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Columbus, Indiana -- October 29, 2004 -- Irwin Financial Corporation (NYSE: IFC), a bank holding company focusing on mortgage banking, small business and home equity lending, today announced net income for the third quarter of 2004 of $17.2 million or $0.57 per diluted share. This compares with net income of $31.1 million or $1.03 per diluted share during the same period in 2003. The decline is largely attributable to a significant deterioration in market conditions for mortgage banking operations. Year-to-date earnings have totaled $55.5 million or $1.84 per diluted share, compared with $56.1 million or $1.89 per share during the same period in 2003. "Conditions in the first mortgage market in the third quarter prevented our balanced revenue model from performing as well as we would like it to in the near term. The decline in mortgage interest rates during the quarter was not sufficient to improve originations or margins meaningfully. At the same time, the decline in rates reduced the value of our servicing portfolio in a manner that is atypical during a period of slowing production. On the positive side, we continued to see good growth in commercial lending and core deposits, as well as significantly increased year-over-year profitability in our home equity and commercial finance lines of business driven principally by improvements in credit quality. These portfolio businesses, which are another important part of our balanced revenue model and are central to our future profitability, enabled us to produce more balanced results for the third quarter, notwithstanding difficult conditions in first mortgage banking markets," said Will Miller, Chairman and CEO. "The interest rate environment in the third quarter was particularly difficult for mortgage banking," Miller continued, "with two 25-basis point Fed Funds rate increases during the quarter combined with a drop in longer-term mortgage rates of about 40 basis points. We have been actively working to align our mortgage production operations with the current rate environment. "We are no longer confident interest rates will rise in the fourth quarter as much as we previously expected, based on economists' forecasts and the forward yield curves earlier in the year. If interest rates do not rise, we expect our revenues and thus net income, will be lower in the fourth quarter than in the third and our net income for the year will be below the results we produced in 2003. As I noted, however, we believe we are in a transitory period for mortgage banking. We expect servicing values and margins in the business will normalize in the long run as we and other mortgage companies adjust our cost structures to lower production levels. We expect these improvements, coupled with the good growth we have had in our credit portfolios in 2004, should cause net income in 2005 to return to levels commensurate with our historic performance."
Consolidated Results Financial highlights for the period include:
Consolidated Results
3Q 3Q Percent 2Q Percent
$ in millions, except EPS 2004 2003 Change 2004 Change
Net Interest Income After
Provision for Losses $64 $61 5% $62 2%
Non-Interest Income 68 105 -35 76 -11
Total Consolidated Net Revenues 132 166 -20 139 -5
Non-Interest Expense 102 114 -10 108 -5
Net Income 17 31 -45 18 -4
Earning per Share (diluted) 0.57 1.03 -45 0.60 -5
Loans and Leases 3,402 3,139 8 3,203 6
Mortgage Loans Held for Sale 971 1,020 -5 1,196 -19
Deposits 3,486 3,019 15 3,361 4
Shareholders' Equity 486 414 17 469 4
Total Risk-Based Capital Ratio 14.6% 14.8% 14.8%
Return on Average Equity 14.1 30.4 15.4
