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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 21% to 80%, 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 [from continuing ops] of $1.01 vs. $1.02 in Q2-06 PRNewswire 7-24 Alabama National BanCorporation reported net income of $22.0 million [$1.06/share] in Q2-07. Excluding the discontinued insurance operations, ANB reported earnings from continuing operations of $21.1 million. Diluted earnings per share (continuing operations) were $1.01 in Q2-07 compared to $0.94 in Q1-07 and $1.02 in Q2-06. ROA in Q2-07 was 1.13% compared to 1.16% in Q2-06. ROE in Q2-07 was 10.14% compared to 11.33% in Q2-06. Book value per common share at the end of Q2-07 was $42.42 compared to $41.51 at the begining of the year. Net interest income in Q2-07 was $64.206 million compared to $58.943 million in Q2-06. Total interest earning assets had an average yield of 7.48% in Q2-07 compared to 7.48% in Q1-07 and 7.10% in Q2-06. Total interest bearing liabilities had an average yield of 4.32% in Q2-07 compared to 4.28% in Q1-07 and 3.67% in Q2-06. ALAB's FTE net interest margin in Q2-07 was 3.72% compared to 3.74% in Q107 and 3.97% in Q2-06. Noninterest income in Q2-07 was $21.657 million compared to $17.863 million in Q2-06. Wealth management contributed $6.3 million [29%] to noninterest income in Q2-07; service charges $4.2 million [19%]; mortgage sales $3.6 million [17%]; investment services $1.6 million [7%] and life insurance $1.1 million [5%]. Total non performing assets as a percentage of period-end loans and other real estate in Q2-07 were 0.32% compared to 0.24% in Q1-07 and 0.13% in Q2-06. Loans charged offs were $2.799 million in Q2-07 compared to $.501 million in Q1-07 and $.513 million in Q2-06. BOH Reports EPS of $.95 vs. $.72 in Q2-06 Business Wire 7-23 Bank of Hawaii reported diluted earnings per share of $0.95 for Q2-07, up from $0.72 in Q2-06 and up from $0.94 in Q1-07. Net income for Q2-07 was $47.7 million, an increase of $10.6 million, or 28.4% from net income of $37.2 million in Q2-06 and up $0.4 million, or 0.8% from net income of $47.3 million in Q1-07. ROA in Q2-07 was 1.84% compared to 1.47% in Q2-06 and 1.83% in Q1-07. ROE in Q2-07 26.30% compared to 21.70% in Q2-06 and 27.00% in Q1-07. Book Value at the end of Q2-07 was $14.34 compared to $14.32 in Q1-07 and $13.18 at the end of Q2-06. FTE Net interest income in Q2-07 was $99.1 million compared to $100.0 million in Q2-06 and $98.4 million in Q1-07. The decrease from Q2-06 was primarily due to increased funding costs. The net interest margin in Q2-07 was 4.12% compared to 4.25% in Q2-06 and 4.07% in Q1-07. Total Earning Assets in Q2-07 were $9.637 billion and they earned $150.0 million at an average yield of 6.23% [6.16% in Q1-07]. Total Interest-Bearing Liabilities in Q2-07 were $7.334 billion and they cost $50.9 million at an average yield of 2.78% [2.75% in Q1-07]. Noninterest income in Q2-07 was $58.0 million compared to $53.2 million in Q2-06 and $61.0 million in Q1-07. The increase from Q2-06 was widespread and included improvements in trust and asset management fees, service charges on deposits, and other fees. Trust and Asset Management contributed $16.1 million [27%] to noninterest income; Mortgage Banking $2.5 million [4%]; Service Charges on Deposit Accounts $11.1 million [19%]; Fees, Exchange, and Other Service Charges $16.5 million [28%]; Investment Securities Gains $0.5 million [1%]; and Insurance $4.9 million [8%]. Non-performing assets at the end of Q2-07 were $6.3 million [0.10% of total loans, foreclosed real estate, and other investments] compared to $5.4 million [0.08%] at the end of Q2-06 and $5.8 million [0.09%] at the end of Q1-07. The increase was largely due to the addition of one purchased lease of $0.9 million collateralized by construction equipment. Net charge-offs for Q2-07 were $3.4 million, or 0.21% annualized of total average loans and leases and included gross charge-offs of $5.2 million that were partially offset by recoveries of $1.8 million. During Q2-07 BOH repurchased 0.4 million shares of common stock at a total cost of $20.1 million. BOH Conference Call: In your CNI portfolio, were there any loan downgrades? BOH: The weighted average risk remained stable - there were no significant downgrades. Weighted average risk rating on funding also was down. We are tightening down on credit risk even more than in Q1. Loan pipeline vs. Q1? commercial coming in pipeline was strong. For balance of year they should remain stable - the unknown is the payoff side. On the Retail side - home equity lending had stable activity, maybe a modest uptick. Mortgage lending pipeline is not as good as in Q1. There were less refi's due to run up in rates. But now that rates are fallin back - that could change. What do you project for your pace of share buybacks for second half? BOH: We want to get to a 7% capital level. If we can not use capital for expansion - we want to give it back to the shareholders. Other than that - we use the 7% target. BOH ended Q2 with an Average Shareholders' Equity to Average Assets ratio of 6.90%. Commercial loan growth in Q2 was solid [the first 6 months of CNI loans was 12% higher that first 6 months of 2006]. Is that sustainable? BOH: We target mid to higher single didget range of growth. BOH stated that they exited $40 