Cardinal Reports Increased Third Quarter Earnings
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Asset Quality Remains Strong, Net Interest Margin Improves, Loans Grew 16%
TYSONS CORNER, Va.--(BUSINESS WIRE)-- Cardinal Financial Corporation (NASDAQ: CFNL) (the "Company") today reported earnings of $2.6 million, or $0.09 per diluted share, for the three month period ended September 30, 2009. This compares to a net loss of $4.4 million or $0.18 per diluted share for the same period of 2008. For the nine month period ended September 30, 2009, earnings totaled $6.9 million, or $0.26 per diluted share, versus a net loss of $1.5 million, or $0.06 per diluted share, for the same nine month period of 2008.
Included in the year-to-date 2009 results was an increase in the level of loan loss provisioning that continues to be influenced by a struggling economy. When comparing the current quarter to the same quarter last year, the provision expense increased $405,000. For the comparable nine month periods, there was an increase of $2.0 million in this expense. Additionally, year-to-date 2009 results were impacted by changes in ongoing and special FDIC insurance assessments, which increased this expense $280,000 and $1.7 million for the three and nine month periods ended September 30, 2009, reducing earnings by $0.01 and $0.04 per diluted share, respectively, versus the same periods in 2008.
Selected Highlights
-- Asset quality continues to be excellent. Nonperforming assets remained
low at 0.50% of total assets, and annualized net loan charge offs
year-to-date were 0.20% of loans outstanding.
-- The loans receivable portfolio grew to $1.263 billion, an increase of
$177 million, or 16.3%, compared to September 30, 2008. For the quarter,
loans held for investment grew $65 million, an annualized increase of
over 20%. Loans held for sale increased 12.8% from the prior year to
$152 million at September 30, 2009.
-- Total deposits grew to $1.275 billion, an increase of 17.5% compared to
September 30, 2008 and 8.1% since the beginning of this year.
-- Total assets at period-end were $1.893 billion versus $1.638 billion one
year earlier, an increase of 15.6%. The increase in total assets was
primarily funded by the Company's deposit growth and a successful
capital raise of $31.6 million, which will allow the Company to continue
penetrating its existing footprint and take full advantage of bank
consolidation opportunities.
-- Total risk-based capital to risk based assets was 14.31%, which
substantially exceeds the 10.0% ratio that banking regulators consider
to be the well-capitalized threshold. Tangible common equity capital
(TCE) as a percentage of total assets was 9.78%.
Income Statement Review
Third quarter net income was $2.6 million, or $0.09 per diluted share. Compared to the year ago quarter, net interest income increased to $13.1 million from $11.3 million. During the current quarter, the net interest margin improved to 2.97% versus 2.84% and 2.61% for the second and first quarters of 2009, respectively. The increases in net interest income and margin are primarily a result of the Bank's success in growing its balance sheet while maintaining asset yields and lowering deposit rates.
Noninterest income increased $1.3 million, or 30%, for the three month period ended September 30, 2009 compared to the same period of 2008. For the nine months ended September 30, 2009, noninterest income increased $4.3 million, or 32%, over 2008 results. The increase was primarily attributable to gains on mortgage banking activities from increases in loan originations and closings. For the third quarter of 2009, the profit from our mortgage banking operations increased to $779,000 versus an operating loss of $325,000 in the same period last year. Year-to-date through September 30th, profit from our mortgage banking operations increased to $3.5 million versus operating earnings of $159,000 last year. Included in year to date results are increased fees of $677,000 from "managed" mortgage banking companies and increased revenues of $984,000 from our title company.
Noninterest expense before nonrecurring items for the three and nine month periods increased to $13.0 million from $12.0 million and to $38.7 million from $35.7 million, for the three and nine month periods ended September 30, 2009 and 2008, respectively. As mentioned, the increase in FDIC premiums accounts for a large portion of this increase. The remaining increase is primarily attributed to mortgage banking activity.
Review of Balance Sheet and Credit Quality
At September 30, 2009, total assets of the Company were $1.893 billion, an increase of 15.6% from total assets of $1.638 billion at September 30, 2008. Portfolio loans receivable grew 16.3% to $1.263 billion at September 30, 2009, from $1.087 billion at September 30, 2008. The increase in the Bank's loan portfolio was primarily comprised of increases in small business, commercial, commercial real estate and home equity lending as we continued to maintain a balanced loan portfolio.
