Published: July 28, 2005
Center Bancorp, Inc. Reports 8.47% Increase in Second Quarter Earnings
Center Bancorp, Inc. (NASDAQ: CNBC), parent
company to Union Center National Bank of Union, New Jersey, today reported
earnings results for the second quarter ended June 30, 2005.
Highlights for the quarter:
-- Successful completion of the acquisition of Red Oak Bank, a $98.3
million commercial bank, on May 20, 2005. This merger serves to strengthen
the Corporation's presence in the Morris County market.
-- Second Quarter EPS of $.18 per share.
-- Total assets increased to $1.2 billion and positions Center as one of
the largest New Jersey headquartered commercial banks.
-- Consummation of a $20.0 million private placement of the Corporation's
stock on June 30, 2005.
-- Continued growth in the Corporation's loan portfolio. Excluding the
impact of the merger with Red Oak, the Corporation achieved a net growth in
loan volume on average of 11.06% for the second quarter and 9.2%,
annualized for the six months ended June 30, 2005.
-- Credit quality continues to remain high.
-- Deposit growth continues to remain strong with total deposits
increasing to $721.2 million at June 30, 2005.
-- Payment of a 5% stock dividend to shareholders on June 15, 2005.
-- Book value increased to $7.57 at June 30, 2005 from $5.41 a year ago.
Net income for the second quarter of 2005 amounted to $1,933,000, an
increase of 8.47% or $151,000 from the $1,782,000 earned for the comparable
quarter of the previous year. On a per share basis, basic and fully diluted
earnings per share were $.18; a 5.26% decrease from $.19 earned in the
comparable three month period ended June 30, 2004. All common stock per
share amounts in this press release have been restated to reflect all
previously declared and paid common stock splits and common stock
dividends.
For the six months ended June 30, 2005, net income amounted to $3,678,000,
an increase of $172,000 or 4.91% as compared with the comparable six month
period ended June 30, 2004. On a per share basis, basic and fully diluted
earnings per share were $.34; a decrease of 8.11% from $.37 earned in the
comparable six month period ended June 30, 2004.
The Corporation's earnings per share figures include the increase in shares
as a result of the acquisition of Red Oak Bank on May 20, 2005, the
issuance of 1,904,761 shares of the holding company's common stock on June
30, 2005 in a private placement of its securities and the issuance of
888,888 shares of the holding company's common stock in a private placement
of its securities on September 29, 2004.
John J. Davis, President & CEO of Center Bancorp, welcomed the shareholders
and customers of Red Oak Bank, which was merged into the Corporation's
Union Center National Bank subsidiary on May 20, 2005. He stated: "We
welcome the opportunity to continue to expand our franchise in the
attractive Morris County market with the addition of a true community bank.
The merger with Red Oak was consistent with our company's continued
strategy of highly focused growth within approximately 50 miles of our
headquarters, through new branches and acquisitions of other financial
institutions with a similar customer culture. In our view, Red Oak
represented Center's best possible acquisition candidate currently in
Morris County. This compliments our existing business strategies and core
focus of providing personalized service to local markets through a
diversified product line. We additionally see significant loan and core
deposit growth opportunities as a result of an expanded market."
Commenting on the financial results for the quarter, he noted: "Results are
consistent with prior periods, an achievement given the challenges
resulting from both a highly competitive marketplace and the uncertainties
of the economy. We did continue to experience some margin compression as a
result of the continued flattening of the yield curve and increased cost of
funds. We continue to make progress in sustaining positive trends such as
loan and core deposit growth and an increase in noninterest income. Other
factors which contributed to the results for the second quarter included a
reduction in the provision for loan losses, offset by an increase in other
expense."
Total interest income, on a fully tax-equivalent basis, for the second
quarter of 2005, increased $2.8 million or 27.4% over the comparable 2004
quarterly period. Total interest expense increased by $2.3 million or
69.7% over the same quarterly period of 2004. For the six months ended June
30, 2005 total interest income on a fully tax-equivalent increased $4.3
million or 21.3% as compared to the comparable six month period in 2004.