million in loans in Q2. Mainly it was syndicate loans that were covenant light. About 50% of the commercial loans are to residential builders. LTV for that portfolio is 60%. It is to national and local builders. It is mainly to high end luxury second homes. For the home equity portfolio, the average FICOs are 760 with LTVs in the range of 60%-75%. BOKF Reports EPS of $.80 vs. $.55 in Q2-06 Business Wire 7-17 BOK Financial Corporation reported earnings of $53.9 million or $0.80 per diluted share for Q2-07 compared with net income of $55.0 million or $0.82 per diluted share for Q2-06. Acquisitions of Worth National Bank and First United Bank were completed during the quarter. Worth added net loans of $281 million, total deposits of $369 million and five banking locations in Fort Worth, Texas. First United added net loans of $94 million, total deposits of $133 million and eleven banking locations in the Denver, Colorado area. ROA in Q2-07 was 1.16% compared to 1.19% in Q1-07 and 1.33% in Q2-06. ROE was 12.06% in Q2-07 compared to 12.29% in Q1-07 and 14.03% in Q2-06. Book value per share at the end of Q2-07 was $26.69 compared to $26.57 at the end of Q1-07 and $23.68 at the end of Q2-07. Net interest revenue totaled $134.9 million for Q2-07, up $13.8 million or 11% over Q2-06 and $6.1 million or 16% annualized over Q1-07. Net interest margin was 3.31% for Q2-07, 3.32% for Q1-07 and 3.40% for Q2-06. Yields on average earning assets increased 29 basis points to 7.00% and the cost of interest-bearing liabilities increased 39 basis points to 4.12% compared with Q2-06. Yields on average earning assets and the cost of interest-bearing liabilities both decreased 2 basis points compared with Q1-07. Fees and commissions revenue totaled $98.8 million for Q2-07, up $4.9 million or 5% over Q2-06. Brokerage and trading revenue contributed $13.3 million [13%] to noninterest income; Transaction card revenue $22.9 million [23%]; Trust fees and commissions $19.5 million [20%]; Deposit service charges and fees $26.8 million [27%]; Mortgage banking revenue $6.7 million [7%]; and Bank-owned life insurance $2.5 million [2%] Non-performing assets totaled $60 million or .52% of outstanding loans at 6-30-07, compared with $41 million or .37% at 3-31-07 and $39 million or .40% at 6-30-06. Non-performing assets at 6-30-07 included $6.9 million of non-accruing loans acquired with First United Bank. BOKF will be reimbursed by the sellers for up to $8 million of losses incurred on any acquired loans in the three-year period after the acquisition date. Excluding acquisitions, non-performing assets increased $10.0 million due primarily to three loans identified as non-accruing during the quarter. BXS Reports EPS of $.43 vs. $.45 in Q2-06 PRNewswire 7-23 BancorpSouth reported net income for Q2-07 of $35.9 million [$0.43/share] compared with $35.5 million [$0.45/share] for Q2-06. These results include the positive effect of an increase in the value of BXS's mortgage servicing asset of $1.2 million and $0.5 million for Q2-07 and Q2-06, respectively. ROA in Q2-07 was 1.11% compared to 1.21% in Q2-06. ROE in Q2-07 was 12.82% compared to 14.32% in Q2-06. Book value per share at the end of Q2-07 was $13.88 compared to $12.76 at the end of Q2-06. Interest revenue for Q2-07 increased 21.0% to $202.6 million. Interest expense increased 36.7% to $95.9 million. The average taxable equivalent yield on earning assets increased to 6.94%. The average rate paid on interest bearing liabilities was 3.86%. Net interest revenue for Q2-07 was $106.7 million compared to $97.2 million for Q2-06 and $98.7 million for Q1-07. Net interest margin was 3.69% for Q2-07 compared with 3.75% for Q2-06 and 3.66% for Q1-07. Noninterest revenue increased 12.4% to $60.2 million for Q2-07 from $53.6 million for Q2-06. Annualized net charge-offs were 0.14% of average loans and leases for Q2-07 compared with 0.18% for Q2-06 and 0.08% for Q1-07. Non-performing loans and leases decreased to $23.9 million [0.27% of loans and leases] at 6-30-07, from $24.4 million [0.32% of loans] at 6-30-06, and decreased from $24.2 million [0.28% of loans] at 3-31-07. BXS Conference Call: $17.665 million of noninterest revenue was from insurance commisions [29% of total noninterest revenues] - up from $14.841 million [which was 27.7% of noninterest revenues] in Q2-06. For Q2-07, the provision for credit losses was $7.8 million compared with $3.6 million for Q2-06 and $1.4 million for Q1-07. The loan loss reserve were up not due to quality of the loans but due to loan growth. Our formula is to put 1% of growth in loans to loan loss reserve. Loans and leases, net of unearned interest was $8.875 billion compared to $7.476 in Q2-06. Annualized net charge-offs were 0.14% of average loans and leases for Q2-07 compared with 0.18% for Q2-06 and 0.08% for Q1-07. Where is the loan growth? Southern half of Mississippi - Northern Alabama [Huntsville] - new offices is Dustin Florida - East Texas denovo operations - Baton Rouge - Fayetville/Bentonville/Rogers. Update on the M&A environment: see a lot of opportunities - so we can be selective - a number of community banks are available for discussions - we expect this environment to continue with community banks facing challenging times with spread managements and new competition on the deposit side. CBSH Reports EPS of $.79 vs. $.78 