no net charge-offs in the third and fourth quarters, and for all of 2006, the ratio of net charge-offs/average loans outstanding was 0.03%, unchanged from 2005.
- Assets under advice from Bank of Florida Trust Company reached $415 million, up $34 million during the fourth quarter and $25 million or 6% higher than one year ago, despite approximately $65 million withdrawn by several large clients for tax payments and business investments. Pretax earnings at the Trust Company were $521,000, three times that earned in 2005.
- Top-line revenue, a non-GAAP measure which the Company defines as net interest income plus noninterest income (excluding net securities gains/losses), climbed 58% ($12.9 million) in 2006 compared to 2005. Fourth quarter top-line revenue rose nearly 10% ($902,000) over third quarter 2006 and 55% ($3.6 million) over fourth quarter 2005. The latter increase is comprised of net interest income growth of 60% on 49% higher average earning assets and noninterest growth of 22%, driven by increased trust fees. The Company considers "top-line revenue" to be useful in explaining financial performance, as it combines the Company's lending or spread income (interest income less interest expense) with its fee income, both of which often pertain to the same customer base and can be managed against the underlying noninterest expense to generate those revenue components.
- Noninterest expense increased $9.2 million or 48% over 2005, $848,000 or 9% of which reflects the August 2006 acquisition of Bristol Bank and the opening of our new Aventura branch. During the last 90 days of 2006, noninterest expense rose $943,000 or 13% compared to third quarter 2006, largely reflective of $306,000 added by a full quarter's operating expenses from the Miami-Dade expansion and $511,000 more in personnel costs, $120,000 of which is management reorganization expense, with the balance in salary and incentive compensation increases. Lastly, $109,000 in organizational costs were incurred related to the plan to establish Bank of Florida-Southeast's Palm Beach county banking office as a separately chartered bank in 2007.
- The impact to annual salaries and benefits, as a result of reorganization in the last two quarters of 2006, is in excess of $875,000, of which approximately $600,000 will be realized in 2007, $120,000 in the first quarter and $160,000 in quarters two through four. The entire annual decrease in salaries and benefits will be realized in 2008. In addition, in response to the softening in residential mortgage lending, the Company closed its Orlando residential mortgage origination office in the third quarter of 2006, the full benefit of which will be experienced in 2007.
- The Company's efficiency ratio (noninterest expense/top-line revenue) was 81% for 2006, a 5 percentage point improvement over 2005 and an indication of positive operating leverage. For the fourth quarter, the Company's efficiency ratio was 79% excluding the impact of the management reorganization and charter establishment expense incurred during the quarter.
The table on pages 3-4 summarizes the Company's results for 2006 and 2005.
Bank of Florida Corp. Summary of Consolidated Financial Data
(Dollars in thousands, except per share data) For the Three Months Ended
Dec. 31, Sept. 30, Increase/(decrease)
2006 2006 $ % Total interest income $16,227 $14,299 $1,928 13.5%
Total interest expense 7,005 5,967 1,038 17.4%
Net interest income before
provision 9,222 8,332 890 10.7%
Provision for loan losses 734 840 (106) -12.6%
Net interest income after
provision 8,488 7,492 996 13.3%
Non interest income 1,074 1,062 12 1.1%
Gain on sale of investments 0 0 0 N/A
Noninterest expense 8,361 7,418 943 12.7%
Income before taxes 1,201 1,136 65 5.7%
Provision for income taxes
(benefit) 524 447 77 17.2%
Net income (loss) 677 689 (12) -1.7%
Basic earnings (loss) per common
share $0.07 $0.08 $(0.01) -12.5%
Diluted earnings (loss) per
common share $0.07 $0.07 - 0.0%
Weighted average common shares -
Basic 9,569,452 9,149,185 420,267 4.6%
Weighted average common shares -
Diluted 9,804,949 9,397,872 407,077 4.3%
Return on average assets 0.31% 0.35% -0.04% -11.4%
Return on average common equity 2.01% 2.20% -0.19% -8.6%