For the six months ended June 30, 2005 total interest expense increased
$3.6 million or 56.2% as compared to the comparable six month period in
2004.
The Corporation's net interest margin declined by 30 basis points to 2.93%
for the second quarter period ended June 30, 2005 as compared to the
comparable period in 2004; on a linked sequential quarter, the
Corporation's net interest margin declined 4 basis points from 2.97% for
the first quarter of 2005. For the six months ended June 30, 2005, the
Corporation's net interest margin declined 26 basis points from 3.21% for
the comparable six month period in 2004. The decline in margin for both
periods was in part due to the recent actions by the Federal Reserve Board
raising rates 50 basis points in the second quarter of 2005 and 200 basis
points since June 30, 2004; the flattening of the yield curve and a shift
toward higher costing funds as part of the funding mix also contributed to
the increase in interest expense in both periods. Continued efforts to
improve the yield on interest earning-assets and to control the cost of
funds have helped to mitigate some of the effects of the current margin
compression. Management believes that the margin can be stabilized;
however, a protracted flat yield curve is expected to have further impact
on compression. Management believes that continuing growth in the loan
portfolio can be expected in 2005, which should help to support margins as
the yield curve continues to moderate and short term rates continue to
rise.
The impact on net interest margins was to some extent mitigated by
non-interest income, which increased by 12.8%, net of gains on securities
sold, for the quarter and continues to be a strong contributing factor to
the performance of the Corporation. Mr. Davis noted: "The Corporation
continues to seek strategic initiatives to develop new sources of
noninterest income to enhance current earnings and to create long-term
sustainable quality earnings performance."
Interest expense for the second quarter increased $2.3 million or 69.7%.
Mr. Davis stated: "As we had noted in the first quarter, the flattening of
the yield curve has had a negative effect on our ability to increase
spreads. We experienced an increase in the cost of funds during the second
quarter, which increased at a faster pace (as a result of the Federal
Reserve's rate tightening policy) than our ability to substantially
increase asset yields."
Mr. Davis added: "We remain encouraged by the prospects for continued
revenue growth in subsequent quarters in light of the sustained growth of
the loan portfolio and increased opportunities to further increase the size
of the loan portfolio with the completion of the Red Oak acquisition. The
continued change in the earning asset mix should have a positive impact on
net interest income."
Total average loan volumes for the second quarter of 2005 increased to
$435.5 million, an increase of $74.0 million or 20.5% on average from
$361.5 million on average for the comparable prior year quarter. On a
linked sequential quarter comparison, total average loans increased by
$54.8 million or 14.4% from $380.7 million on average during the first
quarter of 2005. The merger with Red Oak Bank contributed $89.6 million in
net loans. Strong growth in commercial and commercial real estate related
loans provided the bulk of the loan growth in the second quarter.
For the six months ended June 30, 2005, total average loan volumes
increased to $408.3 million, an increase of $53.6 million on average (up
15.1% from $354.7 million on average for the comparable six months ended
June 30, 2004).
Mr. Davis stated: "We are encouraged by the key credit quality trends,
which have been maintained during a period of strong loan growth and
national economic instability." Asset quality continues to remain high and
no additional provisions were made to the allowance for loan losses during
the quarter. At June 30, 2005, the total allowance for loan and lease
losses amounted to $4.9 million or 1.0% of total loans. The acquisition of
Red Oak Bank contributed $1.2 million to the allowance. Net recoveries
amounted to $6,000 for the six month period. Non-performing assets at June
30, 2005 consisted of non-accrual loans totaling $350,000 comprised of five
commercial loans, $300,000 was related to assets acquired from Red Oak
Bank; no loans were on non-accrual status at December 31, 2004 or March 31,
2005.
Interest-bearing liabilities increased $139.8 million on average during the
second quarter of 2005, as compared to the second quarter in 2004. Total
non-interest bearing core deposits increased $10.4 million on average in
the second quarter of 2005 in comparison to the comparable quarter in 2004.
