Vail Banks (NASDAQ:VAIL)
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Vail Banks Announces Second Quarter Results
AVON, Colo., July 19 /PRNewswire-FirstCall/ -- Vail Banks, Inc. (NASDAQ:VAIL)
today reported diluted net income per share of $0.18 for the second quarter
2005 compared to $0.11 for the second quarter of 2004 and $0.16 for the first
quarter 2005. Net income for the quarter was $971,000 versus $574,000 in the
second quarter of 2004 and $885,000 in the first quarter 2005.
"Highlights of the quarter were continued high credit quality and new loan
originations," commented Gary Judd, CEO of Vail Banks, Inc. "Our ability to
improve credit quality, while increasing loan outstandings by $82 million
compared to the second quarter of 2004, is a very positive trend for the
Company. Asset quality continues to be strong with $50,000 in net recoveries
for the quarter compared to net charge-offs of $35,000 for the same period last
year. Now, three of the past four quarters have shown a net recovery.
Additionally, we ended the quarter with no non-accrual loans and only $8,000 in
loans Past Due Ninety Days and Accruing. This represents unprecedented strong
credit quality for the Company. No loan loss provision was justified this
quarter as the Company's loan loss reserve model for estimated reserves
resulted in a reversal of $36,000 from the Company's allowance for loan
losses."
"The average growth in loans of $82.0 million since the second quarter of last
year is a 25 percent increase. Average earning assets are up 12 percent since
the second quarter 2004, or $60.0 million, while total average assets have
increased 10 percent or $62.1 million over the same period. We have also
improved our earning asset mix in this period as well," indicated Mr. Judd.
"Interest and fee income on loans is up 34 percent or $2.1 million from the
second quarter of 2004. This increase, coupled with the improved margin
resulting from strong core deposit growth and increases in short-term rates,
increased net interest income 30 percent or $1.6 million for the second quarter
2005 compared to the second quarter of 2004. Over this same period, net
interest margin has increased from 4.38 percent to 5.00 percent on a fully tax
equivalent basis. Return on tangible equity has increased from 10.32 percent
at June 2004 to 15.69 percent. The Company's balance sheet remains asset
sensitive and, therefore, benefits from the actions of the Federal Reserve Bank
to increase short-term interest rates," commented Mr. Judd.
Deposit growth during the quarter contributed to maintaining a strong liquidity
position at June 30, 2005. Year-to-date, average deposits increased by $25.2
million. Average core deposits increased $35.3 million or 9.5 percent
year-to-date. Federal funds sold increased $21.6 million year-to-date, or 125
percent, while investment securities decreased 7.5 percent or $7.8 million
year-to-date.
Total non-interest income increased $106,000 or 7 percent from the previous
quarter. $65,000 of this increase represents higher mortgage fees from
improved origination volumes. Other components of non-interest income remain
quite stable.
Non-interest expenses increased $109,000 during the second quarter over the
previous quarter. $43,000 of this increase resulted from increased maintenance
costs on Company-owned and occupied real estate. Mortgage incentive
compensation also increased as a result of increased origination volume and was
offset with savings in salaries and employee benefits due to decreased health
insurance costs. "We also invested considerable time and resources to support
the April 5, 2005 launch of WestStar Bank's new brand platform -- WestStar
Bank. Expect Action," stated Mr. Judd.
On July 8, 2005, the Company commenced operations in a new branch in Fruita,
just to the west of Grand Junction. "We are very excited to expand our
presence in one of Colorado's fastest growing markets. Rick Brown, Regional
President of our Northwest Region, will lead our growth initiative in the
Fruita market," commented Mr. Judd.
At its meeting on July 18, 2005 the Board of Directors of Vail Banks declared a
regular quarterly dividend of $0.07 per share payable August 12, 2005 to
shareholders of record on July 29, 2005.
Vail Banks, Inc., through its subsidiary WestStar Bank, has 24 banking offices
in 19 communities in Colorado, including Aspen, Avon, Breckenridge, Cedaredge,
Delta, Denver, Dillon, Edwards, Estes Park, Frisco, Fruita, Glenwood Springs,
Granby, Grand Junction, Gypsum, Montrose, Norwood, Telluride and Vail.
