Harbor Florida Bancshares (NASDAQ:HARB)
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From Dec 2019 to Dec 2024
FORT PIERCE, Fla., Oct. 18 /PRNewswire-FirstCall/ -- Harbor Florida Bancshares, Inc. (NASDAQ:HARB) ("the Company"), the holding company for Harbor Federal Savings Bank ("the Bank"), announced that diluted earnings per share for its fourth fiscal quarter ended September 30, 2006 decreased 15.7% to 43 cents per share on net income of $10.1 million, compared to 51 cents per share on net income of $12.0 million for the same period last year. Diluted earnings per share for the year ended September 30, 2006 increased 1.5% to $2.01 per share on net income of $47.0 million, compared to $1.98 per share on net income of $46.2 million for the same period last year. The current quarter and year included $1.7 million or 7 cents per share of non-deductible expenses related to the announced merger with National City Corporation ("National City"). The decrease in earnings for the quarter was due primarily to the merger related expenses. The increase for the year was primarily due to increased net interest income and other income, partially offset by increased other expense. Net interest income increased for both the quarter and year resulting from increases in average interest-earning assets due primarily to originations of loans. This growth was funded primarily with deposits, FHLB advances and repayments of mortgage-backed securities.
The Company also announced that its Board of Directors has declared a quarterly cash dividend of 27.5 cents per share for the quarter ending September 30, 2006. The dividend is payable November 17, 2006 to shareholders of record as of October 30, 2006.
On July 11, 2006, National City Corporation (NYSE:NCC) and Harbor Florida Bancshares, Inc. announced that they had reached a definitive agreement by which National City would acquire Harbor Florida Bancshares, Inc. Under the terms of the agreement, Harbor Florida stockholders will receive National City common stock worth $45 for each share of Harbor Florida common stock in a tax- free exchange. The exchange ratio will be based on the average closing price of National City common stock for the 10 trading days immediately preceding Federal Reserve Board approval of the transaction. The transaction has a total indicated value of approximately $1.1 billion. Subject to regulatory and Harbor Florida stockholder approvals, the transaction is expected to close in the fourth quarter of 2006. A special meeting of Harbor shareholders will be held on November 17, 2006. Upon completion of the transaction, Michael J. Brown, Sr., Chairman and CEO, President and Chief Operating Officer J. Hal Roberts and Executive Vice President Michael J. Brown, Jr., will continue serving in substantially similar roles with National City's Florida Division.
FINANCIAL CONDITION
Total assets increased to $3.267 billion at September 30, 2006, from $3.012 billion at September 30, 2005. Total net loans increased to $2.602 billion at September 30, 2006, from $2.276 billion at September 30, 2005. Total deposits increased to $2.260 billion at September 30, 2006, from $2.056 billion at September 30, 2005.
For the year ended September 30, 2006, total net loans increased 14.3% due primarily to net increases of $212.8 million in residential one-to-four family mortgage loans, $49.3 million in land loans, $13.6 million in nonresidential mortgage loans, $46.9 million in consumer loans, and $6.0 million in commercial loans. These increases were the result of increased expansion and growth in the Bank's primary markets. Loan originations, while strong in all markets, declined from the historically high levels of the past year. Specifically, total loan originations for the year ended September 30, 2006 were 27.0% lower than originations for the same period in 2005. The Company believes the decrease in originations was due to a combination of higher interest rates, a decline in storm related reconstruction, and somewhat lower consumer demand.
Deposits at September 30, 2006 increased 9.9% to $2.260 billion from $2.056 billion at September 30, 2005 due to an increase of $392.4 million in certificate accounts partially offset by a net decrease of $188.6 million in core deposits (transaction and savings accounts). Certificate account growth reflects customers' increased preference for longer-term deposit products in a higher interest rate environment. The Company has also used selective programs to attract additional certificate accounts as a longer term, fixed-rate funding source. The Company continues to emphasize growth in transaction accounts.
RESULTS OF OPERATIONS
Net interest income increased 1.6% to $28.6 million for the quarter ended September 30, 2006, from $28.2 million for the quarter ended September 30, 2005. This increase was primarily a result of a 9.3% increase in average interest-earning assets over the comparable period in 2005, partially offset by a decrease of 28 basis points in the net interest margin. Average total loans increased by $367.5 million or 16.4%, reflecting continued strong loan originations as a result of expansion and growth in the Bank's primary markets. Average balances of deposits and FHLB advances increased $194.7 million and $43.5 million, respectively. The average balance of mortgage- backed securities and investment securities decreased $76.6 million and $27.6 million, respectively. The average balance of core deposits decreased to 38.7% of total average deposits from 51.6% for the same quarter last year, reflecting the increased demand for certificate accounts and the Company's programs designed to attract fixed rate deposits.