At June 30, 2005 this source of funding amounted to $148.7 million or 20.6%
of total deposits. The Corporation acquired $70.8 million total deposits
with the merger with Red Oak Bank.
Non-interest income, increased $101,000, exclusive of gains on securities
sold (which decreased $8,000). This was an increase of 12.8% for the
second quarter compared with the comparable quarter in 2004. Noninterest
income, including gains on securities sold, increased $93,000 or 11.3% for
the second quarter compared with the comparable quarter in 2004. The
increased revenue was primarily driven by the increase in other income,
which includes loan fees, and annuity and insurance sales fees.
Total non-interest expense in the second quarter of 2005 was $5.4 million,
up 10.58% as compared to the second quarter of 2004. Personnel-related
expenses, the Corporation's largest non-interest operating expense
component, increased 13.7% from a year ago. The increase was driven
primarily by increased staffing levels, coupled with merit and promotional
pay increases and certain employee related expenses. Red Oak Bank added
$38,465 to personnel-related expenses during the second quarter. Full time
equivalent staffing levels were 212 for the quarter compared to 189 in the
second quarter of 2004. The 11.08% increase in other expense in the second
quarter was primarily attributable to increased audit, legal and consulting
expenses, in part due to continued compliance with Sarbanes Oxely.
The effective tax rate continues to be less than the statutory rates,
substantially as a result of tax free income generated from the
Corporation's municipal and other tax advantaged securities.
Total assets at June 30, 2005 reached $1.2 billion, an increase of $245.6
million or 26.3% from assets of $933.8 million at June 30, 2004 and $169.6
million or 16.8% from December 31, 2004. The acquisition of Red Oak Bank on
May 20, 2005 contributed to this growth.
On June 30, 2005 Center Bancorp, Inc. announced that it issued 1,904,761
shares of the holding company's common stock to a limited number of
accredited investors in a private placement of its securities. The shares
were issued at a purchase price of $10.50 per share. Net proceeds to the
holding company were approximately $18.9 million, after commissions and
expenses. Center Bancorp intends to utilize the net proceeds from this
offering for general working capital purposes and to expand the Company's
capital position in order to support future asset growth, to fund bank and
non-bank acquisitions and to supply capital at the holding company (as
distinct from the bank subsidiary) level.
At June 30, 2005, the total Tier 1 capital leverage ratio was 9.45%, the
total Tier 1 Risk Based Capital ratio was 14.67% and the Total Risk Based
Capital ratio was 15.39%. Total Tier 1 capital increased to approximately
$101.4 million at June 30, 2005 from $67.7 million at June 30, 2004. These
ratios continue to exceed those necessary to be considered a
well-capitalized institution under Federal Regulatory guidelines.
At June 30, 2005, book value per common share was $7.57 as compared with
$5.41 a year ago. At June 30, 2005, tangible book value per common share
was $6.32 as compared to $5.19 a year ago. The Corporation recorded
approximately $15.3 million in goodwill resulting from the merger with Red
Oak Bank. Annualized return on average stockholders' equity for the three
months ended June 30, 2005 was 10.45% compared to 13.25% for the comparable
period in 2004.
Mr. Davis concluded: "Our challenge will be to continue to grow our
commercial business base and increase loans while containing operating
expense and the more significant cost of funds as we make progress in
driving more revenue to the bottom line. We believe that the second
quarter results are supportive of the Company's stated goals to deliver
consistent earnings performance."
Center Bancorp, Inc., through its wholly owned subsidiary, Union Center
National Bank, Union, New Jersey, currently operates thirteen banking
locations. Banking centers are located in Union Township (6 locations),
Berkeley Heights, Madison, Millburn/Vauxhall, Morristown (2 locations),
Springfield, and Summit, New Jersey. The Bank also operates remote ATM
locations in the Union New Jersey Transit train station and in Union
Hospital. The Bank recently received approvals to install and operate two
additional off-premise ATM locations in the Chatham and Madison New Jersey
Transit Stations.