in Q2-06 press release of 7-12 Commerce Bancshares announced earnings of $.79/share for Q3-07 compared to $.78/share in Q2-06. Net income for Q2-07 amounted to $55.6 million compared with $55.3 million in Q2-06. ROA was 1.46% compared to 1.38% in Q1-07 and 1.61% in Q2-06, and ROE was 15.1% in Q2-07 compared to 14.41% in Q1-07 and 16.59% in Q2-06. Book value was $21.12 compared to $20.86 at the end of Q1-07 and $19.12 at the end of Q2-06. Net interest income in Q2-07 was $133.864 million compared to $131.479 million in Q1-07 and $126.479 million in Q2-06. The net interest margin was 3.82% compared to 3.83% in Q1-07 and 3.98% in Q2-06. Overall tax equivalent yield on interest earning assets remained flat with the previous quarter, while the overall cost of interest bearing liabilities increased just 2 basis points to 3.04% Non-interest income in Q2-07 was $94.059 million compared to $84.284 million in Q1-07 and $88.179 million in Q2-06. The increase in non-interest income over the 2nd quarter of last year resulted mainly from double digit growth in bank card, trust and corporate cash management fee income. The increase in bank card fees for the quarter was primarily due to higher fees earned on debit and corporate card transactions, which grew by 14.8% and 30.7%, respectively. Merchant fees, included in bank card revenues, decreased 8.9%, and continued to reflect slightly lower pricing margins and the loss of a large merchant customer last year. Credit card fees were up slightly. Trust fees for the quarter increased 11.0%. Non-Performing Assets to Loans was .33% in Q2-06 compared to .18% in Q2-06 and .18% in Q1-07. Total non-performing assets amounted to $34.2 million, an increase of $16.2 million over the previous quarter. This increase was mainly the result of placing one residential construction loan of $13.2 million on non-accrual status. The loan is secured by both undeveloped land and residential lots in the St. Louis metropolitan area, and management believes the collateral values are adequate to support carrying value. CBSS Reports EPS of $.82 vs. $.88 in Q2-06 Business Wire 7-25 Compass Bancshares reported Q2-07 earnings of $109.3 million compared to $115.4 million earned during Q2-06. ROA in Q2-07 was 1.27% compared to 1.40% in Q2-06. ROE in Q2-07 was 14.69% compared to 17.75% in Q2-06. Book value per common share at the end of Q2-07 was $22.48 compared to $20.15 at the end of Q2-06. Net interest income was $278.1 million for Q2-007 compared to $287.7 million earned in Q2-06. Total earning assets in Q2-07 were $31.908 billion and earning $554.135 million with an average annual yield of 6.97%. Total interest bearing liabilities in Q2-07 were $25.151 billion and cost $272.729 million with an average annual rate of 4.35%. The Net yield on earning assets in Q2-07 was 3.54% compared to 3.80% in Q2-06. Noninterest income increased to $188.2 million compared to $181.4 million in Q2-06. Service charges on deposit accounts contributed $76.762 million [41%] to noninterest income in Q2-07; Card and merchant processing fees $30.484 million [16%]; Insurance commissions $14.555 million [8%]; Retail investment sales $12.936 million [7%]; and Asset management fees $9.558 [5%]. Net charge-offs as a percentage of average loans were 0.39 percent in the second quarter of 2007 compared to 0.28 percent during the second quarter of 2006. Nonperforming assets as a percentage of loans and other real estate increased to 0.58% primarily as a result of increased nonperforming assets in a specific, isolated real estate construction portfolio in a Southeastern market. NPAs were 0.40% in Q1-07 and 0.28% in Q2-06. CFR Reports EPS of $.89 vs. $.86 in Q2-06 PRNewswire 7-25 Cullen/Frost Bankers reported Q2-07 net income of $53.6 million, a 10.5% increase from the $48.6 million reported for Q2-06. On a per-share basis, earnings for Q2-07 were $.89/share compared to $.86/share in Q2-06. ROA in Q2-07 was 1.66% compared to 1.70% in Q2-06. ROE in Q2-07 was 15.40% compared to 19.02% for Q2-06. Book value at the end of Q2-07 was $22.99 compared to $23.64 in Q1-07 and $18.51 at the end of Q2-06. FTE net interest income in Q2-07 increased 11.6% to $133.1 million compared to the $119.3 million in Q2-06. Net interest margin reach 4.72%, the highest level we have achieved in five years, compared to 4.65% in Q1-07 and 4.70% in Q2-06. Non-interest income for Q2-07 increased 5.4% to $64.0 million, compared to the $60.8 million in Q2-06. Service charges on deposit accounts contributed $20.1 million [31%] to noninterest income in Q2-07; Trust fees $17.7 million [28%]; and Insurance commissions and fees $6.5 million [10%]. Non-performing assets at the end of Q2-07 was $49.725 million compared to $50.484 million in Q1-07 and $37.285 million in Q2-06. NPAs as a percentage of: Total loans and foreclosed assets was 0.67% at the end of Q2-07 compared to 0.68% at the end of Q1-07 and 0.57% in Q2-06. Net charge-offs in Q2-07 were $2.723 million compared to $2.591 million in q1-07 and $3.695 million in Q2-06. Charge-off as an annualized percentage of average loans in Q2-07 were 0.15% compared to 0.14% in Q1-07 and 0.23% in Q2-06. CFR Conference Call: CFR's merger with Summit closed in December of 2006. We are pleased with the merged Ft Worth market operations. The Texas economy continues to outperform. All of markets we serve