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Using the Forecaster Model In 2006, geography was destiny - and the metrics were misleading. It was a winning strategy to 'avoid' California and Oregon and 'buy' Texas and Oklahoma. The stocks that the analyst liked did not out-'total return' the stocks the analysts did not like. The low yielders failed to out-return the high yielders. Nor was buying the high P/E stocks or high Price/Book stocks a winning strategy. In a sector where the dividend payout ratio varies from 17% to 77%, it is not a surprise that the dividend discount model fails to be predictive. This sector sells at a fairly consistent P/E ratios despite wide variations in CAGRs. That is not logical. And the CAGRs also fail to be predictive of the stocks with high price to book ratios. That is not logical. I am not giving up hope that this sector can be forecasted. But my readers should be pessimestic about the predictions in the forecaster spreadsheet until it shows more signs of some success. This is the link to the 2006 stats for this sector, showing the projections based on 2006 begining of the year stats - along with the 2006 returns in the 'forecasting' spreadsheet which is the last of five spreadsheet posted - or roughly in the middle of the long page. ALAB Reports EPS of $0.95 vs. $1.02 in Q1-06 PRNewswire 4-24 Alabama National BanCorporation reported earnings of $19.9 million, up 11.6% from the $17.9 million earned in Q1-06. Diluted earnings per share of $0.95 were 6.8% below the $1.02 reported in Q1-06, and diluted cash earnings per share of $1.00 were 5.1% below Q1-06's $1.05. Total revenue of $82.7 million was 17.3% above Q1-06's $70.5 million. ROA in Q1-07 was 1.05% compared to 1.21% in Q1-06. ROE in Q1-07 was 9.36% compared to 12.53% in Q1-06. Book value per common share at the end of Q1-07 was $42.13, $41.51 at the end of Q4-06. Net interest income in Q1-07 was $63.051 million compare to $52.575 million in Q1-06. The net interest margin declined from 3.81% in Q4-06 to 3.74%. NIM in Q1-06 was 3.93%. In Q1-07 ALAB had total earning assets of $6.930 billion for which ALAB received $127.822 million at a yield of 7.48% compared to Q1-06's 5.425 billion that earned $90.622 million at a yield of 6.78%. In Q1-07 ALAB had total interest-bearing liabilities of $6.046 billion for which ALAB paid $63.827 million in interest at a yield of 4.28% compared to Q1-06's $4.630 billion for which ALAB paid $37.615 million in interest at a yield of 3.30%. Noninterest income in Q1-07 was $19.695 million compared to $17.947 million in Q1-06. As a percentage of period-end loans and other real estate owned, nonperforming assets rose to 0.24% at 3-31-07, as compared with 0.09% at 3-31-06 and 0.21% at 12-31-06. BOH Reports Q1 EPS of $0.94 vs. $0.87 in Q1-06 Businesswire 4-23 Bank of Hawaii Corporation reported diluted EPS of $0.94 for Q1-07, an increase of $0.07 or 8.1% from diluted EPS of $0.87 in Q1-06. Net income for Q1-7 was $47.3 million, up $2.0 million or 4.4% from $45.4 million in Q1-06. Total revenue during Q1-07 increased 2.8% while total noninterest expense increased 1.6% compared with the same quarter last year, resulting in positive operating leverage of 4.1%. ROA in Q1-07 was 1.83%, up from 1.82% during Q1-06. ROE in Q1-07 was 27.00%, up from 26.13% during Q1-06. Book Value per share at the end of Q1-07 was $14.32 compared to $14.45 at the end of Q4-06 and $13.36 at the end of Q1-06. FTE Net interest income for Q1-07 was $98.4 million, down $4.0 million from $102.4 million in Q1-06. The net interest margin for Q1-07 was 4.07%, down from 4.41% in Q1-06 largely due to the continued effects of the inverted yield curve and shifts in the funding mix. Total Earning Assets in Q1-07 were $9.710 billion earning $148.6 million at an average yeild of 6.16% compared to Q1-06's $9.670 billion earning $149.7 million at an average yield of 6.17%. Total Interest-Bearing Liabilities in Q1-07 were $7.384 billion costing $50.2 million at an average yield of 2.75% compared to Q1-06's 7.345 billion costing $49.3 million at an average yield of 2.66%. Noninterest income was $61.0 million for Q1-07, an increase of $8.4 million or 16.0 percent compared to noninterest income of $52.6 million in Q1-06. The ratio of non-performing assets to total loans, foreclosed real estate, and other investments at 3-31-07 was 0.09%, unchanged from 3-31-06. BOKF Reports Q1 EPS of $0.78 vs. $0.81 in Q1-06 Businesswire 4-17 BOK Financial Corporation reported earnings of $52.8 million [$0.78/share] for Q1-07, compared with net income of $54.7 million [$0.81/share] for Q1-06. Net income for Q1-06 included $3.3 million or $0.05/share from net appreciation in the value of mortgage servicing rights due to a significant increase in interest rates. ROA was 1.19% in Q1-07 compared to 1.14% in Q4-06 and 1.24% in Q3-06. ROE was 12.29% in Q1-07 compared to 11.83% in q4-06 and 12.90% in Q3-06. Book value per share at the end of Q1-07 was $26.57, $25.66 at the end of Q4-06 and $24.98 at the end of Q3-06. Net interest revenue totaled $128.8 million, up $11.5 million or 10% over the first quarter of 2006 and $4.6 million or 15%, annualized, over the fourth quarter of 2006. Average earning assets for Q1-07 grew $1.8 billion or 12% compared with Q1-06, including a $1.7 billion increase in average outstanding loans. Net interest margin was 3.32% for Q1-07 compared with 3.39% for Q1-06 and 3.25% for Q4-06. Aggregate net loan yield was 8.02% for Q1-07, unchanged from the previous quarter while the securities portfolio yield increased 19 basis points. The overall cost of interest-bearing funds was up 4 basis points to 4.14%. Fees and commissions revenue totaled $92.0 million forQ1-07, up 2% from the same period last year. Non-performing assets totaled $41 million or .37% of outstanding loans at 3-31-07, compared with $36 million or .33% at 12-31-06 and $40 million or .44% at 3-31-06. The company has virtually no exposure to sub-prime mortgage products. BXS Reports Q1 Net Income of $0.42 vs. $0.47 in Q1-06 PRNewswire 4-23 BancorpSouth's net income was $33.6 million [$0.42/share] for Q1-07 including a negative impact of $0.01/share resulting from a $1.8 million pre-tax decline in the value of BancorpSouth's mortgage servicing asset. Net income for Q1-06 was $37.7 million [$0.47/share] which included a positive impact of $0.04/share from a $4.8 million reduction in the previous allowance for credit losses related to Hurricane Katrina. ROA in Q1-07 was 1.11% compared to 1.30% in Q1-06. ROE in Q1-07 was 12.90% compared to 15.72% in Q1-06. Book value per share at the end of Q1-07 was $13.70 compared to $12.59 at the end of Q1-06. Interest revenue for Q1-07 increased 17.0%, or $27.2 million, to $187.1 million from $159.9 million for Q1-06 and increased 4.3% from $179.4 million for Q4-06. Interest expense increased 38.3%, or $24.5 million, to $88.5 million for Q1-07 from $64.0 million for Q1-06 and 6.4% from $83.1 million for Q4-06. The average taxable equivalent yield on earning assets increased to 6.85% for Q1-07 from 6.16% for Q1-06 and 6.70% for Q4-06. The average rate paid on interest bearing liabilities was 3.80% for Q1-07, compared with 2.91% for Q1-06 and 3.67% for Q1-06. Net interest revenue increased 2.9% to $98.7 million for Q1-07 from $95.9 million for Q1-06 and increased 2.5% from $96.3 million for Q4-06. Net interest margin was 3.66% for Q1-07 compared with 3.73% for Q1-06 and 3.64% for Q4-06. Noninterest revenue increased 