The Bank's asset growth was primarily funded by a 17.5% increase in deposits, which totaled $1.276 billion at September 30, 2009 versus $1.086 billion a year earlier. Demand deposit account balances increased by 4.6% year over year reflecting the Bank's continued focus on generating lower funding costs.
Although the quality of the Bank's loan portfolio has remained excellent, the total allowance for loan losses was increased to 1.38% of loans outstanding due to the current credit market, economic uncertainties and a slight increase in the Company's nonperforming assets, which increased to 0.50% of total assets at September 30, 2009 compared to 0.41% at June 30, 2009 and 0.29% at December 31, 2008. The third quarter 2009 increase in nonperforming loans totaled $1.9 million and consisted of one commercial loan which is secured by real estate and four residential mortgage loans. Net loan charge-offs totaled $727,000 for the third quarter of 2009, compared to $778,000 for the same period of 2008. On a year-to-date basis, net loan charge-offs totaled $1.8 million, or 0.20% of loans outstanding on an annualized basis, compared to $1.1 million or 0.14% for the nine months ended September 30, 2008. Early stage loan delinquencies at 30-89 days past due were $15,000 at September 30, 2009 versus $541,000 at September 30, 2008.
MANAGEMENT COMMENTS
Bernard H. Clineburg, Chairman and Chief Executive Officer of the Company, said:
"I continue to be pleased with our Company's performance this year, considering the ongoing challenges with both the U.S. and regional economies. The quality of our loan portfolio remains strong, differentiating Cardinal from many of its competitors in this environment. We also have been successful in our campaign to aggressively lend to qualified borrowers. Our loan portfolio grew over $60 million this quarter, again achieving annualized growth well into the double digits. Although management has closely monitored deposit pricing, we have been able to primarily fund this asset growth with new deposit relationships. As a result of growth in both our loan and deposit balances, we have experienced a significant increase in our net interest margin since the beginning of the year.
"Noninterest income has also increased significantly since last year, mainly as a result of improved activity at our mortgage banking subsidiary, George Mason. Residential loan closings have almost doubled last year's volume and have surpassed $2.0 billion year to date.
"Our recent capital raise put us in a position to substantially raise our legal lending limit and to extend our activities and relationships with larger businesses in the Washington DC metropolitan area. We also anticipate that announced bank mergers will result in further consolidation in our market. There are over 400 branches in the marketplace that will be impacted by the mergers, and some may close. We stand ready to capitalize on the dislocation of customers that normally occurs from this activity.
"While no financial institution is completely immune to downturns in the economy, we are proud that we maintain superb asset quality and significantly exceed regulatory requirements for a well capitalized bank. As always, the board and management remain committed to operating a safe and sound financial institution and building upon our quality growth, and we believe we are well positioned to maximize the value of the Cardinal franchise."
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements contain information related to matters such as the Company's intent, belief or expectation with regard to such matters as financial and operational performance, credit quality and branch expansion. Such statements are necessarily based on management's assumptions and estimates and are inherently subject to a variety of risks and uncertainties concerning the Company's operations and business environment, which are difficult to predict and beyond the control of the Company. Such risks and uncertainties could cause actual results of the Company to differ materially from those matters expressed or implied in such forward-looking statements. For an explanation of the risks and uncertainties associated with forward-looking statements, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and other reports filed with and furnished to the Securities and Exchange Commission.
About Cardinal Financial Corporation: Cardinal Financial Corporation, a financial holding company headquartered in Tysons Corner, Virginia with assets of $1.9 billion at September 30, 2009, serves the Washington Metropolitan region through its wholly-owned subsidiary, Cardinal Bank, with 25 conveniently located banking offices. Cardinal also operates several other subsidiaries: George Mason Mortgage, LLC, and Cardinal First Mortgage, LLC, residential mortgage lending companies based in Fairfax, with six offices throughout the Washington Metropolitan region; Cardinal Trust and Investment Services, a trust division; Cardinal Wealth Services, Inc., a full-service brokerage company; and Wilson/Bennett Capital Management, Inc., an asset management company. The Company's stock is traded on NASDAQ (CFNL). For additional information please visit our Web site at www.cardinalbank.com or call (703) 584-3400.
