TIB Financial Corp. Reports Strong Increases in Second Quarter Net Income and Loan Growth25 July 2006
TIB Financial Corp. (Nasdaq: TIBB), parent of TIB Bank, a leading community bank serving the greater Naples-Fort Myers area, South Miami-Dade County and the Florida Keys, today reported second quarter net income and earnings per share of $2.50 million and $0.42 per diluted share compared to $2.18 million and $0.37 in the prior year reflecting increases of 14%. Net income from continuing operations increased to $2.33 million and $0.39 per diluted share compared to $2.00 million and $0.34 in the prior year, reflecting increases of 17% and 15% respectively.
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For the first six months of 2006, net income increased more than 30% to $4.86 million and more than 28% to $0.82 per diluted share from the $3.73 million and $0.64 reported during the first half of 2005. Net income from continuing operations was $4.69 million, an increase of over 40% from the $3.35 million reported for the same period a year ago. On a per diluted share basis, earnings from continuing operations were $0.79 for the first six months of 2006, up 39% over $0.57 for the same period in 2005. Further comparisons made herein are presented on a continuing operations basis and do not include discontinued operations related to the December 2005 sale of the merchant bankcard processing business segment.
TIB Financial also reported total assets of $1.23 billion as of June 30, 2006, representing 14% asset growth since December 31, 2005 and 22% growth from $1.01 billion as of June 30, 2005. Total loans increased 14% and 30% to $1.00 billion at June 30, 2006 compared with $882.4 million at December 31, 2005 and $773.8 million a year ago, respectively. Total deposits increased to $1.02 billion as of June 30, 2006, compared to $920.4 million as of December 31, 2005 and $870.2 million as of June 30, 2005, increases of 11% and 17%, respectively.
"Clearly, higher interest rates are having an impact on economic development and real estate activity in our markets. This has further elevated the intensity of competition for quality loans and lower-cost core deposits, although at the same time there is still ongoing disruption from recent acquisitions of local banks. So the current environment is presenting a variety of challenges and opportunities for TIB Financial," said Edward V. Lett, chief executive officer and president. "We see good continuing growth opportunities in our market areas arising out of our unique primary strategic focus as a middle-market commercial lender."
"We build lasting relationships with local customers whose businesses comprise the infrastructure of the year-round economy, such as physicians, the building trades, law firms, architects, title companies, retail and service companies, municipalities -- all representing a vibrant core market with solid growth opportunities for TIB," said Lett.
"We expect our growth rates may moderate in step with the local economy. Our principal focus continues to be the generation of quality assets, above- average profitability and sustainable growth, while at the same time investing to support future core market opportunities and improvements in service delivery and operating efficiency," said Lett. "We believe we can successfully achieve these dual objectives as we move through the balance of the year."
The increase in net income from continuing operations for the second quarter of 2006 over the same period a year ago resulted primarily from a 24% increase in net interest income to $11.9 million in the current quarter compared to $9.64 million a year ago. The tax equivalent net interest margin of 4.30% for the three months ended June 30, 2006 contracted in comparison with the 4.45% and 4.40% net interest margins reported during the first quarter of 2006 and second quarter of 2005, respectively. The decline in our net interest margin reflects challenging competitive and interest rate environments consistent with industry-wide trends.
Non-interest income, which includes service charges, real estate fees and other operating income, totaled $1.54 million for the second quarter of 2006, representing a 15% decrease from the second quarter of 2005. This decrease is primarily attributable to a lower volume of residential real estate sales in our local markets resulting in a lower volume of mortgage loans originated and sold. Additionally, during the second quarter of 2005, non-interest income included a gain of approximately $267,000 related to the sale of a parcel of land.
The Company continues its investment in growth and expansion balanced by cost containment which resulted in non-interest expense for the second quarter of 2006 of $8.8 million, an increase of 15% compared to $7.6 million for the second quarter of 2005. This increase reflects our continued investment in the people, systems and facilities which contribute to the momentum of our asset and revenue growth. The increase in non-interest expense is primarily attributable to a 13% increase in personnel costs coupled with a 21% increase in other expenses, most significantly, additional costs in collection and recovery efforts associated with maintaining the low loss ratios we have experienced in our indirect loan portfolio as compared to industry ratios. The higher personnel costs include approximately $128,000, or $0.02 per diluted share, of stock-based compensation expense recorded subsequent to the adoption of SFAS No. 123(R) on January 1, 2006.