10.6% to $58.4 million for Q1-07 from $52.8 million for Q1-06. Insurance commission revenue rose 21.3% for Q1-07 from Q1-06, representing the fourth consecutive quarter of double-digit growth. The expansion of this business - and a significant continuing growth opportunity - is primarily attributable to growth in our Mississippi and Louisiana operations in the aftermath of Hurricane Katrina. Non-performing loans and leases decreased 7.0% to $24.2 million, or 0.28% of loans and leases at 3-31-07, from $26.0 million, or 0.35% of loans and leases at 3-31-06, and increased 3.1% from $23.5 million, or 0.30% of loans and leases at 12-31-06. CBSH Reports Q1 EPS of $0.73 Businesswire 4-12 Commerce Bancshares announced earnings of $.73 per share for Q1-07, a decrease of 1.4% compared to $.74 per share in Q1-06. Net income for Q1-07 amounted to $51.5 million compared with $52.9 million in Q1-06, or a decrease of 2.7%. The ROA for Q1-07 was 1.4%, and the ROE was 14.4%. Book value was $20.86. Total interest income was $228.267 million in Q1-07 - up from $228.159 million in Q4-06. Net interest income for Q1-07 was $131.5 million, a decrease of $2.8 million from Q4-06. The net yield on earning assets was 3.83% compared to 3.89% in Q4-06 and 3.97 in Q1-06. Total interest earning assets $13.950 billion while total interest income was $228.159 million net a 'calculated' average yield of 6.54%. Total interest bearing liabilities in Q1-07 were $12.745 billion with interest expenses of $93.927 million is a 'calculated' average yield of 2.95%. [Other releases included this data - my calculations may have been made using the wrong line items] Non-interest income was $26.511 million, down from $29.323 million in Q4-06. Non-Performing Assets to Loans ratio in Q1-07 was .18% compared to .12% in Q1-06. CBSS Reports Q1 EPS of $0.85 vs. $0.85 in Q1-06 Businesswire 4-19 Compass Bancshares reported earnings of $113.1 million for Q1-07, a five percent increase over the $107.9 million earned during Q1-06. On a per share basis earnings were $0.85, including $0.03 of additional costs related to the recent announcement regarding the signing of a definitive agreement under which Banco Bilbao Vizcaya Argentaria, S.A. ("BBVA") will acquire Compass pending customary closing conditions and regulatory approvals and the approval of the stockholders. ROA was 1.34% and ROE was 15.90%. Book value per common share at the end of Q1-07 was $22.32 compared to $19.82 at the end of Q1-06. Net interest income in Q1-07 was $278.401 million compared to $260.261 million in Q1-06. Net interest margin increased to 3.61% from 3.58% during Q4-06. Total earning assets in Q1-07 were $31.604 billion earnings $546.826 million at an average yield of 7.02%. Total interest bearing liabilities were $24.960 billion costing $265.255 million with an average yield of 4.31%. Noninterest income in Q1-07 was $178.804 million compared to $165.289 million in Q1-06. Nonperforming assets as a percentage of loans and other real estate increased to 0.40% primarily as a result of increased nonperforming assets in a specific, isolated real estate construction portfolio in a Southeastern market. CNB Reports Q1 EPS of $0.43 vs. $0.42 in Q1-06 Businesswire 4-17 The Colonial BancGroup, announced Q1-07 earnings of $0.43/share, a 2% increase over the $0.42 earned for the same quarter of the previous year. Net income for the quarter was $65 million. ROA for Q1-07 was 1.15% compared to 1.16% in q4-06, 1.19% in Q3-06, 1.21% in Q2-06 and 1.23% in Q1-06. ROE for Q1-07 was 12.91% compared to 12.85% in Q4-06, 13.51% in Q3-06,13.58% in Q2-06 and 13.44% in Q1-06. Book value per share at the end of Q1-07 was $13.63 compared to $12.61 at the end of Q1-06. Net interest income was $181 million in Q1-07, a 2% decrease from Q4-06. Net interest margin [3.48%] contracted five basis points from Q4-06 and was 3.86% in Q1-06. Net interest income continues to be impacted by our policy of accepting slower asset growth in return for dealing only with borrowers who meet our credit standards and the migration of customer deposits from low or no rate products to higher rate products. Total interest earning assets in Q1-07 were $21.017 billion earnings $378.177 million with an average yield of 7.28% compared to Q1-06's $19.704 billion earning $334.992 million with an average yield of 6.87%. Total interest bearing liabilities in Q1-07 were $18.056 billion costing $196.631 million with an average yield of 4.41% compared to Q1-06's $16.381billion costing $146.515 million with an average yield of 3.62%. Core noninterest income in Q1-07 was $46.240 million compared to $41.501 million in Q1-06. Total nonperforming assets as a percent of net loans and nonperforming assets in Q1-07 was 0.22% compared to 0.16% in q4-06, 0.10% in Q3-06, 0.18% in Q2-06 and 0.24% in Q1-06. CFR Reports Q1 Net Income of $0.78 vs. $0.83 in Q1-06 PRNewswire 4-25 Cullen/Frost Bankers reported Q1-07 net income of $47.3 million [$0.78/share], compared to Q1-06 earnings of $46.7 million [$0.83/share]. The Q1-07 results included $5.3 million in expenses relating to the early redemption of $100 million in trust preferred securities or $.06 per diluted common share after taxes. ROA in Q1-07 was 1.47% compared to 1.68% in Q1-06. ROE in Q1-07 was 13.78% compared to 18.86% in Q1-06. Book value at end of Q1-07 was $23.64 compared to $23.01 at the end of Q4-06, $20.08 at the end of Q3-06, $18.51 at the end of Q2-06 and $18.34 at the end of Q1-06. Net interest income increased 14.3% to $131.1 million, compared to the $114.7 million in Q1-06. Average loans were up 17.4% to $7.4 billion, from the $6.3 billion in Q1-06. Average deposits for the quarter were $10.3 billion, up 14.0% over the $9.0 billion in Q1-06. These average loan and deposit growth rates were impacted by three acquisitions completed during 2006. The net interest margin decreased one basis point from Q1-06 to 4.65%, offsetting, in small part, the positive impact of the higher volume of earning assets. The net interest margin increased three basis points from 4.62% in Q4-06. Total Earning Assets in Q1-07 were $10.180 billion earings $178.974 milion at an average yield of 6.93% compared to Q1-06's $10.090 bilion earning $171.079 million at an average yield of 6.74%. Total Interest-Bearing Funds in Q1-07 were $6.996 billion costing $57.881 million at an average yield of 3.29% compared to Q1-06's $6.963 billion costing $51.770 million at an average yield of 2.98%. Total earning assets in 2006 were $10.203 billion earning $693.934 million for the year at an average yield of 6.76%. Total interest-bearing liabilities for 2006 were $7.020 billion costing $214.796 million at an average yield of 3.06%. Non-interest income for Q1-07 increased 9.9% to $67.1 million, from the $61.0 million reported in Q1-06. NPAs as a percentage of total loans and foreclosed assets was 0.68% in Q1-07, 0.78% in Q4-06 and 0.63% in Q1-06. Conference Call Notes: The Texas economy is growing about one percentage point faster than the US average. Consumer deposits were up with new account growth at 3.6% annualized growth. CFR has started its remote deposit capture with over 500 work stations in service. The competition from the market place remains our number one challenge. During Q1 we declined loan business due to price and structure of loans. We are seeing 5 year loans with no prepayment terms - and more financing without personal liability or collateral. We will not do those kinds of loans. So in the