Cardinal Financial Corporation and Subsidiaries
Summary Statements of Condition
September 30, 2009, December 31, 2008 and September 30, 2008
(Dollars in thousands)
(Unaudited) (Unaudited) % Change
September 30, December 31, September 30, Current Year
2009 2008 2008 Year Over
Year
Cash and due from $ 12,251 $ 14,919 $ 22,124 -17.9 % -44.6 %
banks
Federal funds sold 7,727 31,009 21,785 -75.1 % -64.5 %
Investment
securities 334,670 265,356 231,044 26.1 % 44.9 %
available-for-sale
Investment
securities 37,526 50,183 52,229 -25.2 % -28.2 %
held-to-maturity
Total investment 372,196 315,539 283,273 18.0 % 31.4 %
securities
Other investments 16,467 16,370 16,822 0.6 % -2.1 %
Loans held for 151,806 157,009 134,553 -3.3 % 12.8 %
sale
Loans receivable, 1,263,291 1,139,348 1,086,531 10.9 % 16.3 %
net of fees
Allowance for loan (17,473 ) (14,518 ) (13,257 ) 20.4 % 31.8 %
losses
Loans receivable, 1,245,818 1,124,830 1,073,274 10.8 % 16.1 %
net
Premises and 15,578 16,463 16,995 -5.4 % -8.3 %
equipment, net
Goodwill and 13,995 14,173 14,232 -1.3 % -1.7 %
intangibles, net
Bank-owned life 33,576 33,176 33,056 1.2 % 1.6 %
insurance
Other assets 23,989 20,269 22,078 18.4 % 8.7 %
TOTAL ASSETS $ 1,893,403 $ 1,743,757 $ 1,638,192 8.6 % 15.6 %
Non-interest $ 154,276 $ 147,529 $ 147,499 4.6 % 4.6 %
bearing deposits
Interest bearing 1,121,600 1,032,315 938,065 8.6 % 19.6 %
deposits
Total deposits 1,275,876 1,179,844 1,085,564 8.1 % 17.5 %
Other borrowed 378,645 367,198 374,007 3.1 % 1.2 %
funds
Mortgage funding 13,167 19,178 7,293 -31.3 % 80.5 %
checks
Escrow liabilities 2,329 1,832 1,250 27.1 % 86.3 %
Other liabilities 20,036 17,699 15,538 13.2 % 28.9 %
Shareholders' 203,350 158,006 154,540 28.7 % 31.6 %
equity
TOTAL LIABILITIES
& SHAREHOLDERS' $ 1,893,403 $ 1,743,757 $ 1,638,192 8.6 % 15.6 %
EQUITY
Cardinal Financial Corporation and Subsidiaries
Summary Income Statements
Three and Nine Months Ended September 30, 2009 and 2008
(Dollars in thousands, except share and per share data)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2009 2008 % Change 2009 2008 % Change
Net interest $ 13,092 $ 11,280 16.1 % $ 35,674 $ 32,660 9.2 %
income
Provision for loan (2,050 ) (1,645 ) 24.6 % (4,750 ) (2,734 ) 73.7 %
losses
Net interest
income after 11,042 9,635 14.6 % 30,924 29,926 3.3 %
provision for loan
losses
Service charges on 514 522 -1.5 % 1,482 1,584 -6.4 %
deposit accounts
Loan fees 503 365 37.8 % 2,161 1,029 110.0 %
Investment fee 975 893 9.2 % 2,665 2,715 -1.8 %
income
Realized and
unrealized gains 2,833 1,985 42.7 % 9,579 5,878 63.0 %
on mortgage
banking activities
Management fee 553 204 171.1 % 1,267 590 114.7 %
income
Other non-interest 326 426 -23.5 % 558 1,586 -64.8 %
income
Total non-interest 5,704 4,395 29.8 % 17,712 13,382 32.4 %
income
Net interest
income and 16,746 14,030 19.4 % 48,636 43,308 12.3 %
non-interest
income
Salaries and 5,897 5,754 2.5 % 17,546 17,250 1.7 %
benefits
Occupancy 1,321 1,429 -7.6 % 4,055 4,205 -3.6 %
Depreciation 464 583 -20.4 % 1,515 1,821 -16.8 %