Provision for loan losses was $487,000 for the quarter ended September 30, 2006, compared to $464,000 for the quarter ended September 30, 2005. The provision for the quarter ended September 30, 2006 was principally due to net charge-offs of $503,000 (primarily due to one commercial business loan.)
Other income decreased to $6.3 million for the quarter ended September 30, 2006, compared to $6.7 million for the quarter ended September 30, 2005. This decrease was due primarily to a decrease of $487,000 in gain on disposal of premises and equipment, offset by $166,000 increase in fees and service charges. The gain on disposal of premises and equipment in the quarter ended September 30, 2005 was due to the sale of business property and insurance proceeds received on hurricane damaged premises and equipment. The increase in fees and service charges was primarily due to growth in the number of transaction accounts.
Other expense increased to $16.6 million for the quarter ended September 30, 2006, from $14.7 million for the quarter ended September 30, 2005. This increase was due primarily to increases of $1.5 million in professional fees and $370,000 in occupancy. Professional fees increased due to $1.7 million of fees related to the announced merger with National City. The increase in occupancy was primarily due to growth in loans and deposits and expenses incurred in the opening of new branches.
Income tax expense was $7.7 million for both the quarters ended September 30, 2006 and 2005. The effective tax rate was 43.3% and 39.2%, respectively. The increase in the effective rate was due to non-deductible merger related expenses.
ASSET QUALITY
Nonperforming loans increased to $4.5 million at September 30, 2006 from $2.2 million at September 30, 2005. This increase is primarily due to an increase in delinquencies in primarily the residential and consumer portfolios. Net charge-offs for the quarter ended September 30, 2006 were $503,000 compared to $7,000 for the same period last year. Net charge-offs for the quarter ended September 30, 2006 included $417,000 related to one commercial business loan. The ratio of the allowance for loan losses to total net loans decreased to .80% as of September 30, 2006, from .87% for the same period last year. This ratio reflects the Company's continued history of low net charge-offs, particularly in the residential and commercial real estate portfolios, and a loan mix high in residential 1-4 family loans. The allowance for loan losses remains sufficient to cover losses inherent in the loan portfolio.
BRANCH EXPANSION
During the first fiscal quarter of 2006, Harbor Federal expanded its branch network to include two new branches in Sanford and one new branch in Clermont on State Route 50. In the second fiscal quarter, Harbor Federal opened new branch facilities for its Virginia Avenue branch in Fort Pierce. In the first fiscal quarter of 2007, the Bank expects to complete construction and open two branches in Orange County, Florida.
Harbor Federal is located in Fort Pierce, Florida and has 41 offices located in an eight-county area of East Central Florida. Harbor Florida Bancshares, Inc. common stock trades on the NASDAQ National Market under the symbol HARB.
HARBOR FLORIDA BANCSHARES, INC.
September 30, September 30,
2006 2005
(In Thousands)
Selected Consolidated Financial Data:
Total assets $3,266,543 $3,012,185
Loans, gross 2,622,396 2,295,609
Allowance for loan losses 20,862 19,748
Net loans 2,601,534 2,275,861
Loans held for sale 12,782 10,695
Interest-bearing deposits 56,330 23,689
Investment securities 89,582 128,871
Mortgage-backed securities 319,102 388,458
Goodwill 3,591 3,591
Deposits 2,260,107 2,056,307
FHLB advances 615,453 595,473
Stockholders' equity 349,427 320,511
# of common shares outstanding 24,138 23,977
Three months Twelve months
ended ended
September 30, September 30,
2006 2005 2006 2005
(In Thousands Except per Share Data)
Selected Consolidated
Operating Data:
Interest income $53,113 $44,158 $199,166 $164,885