environment can we grow loans more than 4.7% annualized? We expect to because our pipeline is strongly up and the trend on commitments is up. Q1 is seasonality weaker for us. Having 2 days less in the quarter cost us $2.7 million in net interest income. Add to that bonuses paid and matching 401(k) payments made - and that shifts FICA. Advertising was up $1 million because with our entry into a new market, wanted more visibility in North Texas due to Summit acquisition. And there is one plus to the seasonality - insurance fees are highest in Q1. The new Texas corp. income tax called 'margin' tax - was supposed to cut property taxes - but it has cost DCF an extra 1.5 cents/quarter. During Q1 we had some margin expansion and stability in challenging environment. There is still pressure on loan yields and pressure on deposit costs. Going forward, we expect some NIM expansion due to loan growth - which will help the balance sheet. $150 million in new investments with better yields should help Q2. There was also some moderation in deposit rate pricing late in Q1 - some prices went down. We track 30 rate categories. We were highest on 15. So we are already very competitive with room low lower deposit pricing. For the year, we project no moves by fed. The markets mid $3.60s EPS consensus projection looks reasonable to us [it was 3.68 at March's close]. QnA Session: John Bencore with JP Morgan - outlook for loan growth - rebound - what growth rate? CFR: Our 'commitments' in Q1-06 were $685 million, they were $635 million in Q2-06; $634 million in Q3; $872 million in Q4-06 and in Q1 they were $802 million. This leads us to forecast 10% to 11% growth. The challenge has not been in getting new loans. The challenge has been in payoffs that we did not expect. John questioned CFR's projection of increased margins from the added bond investments. At what yields were they? CFR: Total investment was $150 million. One was a $120 million investment in Freddie Mac's at 5.5% and a second was a $47 million in a muni with a tax equivalent rate of 6.2% Andrea Chou with Lehman asked if the commercial DDA account balances were growing. CFR: Commercial DDA deposits are stronger in April due to taxes. Bob Patton with Morgan Keegan asked which banks in what regions were loosening standards and pricing. CFR: It is pretty much everywhere with small and large banks. I am sure some of them are saying we are doing some of it. You are always tweaking pricing and terms. But giving up person guarantees . . . when market cycles - it comes back to haunt you. We see some instance where banks are buying market share with irrational pricing. Brent Crist with Fox-Pitt Kelton noted that CFR's margin improvement is dependant on loan growth. How will you fund loan growth? CFR: Probably it will be 50%-60% from deposits and capital. Brent asked where CFR pulled back rates on deposits and by how much. CFR: We are high in money market accounts. We have already moved down CD rates. We are high on basic checking rates. We rated highest in savings accounts. And we were the highest rate in two of six jumbo CD categories. Brent asked if CFR will you stay at the high end? CFR: We think we do have pricing power and can still offer value. Jon Arfstrom with RBC Capital said that CFR's commitment numbers helpful. But it appeared that something changed in Q3 to cause numbers to improve. CFR: It was a lot of hard work. And in Q4 we did have some 'public finance' that amounted to some big dollars. Overall, it was our focus on going after the customers. And we targeted customers who are a better fit for Frost. WE have surveyed and studied why customers have stayed with us - then looked at pool of prospect that meet those criteria in which we are successful. John wanted to know CFR's average earning asset yields. CFR: The earning asset yield 6.95% in Q1-07 and 6.88% in Q4-06. And the costs of funds were 3.82% in Q1 and 3.30% in Q4-06. Heather Wolf with Merrill Lynch noted that it appeared the commitment numbers did not translate into loan growth. CFR: The commitment numbers in public finance do not always flow through. But once again, we were more a victim of having high pay downs than failing to turn commitments into loans. Heather asked what percentage or dollar amount of the $870 million in commitments were from public finance. CFR: About $100 million. Brent Crist with Fox-Pitt Kelton want more color on the mid $3.60s guidance. If one backed out 84 cents of core EPS from Q1, then one would have to assume 90 cents per quarter for the rest of the year. What will cause that lift in EPS per quarter? CFR: It will come from additional loan growth; the negative seasonality goes away; hard work on other fronts; and margin expansion. CYN Reports Q1 Net Income of $1.15 vs. $1.12 in Q1-06 Prime Newswire 4-18 City National Corporation, the parent company of wholly owned City National Bank and Business Bank of Nevada, today reported Q1-07 net income of $56.5 million [$1.15/share] compared to $1.12/share on net income of $57.2 million in Q-06. ROA in Q1-07 was 1.55% compared to 1.57% in Q1-06. ROE was 15.10% in Q1-07 compared to 15.68% in Q1-06. Book value per share at the end of Q1-07 was $32.72 compared to $29.87 at the end of Q1-06. Fully taxable-equivalent net interest income totaled $151.3 million in Q1-07, down 3% from Q-06. Net interest margin for Q1-07 was 4.49% compared to 4.62% in Q1-06. Total interest-earning assets in Q1-07 were $13.661 billion with an average yield of 6.48%. Total interest-bearing liabilities were $7.608 billion with an average yield of 3.57% while Noninterest-bearing deposits were $5.489 billion. Noninterest income reached $66 million in Q1-07, up 20% from the previous year, or 9% excluding the impact of City National's Q2-06 acquisition of Independence Investments and the Q4- disposition of an investment affiliate. Nonperforming assets as a percentage of total loans was 0.22% in Q1-07, 0.20% in Q4-06 and 0.15% in Q1-06. Nonperforming assets as a percentage of total assets was 0.15% in Q1-07, 0.14% in Q4-06 and 0.10% in Q1-06. Conference Call Notes City has a diversified loan portfolio primarily with long term clients. CYN has never foreclosed on single family residential loan. City is not a subprime lender. The CYN acquisition of Lydian Wealth Management is scheduled to close during Q2. Lydian serves ultra-affluent clientele. Moody’s upgraded CYN to AA3 rating - and less than one percent of all US banks have that high a rating. Will disruption in the subprime market effect Southern California? There are increased home foreclosures in pockets of the market - but they are focused on low end or starter homes. Home prices have leveled. Housing is still very much in demand. DDAs were down in Q1 - which is seasonal. Deposit cost up 14% in Q1, but the rate of increase has slowed. Net interest margin held its ground despite competition. Deposit service charges were up 5% from last year. CYN's E-deposit program expands our geographic footprint - it allows non-California branches of our existing customer base to bank with us. CYN has had $4 billion e-deposits since inception of this program in May 2006. Andrea Chou of Lehman Brothers noted that CYN's credit costs lower than expected - will that cause a change in CYN's earning guidance? And what are offsets? CYN: We are sticking with our original outlook. The deposit mix is different than we anticipated - and their have been higher payoffs of exist [and higher yielding] loans that were not