had good growth. But Texas is one of the most competitive markets where there is aggressive pricing of deposit products. Since the beginning of the year, CFR has reduced to 4 from 6 the number of DDA products and added free bill pay and more ATM access. CFR offers a competitive 6.9% on home equity loans and offers 5% on two year CDs. The CFR branch network has increased 25% from last year and CFR has added branches in San Antonio, Austin and Brownsville. Loan growth is CFR's primary focus. One might asked why the commitment is strong and while loan growth is flat. In Q2 CFR had greater paydowns and payoffs on loans than is typical. That was due to greater liquidity [companies being bought and loans terminated with the new purchase of the company] and companies are making money and thus can do quicker paydowns. This is especially true in the oil and gas loans because those companies are generating excess funds. Real estate construction loans have been terminated with a purchase at certificate of occupancy instead of stabilization. An example: CFR financed the construction of a small mid-market hotel financed for $11.1 million sold at $14.5 million after certificate of occupancy - when normally builder would have waited till occupancy and room rates were established. Several developers are selling sooner. Approx 10% of loans were lost because the lender sold the property. Approx 5% of lenders were asked to move due to deterioration of the LTV. In Q2-07, of the business loan apps lost to competition in Q2-07, CFR lost 52% due to price and 48% lost to structure. San Antonio, Ft Worth and Austin continue to be our strongest markets. Dallas, Houston and the Valley are our weakest markets. There are 1 million companies in Texas with sales over $1 million and 650,000 of those are in our footprint. CFR's footprint contains 70% of the Texas population and that 70% has $3 thousand to $5 thousand more in average income per annum than the state average. In a survey on customer satisfaction - we led our top competitors. NIM was up and that was not due to any one big thing. Our yields on Loans and investments added 3 basis points. A large investment in a 2 year treasury yielding only 3.85% matured and we received a higher yield on the reinvestment. Our deposit mix also help since we sold $49 million less in consumer jumbo CDs and has $20 million in state CD deposits. On negative side - cost of 'iolted deposits' [CFR had $120 million in NOW accounts for iolted [an acronym] deposits - deposits by law firms - they hold funds prior to distribution to plaintiffs and the interest is remitted to state. The state agency decided regular NOW accounts were not qualified and the rates went up to 3.85% - that hurt NIM by two basis points. Trust fees up 12.5% - driven by investment fees. 40% plus of our managed accounts are in equities and they have done well in Q2. We prepare tax returns for trust customers - and collect fees on that - and that inflow is seasonal. Estate fees were volatile. Service charges on deposits up $1.3 million and that was due to CFR's overdraft fees being higher - and due to seasonality - Q2 always has higher overdrafts than Q1. CFR's overdraft fees went from lower than market average to the midpoint - and that added growth to service fees. But during Q2 CFR added free bill pay, which reduced fee income. A state tax on income from out of state receipts reduced that tax and that had a benefit of 4 cents/share or $3 to $4 million benefit, but the aforementioned 'iolta' change offset that tax reduction benefit. CNB Reports EPS of $.43 vs. $.43 in Q2-06 press release of 7-18 The Colonial BancGroup announced earnings for the quarter ended June 30, 2007 were $0.43 per diluted share. Net income for the quarter was $66 million. ROA in Q2-07 was 1.15% compared to 0.64% in Q1-07 and 1.21% in Q2-06. ROE in Q2-07 was 12.24% compared to 7.15% in Q1-07 and 13.58% in Q2-06. Book value per share at the end of Q2-07 was $14.04 compared to $ 13.71 at the end of Q1-07. Colonial's net interest income for Q2-07 was $190.217 million compared to $179.945 million in Q1-07. The strong increase in net interest income was attributable to a 20 basis point increase in CNB's net interest margin primarily as a result of the sale of low yielding investments and the corresponding reduction in wholesale borrowings at the beginning of the quarter. The net interest margin increased to 3.66% for the quarter, up from 3.46% for Q1-07. Total interest earning assets in Q2-07 was 20.968 billion and earned $385.282 million at an average yieldl of 7.37%. Total interest bearing liabilities in Q2-07 were $17.708 billion and cost $193.658 million at an average weild of 4.39% Total noninterest income in Q2-07 was $58.781 million compared to $15.219 million [which included a $36 million restructuring charge] in Q1-07 and $44.873 million in Q2-06. The increase over the first quarter was primarily from retail banking fees, financial planning services and income from joint venture activities. Total noninterest income included a $4.9 million gain on the sale of the CNB's merchant services business in the quarter. Nonperforming assets ratio in Q2-07 was 0.29% and totaled $45.552 million in Q2-07 compared to $32.855 million in Q1-07 and $27.302 million in Q2-06. CYN Reports EPS of $1.19 vs. $1.16 in Q2-06 Prime Newswire 7-18 City