Data processing 469 402 16.7 % 1,438 1,257 14.4 %
Telecommunications 328 256 28.1 % 939 742 26.5 %
Impairment of
Fannie Mae - 4,408 -100.0 % - 4,408 -100.0 %
perpetual
preferred stock
Impairment of - 2,821 -100.0 % - 2,821 -100.0 %
goodwill
Settlement with
mortgage - - 0.0 % - 1,800 -100.0 %
correspondent
Other operating 4,499 3,603 24.9 % 13,228 10,414 27.0 %
expense
Total non-interest 12,978 19,256 -32.6 % 38,721 44,718 -13.4 %
expense
Income (loss)
before income 3,768 (5,226 ) -172.1 % 9,915 (1,410 ) -803.2 %
taxes
Provision
(benefit) for 1,164 (816 ) -242.6 % 3,000 84 3471.4 %
income taxes
NET INCOME (LOSS) $ 2,604 $ (4,410 ) -159.0 % $ 6,915 $ (1,494 ) -562.9 %
Earnings per
common share - $ 0.09 $ (0.18 ) -149.5 % $ 0.26 $ (0.06 ) -525.1 %
basic
Earnings per
common share - $ 0.09 $ (0.18 ) -148.7 % $ 0.26 $ (0.06 ) -517.4 %
diluted
Weighted-average
common shares 28,999,230 24,327,751 19.2 % 26,559,683 24,393,167 8.9 %
outstanding -
basic
Weighted-average
common shares 29,524,878 24,327,751 21.4 % 27,047,915 24,393,167 10.9 %
outstanding -
diluted
Reconciliation of
Non-GAAP measures:
GAAP net income $ 2,604 $ (4,410 ) $ 6,915 $ (1,494 )
reported above
After tax impact
on:
- FDIC special - - 557 -
assessment
- impairment of
Fannie Mae - 3,992 - 3,992
perpetual
preferred stock
- impairment of - 1,846 - 1,846
goodwill
- settlement with
mortgage - - - 1,179
correspondent
Operating
earnings,
excluding $ 2,604 $ 1,428 82.4 % $ 7,472 $ 5,523 35.3 %
nonrecurring
expenses reported
above:
GAAP earnings per
share - diluted $ 0.09 $ (0.18 ) $ 0.26 $ (0.06 )
reported above
After tax impact
on:
- FDIC special - - 0.02 -
assessment
- impairment of
Fannie Mae - 0.16 - 0.16
perpetual
preferred stock
- impairment of - 0.08 - 0.07
goodwill
- settlement with
mortgage - - - 0.05
correspondent
Operating earnings
per common share -
diluted (excluding
nonrecurring
expenses reported $ 0.09 $ 0.06 50.3 % $ 0.28 $ 0.22 25.0 %
above )
GAAP non-interest
expense reported $ 12,978 $ 19,256 $ 38,721 $ 44,718
above
Less nonrecurring
expenses:
- FDIC special - - 844 -
assessment
- impairment of
Fannie Mae - (4,408 ) - (4,408 )
perpetual
preferred stock
- impairment of - (2,821 ) - (2,821 )
goodwill
- settlement with
mortgage - - - (1,800 )
correspondent
Non-interest
expense, excluding
nonrecurring $ 12,978 $ 12,027 7.9 % $ 39,565 $ 35,689 10.9 %
expenses reported
above
Cardinal Financial Corporation and Subsidiaries
Selected Financial Information
(Dollars in thousands, except per share data and ratios)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Income
Statements:
Interest $ 21,923 $ 21,951 $ 63,571 $ 67,283
income
Interest 8,831 10,671 27,897 34,623
expense
Net interest 13,092 11,280 35,674 32,660
income
Provision for 2,050 1,645 4,750 2,734
loan losses
Net interest
income after 11,042 9,635 30,924 29,926
provision for
loan losses
Non-interest 5,704 4,395 17,712 13,382
income
Non-interest 12,978 19,256 38,721 44,718
expense
Net income
before income 3,768 (5,226 ) 9,915 (1,410 )
taxes
Provision for 1,164 (816 ) 3,000 84