anticipated. Todd Hagerman of Fox Pitt Kelton noted that margins seem to have stabilized - and wanted CYN's outlook. CYN: Pricing pressure on loans is intense, but not getting worse. On deposits, costs have stabilized some, but the environment is still challenging. This is why we are cautious on what we anticipate. We need to grow deposits to expand our margins. Joe Medford with RBC Capital noted that CYN's assets under management were down in Q1. CYN: Now that we have [subsidiary] Independence, their client assets are more volatile. Gary Townsend with FBR noted that CYN is receiving some additional recoveries on their commercial loans. It appeared that credit quality is holding up exceptionally well. CYN: Credit quality can't get any better. We are still getting recoveries. But that well is running dry. We feel good our about credit quality - and if the market hits a rough spot, we will do better than average. Rob Rochelle of Deutche Banks noted that LA County is seeing higher foreclosures. Will CYN increase loan loss reserves? CYN: In our 53 year history, City has never lost a penny on a residential foreclosure. We have not added to reserve in 15 quarters. Heather Wolf of Merrill Lynch asked why CYN is comfortable forecasting that loan growth will grow. CYN: It is always uncertain till you see it on the books. But our loan team indicates that the loan pipeline is strong. FHN Reports Q1 EPS of $0.55 vs. $1.67 in Q1-06 Businesswire 4-12 First Horizon National Corporation announced Q1-07 earnings of $70.5 million [$.55/share] compared to Q4-06 earnings of $76.5 million [$.60/share]. Results for Q1-07 reflected [1] an expected seasonal decline; [2] a $15 million negative impact on mortgage hedging results; [3] a $7.5 million reduction in tax expense as we received approval to consolidate our mortgage company into our bank and [4] $10.3 million of net securities gains recognized as the investment portfolio was reduced to compensate for loan growth. Q1-06 EPS was distorted by a huge return in the sale from discontined operations. ROE was 11.6% in Q1-07 compared to 12.1% in Q4-06. ROA was .74% in Q1-07 compared to .77% in Q4-06. Book Value per share at the end of Q1-07 was $19.88 compared to $19.61 at the end of Q4-06, $20.06 at the end of Q3-06, $19.59 at the end of Q2-06 and $19.36 at the end of Q1-06. Q1-07 Interest income was $583.185 million compared to $533.369 million in Q1-06. The consolidated net interest margin remained stable at 2.84% for Q1-07 compared to 2.86% percent Q4-06. The net interest spread also remained stable at 2.21 percent for first quarter 2007 and fourth quarter 2006. The decline in margin is primarily attributable to a tighter spread on the warehouse, which decreased by 12 basis points to 1.12% for Q1-07, creating a negative impact on the overall corporate margin this quarter as compared to Q4-06. Total earning assets [Interest income] in Q1-07 was $33.750 billion earing $583.427 million with an average yield of 6.98%. Total interest-bearing liabilities [/Interest expense] in Q1-07 were $29.325 billion costing $345.766 million with an average yield of 4.77%.. Noninterest income was $283.188 million compared to $197.610 million in Q1-06. this was caused by a shift in Securities gains to a positive $10.273 million from a loss of $80.281 miilion in Q-06. FICO score distribution: [1] Greater than 700 was 83.60% compared to 80.62% in Q1-06; [2] FICO's of 660 to 699 was 11.51% in Q1-07 compared to 14.52% in Q1-06; [3] FICO's of 620 to 659 was 3.38% in Q-07 compared to 4.04% in Q1-06; [4] FICO's of less than 620 was 1.52% in Q1-07 compared to .82% in Q-06; Average FICO score in Q1-07 was 746 compared to 740 in Q-06. Cumulative LTV distribution: [1] Less than to 80% was 63.13% in Q-07 compared to 61.96% in Q1-06; [2] 80.1% to 90.0% was 25.49% in Q1-07 compared to 24.12% in Q1-06; [3] Greater than 90% was 11.39% in Q1-07 compared to 13.92% in Q-06; Average CLTV was 72.95% in Q1-07 compared to 75.07% in Q1-06. The nonperforming assets ratio related to the loan portfolio decreased to 56 basis points in first quarter 2007 from 58 basis points in fourth quarter 2006 due to the resolution of these previously identified problem loans and as overall low levels in the retail and commercial loans portfolios outweighed the expected increase in construction lending. FNB Reports Q1 Net Income of $0.29 vs. $0.27 in Q1-06 PRNewswire 4-19 F.N.B. Corporation reported Q1-07 net income of $17.4 million [$0.29/share], a 7.4% increase from Q1-06's net income of $15.8 million [$0.27/share] and were essentially equal to Q4-06's net income of $17.6 million [$0.29/share]. ROE for Q1-07 was 13.1% compared to 12.88% in Q4-06 and 13.33% in Q1-06. ROA for Q1-07 was 1.17% compared to 1.16% in Q4-06 and 1.14% in Q1-06. Shareholders' equity 3-31-07 was $538 million, or $8.91/share compared to $8.90 at the end of Q4-06 and $8.37 at the end of Q1-06. Net interest income was $47.920 million in Q-07 compared to $47.958 million in Q4-06 and $45.819 million in Q1-06. Net interest income increased slightly compared to the prior quarter, reflecting a stable net interest margin and loan growth. The 3.73% net interest margin for Q1-07 included six basis points of incremental benefit from $0.8 million of interest recovery on previously non-accruing loans. Yield on earning assets in Q1-07 was 6.98% compared to 6.84% in Q4-06 and 6.42% in Q1-06. Cost of funds in Q1-07 was 3.61% compared to 3.55% in Q4-06 and 2.92% in Q1-06. Total non-interest income was $20.916 million in Q1-07 compared to $19.296 million in q4-06 and $19.629 million in Q1-06. Non-interest income increased 6.6% driven by organic growth in our insurance, securities and trust businesses. Non-interest income represented 30% of net revenue for the first quarter of 2007. The ratio of non-performing loans to total loans was 63 basis points at March 31, 2007, an improvement from 66 and 81 basis points at December 31, 2006 and March 31, 2006, respectively, representing a favorable trend for five consecutive quarters. HBHC Reports Q1 EPS of $0.58 vs. $0.67 in Q1-06 Prime Newswire 4-17 Hancock Holding Company announced earnings for Q1-07 of $19.2 million, a decrease of $2.8 million, or 13%, from Q1-06. Diluted earnings per share for Q1-07 were $0.58, a decrease of $0.09 from Q1-06. Hancock's net income for Q1-07 was $19.2 million compared to $22.0 million for Q1-06. ROA for Q1-07 was 1.32% compared to 1.49% for Q1-06. ROE was 13.77% compared to 18.34% for Q1-06. Book value per share at the end of Q1-07 was $17.27 compared to $17.09 at the end of Q4-06 and $15.06 at the end of Q1-06. Net interest income for Q1-07 decreased $4.5 million, or 8%, from Q1-06, and was $1.6 million, or 3%, lower than Q4-06. Net interest margin was 4.04% in Q1-07, 26 basis points narrower than Q1-06 and 2 basis points narrower than Q4-06. Compared to the same quarter a year ago, the primary driver of the $4.5 million decrease in net interest income was a $104.7 million, or 2%, decrease in average earning assets mainly from a reduction in total borrowings of $82.0 million, or 29%, and a decrease in average deposits of $39.8 million, or 0.8%. The net interest margin narrowed 26 basis points as the decrease in the average earning asset yield (46 basis points) did not offset the increase in total funding costs (72 basis points). Average earning assets in Q1-07 were $5.354 billion earning $88.124 million at an average yield of 6.64%. Total interest bearing liabilites in Q1-07 were $4.217 billion costing $34.308 million at an average yield of 3.30%. Non-interest bearing liabilities were $983.973 million bringing the average cost of funds to 2.60%. Non-interest income for Q1-07 was up $1.0 million, or 4%, compared to Q1-06, but was down $1.6 million, or 6%, compared to Q4-06. The primary factors impacting the higher levels of non-interest income as compared to the same quarter a year ago, were higher levels of service charge fees (up $1.3 million, or 17%) and trust fees (up $0.6 million, or 20%). Compared to Q1-06, the ratio of non-performing assets as a percent of total loans and foreclosed assets was down 19 basis points from the 0.35% reported at 3-31-06. PCBC Reports Q1 Net Income of $1.23 vs. $1.43 in Q1-06 Businesswire 4-24 Pacific Capital Bancorp reported net income for Q1-07 was $58.1 million, or $1.23 per diluted share, compared with net income of $67.4 million, or $1.43 per diluted share, reported for Q1-06. The Company's RAL and RT programs generated $67.5 million in pre-tax income during the first quarter of 2007, a decline of 20.2% from the $84.6 million in pre-tax income generated during the same period of 2006. Total volume for these programs was 5.84 million transactions during the first quarter, a decrease of 2% over the 5.93 million transactions processed in the first quarter of the prior year. ROE in Q1-07 was 37.1% compared to 48.5% in Q1-06. ROA in Q1-07 was 2.88% compared to 3.78% in Q1-06. Excluding the impact of the RAL/RT programs, ROE and ROA for Q1-07 were 15.4% and 1.14%, respectively, compared to 16.13% and 1.14%, respectively, for the first quarter of 2006. Book value per share at the end of Q1-07 was $14.24 compared to $12.85 at the end of Q1-06. During Q1-07, total interest income was $246.4 million, compared with $217.1 million in Q1-06. Excluding the RAL program, total interest income was $122.4 million in Q1-07, compared with $103.6 million in Q1-06. Net interest margin for Q1-07 was 9.36%, which compares with 10.54% in Q1-06. Exclusive of RALs and Holiday loans in both periods, net interest margin in Q1-07 was 3.88%, compared with 4.37% in Q1-06. This also compares with a net interest margin of 3.83% in Q4-06, exclusive of RALs and Holiday loans. Total earning assets in Q1-07 were $8.086 billion earning $247.966 million at an average yield of 12.44%. [Consumer loans which includes RALs were 26% of earning assets with an average yield of 27.94%] Total interest-bearing liabilities in Q1-07 were $6.068 billion costing $61.316 million with an average yield of 4.10%. Exclusive of RALs, total nonperforming assets, which include nonperforming loans and other real estate owned, were $22.5 million, or 0.32% of total assets, at 3-31-07, compared with $20.2 million, or 0.28% of total assets, at 12-31-06. For the full year 2007, Pacific Capital Bancorp continues to expect fully diluted earnings per share to range between $2.05 and $2.11. Conference Call Notes PCBC is selling its Auto loan portfolio and exiting that business. PCBC has virtuall no exposure to subprime. Core banks EPS in Q1-07 was 40 cents compared to 39cents in Q1-06. A change in provision expense to normalized levels caused some shrinkage. Andrea Chou from Lehman Brothers noted that PCBC had 35-40 cents/share of EPS from the 'core bank' in Q1. But that run rate would have to go down for the rest of the year to fit into the EPS guidance. PCBC responded that Holiday loans, security sales, and a reversal of bonus accrual, if revfersed from Q1's gains, would bring us down the run rate to 32 cents. PCBC noted that there would be atypical resturcturing charges going forward that also would decriment that run rate. PCBC said that their indirect auto loans were thrid party originated loans. It was their goal going forward to not have loan relationships without deposits relationships. One analyst noted that the equipment leasing portfolio was a loans without deposit relationship too - will they exist that business? PCBC responded that the would not comment any more than say that they are exaining their whole portfolio. John Morford with RBC Capital noted that loan growth looked broad based and wanted to know if PCBC expected that trend to continue - and wanted to know about early paydowns on commercial loans. PCBC said that their were several large payoff in commerical loans in Q1-07, but expect good growth in loans for the rest of the year. PRSP Reports Q1 Net Income of $0.50 vs. $0.47 in Q1-06 PRNewswire 4-19 Prosperity Bancshares reported net income for Q1-07 of $20.229 million [$0.50/share], an increase in net income of $7.365 million or 57.3%, compared with $12.864 million [$0.46/share - 8.7% increase in EPS] for Q1-06. Prosperity completed its acquisition of Texas United Bancshares (TXUI) and its subsidiary banks State Bank, Gateway National Bank, GNB Financial, and Northwest Bank on 1-31-07. Prosperity also completed its acquisition of SNB Bancshares (SNBT) and its subsidiary Southern National Bank of Texas on 4-01-06. ROA for Q1-07 1.40% compared to 1.43% in Q1-06 and 1.47% in Q4-06. ROE for Q1-07 was 8.71% compared to 10.92% in Q1-06 and 10.08% in Q4-06. Book value per share at the end of Q-07 was $24.37 compared to $17.06 at the end of Q1-06 and $20.26 at the end of Q4-06. Net interest income before provisions for credit losses for Q1-07 increased 57.9%, to $46.088 million compared with $29.190 million during the same period in 2006. The increase was attributable primarily to a 53.5% increase in average earning assets. The net interest margin in Q1-07 was 3.93% compared 3.81% Q1-06 and 3.79% in Q4-06. Non-interest income increased 52.2% to $11.671 million for Q-07 compared with $7.667 million for Q1-06. Total interest earning assets in Q1-07 were $4.821 billion earning $79.863 million with an average yield of 6.72% compared to Q1-06's $3.142 billion earning $45.684 million with an average yield of 5.90%. Total interest bearing liabilities in Q1-07 were $3.801 billion costing $33.775 million with an average yield of 3.60% compared to Q1-06's $2.427 billion costing $16.494 million with an average yield of 2.76%. Non-performing assets totaled $4.314 million or 0.09% of average earning assets at 3-31-07 compared with $1.267 million or 0.08% [per call] of average earning assets at 3-31-06. [Approx 81% from non-performing loans were from portfolios in our last two acquisitions.] Conference Call Notes NPAs [Non-performing assets] are growing due to recent bank acquisitons. 