As noted in the table above, net revenues declined on both a sequential quarter basis and compared with the year earlier quarter. The majority of the declines in each period occurred in our mortgage banking segment. On a sequential quarter basis, mortgage banking revenues dropped $6 million or 9 percent, principally reflecting reduced recovery of mortgage servicing impairment, net of hedge costs. Our loan and lease portfolio totaled $3.4 billion as of September 30, 2004, up $200 million or 6 percent from the end of the second quarter, and eight percent from a year earlier. Our first and second mortgage loans held for sale totaled $1.0 billion at quarter end, down 19 percent from June 30. Deposits totaled $3.5 billion at September 30, up 15 percent from a year earlier. Average core deposits of $2.1 billion rose at an annualized rate of 36 percent during the third quarter and have increased $437 million or 26 percent during the past year. We had $486 million or $17.16 per share in common shareholders' equity as of September 30, 2004. At quarter end, our Tier 1 Leverage Ratio and Total Risk-based Capital Ratio were 11.2 percent and 14.6 percent, respectively, compared to 11.5 percent and 14.8 percent as of June 30, 2004. Our consolidated loan and lease loss provision totaled $2 million, unchanged from the second quarter of 2004. Our provision, reflected continued improvement in overall credit quality and a $3.5 million reversal in loss provision related to a reclassification at fair value of a $150 million portfolio of home equity loans to held-for-sale status, pending an October secondary market delivery. Absent this re-classification, provision in the third quarter would have been $5 million, compared to actual charge-offs of $4 million. Nonperforming assets (including other real estate owned of $6 million) were $43 million or 0.79 percent of total assets as of September 30, 2004, up from $40 million or 0.74 percent of total assets at the end of June. The increase principally reflects a series of single vendor-based leases in our commercial finance segment on which we believe we are adequately reserved. Our on-balance sheet allowance for loan and lease losses totaled $48 million as of September 30, down $6 million from the end of June. The allowance declined during the quarter largely as a result of the re-classification of home equity loans to loans held for sale where they are now carried at fair value. The ratio of on-balance sheet allowance for loan and lease losses to nonperforming loans and leases totaled 136 percent at September 30, compared to 163 percent at June 30. Net charge-offs totaled $4 million, unchanged from the second quarter. The amount of 30-day and greater delinquencies which rose slightly in all on balance sheet credit portfolios-more rapidly in our older, off balance sheet portfolio, the ratio of charge-offs to average loans and leases, and the allowance for loans and lease losses to total loans and leases for our principal credit-related portfolios are shown below: Home Equity Home Equity
Commercial Lending On- Lending Off- Commercial
Banking Balance Sheet Balance Sheet(1) Finance
30-Day and
Greater
Delinquencies
* September 30,
2004 0.24% 1.87% 10.78% 0.95%
* June 30, 2004 0.19 1.45 9.92 0.88
* March 31, 2004 0.29 2.46 8.65 0.86
* December 31,
2003 0.36 2.91 10.18 0.87
* September 30,
2003 0.72 3.29 9.55 1.10
Annualized Charge-
offs
* 3Q04 0.11% 0.68% 3.19% 1.47%
* 2Q04 0.15 1.08 4.25 0.87
* 1Q04 0.24 2.61 6.28 1.12
* 4Q03 0.30 3.03 7.13 1.19
* 3Q03 0.20 2.45 6.23 1.97
Allowance to Loans
and Leases
* September 30,
2004 1.02% 1.97% 5.97% 2.05%
* June 30, 2004 1.06 3.16 8.12 2.30
* March 31, 2004 1.10 4.08 10.25 2.29
* December 31,
2003 1.11 4.22 10.47 2.47
* September 30,
2003 1.12 4.17 11.16 2.51
1. Off-balance sheet loans underlie our residual interests. These loans have been treated as sold under SFAS 140 and have a reserve methodology that reflects life-of-account loss expectations, whereas our policy for on-balance sheet loans requires that we hold loss reserve coverage sufficient for potential losses inherent in the portfolio at the balance sheet date. The figures for reserves in the column labeled "Home Equity Lending Off-Balance Sheet," therefore, are not balance sheet accounts of "allowance for loan and lease losses," but instead represent the percentage of undiscounted losses assumed in our residual valuation relative to the underlying loan balances supporting the residual interests.