Union Center National Bank is the largest commercial Bank headquartered in
Union County; it was chartered in 1923 and is a full-service banking
company.
For further information regarding Center Bancorp Inc., call
1-(800)-862-3683. For information regarding Union Center National Bank,
visit our web site at "http://www.centerbancorp.com"
http://www.centerbancorp.com.
All non-historical statements in this press release (including statements
regarding loan and core deposit growth, interest rates and the
Corporation's net interest margin) constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements may use such forward-looking terminology
as "expect," "look," "believe," "plan," "anticipate," "may," "will" or
similar statements or variations of such terms or otherwise express views
concerning trends and the future. Such forward-looking statements involve
certain risks and uncertainties. These include, but are not limited to, the
direction of interest rates, continued levels of loan quality and
origination volume, continued relationships with major customers including
sources for loans, as well as the effects of international, national,
regional and local economic conditions and legal and regulatory barriers
and structure, including those relating to the deregulation of the
financial services industry, and other risks cited in reports filed by the
Corporation with the Securities and Exchange Commission. Actual results may
differ materially from such forward-looking statements. Center Bancorp,
Inc. assumes no obligation for updating any such forward-looking statement
at any time.
Center Bancorp, Inc. and Subsidiaries
Consolidated Statements of Condition
June 30, December 31,
(Dollars In Thousands) 2005 2004
(unaudited)
ASSETS
Cash and due from banks $ 32,001 $ 12,033
Federal funds sold and securities
purchased under agreement to resell 0 0
----------- -----------
Total cash and cash equivalents $ 32,001 12,033
Investment securities held to maturity
(approximate market value of $154,017 in
2005 and $127,898 in 2004) 151,088 124,162
Investment securities available-for-sale 436,670 453,524
----------- -----------
Total investment securities 587,758 577,686
Loans, net of unearned income 498,602 377,304
Less--Allowance for loan losses 4,995 3,781
----------- -----------
Net loans 493,607 373,523
Premises and equipment, net 18,110 17,622
Accrued interest receivable 5,649 4,533
Bank owned separate account life insurance 18,215 17,848
Other assets 6,452 3,679
Goodwill 16,776 2,091
----------- -----------
Total assets $ 1,178,568 $ 1,009,015
=========== ===========
LIABILITIES
Deposits:
Non-interest-bearing $ 148,742 $ 127,226
Interest-bearing:
Certificates of deposit $100,000
and over 118,126 163,810
Interest-bearing demand, savings
and time deposits 454,338 411,236
----------- -----------
Total deposits 721,206 702,272
Short-term borrowings 164,934 101,357
Long-term borrowings 168,555 115,000
Subordinated debentures 15,465 15,465
Accounts payable and accrued liabilities 6,724 6,278
----------- -----------
Total liabilities 1,076,844 940,372
----------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock, no par value, Authorized
5,000,000 shares; None Issued 0 0
Common stock, no par value: Authorized
20,000,000 shares; issued 14,467,962 and
11,475,446 shares in 2005 and 2004,
respectively 65,592 30,441
Additional paid in capital 3,775 4,477
Retained earnings 37,081 36,973
Treasury stock at cost (1,041,920 and
1,056,972 shares in 2005 and 2004,
respectively) (3,721) (3,775)
Restricted stock 0 0
Accumulated other comprehensive
(loss)/income (1,043) 527
----------- -----------
Total stockholders' equity 101,684 68,643
----------- -----------
Total liabilities and stockholders' equity $ 1,178,568 $ 1,009,015
=========== ===========
All per common share amounts have been adjusted retroactively for common
stock splits and common stock dividends impacting the periods presented.