91% of current NPAs came from our last four acquisitions, but NPAs will not get out of hand. The good conditions in the Texas economy should help us work through these assets. Primarily due to the TXUI acquisition, construction as a share of total loans did grow from 20% to 23%. But these loans are with local builders that we monitor closely. RF Reports Q1 EPS of $0.45 vs. $0.64 in Q1-06 Businesswire 4-12 Regions Financial Corporation reported Q1-07 earnings from continuing operations of 65 cents per diluted share. Excluding 4 cents of merger charges, earnings from continuing operations of 69 cents per diluted share. Q1-07 GAAP EPS was $0.45/share. ROA was 0.95% in Q1-07 compared to 1.15% in Q4-06 and 1.40% in Q1-06. ROE was 16.29% in Q1-07 compard to 19.59% in Q4-06 and 22.32% in Q1-06. Stockholders' equity per share at the end of Q1-07 was $28.14 compared to $28.36 at the end of Q4-06, $24.27 at the end of Q3-06, $23.56 at the end of Q2-06 and $23.33 at the end of Q1-06. Net interest income for Q1-07 was $1.175 billion and non-interest income [from continuing operations] was $697 million. Net interest margin was 3.99% in Q1-07 [expect 3.85% for full 2007] compared to 4.10% in Q4-06 and 4.18% in Q1-06. Implementing FIN48 will have an impact of $50 million or 7 cents/share and also impacts net interest margin by 7 basis points. Total interest-earning assets in Q1-07 were $120.600 billion earning $2.118 billion with an average yield of 7.12% compared to Q1-06's 74.355 billion earning $1.219 billion with an average yield of 6.65%. Total interest-bearing deposits in Q1-07 were $79.722 billion costing $687.459 million with an average yield of 3.50% compared to Q1-06's $47.071 billion costing $314.708 million with an average yield of 2.71%. Total non-interest income in Q1-07 was $696.912 million compared to $460.391 million in Q1-06. Total non-performing assets (including loans 90 days past due) as a percentage of loans and other real estate 0.67% compared to 0.86% in Q1-06. TRMK Reports Q1 Net Income of $0.44 vs. $0.53 in Q1-06 Businesswire 4-17 Trustmark Corporation announced net income of $25.9 million in the first quarter of 2007, which represented basic earnings per share of $0.44. ROA in Q1-07 was 1.19% compared to 1.45% in Q1-06. ROE in Q1-07 was 11.68% compared to 15.99% in Q1-06. Book value per share at the endof Q1-07 was $15.36 compared to $13.57 at the end of Q1-06. Net interest income in Q1-07 was $74.495 million compared to $70.790 million in Q1-06. Average yield on earning assets was 6.96% in Q1-07 compared to 6.22% in Q1-06. Average cost of liabilites was 3.07% in Q1-07 compared to 2.33% in Q1-06, while the average rate of interest-bearing liabilities was 3.79% in Q1-07 compared to 2.88% in Q1-06. This resulted in a net interest margin of 3.89% in Q1-06, equal to the 3.89% margin in Q1-06. Total noninterest income in Q1-07 was $38.151 million compared to $36.690 million in Q1-06. Nonperforming assets/total loans at the end of Q1-07 was 0.59%, equal to the 0.59% in Q1-06. UB Reports Q1 Net Income of $1.07 vs. $1.24 in Q1-06 Businesswire 4-19 UnionBanCal Corporation reported Q1-07 net income of $149.6 million [$1.07/share]. Income from continuing operations for Q1-06 was $181.5 million [$1.24/share]. Income from continuing operations for Q4-06 was $227.7 million [$1.61/share] including $72.8 million [$0.51/share] in state income tax refunds, and $5.3 million, [ $0.04/share] in tax adjustments. Excluding these items, income from continuing operations for Q4-06 was $149.6 million [$1.06/share]. Total revenue compared with first quarter 2006 decreased 4.5%, due to a 2.1% increase in noninterest income and a 7.7% decrease in net interest income. The decrease in net interest income was primarily due to a deposit mix shift. ROA from continuing operations in Q1-07 was 1.53% compared to 1.75% in Q4-06 and 1.15% in Q1-06. ROE from continuing operations in Q1-07 was 16.21% compared to 19.48% in Q4-06 and 13.45% in Q1-06 . Book value at the end of of Q1-07 was $31.94 compared to $32.86 at the end of Q4-06 and $32.98 at the end of Q1-06. Net interest income was $430.6 million in first quarter 2007, down $35.7 million [7.7%] from Q1-06. Compared to Q1-06, average interest bearing deposits increased $5.0 billion [23.7%] while average noninterest bearing deposits decreased $2.4 billion [13.8%]. The decline in noninterest bearing deposits was primarily due to a $1.7 billion [14.8%] decrease in average other commercial noninterest bearing deposits and a $0.3 billion [11.6%] decrease in average title and escrow deposits. The average yield on earning assets of $48.4 billion was 6.06 percent, up 29 basis points over Q1-06, with the average loan yield increasing 25 basis points. The average rate on interest bearing liabilities of $31.9 billion was 3.75%, up 126 basis points compared with Q1-06, reflecting higher short-term interest rates, an unfavorable change in deposit mix, and heightened competition for deposits. The net interest margin in Q1-07 was 3.58%, compared with 4.36% in Q1-06. Noninterest income was $222.6 million, up $4.6 million, or 2.1%, from Q1-06. Nonperforming assets at 3-31-07, were $42 million, or 0.08% of total assets. This compares with $42 million, or 0.08% of total assets, at 12-31-06, and $42 million, or 0.09% of total assets, at 3-31-06. UMBF Reports Q1 EPS of $0.41 vs. $0.31 in Q1-06 Businesswire 4-24 UMB Financial Corporation announced quarterly earnings of $17.3 million [$0.41/share] for Q1-07 compared to $13.2 million [$0.31/share] in Q1-06. Revenue was higher due to a 9.0% increase in net interest income and a 12.7% increase in noninterest income. These revenue increases were partially offset by a 7.8% increase in noninterest expense. ROA in Q1-07 was 0.86% compared to 0.70% in Q1-06. ROE in Q1-07 was 8.19% compared to 6.42% in Q1-06. Book value per share at the end of Q1-07 was $20.42 compared to $19.35 at the end of Q1-06. Net interest income for Q1-07 increased $4.7 million, or 9.0%, compared Q1-06 due primarily to higher average earning assets and rates. Average earning assets increased by $407.7 million, or 5.9%, as compared to Q1-06. Most of this increase was due to a $464.1 million, or 13.6%, increase in average loans. Net interest margin increased by 9 basis points to 3.32% for Q1-07 as compared to Q1-06. Although net interest spread decreased by 4 basis points [to 2.40% from 2.44%] for Q1-07 compared to Q1-06, the contribution from noninterest-bearing deposits increased by 13 basis points. Total earning assets in Q1-07 were $7.308 billion at an average yield of 5.96% compared to Q1-06's $6.900 billion at an average yield of 5.24%. Total interest- bearing liabilities in Q1-07 were $5.436 billion with an average yield of 3.56% compared to Q1-06's $4.956 billion at an average yield of 2.80%. Noninterest-bearing demand deposits in Q1-07 were $1.779 billion compared to $1.875 billion in Q1-06. Noninterest-bearing deposits comprised 32.2% of total deposits as of 3-31-07. Noninterest income of $67.4 million increased $7.6 million, or 12.7%, for Q1-07 compared to Q1-06. The increase was primarily attributable to higher trust and securities processing income, bankcard income and deposit service charges. Nonperforming loans were 0.20% of loans as of 3-31-07 as compared to 0.19% at 3-31-06. UMPQ Reports Q1 EPS of $0.36 vs. $0.39 in Q1-06 Businesswire 4-19 Umpqua Holdings announced Q-07 operating earnings of $21.0 million, or $0.36 per diluted share, compared to $17.6 million, or $0.39 per diluted share, for the first quarter of 2006. ROA is Q1-07 was 1.15% compared to 1.35% in Q4-06 and 1.31% in Q1-06. ROE in Q1-07 was 7.22% compared to 8.47% in Q4-06 and 9.50% in Q1-06. Book value per share at the end of Q1-07 was $20.07 compared to $19.91 at the end of Q4-06 and $16.79 at the end of Q1-06. Net interest income was $68.639 million in Q1-07 compared to $73.289 million in Q4-06 and $54.279 million in Q1-06. Umpqua Bank, Umpqua Holdings' bank subsidiary, reported on a tax equivalent basis a net interest margin of 4.72% for Q1-07, compared to 4.95% for Q1-06, and 4.97% for Q4-06. [Four cents/share effect on EPS]. Cost of interest bearing deposit were up - and demand deposits fell $41 million. Total yield on earning assets was 7.42% in Q1-07 compared to 7.50% in Q4-06 and 6.96% in Q1-06. Cost of interest bearing deposits was 3.62% in Q1-07 compared to 3.44% in Q4-06 and 2.63% in Q1-06. UMPQ has no exposure to the sub-prime market. Total non-interest income was $13.636 