Interest expense 24,489 15,971 83,298 56,065
Net interest income 28,624 28,187 115,868 108,820
Provision for loan losses 487 464 1,559 1,915
Net interest income after
provision for loan losses 28,137 27,723 114,309 106,905
Other Income:
Fees and service charges 4,805 4,639 18,716 16,718
Insurance commissions and fees 794 843 3,514 3,237
Gain on sale of mortgage loans 613 656 2,691 2,289
Gain (loss) on disposal of
premises and equipment, net (11) 476 71 800
Gain on sale of debt
securities - - - 41
Other 63 76 283 354
Total other income 6,264 6,690 25,275 23,439
Other expenses:
Compensation and benefits 8,435 8,330 33,860 31,773
Occupancy 2,557 2,187 9,712 7,823
Other 5,603 4,144 17,476 14,803
Total other expenses 16,595 14,661 61,048 54,399
Income before income taxes 17,806 19,752 78,536 75,945
Income tax expense 7,712 7,740 31,543 29,749
Net income $10,094 $12,012 $46,993 $46,196
Net income per share:
Basic $0.44 $0.52 $2.03 $2.03
Diluted $0.43 $0.51 $2.01 $1.98
Weighted average shares
outstanding
Basic 23,182 22,953 23,102 22,811
Diluted 23,518 23,437 23,416 23,276
Three months ended Twelve months ended
September 30, September 30,
2006 2005 2006 2005
Selected Financial
Ratios:
Performance Ratios:
Return on average
assets (1) 1.24 % 1.61 % 1.49 % 1.61 %
Return on average
stockholders'
equity (1) 11.63 % 15.14 % 14.04 % 15.31 %
Book value per
share $14.48 $13.37 $14.48 $13.37
Net interest
rate spread (1) 3.42 % 3.79 % 3.59 % 3.78 %
Net interest
margin (1) 3.71 % 3.99 % 3.83 % 3.96 %
Non-interest expense
to average assets (1) 2.04 % 1.96 % 1.94 % 1.90 %
Net interest income
to non-interest
expense (1) 1.75 x 1.95 x 1.90 x 2.00 x
Average interest-
earning assets
to average
interest-bearing
liabilities 109.21 % 109.11 % 108.79 % 108.70 %
Efficiency ratio (1) 47.96 % 43.12 % 44.20 % 42.24 %
Asset Quality
Ratios:
Non-performing
assets to total
assets 0.14 % 0.07 % 0.14 % 0.07 %
Allowance for
loan losses to
total loans 0.80 % 0.87 % 0.80 % 0.87 %
Allowance for
loan losses to
classified loans 275.60 % 459.55 % 275.60 % 459.55 %
Allowance for
loan losses to
non-performing
loans 459.16 % 904.99 % 459.16 % 904.99 %
Capital Ratios:
Average shareholders'
equity to average
assets 10.66 % 10.63 % 10.61 % 10.53 %
Shareholders'
equity to assets
at period end 10.70 % 10.64 % 10.70 % 10.64 %
(1) Ratio is annualized.
Three months ended Twelve months ended
September 30, September 30,
2006 2005 2006 2005
(In Thousands)
Selected Average
Balances:
Total assets $3,229,893 $2,962,287 $3,154,338 $2,866,124
Interest
earning assets 3,099,695 2,837,158 3,026,027 2,747,786
Gross loans 2,614,418 2,246,943 2,494,070 2,084,792
Stockholders'
equity 344,408 314,825 334,595 301,764
Deposits 2,196,584 2,001,917 2,141,562 1,951,760
Asset Quality:
Nonaccrual loans 4,544 2,182 4,544 2,182
Net loan
charge-offs
(recoveries) 503 7 445 (31)
Loan Originations:
Residential $127,254 $277,241 $666,185 $964,626
Commercial Real
Estate 53,756 61,613 200,865 269,275
Consumer 43,797 51,594 176,885 192,332
Commercial
Business 11,289 14,539 43,296 62,134
Total loan
originations $236,096 $404,987 $1,087,231 $1,488,367
Loan Sales: $35,416 $45,308 $119,123 $123,531
For the three months ended
Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
2006 2006 2006 2005 2005
(In Thousands Except Per Share Data)
Selected Consolidated
Operating Data:
Interest income $53,113 $51,108 $48,485 $46,458 $44,158
Interest expense 24,489 21,641 19,208 17,959 15,971
Net interest income 28,624 29,467 29,277 28,499 28,187
Provision for loan losses 487 370 349 352 464
Net interest income after
provision for loan losses 28,137 29,097 28,928 28,147 27,723
Other Income:
Fees and service charges 4,805 4,611 4,722 4,578 4,639
Insurance commissions
and fees 794 1,005 1,032 683 843
Gain on sale of mortgage
loans 613 535 665 877 656
Gain (loss) on disposal
of premises and
equipment, net (11) 98 (12) (3) 476
Gain on sale of debt
securities - - - - -
Other 63 88 69 62 76
Total other income 6,264 6,337 6,476 6,197 6,690
Other expenses:
Compensation and
benefits 8,435 8,346 8,550 8,530 8,330
