Cavalry Bancorp (NASDAQ:CAVB)
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Cavalry Bancorp, Inc. (the "Company") (Nasdaq NMS: CAVB)
announced today third quarter and year-to-date consolidated earnings
for its wholly-owned subsidiary Cavalry Banking ("Bank") and the
Company.
THIRD QUARTER 2005 HIGHLIGHTS:
-- Net income of $2.15 million, up 45.3 percent from the prior
year's $1.48 million and up 15.6 percent from second quarter
2005 net income of $1.86 million.
-- Return on average assets of 1.39 percent for the third
quarter compared to 1.10 percent for the same quarter last
year
-- Net interest margin of 4.32 percent for the third quarter
compared to 4.18 percent for the same quarter last year
-- Strong balance sheet growth:
-- Total assets at September 30, 2005 of $632.0 million
representing growth of $27.4 million during the third
quarter of 2005.
-- Loans at September 30, 2005 of $476.4 million representing
growth of $26.5 million during the third quarter of 2005.
-- Deposits at September 30, 2005 of $564.1 million
representing growth of $24.9 million during the third
quarter of 2005.
-- Superior credit quality:
-- Net charge-offs to average loans of 0.01 percent for the
third quarter of 2005.
-- Nonperforming loans of 0.22 percent of total loans and
other real estate.
Ed Loughry, Cavalry's Chairman and Chief Executive Officer said,
"In 2004, we made several strategic decisions to enhance the long-term
profitability of this Company. One was an intense focus by our sales
teams on attracting and maintaining transaction-based deposit accounts
and another was the acceleration of the repayment of our leveraged
Employee Stock Ownership Plan ("ESOP"). As a result of those and other
decisions, we have transformed the profitability performance of this
firm for 2005 and beyond."
Net income increased from $1.48 million or $0.22 per share diluted
for the quarter ended September 30, 2004 to $2.15 million or $0.29 per
share diluted for the quarter ended September 30, 2005. Annualized
return on average assets increased from 1.10 percent for the quarter
ended September 30, 2004 to 1.39 percent for the quarter ended
September 30, 2005. Annualized return on average shareholders' equity
increased from 10.51 percent for the quarter ended September 30, 2004
to 14.65 percent for the quarter ended September 30, 2005.
"One of the strengths of this Company has been our ability to
expand our net interest margin at the same time we are experiencing
significant growth in our assets," said Bill Jones, Executive Vice
President and Chief Administrative Officer.
Net income increased from $3.7 million or $0.55 per share diluted
for the nine months ended September 30, 2004 to $6.2 million or $0.85
per share diluted for the nine months ended September 30, 2005.
Annualized return on average assets increased from 0.95 percent for
the nine months ended September 30, 2004 to 1.42 percent for the nine
months ended September 30, 2005. Annualized return on average
shareholders' equity increased from 8.82 percent for the nine months
ended September 30, 2004 to 14.77 percent for the nine months ended
September 30, 2005.
Earnings for the nine months ended September 30, 2005 include a
tax benefit of $427,000. This tax benefit resulted from the
distribution of cash dividends to the participants of the ESOP.
Total assets of the Company increased from $578.7 million at
December 31, 2004 to $632.0 million at September 30, 2005. Net loans
receivable increased from $430.5 million at December 31, 2004 to
$476.4 million at September 30, 2005. Deposits increased from $506.5
million at December 31, 2004 to $564.1 million at September 30, 2005.
Total assets of the Company increased 14.51 percent from $551.9
million at September 30, 2004 to $632.0 million at September 30, 2005.
Net loans receivable increased 15.13 percent from $413.8 million at
September 30, 2004 to $476.4 million at September 30, 2005. Deposits
increased 16.00 percent from $486.3 million at September 30, 2004 to
$564.1 million at September 30, 2005.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Certain of these statements contained in this
release which are not historical facts are forward-looking statements
that are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth in the
forward-looking statements, including the uncertainties inherent in
the process of auditing and making end-of-year adjustments to a
corporation's financial statements. By making these forward-looking
statements, the Company undertakes no obligation to update these
statements for revisions or changes after the date of this release.
Additional Information and Where to Find It
This communication is not a solicitation of a proxy from any
security holder of Pinnacle Financial Partners, Inc. ("Pinnacle") or
Cavalry Bancorp, Inc. ("Cavalry"). Pinnacle has filed a registration
statement on Form S-4 with the Securities and Exchange Commission
("SEC") in connection with the proposed merger of Pinnacle and
Cavalry. The Form S-4 contains a joint proxy statement/prospectus and
other documents for the shareholders' meeting of Pinnacle and Cavalry
at which time the proposed merger will be considered. The Form S-4 and
joint proxy statement/prospectus contain important information about
Pinnacle, Cavalry, the merger and related matters.
INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE
REGISTRATION STATEMENT AND THE PRELIMINARY COPY OF THE JOINT PROXY
STATEMENT/PROSPECTUS INCLUDED THEREIN WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED TRANSACTION BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT PINNACLE, CAVALRY AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these
documents once they are available through the website maintained by
the SEC at http://www.sec.gov. Free copies of the joint proxy
statement/prospectus also may be obtained by directing a request by
telephone or mail to Pinnacle Financial Partners Inc., 211 Commerce
Street, Suite 300, Nashville, TN 37201, Attention: Investor Relations
(615) 744-3710 or Cavalry Bancorp, Inc., 114 West College Street, P.O.
Box 188, Murfreesboro, TN 37133, Attention: Investor Relations (615)
849-3313.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
Participants in the Solicitation
The directors and executive officers of Pinnacle and Cavalry may
be deemed to be participants in the solicitation of proxies with
respect to the proposed merger. Information about Pinnacle's directors
and executive officers is contained in the proxy statement filed by
Pinnacle with the SEC on March 14, 2005, which is available on
Pinnacle's web site (www.pnfp.com) and at the address provided above.
Information about Cavalry's directors and executive officers is
contained in the proxy statement filed by Cavalry with the SEC on
March 18, 2005, which is available at Cavalry's website (www.cavb.com)
and at the address provided above. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests by security holding or otherwise, will
be contained in the joint proxy statement/prospectus and other
relevant material to be filed with the SEC when they become available.
Investors and security holders may obtain free copies of these
documents once they are available through the website maintained by
the SEC at http://www.sec.gov. Free copies of the joint proxy
statement/prospectus also may be obtained by directing a request by
telephone or mail to Pinnacle Financial Partners Inc., 211 Commerce
Street, Suite 300, Nashville, TN 37201, Attention: Investor Relations
(615) 744-3710 or Cavalry Bancorp, 114 West College Street, P.O. Box
188, Murfreesboro, TN 37133, Attention: Investor Relations (615)
849-3313. This communication shall not constitute an offer to sell or
the solicitation of an offer to buy securities, nor shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
(Selected financial data follows)
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Cavalry Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share data)
Assets September 30, December 31,
------ 2005 2004
---- ----
Cash and cash equivalents $ 67,458 $ 63,135
Time deposits with Federal Home Loan Bank 4,000 -
Investment securities available-for-sale, at
fair value 42,934 42,183
Loans held for sale, at estimated fair value 1,067 2,501
Loans receivable, net of allowances for loan
losses of $4,955 at September 30, 2005 and
$4,863 at December 31, 2004 476,354 430,526
Accrued interest receivable 2,448 1,985
Office properties and equipment, net 17,202 17,607
Required investments in stock of the Federal
Home Loan Bank and Federal Reserve Bank, at
cost 3,317 3,125
Foreclosed assets 119 16
Bank owned life insurance 11,933 11,604
Goodwill 1,772 1,772
Other assets 3,402 4,216
------------ -----------
Total assets 632,006 578,670
============ ===========
Liabilities
-----------
Deposits:
Non-interest-bearing $ 112,360 $ 81,719
Interest-bearing 451,695 424,815
------------ -----------
564,055 506,534
Advances from Federal Home Loan Bank of
Cincinnati 2,794 2,835
Dividends payable 577 11,332
Accrued expenses and other liabilities 6,416 4,136
------------ -----------
Total liabilities 573,842 524,837
------------ -----------
Shareholders' Equity
--------------------
Preferred Stock, no par value Authorized -
250,000 shares; none issued or outstanding
at September 30, 2005 and December 31, 2004 - -
Common Stock, no par value Authorized-
49,750,000 shares; issued and outstanding
7,217,565 at September 30, 2005, and
December 31, 2004 19,354 19,354
Retained earnings 39,259 34,598
Accumulated other comprehensive loss, net of
tax (449) (119)
------------ -----------
Total shareholders' equity 58,164 53,833
------------ -----------
Total Liabilities and Shareholders' Equity 632,006 578,670
------------------------------------------ ============ ===========
Cavalry Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2005 2004 2005 2004
Interest income:
Loans $ 7,711 $ 5,994 $ 21,081 $ 16,839
Investment securities:
Taxable 308 332 916 979
Non-taxable 33 36 83 74
Other 552 120 1,335 261
---------- ---------- ---------- ----------
Total interest income 8,604 6,482 23,415 18,153
---------- ---------- ---------- ----------