million in Q-07 compared to $14.113 million in Q4-06 and $12.202 million in Q1-06. Conference Call Notes Mathew Clark with KBW noted that loan yield were down 10 basis points. Was that mainly due to drop in construction business - or the competition environment - other causes? UMPQ: Fixed rate loans were paid off and replaced by lower yielding loans - plus factors you mentioned. Our Q1 average yield on loans was 8.16% - which was significantly higher than Q4-06 and reflects better pricing going forward. Mathew wanted UMPQ's outlook for construction loan balances - will you have net growth in 2007? UMPQ: Our Oregon Washington outlook - we are bullish going by data from our pipeline. UMPQ projects that loan growth will stay even with pay-off and completions. California, two years ago there was tremendous growth. Payoffs doubled in 2006 - and payoffs are at the same pace so far in 2007. Our pipeline is strong, but payoffs could be stronger. Mathew wanted to know UMPQ's loss provision expenses looking forward? UMPQ: We are in strong shape. Our loan quality is outstanding. No anticipated significant charge-offs. Todd Hagerman with Fox Pit Xxxman wanted color or the demand between commercial and residential construction, and the differences between the Sacramento and Oregon markets. UMPQ: In California the single family market was hot two years ago - but that came to an abrupt halt. And demand is substantially reduced from the level of even last year. Commercial is strong and has picked up, with a shift from retail to mixed use and office construction financing. Underwriting standards have been strengthened. While Commercial demand is good, it has not replaced the lack of residential construction. About 40% of construction is residential - 60% commercial in Oregon/Washington. Total loans were up 12% growth. C&I loans are up 20%. Steve Calero of Black Rock noted the UMPQ's cost of funds was up 5 basis points. UMPQ: We will continue to manage this. We misjudged [in 2006] how competitive rates would get this year. Steve want to know how UMPQ could cut employee expenses and still keep customer service from not deteriorating. UMPQ: We will not risk our strategy on customer service. That strategy has been successful. The changes [cuts] we made in employment are from automation. Check imaging has saved us millions. Most of our cost savings were just basic common sense. We statistically measure service, so it will not slip without us knowing. Our quality score should be HIGHER next quarter. [UMPQ's current ROQ score was 2.56 in the Oregon/Washington markets.] Steve asked if the credit spreads have stabilized. UMPQ: We know yields on loans are going up and the cost of funds appear to have stabilized. It is the California paydowns that have had the most impact on us. Joe Worford with RBC noted that UMPQ had increase in deposit cost in Q1 but they said they were lowering rates. UMPQ: We did make adjustments, lowering rates in January. But not everything reprices overnight. The fact that our cost of funds was up ONLY 5 basis point is encouraging. Joe asked if NIMS decline steadily over the quarter. UMPQ: The decline was mostly in January, while NIMs stabilized in February and March. We need to grow C&I lending to replace some of the real estate loans in California. We should have reacted earlier. We are working on that now. Staff today is better than staff we had one year ago. Feldman with Segal asked if UMPQ had pricing power in California - or adapting to competitive pressures. UMPQ: Pricing is fair - we have line in sand on quality loans at reasonable pricing. We are not seeing banks offering discounts to market prices like 6 months ago. We will do more C&I loans. UMPQ noted that they do not get fee income on loans in California like they do elsewhere. Feldman: There is a time lag building a C&I portfolio. UMPQ: 85% of our current loan portfolio is real estate in California - the rest is C&I and consumer loans. We project a 5% move to bring C&Is up to a 20% share - then we will be happy. WTNY Reports Q1 Net Income of $0.55 vs. $0.57 in Q1-06 PRNewswire 4-24 Whitney Holding Corporation earned $37.0 million [$0.55/share] in Q1-07 compared with $36.1 million [$0.57/share] for Q1-06. ROA in Q1-07 was 1.48% compared to 1.34% in Q4-06 and 1.37% in Q1-06. ROE in Q1-07 was 13.10% compared to 11.93% in Q4-06 and 12.74% in Q1-06. Book value per share at the end of Q1-07 was $17.76 compared to $16.88 at the end of Q4-06 and $16.90 at the end of Q1-06. Whitney's net interest income for Q1-007 increased $1.7 million, or 1%, compared to Q1-06. Average earning assets were stable between these periods. The net interest margin was 5.08% for the first quarter of 2007, up 6 basis points from the year-earlier period. The overall yield on earning assets increased 72 basis points from the first quarter of 2006. The main factors behind this yield improvement were the rise in benchmark rates for the large variable-rate segment of Whitney's loan portfolio and a favorable shift in the mix of earning assets. The cost of funds increased 66 basis points between the first quarters of 2006 and 2007. This increase was driven by higher competitive market rates as well as a shift in the funding mix to higher-cost sources, as discussed below. Noninterest income increased 14%, or $2.9 million, from the first quarter of 2006. Noninterest-bearing deposits funded approximately 29% of average earning assets in the first quarter of 2007, and the percentage of funding from all noninterest-bearing sources was 34% for the period. These percentages, while down from their highpoints of 35% and 36%, respectively, in the first quarter of 2006, are comparable to or slightly above pre-storm levels. Higher-cost interest-bearing funds, which include time deposits and borrowings, funded 32% of average assets in 2007's first quarter, compared to 27% in the year-earlier period. Total interest-earning assets had an average yield of 7.00% in Q1-07 compared to 6.95% in Q4-06 and 6.28% in Q1-06. Total interest-bearing liabilities had an average yield of 2.91% in Q1-07 compared to 2.78% in Q4-06 and 1.98% in Q1-06. Nonperforming assets as a percentage of loans plus foreclosed assets and surplus property at the end of Q1-07 was .76% compared to .81% in Q4-06 and .80% in Q1-06. ZION Reports Q1 EPS of $1.36 vs. $1.28 in Q1-06 PRNewswire 4-19 Zions Bancorporation reported Q1-07 net earnings applicable to common shareholders of $149.7 million, or $1.36 per diluted common share. This represents an increase of 8.7% and 6.3% over the $137.6 million, or $1.28 per diluted common share, for the first quarter of 2006. ROE was 12.25% compared to 12.08% for Q4-06 and 12.92% for Q1-06. ROA for Q1-07 was 1.31%, unchanged from Q1-06. Book value per common share at the end of Q1-07 was $46.04 compared to $40.95 at the end of Q1-06. Net interest income for Q1-07 decreased $2.0 million or 1.7% annualized to $457.1 million compared to $459.0 million for Q4-06, and increased $34.2 million or 8.1% compared to $422.8 million for Q1-06. Taxable-equivalent net interest income for Q1-07 was $463.7 million compared to $465.3 million for Q4-06 and $428.8 million for Q1-06. [ZION generates 5 million/day in interest income - so having two less days in the quarter cut income by ten million.] The net interest margin was 4.51% for Q1-07 compared to 4.60% for Q4-06 and 4.69% for Q1-06. [The decline in non-interest bearing DDA hurt margin by 5 basis points - seasonality in DDA and there is