National Corporation reported Q2-07 net income of $59.2 million, or $1.19 per share, up from $58.7 million, or $1.16 per share, for Q2-06. Year to date, City National has earned $115.7 million, or $2.34 per share, on revenue of $440.1 million. In the first half of 2006, CYN earned net income of $116 million, or $2.28 per share, on revenue of $419.9 million. CYN's Q2-07 financial results reflect the company's May 1, 2007 acquisition of Convergent Wealth Advisors (formerly Lydian) and its February 28, 2007 acquisition of Business Bank of Nevada. ROE in Q2-07 was 14.79% compared to 15.10% in Q2-06 and its ROA was 1.54% compared to 1.59% in Q2-06. Book value at the end of Q2-07 was $33.27 compared to $29.05 at the end of Q2-07. FTE net interest income reached $157.3 million in Q2-07, compared with $157.9 million for Q2-06 and $151.3 million in Q1-07. Net Interest Margin in Q2-07 was 4.47% compared to 4.49% in Q1-07 and 4.65% in Q2-06. Noninterest income grew to $73.7 million, a 26% increase from Q2-06, and now accounts for 33% of CYN's total revenue. Trust and investment fees contributed $34.8 million to noninterest income [47%]; Brokerage and mutual fund fees $13.9 million [19%]; Cash management and deposit transaction fees $8.5 million [11%]; International services $7.5 million [10%]; and Bank-owned life insurance $0.7 million [1%]. At June 30, 2007, nonaccrual loans were $22.3 million, compared with $15 million in Q2-06 and $23.4 million in Q1-07. Nonaccrual loans as a percentage of total loans in Q2-07 was 0.20% compared to 0.22% in Q1-07 and 0.15% in Q2-06. During Q2-07, CYN repurchased 16,500 of its outstanding shares at an average cost per share of $74.74. CYN Conference Call: Mortgage portfolio has low loan to value to homes at high end of market - CYN has no sub-prime loans. We have prepared the banks less than benign phases of the credit cycle. Non-interest income is now one third of CNY revenue, CYN stated a goal to get to 35% five year ago - it has doubled as a percentage in last five years while we have grown interest income 45%. E-Deposits - remote image deposits, started in May of 2006 and are now up to $1 billion per month in deposits. Margins held up well despite higher deposit costs. CYN amount the highest in banking - one reason is deposit base. Half of deposits are non-interest bearing. Core deposits have been stable. Deposits usually ramp up in second half - esp in Q4. Short term borrowings are being drawn down - held for liquidity purposes. In California, job growth and income growth is still strong - 9,000 jobs added per month. Median home prices still going up in Orange County. In Nevada, things going well in all industries except construction. We like our markets, our business model, our growth prospects, our value proposition, our growing client base and our talented team. CYN still expect pressure on margins due to loan pricing and deposit pricing. NPAs had little movement. There was 8 basis points in charge-offs. It was a distribution company that got into trouble. If one were to back out the $8.2 billion from assets under management from Lydian acquisition - growth in that category looked low. While most of the high net worth business is doing well, there was some slowness. Marketing expense was up $1.8 million [due to new deposit product roll-out]. Acquisitions brought in some increase - but the bank had a healthy increase on its own. CYN's loan loss reserve will probably increase given size of loan portfolio. The Construction portfolio growth continues. CYN's client base is with clients that have long established relationships. Most is commercial real estate - most office and industrial. But there is a good diversification in the loan portfolio in some medical office and retail properties. The commercial side of the real estate business is better than it has ever been because the rents have gone up. Few share repurchases in Q2 - was that due to acquisitions? We are limited by windows that are open in the market. And we want to be opportunistic at when we buy. It was more a timing issue. We intend to use our authorization to buy back stock. One of CYN's competitors had a decline in escrow deposits and you did not. Why? We have a good team that has been in business for a long time. It is a specialized business that has a high service component to it. FHN Reports Income of $0.17 vs. $0.82 in Q2-06 PRNewswire 7-19 First Horizon National Corporation reported Q2-07 earnings from coninuing operations of $22.2 million [$.17/share] compared to Q1-07 earnings of $70.5 million [$.55/share] and Q2-07 earnings of $104.309 million [$.82/share]. ROA in Q2-07 was .23% compared to .74% in Q1-07 and 1.09% in Q2-06. ROE in Q2-07 was 3.57% compared to 11.61% in Q1-07 and 11.74% in Q2-06. Book Value at the end of Q2-07 was $19.43 compared to $19.88 at the end of Q1-07 and $19.59 at the end of Q2-06. Net interest income in Q2-07 was $239.432 million compared to $237.419 million in Q1-07 and $253.598 million in Q2-06. Net interest margin in Q2-07 was 2.79% compared to2.84% in Q1-07 and 2.99% in Q2-06. Total earning assets/interest income returned 6.94% in Q2-07 compared to 6.97% in Q1-07 and 6.83% in Q2-06. Total interest-bearing liabilities/interest expense yielded 4.81% in Q2-07 compared to 4.77% in Q1-07 and 4.49% in Q2-06. Noninterest income in Q2-07 was $281.313 million