This news release contains forward-looking statements, as defined by federal
securities laws, including statements about financial outlook and business
environment. These statements are provided to assist in the understanding of
future financial performances and such performance involves risks and
uncertainties that may cause actual results to differ materially from those in
such statements. Any such statements are based on current expectations and
involve a number of risks and uncertainties. For a discussion of factors that
may cause such forward-looking statements to differ materially from actual
results, please refer to the section entitled "Certain Factors Affecting
Forward-Looking Statements" in Vail Banks, Inc.'s annual report filed on Form
10-K with the Securities and Exchange Commission.
Vail Banks, Inc.
Financial Highlights
(in thousands, except share data)
(unaudited)
Three Months Ended
June 30, Mar. 31, Dec 31, Sept. 30, June 30,
2005 2005 2004 2004 2004
Earnings and
Performance
Net income $971 $885 $643 $559 $574
Diluted net
income per share 0.18 0.16 0.12 0.10 0.11
Return on assets 0.60% 0.55% 0.41% 0.37% 0.39%
Return on equity 6.41 5.95 4.30 3.79 3.95
Net interest
margin (FTE) 5.00 5.11 4.95 4.68 4.38
Efficiency ratio 84 84 89 87 89
Return on tangible
equity 15.69 14.86 10.93 9.87 10.32
Asset Quality Ratios
Net charge-offs
(recoveries) to
average loans (0.05)% (0.03)% 0.03% (0.05)% 0.04%
Allowance for loan
losses to loans 0.95 0.99 0.96 0.97 0.97
Allowance for loan
losses to
non-performing
loans (1) NA 287 1,657 460 217
Non-performing
assets to
loan-related
assets 0.14 0.54 0.25 0.37 0.67
Risk assets to
loan-related
assets (2) 0.14 0.80 0.25 0.37 0.67
Capital Ratios
Equity to assets
at period end 9.44% 8.81% 9.44% 9.50% 9.82%
Tangible equity
to assets at
period end 3.93 3.55 3.75 3.72 3.70
Leverage ratio 8.12 8.01 8.06 8.28 7.93
Tier 1 capital
ratio 10.70 10.14 10.52 10.88 11.35
Total capital
ratio 12.05 11.62 12.02 12.47 13.22
Other Information
at Period End
Book value
per share $11.05 $10.84 $11.25 $11.19 $10.89
Tangible book
value per share 4.61 4.37 4.46 4.38 4.10
Closing market
price 14.64 13.13 13.18 13.08 12.44
Shares
outstanding 5,604,235 5,578,824 5,326,504 5,310,754 5,326,330
Full time
equivalent
associates 254 243 249 252 238
Banking offices 23 23 23 23 22
(1) Calculation is not applicable (NA) when non-performing loans equal
zero.
(2) Risk assets are non-performing assets plus loans 90 days or more
past due and accruing.
Vail Banks, Inc.
Balance Sheet
(in thousands, except share data)
June 30, December 31, Percent
Assets 2005 2004 Change
(unaudited)
Cash and due from banks $17,887 18,360 (3)%
Federal funds sold 38,865 17,295 125
Investment securities
Available for sale 96,046 103,779 (7)
Held to maturity 186 246 (24)
Investments in Trust I
and Trust II 743 743 0
Loans held for sale 1,200 7,110 (83)
Gross loans 421,813 407,629 3
Allowance for loan losses (4,003) (3,895) 3
Net deferred loan fee income (1,098) (1,276) (14)
Investment in bank stocks 4,508 4,457 1
Premises and equipment, net 38,751 38,721 0
Goodwill, net 35,970 35,970 0
Other intangible assets, net 139 159 (13)
Other assets 5,193 5,297 (2)
$656,200 634,595 3%
Liabilities and
Shareholders' Equity
Liabilities
Deposits $519,908 500,444 4%
Securities sold under
agreements to repurchase 17,134 894 1,817
Federal Home Loan
Bank advances 27,132 42,444 (36)
Subordinated notes to
Trust I and Trust II 24,743 24,743 0
Other liabilities 2,922 3,605 (19)
Total liabilities 591,839 572,130 3
Minority interest 2,444 2,563 (5)
Shareholders' equity
Common equity 62,582 60,520 3
Accumulated other
comprehensive loss (665) (618) 8
Total shareholders'
equity 61,917 59,902 3
$656,200 634,595 3%
Loan Mix at Period End
Commercial, industrial,
and land $224,899 239,946 (6)%
Real estate --
construction 120,942 92,705 30
Real estate --
mortgage 69,470 69,164 0
Consumer 6,502 5,814 12
Total gross loans $421,813 407,629 3%
Deposit Mix at Period End
Interest bearing checking $89,035 92,279 (4)%
Savings 31,845 31,261 2
Money market 169,420 132,388 28
CDs under $100,000 47,600 51,541 (8)
CDs $100,000 and over 66,807 72,848 (8)
Interest bearing
deposits 404,707 380,317 6
Non-interest bearing
checking 115,201 120,127 (4)
Total deposits $519,908 500,444 4%
Shares Outstanding
at Period End 5,604,235 5,326,504 5%
Vail Banks, Inc.
