Bank of Florida Corp. Reports Third Quarter 2008 Results.NAPLES, Fla. -- Bank of Florida Corporation (Nasdaq:BOFL BOFL Breath of Life (Wellfleet/Bay Networks) ) reported third quarter 2008 results. Highlights for the third quarter include: * Third quarter provision for loan losses totaled $6.2 million, up $4.6 million from $1.6 million in the second quarter of 2008, and up $5.9 million from $336,000 in the third quarter of 2007 * Allowance for loan losses was 1.14% of total loans, an increase from 1.11% in the second quarter of 2008 and 1.02% in the year-ago quarter * Net interest margin was 3.33%, a decrease of 25 basis points compared to 3.58% in the second quarter of 2008 and down 63 basis points from 3.96% in the third quarter of 2007 * Loan growth of 8% on a year-over-year basis; loans grew 5% (19% annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. ) from the second quarter * Core deposits, including CDs with balances of less than $100,000 and $80 million in new reciprocal Bilateral; two-sided; mutual; interchanged. Reciprocal obligations are duties owed by one individual to another and vice versa. A reciprocal contract is one in which the parties enter into mutual agreements. CDAR CDAR Customer Dialed Account Recording CDAR Current Descriptor Address Register CDAR Collateral Duty Addictions Representative CDAR Certificate of Deposit Account Registry CDAR Controlled Drug Administration Record CDAR Classified Document Accountability Register deposits, grew 72% (annualized) compared to the second quarter of 2008 * Net loss of $3.4 million or $0.27 per share * Capital position remains strong, with $20 million in excess of the minimum regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. to be considered "well-capitalized," and leverage, total capital and tangible equity ratios of 9.19%, 11.57%, and 8.90%, respectively * Opened second location in affluent Coral Gables Coral Gables, city (1990 pop. 40,091), Miami-Dade co., SE Fla., SW of Miami; inc. 1925. Founded at the height of the Florida land boom, Coral Gables is a noted planned city, with tree-lined boulevards and Mediterranean-style buildings. market (Miami-Dade) "As we stated in our third quarter 2008 preliminary earnings release on October 10, we recorded a significantly higher provision for loan losses during the third quarter as a result of the difficult economic conditions that persist across our markets," said Michael L. McMullan, Bank of Florida Corporation's President and Chief Executive Officer. "Residential real estate continues to be very difficult to value, and while there is demand for residential housing, buyers remain on the sidelines On the sidelines An investor who decides not to invest due to market uncertainty. on the sidelines Of or relating to investors who, having assessed the market, have decided to avoid committing their funds. due to the tight credit market and tough economic conditions. With this, we will continue to take a very proactive approach in recognizing losses resulting from the continued pressure on real estate values. Also, as stated in our October 10th release, we will continue to closely monitor our loan portfolio, obtain new appraisals and real estate valuations, and recognize losses in a timely manner to successfully manage through this credit cycle. As a result of these actions, we anticipate increasing our allowance for loan losses during the fourth quarter." "We also anticipate further net interest margin compression during the fourth quarter as loans re-price at lower levels, due to the 50 basis point cut in the prime rate that occurred in early October, as well as the persistent competitive deposit market. Additionally, we will continue to focus on non-interest expenses and improving operating efficiencies. Beginning in 2009, we anticipate that the Cape Coral Cape Coral, city (1990 pop. 74,991), Lee co., SW coastal Fla., located on an estuary of the Caloosahatchee River; inc. 1970. It is mostly a residential city that has grown rapidly along with the southern Florida area. office, which was closed in May, will save approximately $500,000 per year." "While we remain well-capitalized, we are currently considering participation in the Treasury Capital Purchase Program, a program we understand to be for strong financial institutions that are positioned to grow during this cycle, both organically as well as through acquisitions. We believe participation in this program is an attractive option which would allow us to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the current opportunities created through this significant market disruption Market Disruption A situation where markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or a unusual trading (as in a crash). ." Third Quarter 2008 Financial Highlights Net Interest Income Net interest income for the third quarter totaled $10.9 million, a decrease of 4% from the second quarter (15% decrease annualized) as net interest margin compression of 25 basis points to 3.33% more than offset average earning asset Earning asset An asset that generates income, e.g., income from rental property. growth. The sequential decrease in the net interest margin was primarily related to interest reversals on non-accrual loans totaling $336,000, which represented approximately 15 basis points of the decrease in the interest margin. Also impacting the net interest margin, but to a lesser extent, was a combination of inflows of new CD and money market deposits, resulting from a promotion in mid-September with premium rates of 4.00% to 4.25%, as well as the addition of