Two major factors contributed to TIB Financial Corp.'s higher effective income tax rate of 38% for the quarter ended June 30, 2006 as compared to 36% for the second quarter of 2005. The primary factor is the higher overall level of pre-tax income from continuing operations resulting in a higher statutory tax rate. In addition, the lower proportion of tax free interest income to pre-tax income results in the provision for income taxes approaching statutory rates.
Credit quality remained solid during the second quarter of 2006. As of June 30, 2006, the allowance for loan losses totaled $8.4 million, or 0.84% of total loans and 884% of non-performing loans. These figures compare with 0.91% and 1,455%, respectively, as of June 30, 2005. Annualized net charge- offs represented 0.16% of average loans for the quarter ended June 30, 2006, and 0.14% for the quarter ended June 30, 2005. The provision for loan losses increased by 35% as compared to the second quarter of 2005 and 77% compared to the first quarter of 2006. The increase from the prior year second quarter is due principally to the growth and change in composition of the loan portfolio. The increase from the first quarter of 2006 was due to growth of loans, increased quantitative economic risk factors employed in estimating the allowance and a higher level of charge-off activity for indirect loans.
During the second quarter of 2006, the Board of Directors of TIB Financial Corp. declared a quarterly cash dividend of $0.1175 per share on its common stock. The cash dividend was paid on July 10, 2006 to all TIB Financial Corp. common shareholders of record as of June 30, 2006. This dividend, when annualized, represents $0.47 per share.
About TIB Financial Corp.
Headquartered in Naples, Florida, TIB Financial Corp. is a growth-oriented financial services company with approximately $1.2 billion in total assets and 16 full-service banking offices throughout the Florida Keys, Homestead, Naples, Bonita Springs and Fort Myers. The Company's stock is traded on The NASDAQ Stock Market under the symbol TIBB.
TIB Financial Corp., through its wholly-owned subsidiary, TIB Bank, serves the personal and commercial banking needs of local residents and businesses in their market areas. The Bank's experienced bankers are local community leaders, who focus on a relationship-based approach built around anticipating specific customer needs, providing sound advice and making timely decisions. To learn more about TIB Bank, visit http://www.tibbank.com.
Copies of recent news releases, SEC filings, price quotes, stock charts and other valuable information may be found on TIB's investor relations site at http://www.tibfinancialcorp.com. For more information, contact Edward V. Lett, Chief Executive Officer and President at (239) 263-3344, or David P. Johnson, Executive Vice President and Chief Financial Officer, at (305) 453-7710.
Except for historical information contained herein, the statements made in this press release constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve certain risks and uncertainties, including statements regarding the Company's strategic direction, prospects and future results. Certain factors, including those outside the Company's control, may cause actual results to differ materially from those in the "forward-looking" statements, including economic and other conditions in the markets in which the Company operates; risks associated with acquisitions, competition, seasonality and the other risks discussed in our filings with the Securities and Exchange Commission, which discussions are incorporated in this press release by reference.