income taxes
Net income $ 2,604 $ (4,410 ) $ 6,915 $ (1,494 )
Balance Sheet September 30, September 30, 2008
Data: 2009
Total assets $ 1,893,403 $ 1,638,192
Loans
receivable, 1,263,291 1,086,531
net of fees
Allowance for (17,473 ) (13,257 )
loan losses
Loans held 151,806 134,553
for sale
Total
investment 372,196 283,273
securities
Total 1,275,876 1,085,564
deposits
Other
borrowed 378,645 374,007
funds
Total
shareholders' 203,350 154,540
equity
Common shares 28,690 24,103
outstanding
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
Selected
Average 2009 2008 2009 2008
Balances:
Total assets $ 1,851,895 $ 1,620,893 $ 1,783,380 $ 1,636,453
Loans
receivable, 1,212,910 1,075,609 1,183,271 1,057,239
net of fees
Allowance for (16,692 ) (12,763 ) (15,725 ) (12,192 )
loan losses
Loans held 131,417 118,009 168,428 132,921
for sale
Total
investment 326,182 313,180 283,652 325,851
securities
Interest
earning 1,778,013 1,541,592 1,708,611 1,554,172
assets
Total 1,271,837 1,083,469 1,220,137 1,107,002
deposits
Other
borrowed 362,391 359,976 363,422 349,178
funds
Total
shareholders' 200,387 159,971 180,041 161,567
equity
Weighted
Average:
Common shares
outstanding - 28,999 24,328 26,560 24,393
basic
Common shares
outstanding - 29,525 24,328 27,048 24,393
diluted
Per Common
Share Data:
Basic net $ 0.09 $ (0.18 ) $ 0.26 $ (0.06 )
income
Fully diluted 0.09 (0.18 ) 0.26 (0.06 )
net income
Book value 7.09 6.41 7.09 6.41
Tangible book 6.41 5.92 6.41 5.92
value (1)
Performance
Ratios:
Return on
average 0.56 % -1.09 % 0.52 % -0.12 %
assets
Return on
average 5.20 % -11.03 % 5.12 % -1.23 %
equity
Net interest 2.97 % 2.96 % 2.81 % 2.84 %
margin (2)
Efficiency 69.05 % 76.73 % 72.53 % 77.51 %
ratio (3)
Non-interest
income to 1.23 % 1.08 % 1.32 % 1.09 %
average
assets
Non-interest
expense to 2.80 % 4.75 % 2.89 % 3.64 %
average
assets
Asset Quality
Data:
Annualized
net
charge-offs
to average 0.20 % 0.14 %
loans
receivable,
net of fees
Total
nonaccrual $ 9,454 $ -
loans
Real estate $ 185 $ -
owned
Nonperforming
loans to
loans 0.75 % 0.05 %
receivable,
net of fees
Nonperforming
loans to 0.50 % 0.04 %
total assets
Total loans
receivable $ 15 $ 541
past due 30
days or more
Total loans
receivable $ 25 $ 584
past due 90
days or more
Allowance for
loan losses
to loans 1.38 % 1.22 %
receivable,
net of fees
Allowance for
loan losses
to 165.89 % 2087.67 %
nonperforming
loans
Capital
Ratios:
Tier 1
risk-based 13.16 % 11.93 %
capital
Total
risk-based 14.31 % 12.91 %
capital
Leverage 11.09 % 10.22 %
capital ratio
Tangible book value is calculated as total shareholders' equity, adjusted
(1) for changes in other comprehensive income, less goodwill and other
intangible assets, divided by common shares outstanding.
Net interest margin is calculated as net interest income divided by total
(2) average earning assets and reported on a tax equivalent basis at a rate of
34%.
Efficiency ratio is calculated as total non-interest expense (less
(3) nonrecurring expense) divided by the total of net interest income and
non-interest income.