liquidity to the balance sheet, which remains a key regulatory focus. On a year-over-year basis, net interest income decreased $1.0 million or 9%. The decrease was largely related to interest reversals on nonperforming loans which increased to $29.1 million in the third quarter of 2008, from $5.7 million in the third quarter of 2007. Asset Quality and Provision for Loan Losses The provision for loan losses totaled $6.2 million, up from $1.6 million in the second quarter and $336,000 in the third quarter of 2007. The increase in the provision was due to net charge-offs of $5.2 million, or 1.72% of average loans, resulting from the continued weakness in real estate values. Two large loans constituted approximately $3.2 million of the charge-offs, both of which are in the Southwest market and had been previously disclosed in the fourth quarter of 2007. These charge-offs consisted of a $1.3 million partial charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. related to a large residential condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. project in Lee County, and a partial charge-off of $1.9 million related to two eight-unit condominium buildings situated on more than four acres in Lehigh Acres. Nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. totaled $33.2 million, or 2.15% of total assets, an increase of $8.5 million from $24.7 million or 1.75% of total assets in the second quarter. Nonperforming loans were $29.1 million, or 2.33% of total loans, up $4.8 million from $24.3 million or 2.03% sequentially. The increase in nonperforming loans was primarily related to four large commercial relationships totaling $8.5 million, somewhat offset by the $5.2 million in charge-offs. Other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most was $4.1 million, an increase from $439,000 as of the second quarter. The increase in other real estate owned was primarily due to the addition of 30 acres of vacant land in Punta Gorda Punta Gorda may refer to:
[TABLE OMITTED] The allowance for loan losses was $14.3 million as of September 30, 2008, an increase of 8% compared to the second quarter of 2008. The allowance as a percentage of loans increased to 1.14% during the third quarter, up slightly from 1.11% during the previous quarter, and was 49.1% of nonperforming loans, down slightly from 54.6% in the second quarter of 2008. The allowance for loan losses allocated by loan category for the second and third quarters of 2008 is shown in the table below. [TABLE OMITTED] Loans 30-89 days past due increased $23.4 million to $37.3 million in the third quarter of 2008, compared to $13.9 million in the second quarter of 2008. The increase in loans 30-89 days past due was primarily related to the addition of 11 credits totaling $28.2 million. The majority of these loans were in the Southwest market (seven loans totaling $18.0 million), followed by Southeast (two loans totaling $6.8 million), and Tampa Bay Tampa Bay, inlet of the Gulf of Mexico, 25 mi (40 km) long and 7 to 12 mi (11.3–19 km) wide, W Fla., separated from the Gulf by numerous small islands; it receives the Hillsborough River. St. (two loans totaling $3.4 million.) Land and construction loans accounted for 31% of total loans past due, while multi-family accounted for 35%, commercial real estate accounted for 16%, one-to-four family accounted for 14%, and commercial and industrial accounted for 4%. Two large loans totaling $8.4 million, which were construction loans in the second quarter of 2008, and considered performing at that time, accounted for the majority of multi-family delinquencies. During the month of October, loans 30-89 days past due decreased $9.1 million to $28.1 million compared to the level as of September 30, 2008. Non-Interest Income Non-interest income increased 11% (43% annualized) to $1.2 million compared to the second quarter of 2008. Included in the increase in non-interest income was $146,000 in net securities and other gains. In the second quarter of 2008, the Company recorded a $136,000 loss on the disposal of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , which was recorded as a reduction of non-interest income and contributed to the third quarter increase. During the third quarter, trust fees remained flat as increased revenues from sales efforts were offset by the decrease in the global equity markets, impacting existing account fees. Service charges decreased 6% sequentially (22% annualized), due to reduced deposit overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers fees, miscellaneous loan fees, and deposit sweep fees. On a year-over-year basis, non-interest income decreased 8%, due to a 14% decrease in trust fees, and a 2% decrease in service charges and other fees. The decrease in trust fees was primarily related to lower client balances due to the current difficult financial markets, which more than offset the addition of 15 new trust relationships. The decrease in service charges and other fees was primarily due to lower loan fees. These decreases more than offset slight increases in mortgage banking fees and net securities and other gains. Non-Interest Expenses During the third quarter of 2008, non-interest expenses increased 6% (23% annualized) to $11.4 million compared to the second quarter of 2008. The primary reason for the increase in non-interest expenses was a 14% (56% annualized) increase in general operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , which was related to higher costs associated with problem assets, including higher repossession The taking back of an item that has been