Net income by line of business is shown below, with additional detail available in the segment summary tables at the end of this release and in the Form 10-Q. 3Q 3Q Percent 2Q Percent
Net Income ($ in millions) 2004 2003 Change 2004 Change
Mortgage Banking $4.1 $25.0 -84% $5.5 -27%
Commercial Banking 5.5 6.0 -8 5.8 -4
Home Equity 8.3 2.6 216 8.9 -7
Commercial Finance 1.1 0.0 NM 1.3 -16
Venture Capital 0.0 0.1 -56 -0.2 NM
Other Segments, Including
Parent -1.8 -2.6 32 -3.4 47
Consolidated Net Income 17.2 31.1 -45 17.9 -4
More complete details on operations of each of our lines of business can be found in our Form 10-Q, which is being filed today with the SEC. About Irwin Financial Irwin® Financial Corporation (http://www.irwinfinancial.com) is an interrelated group of specialized financial services companies organized as a bank holding company, with a history tracing to 1871. The Corporation, through its major subsidiaries -- Irwin Mortgage Corporation, Irwin Union Bank, Irwin Home Equity Corporation, Irwin Commercial Finance, and Irwin Ventures -- provides a broad range of financial services to consumers and small businesses in selected markets in the United States and Canada. About Forward-Looking Statements This press release contains forward-looking statements and estimates that are based on management's expectations, estimates, projections, and assumptions. These statements and estimates include but are not limited to earnings estimates and projections of financial performance and profitability, and projections of business strategies and future activities. These statements involve inherent risks and uncertainties that are difficult to predict and are not guarantees of future performance. Words that convey our beliefs, views, expectations, assumptions, estimates, forecasts, outlook and projections or similar language, or that indicate events we believe could, would, should, may or will occur (or might not occur) or are likely (or unlikely) to occur, and similar expressions, are intended to identify forward-looking statements, which may include, among other things:
We undertake no obligation to update publicly any of these statements in light of future events, except as required in subsequent periodic reports we file with the Securities and Exchange Commission. Actual future results may differ materially from what is projected due to a variety of factors including: potential changes in, volatility and relative movement (basis risk) of interest rates, which may affect consumer demand for our products and the success of our interest rate risk management strategies; staffing fluctuations in response to product demand; the relative profitability of our lending operations; the valuation and management of our servicing and derivatives portfolios, including short-term swings in valuation of such portfolios due to quarter-end movements in secondary market interest rates which are inherently volatile; borrowers' refinancing opportunities, which may affect the prepayment assumptions used in our valuation estimates and which may affect loan demand; unanticipated deterioration in the credit quality of our loan assets; unanticipated deterioration in or changes in estimates of the carrying value of our other assets, difficulties in delivering loans to the secondary market as planned; difficulties in expanding our business and obtaining funding as needed; competition from other financial service providers for experienced managers as well as for customers; changes in