evidence trend appears to have reversed. Spread compression caused 4 basis points decline. ZION's 2006 NIM was 4.63% - that was the highest in a decade. As recently as 2004 NIM was 4.27%. ZION has no sub-prime or Alt-A exposure]. Total interest-earning assets in Q1-07 were $41.696 billion earning $777.089 million at an average yield of 7.56% compared to Q1-06's $37.054 billion earning $644.047 million with an average yield of 7.05%. Total interest-bearing liabilities in Q1-07 were $32.294 billion costing $313.368 million with and average yield of 3.94% compared to Q1-06's $28,140 billion costing $215.223 million with an average yield of 3.10%. Noninterest-bearing deposits were $9,294 billion in Q1-07 compared to $9.503 billion in Q1-06. Noninterest income for Q1-07 was $145.4 million compared to $139.9 million for Q4-06 and $128.5 million for Q1-06. Nonperforming assets were $82.5 million at 3-31-07 compared to $82.0 million at 12-31-06 and $96.6 million at 3-31-06. The ratio of nonperforming assets to net loans and leases and other real estate owned was 0.23% at 3-31-07 compared to 0.24% at 12-31-06 and 0.31% at 3-31-06. Conference Call Notes: Zion stated that the net interest margins will continue to be sensitive to DDA growth and our NIM outlook is for it to be flat to down. Credit quality, because it started from a position of being atypically strong, will deteriorate slightly in coming quarters. Loan growth is expected in all lines but residential. James Abbot with FBR wanted more color on deposit attrition. The $500 million in deposit fall looked to be more than just seasonal. Zion: We looked at the history of changes in terms of percent from Q4 to Q1. In 2003 there was 7.5 percentage points less growth. In 2004 there was 2.7 percentage points less growth. In 2005 there was 5.4 percentage points less growth. In 2006 we closed Amegy - the growth was 2.1 percentage points less when we include funds with the Stockman acquisition - and it was 4.5% less growth without including Stockman. James asked if fee income fell - those fees that are related to DDA. Zion: Deposit service charges grew a little in Q1 despite softness in balances. James asked what Zion was doing to revitalize their California branches. Zion: California has been more dependant on residential loans for their prior growth. And the California banks also loan to Las Vegas - and Vegas is also hurting. We are not reaching for growth in California. Jason Goldberg with Lehman Brothers noted that Zion had mentioned competitive pricing pressures and wanted more color. Zion: The pressure is on loans and deposit pricing. There is no pattern. The biggest impact [outside decline in DDA] is the change in mix towards more expensive funds and more CDs. Steven Appellopolis with JP Morgan asked if Zion was projecting cost of deposits to increase again. Zion: I do not know that there is not a lot of pricing pressure out there on deposits - but there is migration to the higher yielding accounts. So Zion projects that they will need to fund assets with higher cost accounts. If none of loan growth is funded with DDA - even if the new loans are priced well, our margins will erode 4 basis points per quarter. In Q1 - due to DDA shrinkage - the NIM eroded even more. Eric Washerstrom with UBS asked - when you close on acquisition, what do you do with non-performing assets? Do you accelerate loss recognition? Zion: There is a mark to fair value on non-performing assets when they are acquired. And it is taken in without a loan loss reserve. Performing assets are brought over at book value along with their existing reserves. Heather Wolf with Merrill Lynch noted that Zion projected growth in DDA's but further margin compression. Zion: You would need growth in all deposit categories that kept up with loans for there not to be spread compression. And we do not see DDA growth keeping pace with loan growth - thus continued pressure on NIMs. Ken Houston with Banc of America asked about Zion's loan sales. Over the last couple of quarters there had been noticeable impairment charges. If there had not been impairments, what line item would that effect? Zion: In Q1 we had loan impairments $4.2 million - without impairment the line from loan servicing would be higher. Ken wanted to know Zion's visibility of future impairments? Zion: We have 8 securitizations in queue for Q2. On four we have already taken impairment charges. Three of the packages are in late stages, so there are no impairments left. That leaves one - and the charges are dependant on interest rate movements between now and when it is sold. These are 10-15 year loans. Background Info on FICO Scores Scores can be as low as 300 or as high as 900. The Web site myFICO.com reports the breakdown of the general population's FICO scores as: [1] 20 percent below 620 [2] 20 percent between 620 and 690 [3] 20 percent between 690 and 745 [4] 20 percent between 745 and 780 [5] 20 percent above 780. American score Breakdown in 2004 from Creditworthy News: Less than 1% score under 500; 5% score 500 to 549; 7% score 550 to 599; 11% score 600 to 649; 16% score 650 to 699; 20% score 700 to 749; 29% score 750 to 799; 11% score 800 or more. Loan rates as of 4-21 for 30 year mortgages per myFICO.com: 720-850 6.148 % 700-719 6.273 % 675-699 6.811 % 620-674 7.961 % 560-619 10.609 % 500-559 11.240 % Rates from Novastar on Mortgage from March 2006: 660 and above 8.25%; 620 to 659 8.74%; 580 to 619 9.12%; 540 to 579 9.46%; 539 and below 9.78%. The weighting of factors in FICO scores: 35% payment history; 30% debt load; 15% lenght of credit history; 10% recent credit applications; 10% types of credit {source: Smartmoney 11-22-06) Fair Isaac uses 22 pieces of data collected from the three major credit bureaus (Equifax, Experian, and TransUnion) to calculate a credit score. Fair Isaac calculates a FICO score based on the data provided by each credit bureau. It's not uncommon to see up to a 50-point differential between ratings. The reason: Bureaus collect data at different times of the month, or one bureau may have inaccurate information. The higher the score, the lower the risk you are to a creditor. The median FICO score is 723. On average, a consumer has a total of 11 credit obligations, of which seven are credit cards and four are loans. (source: BusinessWeek 11-28-05) Ratings & Dividend Changes On 4-26 Punk, Ziegel & Co Downgraded RF from Buy to Market Perform. On 4-19 Friedman Billings Upgraded CYN from Underperform to Market Perform. On 4-19 Stanford Research Downgraded CNB from Buy to Hold. On 4-16 JP Morgan Downgraded PCBC from Overweight to Neutral. On 4-13 Stifel Nicolaus Initiated RF at Sell. On 4-12 Deutsche Securities Initiated CYN at Hold. On 4-26 CFR declared a second quarter cash dividend of $.40 per common share, a 17.6% increase from the previous dividend of $.34 per common share. The dividend is payable June 15, 2007 to shareholders of record on June 1 of this year. On 4-25 BXS declared a quarterly cash dividend of $0.21 per common share, an increase of 5% in the previous $0.20 per share quarterly amount paid on the Company's common stock. The dividend is payable July 2, 2007 to shareholders of record at the close of business of June 15, 2007. On 3-05 Punk, Ziegel & Co Downgraded FHN from Market Perform to Sell. On 3-06 AG Edwards Upgraded RF from Sell to Hold. On 3-12 Cohen Bros Downgraded PRSP from Buy to Hold. On 3-14 Cohen Bros Upgraded FNB from Hold to Buy. Home Page Factoids Previous Update |