Center Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited) Three Months Ended Six Months Ended
(In Thousands, Except Per June 30, June 30,
Share Data) 2005 2004 2005 2004
----------- ----------- ----------- -----------
Interest income:
Interest and fees on
loans $ 5,928 $ 4,490 $ 10,961 $ 8,866
Interest and dividends
on investment
securities:
Taxable interest
income 4,935 4,119 9,423 8,099
Non-taxable interest
income 992 853 1,965 1,733
Dividends 465 270 915 604
Interest on Federal
funds sold and
securities
purchased under
agreement to resell 17 0 29 0
----------- ----------- ----------- -----------
Total interest income 12,337 9,732 23,293 19,302
----------- ----------- ----------- -----------
Interest expense:
Interest on
certificates of
deposit $100,000
and over 987 92 1,986 193
Interest on other
deposits 1,896 1,561 3,456 3,202
Interest on
borrowings 2,605 1,580 4,587 3,025
----------- ----------- ----------- -----------
Total interest expense 5,488 3,233 10,029 6,420
----------- ----------- ----------- -----------
Net interest income 6,849 6,499 13,264 12,882
Provision for loan
losses 0 205 0 410
----------- ----------- ----------- -----------
Net interest income after
provision for loan
losses 6,849 6,294 13,264 12,472
----------- ----------- ----------- -----------
Other income:
Service charges,
commissions and fees 475 477 970 958
Other income 159 109 255 211
Annuity & Insurance 72 12 114 20
Bank Owned Life Insurance 185 192 367 358
Gain on securities sold 23 31 36 157
----------- ----------- ----------- -----------
Total other income 914 821 1,742 1,704
----------- ----------- ----------- -----------
Other expense:
Salaries and employee
benefits 3,004 2,641 5,881 5,278
Occupancy, net 442 459 1,012 1,022
Premises and equipment 483 475 941 920
Stationery and printing 181 144 302 296
Marketing and
advertising 160 147 332 296
Other 1,153 1,038 2,294 2,083
----------- ----------- ----------- -----------
Total other expense 5,423 4,904 10,762 9,895
----------- ----------- ----------- -----------
Income before income
tax expense 2,340 2,211 4,244 4,281
Income tax expense 407 429 566 775
----------- ----------- ----------- -----------
Net income $ 1,933 $ 1,782 $ 3,678 $ 3,506
=========== =========== =========== ===========
Earnings per share:
(Note 4)
Basic $ .18 $ .19 $ .34 $ .37
Diluted $ .18 $ .19 $ .34 $ .37
----------- ----------- ----------- -----------
Weighted average common
shares outstanding:
Basic 10,962,507 9,422,960 10,697,411 9,410,420
Diluted 11,005,043 9,482,201 10,741,239 9,481,883
=========== =========== =========== ===========
All per common share amounts have been adjusted retroactively for common
stock splits and common stock dividends impacting the periods presented.
Center Bancorp, Inc. and Subsidiaries
Average Balance Sheet with Interest and Average Rates
Period Ended June 30
(unaudited)
Six Month Period Ended June 30, 2005
Interest Average
(tax-equivalent basis, Average Income/ Yield/
dollars in thousands) Balance Expense Rate
Assets
---------- ---------- ----------
Interest-earning assets:
Investment securities: (1)
Taxable $ 425,932 $ 9,676 4.54%
Non-taxable 145,900 3,846 5.27%
Loans, net of unearned income (2) 408,292 10,961 5.37%
Federal funds sold and securities
purchased under agreement to resell 2,201 29 2.64%
---------- ---------- ----------
Total interest-earning assets 982,325 24,512 4.99%
Non-interest-earning assets
Cash and due from banks 19,840
BOLI 18,013
Other assets 33,541
Allowance for possible loan losses (4,082)
---------- ---------- ----------
Total non-interest-earning assets 67,312
---------- ---------- ----------
Total assets $1,049,637
========== ========== ==========
Liabilities and stockholders' equity
Interest-bearing liabilities:
Money market deposits $ 87,849 932 2.12%
Savings deposits 113,732 765 1.35%
Time deposits 240,274 3,311 2.76%
Other interest - bearing deposits 120,873 434 0.72%
Short-term Borrowings & FHLB Advances 260,048 4,125 3.17%