the value of companies in which we invest; changes in variable compensation plans related to the performance and valuation of lines of business where we have compensation systems tied to line of business performance; unanticipated outcomes in litigation; legislative or regulatory changes, including changes in tax laws or regulations, changes in the interpretation of regulatory capital rules, changes in consumer or commercial lending rules or rules affecting corporate governance, and the availability of resources to address these rules; changes in applicable accounting policies or principles or their application to our businesses; or governmental changes in monetary or fiscal policies. IRWIN FINANCIAL CORPORATION
Selected Consolidated Financial Highlights
($'s in thousands, except per share data)
Q3-2004 Q3-2003 $ Change % Change Q2-2004
Net Interest Income $65,660 $75,633 ($9,973) (13.2) $64,256
Provision for Loan
and Lease Losses (1,898) (14,778) 12,880 87.2 (1,794)
Noninterest Income 67,935 104,663 (36,728) (35.1) 76,106
Total Net
Revenues 131,697 165,518 (33,821) (20.4) 138,568
Noninterest Expense 102,492 114,406 (11,914) (10.4) 107,855
Income before Income
Taxes 29,205 51,112 (21,907) (42.9) 30,713
Income Taxes 12,011 19,994 (7,983) (39.9) 12,769
Net Income $17,194 $31,118 (13,924) (44.7) $17,944
Dividends on Common
Stock $2,266 $1,959 $307 15.7 $2,262
Diluted Earnings Per
Share (31,266
Weighted Average
Shares Outstanding) $0.57 $1.03 (0.46) (44.7) $0.60
Basic Earnings Per
Share (28,293
Weighted Average
Shares Outstanding) 0.61 1.11 (0.50) (45.0) 0.64
Dividends Per Common
Share 0.08 0.07 0.01 14.3 0.08
Net Charge-Offs $4,470 $8,524 ($4,054) (47.6) $4,460
Performance Ratios -
Quarter to Date:
Return on Average
Assets 1.2% 2.2% 1.4%
Return on Average
Equity 14.1% 30.4% 15.4%
YTD-2004 YTD-2003 $ Change % Change
Net Interest Income $189,119 $211,986 ($22,867) (10.8)
Provision for Loan
and Lease Losses (11,838) (37,655) 25,817 68.6
Noninterest Income 226,397 230,996 (4,599) (2.0)
Total Net
Revenues 403,678 405,327 (1,649) (0.4)
Noninterest Expense 310,686 313,700 (3,014) (1.0)
Income before Income
Taxes 92,992 91,627 1,365 1.5
Income Taxes 37,513 35,505 2,008 5.7
Net Income $55,479 $56,122 (643) (1.1)
Dividends on Common
Stock $6,788 $5,865 $923 15.7
Diluted Earnings Per
Share (31,256
Weighted Average
Shares Outstanding) $1.84 $1.89 (0.05) (2.6)
Basic Earnings Per
Share (28,244
Weighted Average
Shares Outstanding) 1.96 2.01 (0.05) (2.5)
Dividends Per Common
Share 0.24 0.21 0.03 14.3
Net Charge-Offs $17,089 $24,347 ($7,258) (29.8)
Performance Ratios -
Year to Date:
Return on Average
Assets 1.4% 1.4%
Return on Average
Equity 15.9% 19.6%
September 30, September 30, June 30,
2004 2003 $ Change % Change 2004
Loans Held for Sale $971,357 $1,020,082 ($48,725) (4.8) $1,196,130
Loans and Leases in
Portfolio 3,401,643 3,139,335 262,308 8.4 3,203,279
Allowance for Loan
and Lease Losses (47,796) (64,145) 16,349 25.5 (53,837)
Total Assets 5,415,571 5,059,183 356,388 7.0 5,425,172
Total Deposits 3,486,457 3,019,275 467,182 15.5 3,361,264
Shareholders' Equity 486,347 414,454 71,893 17.3 469,486
Shareholders' Equity
available to
Common Shareholders
(per share) 17.16 14.81 2.35 15.9 16.60
Average
Equity/Average
Assets (YTD) 9.0% 7.3% 9.6%
Tier I Capital $621,127 $534,729 $86,398 16.2 $614,003
Tier I Leverage
Ratio 11.2% 9.3% 11.5%
Total Risk-based
Capital Ratio 14.6% 14.8% 14.8%
Nonperforming Assets
to Total Assets 0.79% 0.90% 0.74%
Mortgage Banking
Q3-2004 Q3-2003 $ Change