sold on credit and delivered to the purchaser because the payments have not been made on it. For example, if an individual fails to render prompt payments on a new car, the car might be subject to repossession by the finance company, and OREO expenses. On a year-over-year basis, non-interest expenses increased 11%, primarily due to a 17% increase in occupancy expenses as a result of the newly opened Coral Gables financial center, the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of the Coral Ridge financial center in Ft. Lauderdale, as well as the build out of the customer service operations center The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. and headquarters facility. General operating expenses increased 25%, primarily due to higher OREO and repossession expense, and increased regulatory assessments. Balance Sheet and Capital Total assets increased $130 million to $1.5 billion in the third quarter of 2008 compared to the second quarter of 2008, an increase of 9% (37% annualized.) On a year-over-year basis, total assets increased $222 million or 17%. Loans increased $56 million to $1.2 billion compared to the second quarter of 2008, an increase of 5% (19% annualized.) The increase in loans on a sequential basis was primarily due to growth in commercial real estate loans and one-to-four family mortgages. Total land and construction loans decreased 4% between the third quarter of 2008 and the second quarter of 2008 (14% annualized). On a year-over-year basis, total loans grew 8%. Total deposits increased $187 million to $1.2 billion in the third quarter of 2008 compared to the second quarter of 2008, an increase of 19% (74% annualized.) The addition of $80 million in reciprocal CDAR deposits during the quarter was primarily the reason for the substantial increase in deposits. Core deposits, which exclude wholesale brokered CDs, wholesale CDAR deposits, and CDs in excess of $100,000, accounted for approximately 58% of total deposits, unchanged from the prior quarter and down slightly from 64% during the third quarter of 2007. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. in the third quarter of 2008 was $196.7 million, down $806,000 sequentially and $2.1 million or 1% on a year-over-year basis. Tangible book value per share was $10.31, down slightly from $10.36 in the prior quarter and $10.51 in the third quarter of 2007. The Company's capital position remains strong, with $20 million in excess of the minimum regulatory requirements to be considered "well-capitalized." The leverage, total capital, and tangible equity ratios were 9.19%, 11.57%, and 8.90%, respectively. The following table summarizes the Company's results for third quarter 2008. [TABLE OMITTED] Conference Call The Company's President and Chief Executive Officer, Michael L. McMullan and Chief Financial Officer, Tracy L. Keegan, will hold a conference call today 9:00 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss third quarter preliminary results. A brief management presentation will be followed by a question and answer period. The webcast noted below, including the audio portion of the conference call, will be maintained for approximately 90 days on the Company's website. Listen via Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the : http://investor.shareholder.com/media/eventdetail.cfm?eventid=60814&Co mpanyID=BOFL&e=1&mediaKey=2677C9841362604E27455BF8B8EA496B (Due to its length, this URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.) Dial-in: Toll Free 877-741-4241 Bank of Florida Corporation Bank of Florida Corporation. (Nasdaq: BOFL) is a $1.5 billion-asset multi-bank holding Company located in Naples, Florida Naples is a city in Collier County, Florida, USA. As of 1 July 2006, the U.S. Census Bureau estimated the city's population at 21,804.[3] Naples is the County seat of Collier County, and is a Principal City of the Naples-Marco Island, Florida Metropolitan Statistical . Bank of Florida Corporation is the parent company for Bank of Florida - Southwest in Collier and Lee Counties; Bank of Florida - Southeast in Broward, Miami-Dade and Palm Beach Counties; Bank of Florida - Tampa Bay in Hillsborough and Pinellas Counties; and Bank of Florida Trust Company, collectively referred to as the "Company." Investor information may be found on the Company's web site, http://www.bankofflorida.com, by clicking on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." To receive an email alert of all company press releases, SEC filings, and events, select the "Email Notification" section. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Certain statements in this press release may contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act of 1995, which statements generally can be identified by the use of forward-looking terminology, such as "may," "will," "expect," "estimate," "anticipate," "believe," "target," "plan," "project," or "continue" or the negatives thereof or other variations thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that or similar terminology, and are made on the basis of management's plans and current analyses of Bank of Florida Corporation, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases, have affected, and in the future could affect Bank of Florida Corporation financial performance and could cause actual results for fiscal 2008 and beyond to differ materially from those expressed or implied in such forward-looking statements. Bank of Florida Corporation does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. |
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