Subordinated Debentures 15,465 462 5.97%
---------- ---------- ----------
Total interest-bearing liabilities 838,241 10,029 2.39%
---------- ---------- ----------
Non-interest-bearing liabilities:
Demand deposits 132,781
Other non-interest-bearing deposits 2,224
Other liabilities 5,042
---------- ---------- ----------
Total non-interest-bearing
liabilities 140,047
---------- ---------- ----------
Stockholders' equity 71,349
---------- ---------- ----------
Total liabilities and
stockholders' equity $1,049,637
========== ========== ==========
Net interest income (tax-equivalent
basis) $ 14,483
---------- ---------- ----------
Net Interest Spread 2.60%
---------- ---------- ----------
Net interest income as percent of
earning-assets (net interest margin) 2.95%
---------- ---------- ----------
Tax-equivalent adjustment (3) (1,219)
---------- ---------- ----------
Net interest income $ 13,264
========== ========== ==========
Six Month Period Ended June 30, 2004
Interest Average
(tax-equivalent basis, Average Income/ Yield/
dollars in thousands) Balance Expense Rate
Assets
---------- ---------- ----------
Interest-earning assets:
Investment securities: (1)
Taxable $ 409,582 $ 8,676 4.24%
Non-taxable 93,883 2,663 5.67%
Loans, net of unearned income (2) 354,665 8,865 5.00%
Federal funds sold and securities
purchased under agreement to resell 0 0 0.00%
---------- ---------- ----------
Total interest-earning assets 858,130 20,204 4.71%
Non-interest-earning assets
Cash and due from banks 19,841
BOLI 16,062
Other assets 27,380
Allowance for possible loan losses (3,205)
---------- ---------- ----------
Total non-interest-earning assets 60,078
---------- ---------- ----------
Total assets $ 918,208
========== ========== ==========
Liabilities and stockholders' equity
Interest-bearing liabilities:
Money market deposits $ 86,634 497 1.15%
Savings deposits 113,220 693 1.12%
Time deposits 154,383 2,013 2.61%
Other interest - bearing deposits 109,365 192 0.35%
Short-term Borrowings & FHLB Advances 242,323 2,683 2.21%
Subordinated Debentures 15,465 342 4.42%
---------- ---------- ----------
Total interest-bearing liabilities 731,390 6,420 1.76%
---------- ---------- ----------
Non-interest-bearing liabilities:
Demand deposits 125,327
Other non-interest-bearing deposits 1,220
Other liabilities 5,655
---------- ---------- ----------
Total non-interest-bearing
liabilities 132,202
---------- ---------- ----------
Stockholders' equity 54,616
---------- ---------- ----------
Total liabilities and
stockholders' equity $ 918,208
========== ========== ==========
Net interest income (tax-equivalent
basis) $ 13,784
---------- ---------- ----------
Net Interest Spread 2.95%
---------- ---------- ----------
Net interest income as percent of
earning-assets (net interest margin) 3.21%
---------- ---------- ----------
Tax-equivalent adjustment (3) (902)
---------- ---------- ----------
Net interest income $ 12,882
========== ========== ==========
(1) Average balances for available-for-sale securities are based on
amortized cost
(2) Average balances for loans include loans on non-accrual status
(3) The tax-equivalent adjustment was computed based on a statutory
Federal income tax rate of 34 percent
Center Bancorp, Inc. and Subsidiaries
Average Balance Sheet with Interest and Average Rates
Period Ended June 3
(unaudited)
Three Month Period Ended June 30,
2005
---------------------------------
Interest Average
(tax-equivalent basis, Average Income/ Yield/
dollars in thousands) Balance Expense Rate
---------- -------- -----
Assets
Interest-earning assets:
Investment securities: (1)
Taxable $ 437,799 $ 5,041 4.61%
Non-taxable 143,506 1,974 5.50%
Loans, net of unearned income (2) 435,539 5,928 5.44%
Federal funds sold and securities
purchased under
agreement to resell 2,397 17 2.84%
---------- -------- -----
Total interest-earning assets 1,019,241 12,960 5.09%
Non-interest-earning assets