Net Interest Income $10,202 $24,326 ($14,124)
Recovery of (Provision for)
Loan Losses 67 (191) 258
Gain on Sales of Loans 39,351 80,775 (41,424)
Gain on Sale of Servicing 440 7 433
Loan Servicing Fees, Net of
Amortization Expense 3,583 (7,283) 10,866
Recovery of Servicing Assets,
Net of Hedging 4,858 14,225 (9,367)
Other Revenues 1,421 3,034 (1,613)
Total Net Revenues 59,922 114,893 (54,971)
Salaries, Pension, and Other
Employee Expense 30,958 45,239 (14,281)
Other Expenses 21,950 28,971 (7,021)
Income Before Income Taxes 7,014 40,683 (33,669)
Income Taxes 2,963 15,648 (12,685)
Net Income $4,051 $25,035 ($20,984)
Total Mortgage Loan
Originations: $2,973,889 $7,049,363 ($4,075,474)
Percent retail 20% 25%
Percent wholesale 31% 38%
Percent brokered 13% 3%
Percent correspondent 36% 34%
Refinancings as a Percentage of
Total Originations 40% 73%
YTD-2004 YTD-2003 $ Change
Net Interest Income $30,646 $61,294 ($30,648)
Recovery of (Provision for)
Loan Losses 457 (221) 678
Gain on Sales of Loans 117,003 283,514 (166,511)
Gain on Sale of Servicing 8,857 7 8,850
Loan Servicing Fees, Net of
Amortization Expense 3,656 (31,839) 35,495
Recovery of Servicing Assets,
Net of Hedging 28,538 856 27,682
Other Revenues 5,312 8,028 (2,716)
Total Net Revenues 194,469 321,639 (127,170)
Salaries, Pension, and Other
Employee Expense 92,140 131,058 (38,918)
Other Expenses 69,954 80,238 (10,284)
Income Before Income Taxes 32,375 110,343 (77,968)
Income Taxes 13,077 42,427 (29,350)
Net Income $19,298 $67,916 ($48,618)
Total Mortgage Loan
Originations: $9,632,196 $19,764,326 ($10,132,130)
Percent retail 21% 26%
Percent wholesale 35% 43%
Percent brokered 11% 3%
Percent correspondent 33% 28%
Refinancings as a Percentage of
Total Originations 52% 73%
September 30, September 30,
2004 2003 $ Change
Owned Servicing Portfolio
Balance $28,531,292 $28,497,923 $33,369
Weighted average interest rate 5.70% 5.86%
Delinquency ratio (30+ days): 3.99% 4.11%
Conventional 2.46% 1.82%
Government 7.05% 8.52%
Loans Held for Sale $670,361 $922,874 ($252,513)
Servicing Asset 345,185 295,102 50,083
Mortgage Banking
% Change Q2-2004
Net Interest Income (58.1) $11,781
Recovery of (Provision for) Loan
Losses 134.8 284
Gain on Sales of Loans (51.3) 34,870
Gain on Sale of Servicing nm 1,928
Loan Servicing Fees, Net of
Amortization Expense 149.2 1,484
Recovery of Servicing Assets, Net
of Hedging (65.8) 13,512
Other Revenues (53.2) 2,052
Total Net Revenues (47.8) 65,911
Salaries, Pension, and Other
Employee Expense (31.6) 31,654
Other Expenses (24.2) 25,062
Income Before Income Taxes (82.8) 9,194
Income Taxes (81.1) 3,680
Net Income (83.8) $5,515
Total Mortgage Loan Originations: (57.8) $3,727,591
Percent retail 20%
Percent wholesale 33%
Percent brokered 11%
Percent correspondent 36%
Refinancings as a Percentage of
Total Originations 54%
% Change
Net Interest Income (50.0)
Recovery of (Provision for) Loan
Losses 306.8
Gain on Sales of Loans (58.7)
Gain on Sale of Servicing nm
Loan Servicing Fees, Net of
Amortization Expense 111.5
Recovery of Servicing Assets, Net
of Hedging nm
Other Revenues (33.8)
Total Net Revenues (39.5)
Salaries, Pension, and Other
Employee Expense (29.7)
Other Expenses (12.8)
Income Before Income Taxes (70.7)
Income Taxes (69.2)
Net Income (71.6)
Total Mortgage Loan Originations: (51.3)
Percent retail
Percent wholesale
Percent brokered
Percent correspondent
Refinancings as a Percentage of
Total Originations
June 30,
% Change 2004
Owned Servicing Portfolio Balance 0.1 $28,844,599