Cardinal Financial Corporation and Subsidiaries
Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities
Three and Nine Months Ended September 30, 2009 and 2008
(Dollars in thousands)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, 2009 September 30, 2008 September 30, 2009 September 30, 2008
Average Average Average Average Average Average Average Average
Balance Yield Balance Yield Balance Yield Balance Yield
Interest-earning
assets:
Loans receivable,
net of fees (1)
Commercial and $ 148,446 4.80 % $ 119,891 6.15 % $ 158,966 4.80 % $ 127,572 6.35 %
industrial
Real estate - 567,150 6.27 % 454,513 6.55 % 531,923 6.26 % 432,948 6.56 %
commercial
Real estate - 178,585 5.04 % 189,041 5.72 % 177,728 4.57 % 190,428 6.11 %
construction
Real estate - 201,500 5.15 % 213,360 5.60 % 202,133 5.34 % 213,018 5.61 %
residential
Home equity lines 114,414 3.58 % 96,196 4.66 % 109,935 3.65 % 90,593 4.92 %
Consumer 2,815 5.78 % 2,608 6.08 % 2,586 6.05 % 2,680 6.48 %
Total loans 1,212,910 5.47 % 1,075,609 6.01 % 1,183,271 5.41 % 1,057,239 6.12 %
Loans held for sale 131,417 4.96 % 118,009 5.79 % 168,428 4.47 % 132,921 5.81 %
Investment
securities - 286,835 4.72 % 258,807 5.29 % 239,301 4.96 % 264,376 5.25 %
available-for-sale
(1)
Investment
securities - 39,347 3.60 % 54,373 4.30 % 44,351 3.78 % 61,475 4.25 %
held-to-maturity
Other investments 15,728 0.84 % 15,726 2.91 % 15,697 0.11 % 15,138 4.82 %
Federal funds sold 91,776 0.25 % 19,068 2.45 % 57,563 0.24 % 23,023 2.52 %
(1)
Total
interest-earning 1,778,013 4.96 % 1,541,592 5.73 % 1,708,611 4.99 % 1,554,172 5.81 %
assets
Non-interest
earning assets:
Cash and due from 1,213 7,241 1,026 7,526
banks
Premises and 15,723 17,276 15,977 17,765
equipment, net
Goodwill and 14,025 17,060 14,090 17,140
intangibles, net
Accrued interest 59,613 50,487 59,401 52,042
and other assets
Allowance for loan (16,692 ) (12,763 ) (15,725 ) (12,192 )
losses
TOTAL ASSETS $ 1,851,895 $ 1,620,893 $ 1,783,380 $ 1,636,453
Interest-bearing
liabilities:
Interest-bearing $ 1,121,501 2.02 % $ 946,894 3.04 % $ 1,075,904 2.30 % $ 979,057 3.34 %
deposits
Other borrowed 362,391 3.42 % 359,976 3.78 % 363,422 3.45 % 349,178 3.89 %
funds
Total
interest-bearing 1,483,892 2.36 % 1,306,870 3.24 % 1,439,326 2.59 % 1,328,235 3.48 %
liabilities
Noninterest-bearing
liabilities:
Noninterest-bearing 150,336 136,575 144,233 127,945
deposits
Other liabilities 17,280 17,477 19,780 18,706
Shareholders' 200,387 159,971 180,041 161,567
equity
TOTAL LIABILITIES &
SHAREHOLDERS' $ 1,851,895 $ 1,620,893 $ 1,783,380 $ 1,636,453
EQUITY
NET INTEREST MARGIN 2.97 % 2.96 % 2.81 % 2.84 %
(1)
(1) The average yields for loans receivable, investment securities available-for-sale and fed funds sold (which includes investments in money market preferred stock) are reported on a fully taxable-equivalent basis at a rate of 34%.