Occupancy 2,557 2,500 2,356 2,298 2,187
Data processing
services 1,082 1,095 1,146 1,060 1,098
Professional fees 1,961 153 470 339 431
Advertising and
promotion 591 698 647 453 650
Other 1,969 2,094 1,846 1,872 1,965
Total other expenses 16,595 14,886 15,015 14,552 14,661
Income before income taxes 17,806 20,548 20,389 19,792 19,752
Income tax expense 7,712 8,056 7,954 7,821 7,740
Net income $10,094 $12,492 $12,435 $11,971 $12,012
Net income per share:
Basic $0.44 $0.54 $0.52 $0.52 $0.52
Diluted $0.43 $0.53 $0.51 $0.51 $0.51
Three months ended Sept 30,
2006 2005
Average Interest & Yield/ Average Interest & Yield/
Balance Dividend Rate Balance Dividend Rate
(Dollars in Thousands)
Analysis of Net
Interest Income:
Assets:
Interest-earning
assets:
Interest-
bearing
deposits $23,161 $303 5.14% $23,937 $205 3.35%
Investment
securities 134,030 1,585 4.72 161,584 1,141 2.82
Mortgage-
backed
securities 328,086 3,517 4.29 404,694 3,829 3.78
Mortgage
loans 2,238,849 40,170 7.16 1,922,884 32,930 6.84
Other loans 375,569 7,538 7.96 324,059 6,053 7.41
Total interest-
earning
assets 3,099,695 53,113 6.83 2,837,158 44,158 6.21
Total
noninterest-
earning
assets 130,198 125,129
Total assets 3,229,893 2,962,287
Liabilities and
Stockholders'
Equity:
Interest-bearing
liabilities
Deposits:
Transaction
accounts $642,936 $1,471 0.91% $822,188 $1,415 0.68%
Savings 191,056 682 1.42 187,936 197 0.42
Official
checks 15,686 - - 22,312 - -
Certificate
accounts 1,346,906 15,285 4.50 969,481 7,706 3.15
Total
deposits 2,196,584 17,438 3.15 2,001,917 9,318 1.85
FHLB
advances 641,739 7,051 4.30 598,285 6,653 4.35
Other
borrowings - - - - - -
Total interest-
bearing
liabilities 2,838,323 24,489 3.41 2,600,202 15,971 2.42
Noninterest-
bearing
liabilities 47,162 47,260
Total
liabilities 2,885,485 2,647,462
Stockholders'
equity 344,408 314,825
Total
liabilities
and
stockholders'
equity $3,229,893 $2,962,287
Net interest
income/
interest rate
spread $28,624 3.42% $28,187 3.79%
Net interest-
earning assets/
net interest
margin $261,372 3.71% $236,956 3.99%
Interest-
earning assets
to interest-
bearing
liabilities 109.21% 109.11%
Twelve months ended September 30,
2006 2005
Average Interest & Yield/ Average Interest & Yield/
Balance Dividend Rate Balance Dividend Rate
(Dollars in Thousands)
Analysis of Net
Interest Income:
Assets:
Interest-earning
assets:
Interest-
bearing
deposits $35,784 $1,591 4.45% $46,454 $1,117 2.40%
Investment
securities 143,563 5,627 3.92 173,747 4,888 2.81
Mortgage-
backed
securities 352,610 13,869 3.93 442,793 16,901 3.82
Mortgage
loans 2,137,756 150,174 7.02 1,783,844 120,208 6.74
Other
loans 356,314 27,905 7.83 300,948 21,771 7.23
Total interest-
earning
assets 3,026,027 199,166 6.58 2,747,786 164,885 6.00
Total
noninterest-
earning
assets 128,311 118,338
Total
assets 3,154,338 2,866,124
Liabilities
and Stockholders'
Equity:
Interest-bearing
liabilities
Deposits:
Transaction
accounts $743,896 $6,314 0.85% $839,707 $4,836 0.58%
Savings 193,975 1,918 0.99 192,115 657 0.34
Official
checks 19,968 - - 22,254 - -
Certificate
accounts 1,183,723 47,107 3.98 897,684 25,282 2.82
Total
deposits 2,141,562 55,339 2.58 1,951,760 30,775 1.58
FHLB
advances 640,084 27,959 4.37 575,925 25,273 4.39
Other
borrowings - - - 275 17 6.26
Total
interest-
bearing
liabilities 2,781,646 83,298 2.99 2,527,960 56,065 2.22
Noninterest-
bearing
liabilities 38,097 36,400
Total
liabilities 2,819,743 2,564,360
Stockholders'
equity 334,595 301,764
Total
liabilities
and
stockholders'
equity $3,154,338 $2,866,124
Net interest
income/
interest rate
spread $115,868 3.59% $108,820 3.78%
Net interest-
earning assets/
net interest
margin $244,381 3.83% $219,826 3.96%
Interest-earning
assets to
interest-
bearing
liabilities 108.79% 108.70%
DATASOURCE: Harbor Florida Bancshares, Inc.
CONTACT: Michael J. Brown, Sr., CEO, +1-772-460-7000, or H. Michael
Callahan, CFO, +1-772-460-7009, or Toni Santiuste, Investor Relations,
+1-772-460-7002, all of Harbor Florida Bancshares, Inc.
Web site: http://www.harborfederal.com/