Weighted average interest rate 5.70%
Delinquency ratio (30+ days): 3.34%
Conventional 1.98%
Government 6.20%
Loans Held for Sale (27.4) $735,278
Servicing Asset 17.0 365,775
Home Equity Lending
Q3-2004 Q3-2003 $ Change % Change Q2-2004
Residual Asset Interest
Income $3,350 $4,131 ($781) (18.9) $3,285
Net Interest Income -
Unsold Loans and Other 23,017 22,524 493 2.2 22,874
Recovery of (provision
for) Loan Losses 232 (10,728) 10,960 102.2 706
Trading Gains (Losses) 4,310 (1,376) 5,686 413.1 6,688
Gain on Sales of Loans,
Including Points and
Fees 8,438 8,108 330 4.1 3,035
Servicing Income, net 2,058 1,694 364 21.5 2,313
Other Revenues 1,485 (335) 1,820 543.3 2,797
Total Net Revenues 42,890 24,018 18,872 78.6 41,698
Salaries, Pension, and
Other Employee Expense 18,627 12,593 6,034 47.9 17,865
Other Expense 10,423 7,063 3,360 47.6 8,990
Income Before Income
Taxes 13,840 4,362 9,478 217.3 14,843
Income Taxes 5,581 1,745 3,836 219.8 5,945
Net Income $8,259 $2,617 $5,642 215.6 $8,898
Loan Volume $396,776 $267,615 $129,161 48.3 $403,822
Loans Sold 405,120 217,789 187,331 86.0 223,956
Net Charge-offs (Loans
Held for Investment) 1,906 5,442 (3,536) (65.0) 2,626
YTD-2004 YTD-2003 $ Change % Change
Residual Asset Interest Income $9,893 $17,100 ($7,207) (42.1)
Net Interest Income - Unsold
Loans and Other 67,328 64,189 3,139 4.9
Provision for Loan Losses (4,961) (23,578) 18,617 79.0
Trading Gains (Losses) 15,640 (52,296) 67,936 129.9
Gain on Sales of Loans,
Including Points and Fees 20,163 18,358 1,805 9.8
Servicing Income, net 7,435 4,238 3,197 75.4
Other Revenues 5,543 317 5,226 nm
Total Net Revenues 121,041 28,328 92,713 327.3
Salaries, Pension, and Other
Employee Expense 52,618 38,318 14,300 37.3
Other Expense 28,673 25,528 3,145 12.3
Income Before Income Taxes 39,750 (35,518) 75,268 211.9
Income Taxes 15,960 (14,207) 30,167 212.3
Net Income $23,790 ($21,311) $45,101 211.6
Loan Volume $1,107,476 $845,120 $262,356 31.0
Loans Sold 831,508 546,091 285,417 52.3
Net Charge-offs (Loans Held for
Investment) 10,225 14,636 (4,411) (30.1)
September 30, September 30, June 30,
2004 2003 $ Change % Change 2004
Home Equity Loans Held
for Sale $300,171 $94,280 $205,891 218.4 $460,118
Home Equity Loans Held
for Investment 668,633 728,220 (59,587) (8.2) 598,021
Allowance for Loan and
Lease Losses (13,179) (30,370) 17,191 56.6 (18,902)
Residual Asset 68,584 78,208 (9,624) (12.3) 73,219
Servicing Asset 40,356 29,097 11,259 38.7 28,122
Managed Portfolio 1,395,721 1,539,623 (143,902) (9.3) 1,543,457
Delinquency Ratio
(30+ days) 4.59% 6.19% 4.16%
Commercial Banking
Q3-2004 Q3-2003 $ Change % Change Q2-2004
Net Interest Income $23,367 $20,116 $3,251 16.2 $21,191
Provision for Loan and Lease
Losses (607) (1,500) 893 59.5 (750)
Other Revenues 3,889 5,744 (1,855) (32.3) 5,061
Total Net Revenues 26,649 24,360 2,289 9.4 25,502
Salaries, Pension, and Other
Employee Expense 11,124 8,498 2,626 30.9 9,665
Other Expenses 6,289 5,818 471 8.1 6,201
Income Before Income Taxes 9,236 10,044 (808) (8.0) 9,636
Income Taxes 3,719 4,071 (352) (8.6) 3,867
Net Income $5,517 $5,973 ($456) (7.6) $5,769
Net Charge-offs $611 $994 ($383) (38.5) $787
Net Interest Margin 3.74% 3.82% 3.64%
YTD-2004 YTD-2003 $ Change % Change
Net Interest Income $65,104 $58,582 $6,522 11.1
Provision for Loan and Lease
Losses (2,557) (4,413) 1,856 42.1
Other Revenues 13,726 16,517 (2,791) (16.9)
Total Net Revenues 76,273 70,686 5,587 7.9
Salaries, Pension, and Other
Employee Expense 30,111 26,139 3,972 15.2
Other Expenses 18,250 16,048 2,202 13.7