SUPPLEMENTAL FINANCIAL DATA IS ATTACHED
TIB Financial Corp. and Subsidiaries
Unaudited Consolidated Statements of Income
For the Quarter Ended
(in thousands, except June March December September June
per share data) 30, 31, 31, 30, 30,
2006 2006 2005 2005 2005
Interest and dividend
income $20,822 $18,879 $17,360 $15,503 $14,225
Interest expense 8,873 7,397 6,574 5,409 4,589
Net interest income 11,949 11,482 10,786 10,094 9,636
Provision for loan losses 982 554 649 448 730
Non-interest income:
Service charges on
deposit accounts 576 556 584 601 567
Investment securities
gains, net - - - 1 -
Fees on mortgage
loans sold 357 425 345 461 582
Other income 611 469 460 491 668
Total non-interest income 1,544 1,450 1,389 1,554 1,817
Non-interest expense:
Salaries & employee
benefits 4,909 4,948 4,725 4,529 4,335
Net occupancy expense 1,503 1,482 1,507 1,380 1,344
Other expense 2,342 2,143 2,349 2,282 1,929
Total non-interest expense 8,754 8,573 8,581 8,191 7,608
Income before income tax
expense 3,757 3,805 2,945 3,009 3,115
Income tax expense 1,428 1,442 1,047 1,060 1,118
Income from continuing
operations 2,329 2,363 1,898 1,949 1,997
Income from discontinued
operations, net of tax 167 - 4,141 105 187
NET INCOME $2,496 $2,363 $6,039 $2,054 $2,184
BASIC EARNINGS PER SHARE:
Continuing operations $0.40 $0.41 $0.33 $0.34 $0.35
Discontinued
operations 0.03 - 0.72 0.02 0.03
Basic earnings per
share $0.43 $0.41 $1.05 $0.36 $0.38
DILUTED EARNINGS PER
SHARE:
Continuing operations $0.39 $0.40 $0.32 $0.33 $0.34
Discontinued
operations 0.03 - 0.70 0.02 0.03
Diluted earnings per
share $0.42 $0.40 $1.02 $0.35 $0.37
Selected Financial Data (Dollars in thousands)
Selected Ratios and As Of or For the Quarter Ended
Statistics
June March December September June
30, 31, 31, 30, 30,
2006 2006 2005 2005 2005
Real estate
mortgage loans:
Commercial $491,258 $467,011 $451,969 $428,314 $411,504
Residential 82,591 76,809 76,003 73,474 75,540
Farmland 22,418 7,005 4,660 3,991 4,550
Construction
and vacant
land 171,000 155,939 125,207 106,015 85,134
Commercial and
agricultural
loans 82,127 81,871 80,055 74,202 62,864
Indirect auto
dealer loans 126,469 120,648 118,018 113,639 108,178
Home equity loans 17,771 17,034 17,232 17,220 16,056
Other consumer
loans 9,147 9,124 9,228 9,428 10,022
Total loans $1,002,781 $935,441 $882,372 $826,283 $773,848
Gross loans $1,004,307 $937,092 $884,024 $828,081 $775,759
Net loan
charge-offs $399 $257 $256 $308 $258
Allowance for
loan losses $8,426 $7,843 $7,546 $7,153 $7,013
Allowance for loan
losses/total loans 0.84% 0.84% 0.86% 0.87% 0.91%
Non-performing
loans $953 $1,374 $956 $532 $482
Allowance for loan
losses/
non-performing
loans 884.16% 570.82% 789.33% 1,344.55% 1,454.98%
Non performing
loans/
gross loans 0.09% 0.15% 0.11% 0.06% 0.06%
Annualized net
charge-offs/
average loans 0.16% 0.11% 0.12% 0.15% 0.14%
Total
interest-
earning
assets $1,151,563 $1,102,274 $1,000,072 $984,994 $941,373
Other real
estate
owned $- $- $190 $190 $190
Intangibles, net
of accumulated
amortization $956 $1,028 $1,100 $1,172 $1,247
Interest bearing
deposits:
NOW accounts $140,131 $140,669 $104,641 $88,570 $85,479
Money market 172,328 182,951 167,072 164,007 179,815
Savings
deposits 52,637 48,649 47,091 47,638 49,884
Time deposits 477,921 451,717 431,804 446,309 341,703
Non-interest
bearing
deposits 176,271 209,040 169,816 166,821 213,328
Total deposits $1,019,288 $1,033,026 $920,424 $913,345 $870,209
Tax equivalent net
interest margin 4.30% 4.45% 4.37% 4.37% 4.40%
Return on average
assets* 0.83% 0.85% 2.28% 0.82% 0.91%
Return on average
equity* 12.52% 12.18% 32.90% 11.45% 12.62%
Non-interest
expense/tax
equivalent net
interest income
and non-interest
income 64.44% 65.86% 70.01% 69.84% 65.98%
Average diluted
shares 5,930,034 5,919,517 5,929,496 5,914,540 5,885,595
End of quarter
shares
outstanding 5,841,420 5,834,038 5,792,598 5,761,746 5,712,264
Total equity $80,526 $79,677 $77,524 $72,011 $70,740
Book value per
common share $13.79 $13.66 $13.38 $12.50 $12.38
Total assets $1,232,022 $1,186,838 $1,076,070 $1,053,894 $1,012,885
* Calculation includes discontinued operations when applicable.