compared to $272.915 million in Q1-07 and $332.119 million in Q2-06. Capital markets contributed $85.054 million [30%] to noninterest income in Q2-07; Mortgage banking $71.300 million [25%]; Deposit transactions and cash management $43.079 million [15%]; Revenue from loan sales and securitizations $9.615 million [3%]; Insurance commissions $7.674 million [3%]; Trust services and investment management $10.628 million [4%]; Brokerage management fees and commissions $10.263 million [4%]; Bankcard income $6.319 million [2%]; and Bank owned life insurance $6.250 million [2%]. Total nonperforming assets in Q2-07 were $194.097 million [0.75%] compared to $135.924 million [0.50%] in Q1-07 and $112.658 million [0.40%] in Q2-06. The net charge-off ratio decreased to 41 basis points in Q2-07 from 48 basis points in Q1-07 as net charge-offs declined to $23.0 million from $26.6 million in Q1-07. FNB Reports Income of $0.29 vs. $0.28 in Q2-06 PRNewswire 7-19 F.N.B. Corporation reported Q2-07 net income increased 5.9% to $17.6 million [$0.29 per diluted share] from $16.6 million [$0.28 per diluted share] in Q2-06. ROE was 13.11% compared to 13.06% in Q1-07 and 13.43% in Q2-06. ROA was 1.17% compared to 1.17% in Q1-07 and 1.15% in Q2-06. Book value per share at the end of Q2-07 was $8.92 compared to $8.91 at the end of Q1-07 and $8.88 at the end of Q2-06. Net interest income FTE in Q2-07 was $47.681 million compared to $45.151 million in Q2-06. The growth in earning assets drove the increase. Net interest margin for both Q1-07 and Q2-07 was 3.73%. However, the net interest margin for Q1-07 included a 6 basis point benefit from $0.8 million in interest income recovery on previously non-accruing loans. Yield on earning assets (FTE) in Q2-07 was 6.98% compared to 6.51% in Q2-06. Cost of funds in Q2-07 was 3.62% compared to 3.07% in Q2-06. Total non-interest income increased 0.7% annualized to $20.375 million from $20.916 million. Growth in securities commissions and trust revenue mostly offset by lower other non-interest income. Service charges contributed $10.2 million to noninterest income [50%]; Insurance commissions and fees $3.2 million [16%]; Securities commissions and fees $1.6 million [8%]; and Trust income $2.1 million [10%]. The ratio of non-performing loans to total loans was 56 basis points at 6-30-07, an improvement from 63 and 74 basis points at 3-31-07 and 6-30-06, respectively. FNB Conference Call: Over two-thirds of the linked-quarter growth in non-interest and interest bearing checking was driven by business deposits. The strong deposit growth also allowed for the continued reduction of our borrowing position, decreasing average short-term and long-term balances by 7.4% from Q1-07. Lower borrowings, combined with the favorable mix of the deposit growth contributed to an increase in the cost of funds of only 2 basis points when compared to Q1-07. The 2 basis points represented the smallest increase in the last 9 quarters. HBHC Reports EPS of $.62 vs. $.58 in Q2-06 Prime Newswire 7-17 Hancock Holding Company announced earnings for Q2-07 were $20.3 million, a decrease of $1.7 million, or 7.6%, from Q2-06. Diluted earnings per share for Q2-07 were $0.62, a decrease of $0.04 from Q2-06. ROA for Q2-07 was 1.42% compared to 1.32% for Q1-07 and 1.45% for Q2-06. ROE was 14.53% compared 13.77% in Q1-07 and 17.89% for Q2-06. Book value per share at the end of Q2-07 was $17.13 compared to $17.27 at the end of Q1-07 and $15.12 at the end of Q2-06. Net interest income FTE in Q2-07 was $53.810 million compared to $53.816 million in Q1-07 and $59.746 million in Q2-06. Net interest margin FTE was 4.17% in Q2-07, 10 basis points narrower than Q2-06 and 13 basis points wider than Q1-07. Compared to the same quarter a year ago, the primary driver of the $5.9 million decrease in net interest income (te) was a $432.7 million, or 8 percent, decrease in average earning assets, mainly from a reduction in total borrowings of $13.2 million, or 6 percent, and a decrease in average deposits of $374.0 million, or 7 percent. The net interest margin narrowed 10 basis points as the increase in the average earning asset yield (44 basis points) did not offset the increase in total funding costs (54 basis points). Q2-07's Non-interest income of $30.193 million was up $4.3 million [16%] compared to Q2-06 and was up $4.3 million [17%] compared to Q1-07. Service charges on deposit accounts contributed $10.5 million [35%] to noninterest income in Q2-07; Trust fees $4.1 million [13%]: Debit card & merchant fees $2.2 million [7%]: Insurance fees $5.0 million [16%]: Investment & annuity fees $2.0 million [7%]: ATM fees $1.3 million [4%]: and Secondary mortgage market operations $1.1 million [4%].Service charge fees were up 14% trust fees were up 21% over Q2-06. Non-performing assets increased $3.5 million from March 31, 2007, reflecting the addition to non-accrual loans of one credit totaling $4.0 million. HBHC's ratio of accruing loans 90 days or more past due to total loans was 0.07% at 6-30-07, compared to 0.18% at 3-31-07, and to 0.22% at 6-30-06. Net charge-offs for the second quarter of 2007 were $1.53 million, or 0.18 percent of average loans, up $63 thousand from the $1.47 million, or 0.18 percent of average loans, reported for the first quarter of 2007. Net charge-offs for the second quarter of 2006 were $3.00 