Top-line revenue $10,296 $9,394 $902 9.6%
Net interest margin 4.44% 4.46% -0.02% -0.4%
Efficiency ratio 81.21% 78.97% 2.24% 2.8%
Average equity to average assets 15.53% 16.05% -0.52% -3.2%
Average loans held for investment
to average deposits 112.83% 108.00% 4.83% 4.5%
Net charge-offs to average loans 0.00% 0.00% 0.00% N/A For the Three Months Ended
Dec. 31, Increase/(decrease)
2005 $ % Total interest income $8,820 $7,407 84.0%
Total interest expense 3,040 3,965 130.4%
Net interest income before provision 5,780 3,442 59.6%
Provision for loan losses 594 140 23.6%
Net interest income after provision 5,186 3,302 63.7%
Non interest income 878 196 22.3%
Gain on sale of investments 0 0 N/A
Noninterest expense 5,448 2,913 53.5%
Income before taxes 616 585 95.0%
Provision for income taxes (benefit) (3,728) 4,252 N/A
Net income (loss) 4,344 (3,667) -84.4%
Basic earnings (loss) per common
share $0.73 $(0.66) -90.4%
Diluted earnings (loss) per common
share $0.70 (0.63) -90.0%
Weighted average common shares -
Basic 5,923,862 3,645,590 61.5%
Weighted average common shares -
Diluted 6,224,724 3,580,225 57.5%
Return on average assets 3.14% -2.83% 90.1%
Return on average common equity 31.50% -29.49% 93.6%
Top-line revenue $6,658 $3,638 54.6%
Net interest margin 4.42% 0.02% 0.5%
Efficiency ratio 81.83% -0.62% -0.8%
Average equity to average assets 9.97% 5.56% 55.8%
Average loans held for investment to
average deposits 97.44% 15.39% 15.8%
Net charge-offs to average loans 0.06% -0.06% N/A For the Year Ended
Dec. 31, Dec. 31, Increase/(decrease)
2006 2005 $ % Total interest income $52,330 $28,491 $23,839 83.7%
Total interest expense 21,221 9,348 11,873 127.0%
Net interest income before
provision 31,109 19,143 11,966 62.5%
Provision for loan losses 2,836 1,903 933 49.0%
Net interest income after
provision 28,273 17,240 11,033 64.0%
Non interest income 4,242 3,259 983 30.2%
Gain on sale of investments 0 0 0 N/A
Noninterest expense 28,585 19,344 9,241 47.8%
Income before taxes 3,930 1,155 2,775 240.3%
Provision for income taxes
(benefit) 1,611 (3,728) 5,339 N/A
Net income (loss) 2,319 4,883 (2,564) -52.5%
Basic earnings (loss) per
common share $0.29 $0.82 $(0.53) -64.6%
Diluted earnings (loss) per
common share $0.28 $0.79 (0.51) -64.6%
Weighted average common shares
- Basic 8,026,312 5,595,233 2,431,079 43.4%
Weighted average common shares
- Diluted 8,278,210 5,813,230 2,464,980 42.4%
Return on average assets 0.32% 0.98% -0.66% 67.3%
Return on average common
equity 2.26% 9.79% -7.53% 76.9%
Top-line revenue $35,351 $22,402 $12,949 57.8%
Net interest margin 4.48% 4.11% 0.37% 9.0%
Efficiency ratio 80.86% 86.35% -5.49% -6.4%
Average equity to average
assets 14.02% 10.34% 3.68% 35.6%
Average loans held for
investment to average
deposits 105.87% 92.81% 13.06% 14.1%
Net charge-offs to average
loans 0.03% 0.03% 0.00% N/A Dec. 31 Sept. 30, Increase/(decrease)
2006 2006 $ % Total assets $883,102 850,096 $33,006 3.9%
Cash & cash equivalents 27,744 48,457 (20,713) -42.7%
Earning assets 838,626 789,695 48,931 6.2%
Investment securities 41,724 41,995 (271) -0.6%
Loans 783,610 728,610 55,000 7.5%
Allowance for loan losses 7,833 7,094 739 10.4%
Intangible Assets 13,831 13,225 606 4.6%
Deposit accounts 691,180 660,443 30,737 4.7%
Borrowings 53,500 50,500 3,000 5.9%
Stockholders' equity $135,505 134,463 $1,042 0.8%
Total common shares outstanding 9,575,153 9,563,703 11,450 0.1%
Book value per common share $14.15 $14.06 $0.09 0.6%
Tangible book value per common
share $12.71 $12.68 $0.03 0.2% Loan loss allowance to total
loans 1.00% 0.97% 0.03% 3.1%
Loan loss allowance to
nonperforming loans 1160.26% 954.12% 1160.26% 100.0%
Nonperforming loans to total
loans 0.09% 0.10% 0.09% 100.0%
Nonperforming assets to total
assets 0.08% 0.09% 0.08% 100.0% Leverage (tier 1 to average
total assets) 13.95% 15.58% -1.63% -10.5%
Assets under advice--Bank of
Florida Trust Company $415,318 $381,371 33,947 8.9% Dec. 31, Increase/(decrease)
2005 $ % Total assets $569,782 $313,320 55.0%
Cash & cash equivalents 50,117 (22,373) -44.6%
Earning assets 538,255 300,371 55.8%
Investment securities 18,622 23,102 124.1%
Loans 486,722 296,888 61.0%
Allowance for loan losses 4,603 3,230 70.2%
Intangible Assets 925 12,906 1395.2%
