East Penn Finl Corp (MM) (NASDAQ:EPEN)
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From Jul 2019 to Jul 2024
East Penn Financial Corporation (NASDAQ Capital Market: EPEN)
reported net income of $1,690,000 for the six months ended June 30,
2007, an increase of 0.7% over net income of $1,679,000 for the six
months ended June 30, 2006. Diluted earnings per share were $0.27 per
share for the first six months of 2007 and 2006. For the second quarter
ended June 30, 2007, East Penn’s net income
was $792,000 as compared with $849,000 for the second quarter of 2006, a
decline of 6.7%. The decrease in earnings was primarily attributable to
expenses incurred as a result of the impending merger of East Penn
Financial Corporation and its subsidiary with Harleysville National
Corporation. On May 16, 2007, a joint press release was issued
announcing the signing of a definitive agreement, dated as of May 15,
2007, for East Penn Financial Corporation and its wholly owned
subsidiary, East Penn Bank, to merge with and into Harleysville National
Corporation. On a year to date basis, the Company recorded $258,000 (or
$190,000 after tax) in merger related expenses, of which $212,000 (or
$188,000 after tax) of those expenses were recorded in the second
quarter.
Brent L. Peters, Chairman of the Board, President and Chief Executive
Officer, commented: “We are very pleased with
our performance despite the persistence of the unfavorable interest rate
environment. Excluding the impact of the merger related expenses from
our operating results, net income for the first six months of 2007 would
have been $1,880,000, or 12.0% ahead of net income for the first six
months of 2006 and $980,000 for the second quarter of 2007, or 15.4%
ahead of net income for the second quarter of 2006. Our financial
results for this year continue to demonstrate our continued efforts to
focus on our core banking business, improve our efficiency and safeguard
asset quality.”
The balance sheet continues to grow with assets increasing 4.8% to
$443.6 million as of June 30, 2007 from $423.3 million as of June 30,
2006. Despite competitive pressures, asset growth was attributable to
loan growth of 8%, which was primarily funded from deposit and cash
management account growth of 7.7%. This growth was achieved even with
the Bank’s payment of a $5 million borrowing
that matured during 2007. In addition, the Bank remains steadfast in
maintaining the quality of its assets. Non-performing assets were 0.49%
of total assets at June 30, 2007 as compared with 0.23% at June 30,
2006. This increase was attributable to the placement of one secured
commercial loan on non-accrual. Net charge-offs as a percentage of
average loans declined to 0.02% for the second quarter of 2007 as
compared with 0.03% for the second quarter of 2006.
The net interest margin for the quarter ended June 30, 2007 was 3.42%,
representing a 33 basis point decrease as compared with the net interest
margin of 3.75% for the quarter ended June 30, 2006. In comparing the
first and second quarters of 2007, the margin compression slowed where
the net interest margin decreased one basis point from 3.43% at March
31, 2007. Nonetheless, the Company has experienced net interest margin
compression as competitive deposit pricing has increased funding costs
faster then earning asset yields have grown.
Other income increased $95,000, or 16.8% in the second quarter of 2007
as compared with the same period in 2006. There were no unusual
transactions that contributed to this increase. Rather it is
attributable to increases in other income generated from core banking
services.
For the three months ended June 30, 2007, other expenses increased
$227,000, or 8.3%, to $2,946,000 compared to $2,719,000 for the three
months ended June 30, 2006. The increase resulted primarily from
recording expenses incurred as a result of the impending merger.
East Penn Financial Corporation is a locally owned and managed bank
holding company headquartered in Emmaus, Pennsylvania. Its principal
banking subsidiary is East Penn Bank, a community bank that has been
serving the Lehigh Valley through its nine branch locations.
Additional information about East Penn Financial Corporation is
available on its website at www.eastpennbank.com.
This press release may contain forward-looking statements as defined by
the Private Securities Litigation Reform Act of 1995. Actual results and
trends could differ materially from those set forth in such statements
due to various factors. Such factors include the possibility that
increased demand or prices for the Company’s
financial services and products may not occur, changing economic and
competitive conditions, technological developments, and other risks and
uncertainties, including those detailed in East Penn Financial
Corporation’s filings with the Securities and
Exchange Commission.
East Penn Financial Corporation
Consolidated Selected Financial Information
June 30,
(in thousands, except share data)
2007
2006
(Unaudited)
Balance Sheet Data:
Total assets
$
443,551
$
423,272
Securities available for sale
65,683
69,424
Mortgages held for sale
135
391
Total loans (net of unearned discount)
337,109
312,093
Allowance for loan losses
(3,343
)
(3,205
)
Premises and equipment, net
9,415
10,094
Non-interest bearing deposits
48,983
49,662
Interest bearing deposits
328,845
305,304
Total deposits
377,828
354,966
Federal funds purchased and securities sold under agreements to
repurchase
10,602
5,575
Other borrowings
19,000
30,000
Junior subordinated debentures
8,248
8,248
Stockholders' equity
25,543
22,854
Common shares outstanding
6,310,474
6,304,262
Book value per share
$
4.05
$
3.63
Three MonthsEnded June 30,
Six MonthsEnded June 30,
(in thousands, except share data)
2007
2006
2007
2006
(Unaudited)
(Unaudited)
Statement of Income Data:
Total interest income
$
6,437
$
5,742
$
12,777
$
11,284
Total interest expense
3,142
2,410
6,243
4,656
Net interest income
3,295
3,332
6,534
6,628
Provision for loan losses
90
119
135
209
Net interest income after provision
3,205
3,213
6,399
6,419
Other income
662
567
1,240
1,210
Other expenses
2,946
2,719
5,622
5,520
Net income before taxes
921
1,061
2,017
2,109
Income tax expense
129
212
327
430
Net income
$
792
$
849
$
1,690
$
1,679
Basic earnings per share (1)
$
0.13
$
0.13
$
0.27
$
0.27
Diluted earnings per share (2)
$
0.12
$
0.13
$
0.27
$
0.27
Cash dividends per common share
$
0.00
$
0.00
$
0.12
$
0.11
Six Months
Ended June 30,
2007
2006
(Unaudited)
(Unaudited)
Selected Financial Ratios:
Annualized return on average equity
13.48
%
14.94
%
Annualized return on average assets
0.77
%
0.84
%
Net interest margin (3)
3.42
%
3.76
%
Efficiency ratios:
Operating expenses as a percentage of revenues (3)
2.57
%
2.76
%
Operating expenses as a percentage of average assets
65.72
%
66.82
%
Tier 1 leverage capital
7.84
%
8.04
%
Net loans (4) as a percent of deposits
89.22
%
87.92
%
Average equity to average assets
5.73
%
5.62
%
Selected Asset Quality Ratios:
Allowance for loan losses / Total loans (4)
0.99
%
1.03
%
Allowance for loan losses / Non-performing assets (5)
154.13
%
330.07
%
Non-accrual loans / Total loans (4)
0.27
%
0.18
%
Non-performing assets (5) / Total assets
0.49
%
0.23
%
Net charge-offs / Average loans (4)
0.02
%
0.03
%
(1) Based upon the weighted average number of
shares of common stock outstanding for the applicable periods.
(2) Based upon the weighted average number of
shares plus dilutive potential common share equivalents outstanding for
the applicable periods.
(3) Calculated on a fully tax-equivalent basis.
(4) The term “loans”
includes loans held in the portfolio, including non-accruing loans, and
excludes loans held for sale.
(5) Includes non-accrual loans.