Statement of Income by Quarter
(in thousands, except share data)
(unaudited)
Three Months Ended
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
2005 2005 2004 2004 2004
Interest income
Interest on
loans $7,410 $6,705 $6,623 $5,829 $5,223
Fees on loans 833 909 1,028 875 943
Interest on
investment
securities 1,028 1,371 1,056 1,134 1,045
Interest on
federal funds
sold and
short-term
investments 219 192 21 25 85
Investments in
Trust I and
Trust II 19 19 19 19 19
Total interest
income 9,509 9,196 8,747 7,882 7,315
Interest expense
Deposits 1,623 1,329 1,200 1,028 1,005
Borrowings 241 364 379 340 345
Federal funds
purchased and
securities sold
under agreements
to repurchase 98 25 19 3 1
Subordinated notes
to Trust I and
Trust II 630 631 631 631 630
Total interest
expense 2,592 2,349 2,229 2,002 1,981
Net interest income 6,917 6,847 6,518 5,880 5,334
Provision for loan
losses (36) 65 180 323 43
Net interest income
after provision 6,953 6,782 6,338 5,557 5,291
Non-interest income
Deposit related 645 620 689 717 692
Mortgage broker
fees 459 394 812 756 775
Gain (loss) on
sale of fixed
assets 12 (8) (1) (11) 103
Other 560 564 524 781 522
Total non-
interest
income 1,676 1,570 2,024 2,243 2,092
Non-interest expense
Salaries and
employee benefits 4,109 4,195 4,375 4,096 3,994
Occupancy 1,044 999 1,050 1,000 846
Furniture and
equipment 650 683 658 608 611
Amortization of
intangible assets 10 10 10 10 10
Other 1,397 1,214 1,521 1,338 1,158
Total non-
interest
expense 7,210 7,101 7,614 7,052 6,619
Income before taxes 1,419 1,251 748 748 764
Income tax expense 448 366 105 189 190
Net Income $971 $885 $643 $559 $574
Diluted net income
per share $0.18 $0.16 $0.12 $0.10 $0.11
Vail Banks, Inc.
Statement of Income
(in thousands, except share data)
Three months ended Percent Six Months ended Percent
June 30, Change June 30, Change
2005 2004 2005 2004
Interest income
Interest on
loans $7,410 5,223 42% 14,115 10,513 34%
Fees on loans 833 943 (12) 1,742 1,717 1
Interest on
investment
securities 1,028 1,045 (2) 2,399 1,818 32
Interest on
federal funds
sold and
short-term
investments 219 85 158 411 289 42
Investments in
Trust I and
Trust II 19 19 0 38 38 0
Total
interest
income 9,509 7,315 30 18,705 14,375 30
Interest expense
Deposits 1,623 1,005 61 2,952 2,024 46
Borrowings 241 345 (30) 605 717 (16)
Federal funds
purchased and
securities sold
under agreements
to repurchase 98 1 0 123 2 6,050
Subordinated
notes to
Trust I
and Trust II 630 630 0 1,261 1,261 0
Total
interest
expense 2,592 1,981 31 4,941 4,004 23
Net interest
income 6,917 5,334 30 13,764 10,371 33
Provision for
loan losses (36) 43 (184) 29 201 (86)
Net interest
income after
provision 6,953 5,291 31 13,735 10,170 35
Non-interest
income 1,676 2,092 (20) 3,246 5,936 (45)
Non-interest
expense 7,210 6,619 9 14,311 13,135 9
Income before
taxes 1,419 764 86 2,670 2,971 (10)
Income taxes 448 190 136 814 1,217 (33)
Net Income $971 574 69% 1,856 1,754 6%
Diluted net
income per
share $0.18 0.11 64% 0.34 0.32 6
Weighted average
shares
outstanding -
diluted 5,335,764 5,417,827 (2) 5,403,438 5,409,908 0
Profitability
Ratios
Return on
assets 0.58% 0.39% 0.57% 0.60%
Return on
equity 6.41 3.95 6.12 6.04
Net interest
margin (FTE) 5.00 4.38 5.07 4.28
Net
chargeoffs /
(recoveries) (0.05) 0.04 (0.04) 0.21
Efficiency
ratio 84 89 84 81
Average
Balances
Assets $654,444 592,343 10% 652,797 592,254 10%
Earning
assets 561,978 501,982 12 558,089 500,313 12
Loans 411,495 329,508 25 406,943 322,088 26
Deposits 523,298 468,618 12 520,309 467,368 11
Shareholders'
equity 60,937 58,453 4 60,611 58,487 4
Vail Banks, Inc.