Cash and due from banks 20,478
BOLI 18,103
Other assets 38,143
Allowance for possible loan losses (4,343)
---------- -------- -----
Total non-interest-earning assets 72,381
---------- -------- -----
Total assets $1,091,622
========== ======== =====
Liabilities and stockholders' equity
Interest-bearing liabilities:
Money market deposits $91,206 526 2.31%
Savings deposits 137,004 410 1.20%
Time deposits 235,311 1,672 2.84%
Other interest - bearing deposits 109,153 275 1.01%
Short-term Borrowings & FHLB Advances 286,144 2,364 3.30%
Subordinated Debentures 15,465 241 6.23%
---------- -------- -----
Total interest-bearing liabilities 874,283 5,488 2.51%
Non-interest-bearing liabilities:
Demand deposits 135,433
Other non-interest-bearing deposits 2,785
Other liabilities 5,150
---------- -------- -----
Total non-interest-
bearing liabilities 143,368
---------- -------- -----
Stockholders' equity 73,971
Total liabilities and
stockholders' equity $1,091,622
========== ======== =====
Net interest income (tax-equivalent basis) $ 7,472
---------- -------- -----
Net Interest Spread 2.58%
---------- -------- -----
Net interest income as percent
of earning-assets (net interest margin) 2.93%
---------- -------- -----
Tax-equivalent adjustment (3) (623)
---------- -------- -----
Net interest income $ 6,849
========== ======== =====
(1) Average balances for available-for-sale securities are based on
amortized cost
(2) Average balances for loans include loans on non-accrual status
(3) The tax-equivalent adjustment was computed based on a statutory
Federal income tax rate of 34 percent
Center Bancorp, Inc. and Subsidiaries
Average Balance Sheet with Interest and Average Rates
Period Ended June 30
(unaudited)
Three Month Period Ended June 30,
2004
---------------------------------
Interest Average
(tax-equivalent basis, Average Income/ Yield/
dollars in thousands) Balance Expense Rate
---------- -------- -----
Assets
Interest-earning assets:
Investment securities: (1)
Taxable $ 409,893 $ 4,384 4.28%
Non-taxable 89,277 1,299 5.82%
Loans, net of unearned income (2) 361,523 4,490 4.97%
Federal funds sold and securities
purchased under
agreement to resell 0 0 0.00%
---------- -------- -----
Total interest-earning assets 860,693 10,173 4.73%
Non-interest-earning assets
Cash and due from banks 18,743
BOLI 16,062
Other assets 30,027
Allowance for possible loan losses (3,315)
---------- -------- -----
Total non-interest-earning assets 61,517
---------- -------- -----
Total assets $ 922,210
========== ======== =====
Liabilities and stockholders' equity
Interest-bearing liabilities:
Money market deposits $95,255 235 0.99%
Savings deposits 141,138 339 0.96%
Time deposits 151,299 977 2.58%
Other interest - bearing deposits 75,424 102 0.54%
Short-term Borrowings & FHLB Advances 255,941 1,411 2.21%
Subordinated Debentures 15,465 169 4.37%
---------- -------- -----
Total interest-bearing liabilities 734,522 3,233 1.76%
---------- -------- -----
Non-interest-bearing liabilities:
Demand deposits 127,222
Other non-interest-bearing deposits 631
Other liabilities 6,047
---------- -------- -----
Total non-interest-
bearing Liabilities 133,900
---------- -------- -----
Stockholders' equity 53,788
---------- -------- -----
Total liabilities and
stockholders' equity $922,210
========= ======== =====
Net interest income (tax-equivalent basis) 6,940
---------- -------- -----
Net Interest Spread 2.97%
---------- -------- -----
Net interest income as percent
of earning-assets (net interest margin) 3.23%
---------- -------- -----
Tax-equivalent adjustment (3) (441)
---------- -------- -----
Net interest income $ 6,499
========== ======== =====
(1) Average balances for available-for-sale securities are based on
amortized cost
(2) Average balances for loans include loans on non-accrual status
(3) The tax-equivalent adjustment was computed based on a statutory Federal
income tax rate of 34 percent
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