Interest expense -
deposits 2,463 1,367 6,386 3,880
Interest expense -
borrowings 24 24 71 73
---------- ---------- ---------- ----------
Total interest expense 2,487 1,391 6,457 3,953
---------- ---------- ---------- ----------
Net interest income 6,117 5,091 16,958 14,200
Provision for loan losses 101 176 211 352
---------- ---------- ---------- ----------
Net interest income after
provision for loan
losses 6,016 4,915 16,747 13,848
---------- ---------- ---------- ----------
Non-interest income:
Servicing income 61 47 165 140
Gain on sale of loans,
net 320 879 984 2,281
Deposit servicing fees
and charges 1,499 1,457 4,285 3,992
Trust service fees 258 266 819 832
Commissions and other
non-banking fees 739 649 2,105 1,899
Other operating income 242 221 800 754
---------- ---------- ---------- ----------
Total non-interest income 3,119 3,519 9,158 9,898
---------- ---------- ---------- ----------
Non-interest expenses:
Salaries and employee
benefits 3,267 3,603 9,666 10,834
Occupancy expense 322 329 919 984
Supplies, communications,
and other office
expenses 221 223 695 706
Advertising expense 70 87 289 404
Professional fees 197 257 531 656
Equipment and service
bureau expense 930 890 2,767 2,557
Loss on sale of
investment securities,
net - 81 - 3
Other operating expense 522 491 1,503 1,464
---------- ---------- ---------- ----------
Total non-interest
expense 5,529 5,961 16,370 17,608
---------- ---------- ---------- ----------
Income before income tax
expense 3,606 2,473 9,535 6,138
Income tax expense 1,461 994 3,286 2,475
---------- ---------- ---------- ----------
Net income $ 2,145 $ 1,479 $ 6,249 $ 3,663
========== ========== ========== ==========
Basic Earnings Per Share $ 0.30 $ 0.23 $ 0.87 $ 0.57
Diluted Earnings Per
Share $ 0.29 $ 0.22 $ 0.85 $ 0.55
Weighted average shares
outstanding - Basic 7,217,565 6,441,148 7,217,565 6,463,810
Weighted average shares
outstanding - Diluted 7,328,799 6,675,920 7,327,831 6,700,546
Cavalry Bancorp, Inc.
Consolidated Financial Highlights
(unaudited)
(dollars in thousands)
September December
30, 31, %
2005 2004 Change
---- ---- ------
FINANCIAL
CONDITION
DATA:
Total assets $ 632,006 578,670 9.22%
Loans
receivable,
net 476,354 430,526 10.64%
Loans held-
for-sale 1,067 2,501 -57.34%
Investment
securities
available-
for-sale 42,934 42,183 1.78%
Cash and cash
equivalents 67,458 63,135 6.85%
Deposits 564,055 506,534 11.36%
Advances from
Federal Home
Loan Bank 2,794 2,835 -1.45%
Shareholders'
Equity 58,164 53,833 8.05%
For the quarters For the nine months
ending ending
September 30, % September 30, %
------------------- -------------------
2005 2004 Change 2005 2004 Change
---- ---- ------ ---- ---- ------
OPERATING
DATA:
Interest
income $ 8,604 6,482 32.74% $ 23,415 18,153 28.99%
Interest
expense 2,487 1,391 78.79% 6,457 3,953 63.34%
Net interest
income 6,117 5,091 20.15% 16,958 14,200 19.42%
Provision for
loan losses 101 176 -42.61% 211 352 -40.06%
Net interest
income
after
provision
for loan
losses 6,016 4,915 22.40% 16,747 13,848 20.93%
Gains from
sale of
loans 320 879 -63.59% 984 2,281 -56.86%
Other income 2,799 2,640 6.02% 8,174 7,617 7.31%
Other
expenses 5,529 5,961 -7.25% 16,370 17,608 -7.03%
Income before
income taxes 3,606 2,473 45.81% 9,535 6,138 55.34%
Income tax
expense 1,461 994 46.98% 3,286 2,475 32.77%
Net income $ 2,145 1,479 45.03% $ 6,249 3,663 70.60%
For the quarters ending For the nine months ending
September 30, September 30,
----------------------- --------------------------
2005 2004 2005 2004
---- ---- ---- ----
KEY FINANCIAL RATIOS
Performance Ratios:
Return on average
assets 1.39% 1.10% 1.42% 0.95%
Return on average
shareholders'
equity 14.65% 10.51% 14.77% 8.82%
Interest rate
spread (tax
equivalent basis) 3.87% 3.89% 3.83% 3.84%
Net interest margin
(tax equivalent
basis) 4.32% 4.18% 4.22% 4.09%
Average interest-
earning assets to
average interest-
bearing liabilities 126.07% 125.35% 124.07% 121.43%
Non-interest
expense as a
percent of average
total assets 3.58% 4.39% 3.71% 4.55%
Efficiency ratio 59.86% 68.94% 62.68% 73.06%
Asset Quality Ratios:
Nonaccrual and 90
days or more past
due loans as a
percent of total
loans, net 0.22% 0.29%
Nonperforming
assets as a
percent of total
assets 0.19% 0.22%
Allowance for loan
losses as a
percent of total
loans receivable 1.04% 1.14%
Net charge-offs to
average
outstanding loans 0.01% 0.01% 0.03% 0.04%
For the nine
months
ending
September Diluted EPS
30, 2005 Impact
------------- ------------
Reconcilation of
Net Income to Net
Income as Adjusted:
Net income $6,249 $0.85
Adjustment:
Tax benefit of
ESOP dividend
paid to
participants (427) (0.06)
------------- ------------
Total adjustment (427) (0.06)
------------- ------------
Net income as
adjusted $5,822 $0.79
============= ============
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