Supplemental Information
(in thousands)
(unaudited)
Three Months Ended
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
2005 2005 2004 2004 2004
Average Balances
Assets $654,444 $651,133 $630,212 $604,689 $592,343
Earning assets 561,978 554,155 534,933 511,363 501,982
Loans 411,495 402,340 394,763 362,585 329,508
Deposits 523,298 517,286 498,080 480,902 468,618
Interest bearing
liabilities 468,261 465,834 455,340 436,601 430,525
Shareholders'
equity 60,937 60,282 59,477 58,621 58,453
Average Deposit Mix
Interest bearing
checking 93,380 93,637 97,081 99,279 95,259
Savings 31,787 31,560 33,013 31,893 30,300
Money market 162,355 147,308 133,006 124,130 126,845
CDs under
$100,000 48,993 50,663 52,144 51,943 53,141
CDs $100,000
and over 67,114 74,850 74,070 69,965 64,829
Interest bearing
deposits 403,629 398,018 389,314 377,210 370,374
Non-interest
bearing checking 119,669 119,268 108,766 103,692 98,244
Total deposits $523,298 $517,286 $498,080 $480,902 $468,618
Net Interest
Margin Analysis
Net interest
income $6,917 $6,847 $6,518 $5,880 $5,334
Fully taxable
equivalent
adjustment 76 140 133 132 134
Net interest
income (FTE) 6,993 6,987 6,651 6,012 5,468
Yields (FTE)
Loans 8.06% 7.67% 7.71% 7.36% 7.53%
Investment
securities 3.76 5.15 3.63 3.59 3.53
Other earning
assets 3.09 2.77 3.26 2.39 1.16
Total earning
assets 6.86 6.83 6.60 6.23 5.97
Cost of funds
Interest bearing
deposits 1.62 1.35 1.23 1.08 1.09
Other interest
bearing
liabilities 6.03 6.10 6.20 6.52 6.53
Total interest
bearing
liabilities 2.23 2.05 1.95 1.82 1.85
Total interest
expense to
earning assets 1.85 1.71 1.65 1.55 1.59
Net interest
margin (FTE) 5.00% 5.11% 4.95% 4.68% 4.38%
Vail Banks, Inc.
Asset Quality
(in thousands)
(unaudited)
Three Months Ended
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
2005 2005 2004 2004 2004
Asset Quality
Nonaccrual loans $0 $1,391 $235 $814 $1,555
Restructured loans 0 0 0 0 0
Total non-
performing loans 0 1,391 235 814 1,555
Foreclosed
properties 589 802 785 606 788
Total non-
performing assets 589 2,193 1,020 1,420 2,343
90+ days past due
and accruing 8 1,053 17 3 8
Total risk assets $597 $3,246 $1,037 $1,423 $2,351
Allowance for
Loan Losses
Beginning Balance $3,989 $3,895 $3,742 $3,369 $3,361
Provision for
loan losses (36) 65 180 323 43
Loan charge-offs 1 24 63 149 120
Loan recoveries 51 53 36 199 85
Net charge-offs
(recoveries) (50) (29) 27 (50) 35
Ending Balance $4,003 $3,989 $3,895 $3,742 $3,369
Net Charge-Offs
(Recoveries) to
Average Loans (0.05)% (0.03)% 0.03% (0.05)% 0.04%
Loans Past Due
30 Days or More
and Accruing 0.20 0.31 0.32 0.15 0.24
DATASOURCE: Vail Banks, Inc.
CONTACT: Raymond E. Verlinde, Sr. EVP/Chief Administrative Officer,
+1-970-328-9710, , or Brady T. Burt, EVP/Chief
Financial Officer, +1-970-328-9711, , both of Vail
Banks, Inc.
Web site: http://www.weststarbank.com/