million or 0.40 percent of average loans. PRSP Reports Income of $0.52 vs. $0.48 in Q2-06 PRNewswire 7-20 Prosperity Bancshares reported net income for Q2-07 was $22.993 million or $0.52 per diluted common share, an increase in net income of $7.098 million or 44.7%, compared with $15.895 million or $0.48 per diluted common share for Q2-06. ROA in Q2-07 was 1.47% compared to 1.40% in Q2-06. ROE in Q2-07 was 8.54% compared to 10.15% in Q2-06. Book value per share at the end of Q2-07 was $24.69 compared to $19.39 at the end of Q2-06. Net interest income before provision for credit losses for Q2-07 increased 40.4%, to $51.344 million compared with $36.582 million Q2-06. The increase was attributable primarily to a 31.2% increase in average earning assets. The annualized net interest margin FTE increased to 4.09% for Q2-07 compared with 3.82% for Q2-06 and 3.93% for Q1-07. Total interest earning assets in Q2-07 was $5.109 billion earning $87.300 million at an avereage rate of 6.85%. Total interest bearing liabilities in Q2-07 was $3.952 billion earning $35.956 million at an average rate of 3.65%. Non-interest income increased $4.689 million or 51.2% to $13.845 million for Q2-07 compared with $9.156 million for Q2-06. The increase was attributable primarily to deposit service charges on the increased number of deposit accounts as a result of the additional banking centers acquired in January 2007. Linked quarter non- interest income increased $2.174 million or 18.6%. Non-performing assets totaled $11.193 million or 0.22% of average earning assets at June 30, 2007 compared with $1.171 million or 0.03% of average earning assets at June 30, 2006. The non-performing assets at June 30, 2007 consisted of eighty-three (83) separate credits or ORE properties. We continue to move quickly to resolve problem assets. As of today, forty-four (44) credits representing approximately $7.3 million [65% of NPAs] of the non-performing assets as of 6-30-07 have been sold, are under contract to be sold, have been paid off or are otherwise resolved. Net loan charge-offs in Q2-07 were $531 thousand compared to $206 thousand in Q2-06. PRSP Conference Call: Southern National had high loan to deposit ratios [close to 100%] and were in position to pay high rates for Jumbo CDs. [PRSP Q2-07 loan to deposit ratio was 67%.] We elected to let the high Jumbos roll off. Excluding the loans acquired as a part of the TXUI acquisition, linked quarter organic loans decreased slightly by $13.653 million or 0.63%. Excluding deposits assumed as a part of the TXUI acquisition, linked quarter deposits decreased $78.647 million or 2.2%. Average monthly new loan production in Q2-07 was $95 million vs. $79 million in Q1-07 [but net loans were down in Q2]. As of 6-30-07, our loans were 40% fixed, 33% adjusted as prime moves, and 27% re-adjusting. On NPAs - there was a $6.9 million increase since March 31st - how much was from TXUI? PRSP: Three of the merged banks [Texas United, Southern National and a little from First Capital] contributed $5.6 million. There is buzz in the market about potential problems in PRSP's residential and construction portfolio? PRSP: Maybe some in the hot but cooling Austin market. PRSP had 88 credits in NPAs with a median of $100,000 - so the NPAs are very granular. Biggest credit in NPAs is in Houston - a lot development loan of $3.3 million that was foreclosed. That credit is now in 'other real estate' - and is under contract for sale. One might ask if a residential sub-division loan being taken back is evidence of market softness. Our view is that it was the borrower and not the market that was weak. We have had interest in that property since we have taken it back. Will PRSP benefit from higher treasury/securities interest rates? PRSP: The ten year did spike up. PRSP does have cash flow from bond portfolio that needs to be invested. Yield on bond portfolio was 4.79% in Q2-07 - and $500 million is to be reinvested from the securities portfolio over the next 12 months - and this should lead to higher margins. You have feelers out in the Texas market - is economy stronger, it appears so? PRSP: So many negative headlines - our economy looks extremely good. Texas is having a soft landing. Unemployment is low. Job creation looks good. We were at warp speed. Prices were going up rapidly. It was hard to find workers to do homes. 50% of jobs in Houston related to oil and gas. Negative headlines elsewhere affects us - makes us cautious. We are positioned for which ever way the economy moves. Regions Reports EPS of $.79 vs. $.78 in Q2-06 press release of 7-16 Regions reported Q2-07 income from continuing operations was $453.7 million, or 63 cents per diluted share, which included $37.2 million in after-tax merger-related expenses (6 cents per diluted share). Excluding the impact of merger-related expenses, earnings per diluted share from continuing operations were 69 cents, equal to Q1-07, despite the lack of income from the first quarter divestiture of 52 branches. Those branches had contributed approximately $20 million to pre-tax earnings, or 2 cents per diluted share, in the first quarter. In the second quarter, the absence of divested branches' earnings per share contribution was neutralized by good expense control, including strong merger-related cost saves; fee gains, especially Morgan Keegan and