Deposit accounts 495,080 196,100 39.6%
Borrowings 14,000 39,500 282.1%
Stockholders' equity 59,061 $76,444 129.4%
Total common shares outstanding 5,943,783 3,631,370 61.1%
Book value per common share $9.94 $4.21 42.4%
Tangible book value per common share $9.78 $2.93 30.0% Loan loss allowance to total loans 0.95% 0.05% 5.3%
Loan loss allowance to nonperforming
loans 1435.40% -275.14% -19.2%
Nonperforming loans to total loans 0.07% 0.02% 28.6%
Nonperforming assets to total assets 0.06% 0.02% 33.3% Leverage (tier 1 to average total
assets) 10.28% 3.67% 35.7%
Assets under advice--Bank of Florida
Trust Company $390,002 25,316 6.5% BANK OF FLORIDA CORPORATION Bank of Florida Corporation. (NASDAQ:BOFL)(Newspaper listing: "BcshFla") is an $883 million-asset multi-bank holding Company located in Naples, Florida. Bank of Florida Corporation is the parent company for Bank of Florida - Southwest in Collier and Lee Counties; Bank of Florida - Southeast in Broward, Miami-Dade and Palm Beach Counties; Bank of Florida - Tampa Bay in Hillsborough County; and Bank of Florida Trust Company. Investor information may be found on the Company's web site, http://www.bankofflorida.com/, by clicking on the "Investor Relations" tab. To receive an email alert of all Company press releases, SEC filings, and events, select the "Email Notification" section.
The foregoing may be deemed to be offering materials of Bank of Florida Corporation in connection with its proposed acquisition of Old Florida Bankshares, Inc. ("Old Florida") on the terms and subject to the conditions in the Agreement and Plan of Merger dated August 28, 2006, between Bank of Florida Corporation and Old Florida.
The Proxy Statement/Prospectus is available for free both on the Securities and Exchange Commission website (http://www.sec.gov/) as a 424(B)(3) filed on November 13, 2006 and from Bank of Florida Corporation as follows: Chief Financial Officer, Bank of Florida Corporation, 1185 Immokalee Road, Naples, FL 34110.
This press release contains certain references to financial measures identified as being stated on an operating basis or which adjust for or exclude nonrecurring merger-related expenses, which are adjustments from comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These financial measures, as used herein, differ from financial measures reported under GAAP in that they exclude unusual or non-recurring charges, losses, credits or gains. This press release identifies the specific items excluded from the comparable GAAP financial measure in the calculation of each non-GAAP financial measure. Management believes that financial presentations excluding the impact of these items provide useful supplemental information that is important to a proper understanding of the Company's core business results by investors. These presentations should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures presented by other companies.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements in this press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which statements generally can be identified by the use of forward- looking terminology, such as "may," "will," "expect," "estimate," "anticipate," "believe," "target," "plan," "project," or "continue" or the negatives thereof or other variations thereon or similar terminology, and are made on the basis of management's plans and current analyses of Bank of Florida Corporation, its business and the industry as a whole. These forward- looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases, have affected, and in the future could affect Bank of Florida Corporation financial performance and could cause actual results for fiscal 2007 and beyond to differ materially from those expressed or implied in such forward-looking statements. Bank of Florida Corporation does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. http://www.newscom.com/cgi-bin/prnh/20061221/CLTH099LOGO http://photoarchive.ap.org/ DATASOURCE: Bancshares of Florida CONTACT: Michael L. McMullan, President & CEO, or Tracy L. Keegan, Executive VP & CFO, both of Bank of Florida Corp., +1-239-254-2147 Web site: http://www.bankofflorida.com/
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