Income Before Income Taxes 27,912 28,499 (587) (2.1)
Income Taxes 11,208 11,435 (227) (2.0)
Net Income $16,704 $17,064 ($360) (2.1)
Net Charge-offs $2,567 $3,107 ($540) (17.4)
Net Interest Margin 3.72% 3.90%
September 30, September 30, June 30,
2004 2003 $ Change % Change 2004
Securities and Short-
Term Investments $358,109 $94,603 $263,507 278.5 $313,580
Loans and Leases 2,159,976 1,968,078 191,898 9.8 2,081,788
Allowance for Loan
and Lease Losses (22,045) (22,031) (14) (0.1) (22,049)
Interest-Bearing
Deposits 2,123,975 1,685,907 438,068 26.0 1,938,282
Noninterest-Bearing
Deposits 286,300 266,331 19,969 7.5 341,896
Delinquency Ratio
(30+ days): 0.24% 0.72% 0.19%
Commercial Finance
Q3-2004 Q3-2003 $ Change % Change Q2-2004
Net Interest Income $7,058 $5,685 $1,373 24.2 $6,881
Provision for Loan and Lease
Losses (1,589) (2,388) 799 33.5 (2,034)
Other Revenues 1,366 1,181 185 15.7 2,622
Total Net Revenues 6,835 4,478 2,357 52.6 7,469
Salaries, Pension, and Other
Employee Expense 3,646 2,808 838 29.8 3,477
Other Expenses 1,268 1,021 247 24.2 1,588
Income Before Income Taxes 1,921 649 1,272 196.0 2,404
Income Taxes 810 603 207 34.3 1,087
Net Income $1,111 $46 $1,065 nm $1,317
Net Charge-Offs $1,958 $2,034 ($76) (3.7) $1,051
Loans Sold 3,863 3,302 561 17.0 15,939
Net Interest Margin 5.25% 5.44% 5.62%
Total Fundings of Loans and
Leases $90,966 $61,679 $29,287 47.5 $88,586
%
YTD-2004 YTD-2003 $ Change Change
Net Interest Income $20,692 $15,890 $4,802 30.2
Provision for Loan and Lease Losses (4,777) (9,321) 4,544 48.8
Other Revenues 4,437 4,678 (241) (5.2)
Total Net Revenues 20,352 11,247 9,105 81.0
Salaries, Pension, and Other
Employee Expense 10,486 8,266 2,220 26.9
Other Expenses 3,691 2,945 746 25.3
Income Before Income Taxes 6,175 36 6,139 nm
Income Taxes 4,040 251 3,789 nm
Net Income (Loss) $2,135 ($215) $2,350 nm
Net Charge-Offs $4,303 $6,505 ($2,202) (33.9)
Loans Sold 27,497 24,109 3,388 14.1
Net Interest Margin 5.53% 5.45%
Total Fundings of Loans and Leases $251,204 $185,588 $65,616 35.4
September 30, September 30, June 30,
2004 2003 $ Change % Change 2004
Investment in Loans
and Leases $559,801 $422,932 $136,868 32.4 $510,308
Allowance for Loan and
Lease Losses (11,488) (10,635) (853) (8.0) (11,738)
Weighted Average Yield 8.98% 9.72% 9.10%
Delinquency ratio (30+
days) 0.95% 1.10% 0.88%
Venture Capital
Q3-2004 Q3-2003 $ Change % Change Q2-2004
Net Interest Income ($3) ($2) ($1) (50.0) ($2)
Mark to Market Adjustment on
Investments 0 0 0 na (350)
Other Revenues 149 444 (295) (66.4) 179
Total Net Revenues 146 442 (296) (67.0) (173)
Operating Expenses 99 329 (230) (69.6) 117
Income (Loss) Before Income Taxes 47 113 (66) (58.4) (290)
Income Tax Expense (Benefit) 18 48 (30) (62.5) (112)
Net Income (Loss) $29 $65 (36) (55.4) ($178)
YTD-2004 YTD-2003 $ Change % Change
Net Interest Income ($6) $7 (13) (185.7)
Mark to Market Adjustment on
Investments (341) (2,421) 2,080 85.9
Other Revenues 477 523 (46) (8.8)
Total Net Revenues 130 (1,891) 2,021 106.9
Operating Expenses 345 440 (95) (21.6)
Income (Loss) Before Income Taxes (215) (2,331) 2,116 90.8
Income Tax Expense (Benefit) (83) (932) 849 91.1
Net (Loss) ($132) ($1,399) 1,267 90.6
September 30, September 30, June 30,
2004 2003 $ Change % Change 2004
Investment in Portfolio
Companies (cost) $14,717 $14,571 146 1.0 $14,592
Mark to Market
Adjustment (11,418) (10,543) (875) (8.3) (11,418)
Carrying Value -
Portfolio Companies $3,299 $4,028 ($729) (18.1) $3,174
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