Quarterly average balances and yields (Dollars in thousands)
Quarter Ended Quarter Ended
June 30, 2006 June 30, 2005
Average Average
Balances Interest** Yield** Balances Interest** Yield**
Loans $970,639 $19,013 7.86% $745,462 $12,934 6.96%
Investments 129,658 1,629 5.04% 84,148 948 4.52%
Interest bearing
deposits 543 7 5.17% 295 2 2.72%
Federal Home Loan
Bank stock 3,907 54 5.54% 2,782 31 4.47%
Fed funds sold 17,334 210 4.86% 53,013 389 2.94%
Total interest
earning assets 1,122,081 20,913 7.48% 885,700 14,304 6.48%
Non-interest
earning
assets 79,528 73,989
Total assets $1,201,609 $959,689
Interest
bearing
liabilities:
NOW $145,203 $952 2.63% $93,953 $207 0.88%
Money market 173,289 1,498 3.47% 175,426 927 2.12%
Savings 51,247 91 0.71% 49,604 63 0.51%
Time 470,429 5,223 4.45% 322,523 2,699 3.36%
Total interest-
bearing
deposits 840,168 7,764 3.71% 641,506 3,896 2.44%
Short-term
borrowings
and FHLB
advances 59,851 662 4.44% 41,042 303 2.96%
Long-term
borrowings 18,756 447 9.56% 17,000 391 9.23%
Total interest
bearing
liabilities 918,775 8,873 3.87% 699,548 4,590 2.63%
Non-interest
bearing
deposits 187,523 178,936
Other liabilities 15,369 11,770
Shareholders'
equity 79,942 69,435
Total liabilities
and shareholders'
equity $1,201,609 $959,689
Net interest
income and
spread $12,040 3.61% $9,714 3.85%
Net interest margin 4.30% 4.40%
** Presented on a fully tax equivalent basis.
Year to date average balances and yields (Dollars in thousands)
Six Months Ended Six Months Ended
June 30, 2006 June 30, 2005
Average Average
Balances Interest** Yield** Balances Interest** Yield**
Loans $942,339 $36,342 7.78% $716,103 $24,246 6.83%
Investments 119,540 2,928 4.94% 80,943 1,823 4.54%
Interest bearing
deposits 470 11 4.72% 463 6 2.61%
Federal Home Loan
Bank stock 3,277 90 5.54% 2,669 58 4.38%
Fed funds sold 22,204 506 4.60% 43,732 598 2.76%
Total interest
earning assets 1,087,830 39,877 7.39% 843,910 26,731 6.39%
Non-interest
earning assets 78,154 73,883
Total assets $1,165,984 $917,793
Interest
bearing
liabilities:
NOW $139,833 $1,687 2.43% $92,846 $385 0.84%
Money market 170,410 2,760 3.27% 167,087 1,560 1.88%
Savings 50,270 166 0.67% 48,079 115 0.48%
Time 456,887 9,775 4.31% 303,483 4,937 3.28%
Total interest-
bearing
deposits 817,400 14,388 3.55% 611,495 6,997 2.31%
Short-term
borrowings
and FHLB
advances 49,195 1,028 4.21% 40,431 551 2.75%
Long-term
borrowings 17,883 854 9.63% 17,104 774 9.13%
Total interest
bearing
liabilities 884,478 16,270 3.71% 669,030 8,322 2.51%
Non-interest
bearing
deposits 185,213 168,787
Other liabilities 16,965 11,166
Shareholders'
equity 79,328 68,810
Total liabilities
and shareholders'
equity $1,165,984 $917,793
Net interest income and
spread $23,607 3.68% $18,409 3.88%
Net interest margin 4.38% 4.40%
** Presented on a fully tax equivalent basis.
Source: prnewswire
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