Cardinal Financial Corporation and Subsidiaries
Segment Reporting at and for the Three and Nine Months Ended September 30, 2009 and 2008
(Dollars in thousands)
(Unaudited)
At and for the
Three Months
Ended
September 30,
2009:
Wealth
Commercial Mortgage Management Intersegment
&
Banking Banking Trust Other Elimination Consolidated
Services
Net interest $ 12,649 $ 655 $ - $ (212 ) $ - $ 13,092
income
Provision for 2,050 - - - - 2,050
loan losses
Non-interest 917 3,724 980 103 (20 ) 5,704
income
Non-interest 8,334 3,192 785 687 (20 ) 12,978
expense
Provision for 961 408 66 (271 ) - 1,164
income taxes
Net income $ 2,221 $ 779 $ 129 $ (525 ) $ - $ 2,604
(loss)
Average Assets $ 1,851,296 $ 137,303 $ 3,430 $ 223,422 $ (363,556 ) $ 1,851,895
At and for the
Three Months
Ended
September 30,
2008:
Wealth
Commercial Mortgage Management Intersegment
&
Banking Banking Trust Other Elimination Consolidated
Services
Net interest $ 10,720 $ 837 $ - $ (277 ) $ - $ 11,280
income
Provision for 865 780 - - - 1,645
loan losses
Non-interest 1,142 2,352 893 8 - 4,395
income
Non-interest 12,096 5,728 859 573 - 19,256
expense
Provision for 605 (1,148 ) 13 (286 ) - (816 )
income taxes
Net income $ (1,704 ) $ (2,171 ) $ 21 $ (556 ) $ - $ (4,410 )
(loss)
Reconciliation
of Non-GAAP
measures:
After tax
impact on:
- Impairment - 1,846 - - - 1,846
of goodwill
- Impairment
of Fannie Mae
perpetual 3,992 - - - - 3,992
preferred
stock
Operating
earnings,
excluding $ 2,288 $ (325 ) $ 21 $ (556 ) $ - $ 1,428
nonrecurring
expenses
reported above
Average Assets $ 1,612,406 $ 124,567 $ 3,589 $ 172,889 $ (292,558 ) $ 1,620,893
At and for the
Nine Months
Ended
September 30,
2009:
Wealth
Commercial Mortgage Management Intersegment
&
Banking Banking Trust Other Elimination Consolidated
Services
Net interest $ 34,191 $ 2,165 $ - $ (682 ) $ - $ 35,674
income
Provision for 4,656 94 - - - 4,750
loan losses
Non-interest 3,077 12,419 2,686 (406 ) (64 ) 17,712
income
Non-interest 25,504 9,154 2,376 1,751 (64 ) 38,721
expense
Provision for 2,025 1,835 105 (965 ) - 3,000
income taxes
Net income $ 5,083 $ 3,501 $ 205 $ (1,874 ) $ - $ 6,915
(loss)
Reconciliation
of Non-GAAP
measures:
After tax
impact on:
- FDIC special 557 - - - - 557
assessment
Operating
earnings,
excluding $ 5,640 $ 3,501 $ 205 $ (1,874 ) $ - $ 7,472
nonrecurring
expenses
reported above
Average Assets $ 1,777,923 $ 170,349 $ 3,447 $ 201,099 $ (369,438 ) $ 1,783,380
At and for the
Nine Months
Ended
September 30,
2008:
Wealth
Commercial Mortgage Management Intersegment
&
Banking Banking Trust Other Elimination Consolidated
Services
Net interest $ 31,110 $ 2,470 $ - $ (920 ) $ - $ 32,660
income
Provision for 1,790 944 - - - 2,734
loan losses
Non-interest 3,565 7,075 2,715 27 - 13,382
income
Non-interest 27,165 12,979 2,575 1,999 - 44,718
expense
Provision for 2,528 (1,512 ) 51 (983 ) - 84
income taxes
Net income $ 3,192 $ (2,866 ) $ 89 $ (1,909 ) $ - $ (1,494 )
(loss)
Reconciliation
of Non-GAAP
measures:
After tax
impact on:
- Impairment - 1,846 - - - 1,846
of goodwill
- Impairment
of Fannie Mae
perpetual 3,992 - - - - 3,992
preferred
stock
- Settlement
with mortgage - 1,179 - - - 1,179
correspondent
Operating
earnings,
excluding $ 7,184 $ 159 $ 89 $ (1,909 ) $ - $ 5,523
nonrecurring
expenses
reported above
Average Assets $ 1,628,002 $ 138,243 $ 3,647 $ 176,287 $ (309,726 ) $ 1,636,453
Source: Cardinal Financial Corporation
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