service charges; and aggressive share repurchases. ROA in Q2-07 was 1.32% compared to 0.95% in Q1-07 and 1.61% in Q2-06. ROE was 22.89% in Q2-07 compared to 16.29% in Q1-07 and 25.73% in Q2-06. Stockholders' equity per share at the end of Q2-07 was $27.96 compared to $28.14 at the end of Q1-07 and $23.56 at the end of Q2-06. Tangible stockholders' equity to tangible assets at the end of Q2-07 was 6.09%. Taxable equivalent net interest income was $1.1 billion but declined slightly from the first quarter, affected by a reduced level of earning assets as well as margin compression. Linked-quarter, Regions' net interest margin declined 17 basis points to 3.82% resulting largely from narrowing spreads and the impact of the first quarter's branch divestitures, which included the sale of $2.7 billion in lower-cost deposits and $1.6 billion in loans. Non-interest revenue, excluding securities transactions, was $729.6 million in the second quarter, driven by growth in deposit service charges, including interchange income, and brokerage income. Morgan Keegan, Regions' broker-dealer operation, produced record quarterly profits of $50.1 million on revenue of $328.8 million. Strong fixed income and equity capital markets activity coupled with an increase in brokerage fees were key drivers. Morgan Keegan's Commission revenue increased an annualized 29% linked-quarter. Principal transactions revenue increased an annualized 67% linked-quarter, primarily as a result of higher levels of sales of fixed income securities driven by the changing yield curve. Investment banking revenue increased $11.8 million linked-quarter, primarily due to strong fixed income underwriting fees. 27,800 new accounts were opened in 2Q07 compared to 25,000 in 1Q07 and 22,200 in 2Q06. Total customer assets were $81.0 billion at 6-30-07, compared to $77.9 billion at 3-31-07 and $62.5 billion at 6-30-06. Total non-performing assets at 6-30-07, were $585.0 million, or 0.62% of loans and other real estate, compared to $422.5 million, or 0.45% at the end of Q1-07 and 0.54% at the end of Q2-06. The increase in non-performing assets was driven partly by weaker demand for certain types of commercial real estate projects and also by the implementation of one set of more prescriptive credit policies, including extensive credit file reviews, for the combined company. About 87% of increase in NPAs came in one geography from one underwriter. The NPA increase does not look systemic. RF still projects a mid 20s for full year projection. During the second quarter, Regions repurchased 19.7 million of its common shares, including an accelerated share buyback of 14.2 million shares. [from the call: some of the stock buy backs have yet to 'settle' because they were not open market transactions.] RF Conference Call: The reduction of net interest margin was due to [1] Divestitures of branches reduced RF's low cost deposits. From Q1 to Q2, net interest margins were down 17 basis points. A fall of ten basis points were from the divestitures. Three basis points of the fall were due to subordinated debt and share repurchases. The sale of Equi-First had 4 basis point positive impact in Q1. There were other items too - some positive and some negative. Some of the fall in margins came from a change in balance sheet mix. And the curve is still flat - and that has an impact. Fin 48 had an impact in Q1-07 and hurt margins by 7 basis points - but that impact is done and over. Why will margins come in at the projected 3.80% for the year? Two things - there will be a continued loss of benefit from purchase accounting - a benefit that will roll off quickly - and newer business is coming at tighter spreads. RF's new business is not creating margins that are equal to the 3.80% level. The construction lending share of loans is projected to continue to fall. There is an average 18 month cycle to these loans - they turn rapidly. And more are rolling off than RF is renewing. Home equity loan customers are also paying off those loans and not renewing. TRMK Reports EPS of $.52 vs. $.55 in Q2-06 Business Wire 7-17 Trustmark announced net income of $29.8 million in the second quarter of 2007, which represented basic earnings per share of $0.52. ROA in Q2-07 was 1.36% compared to 1.51% in Q2-06. ROE in Q2-07 was 13.37% compared to 16.29% in Q2-06. Book value of stock at the end of Q2-07 was $15.47 compared to $13.62 at the end of Q2-06. Total FTE interest income in Q2-07 was $136.776 million compared to $118.578 million in Q2-06. Net interest income FTE in Q2-07 was $75.994 million compared to $74.024 million in Q2-06. Interest Yield FTE in Q2-07 was 7.03% compared to 6.47% in Q2-06. Interest Cost FTE in Q2-07 was 3.11% compared to 2.54% in Q2-06. Net interest margin FTE in Q2-07 was 3.91% compared to 3.93% in Q2-06. The average rate on interest-bearing liabilities cost 3.86% in Q2-06 compared to 3.15% in Q2-06. Total noninterest income in Q2-07 was $40.470 million compared to $39.383 million in Q2-06. Insurance and Wealth Management income posting increases of 12.9% and 8.9%, respectively. Service charges on deposit accounts contributed $13.7 million [34%] to noninterest income in Q2-07; Insurance commissions $9.9 million [24%]; Wealth management $6.4 million [16%]; and Mortgage banking $1.8 million [4%]. Nonperforming assets to total loans ratio was 0.46% in Q2-07 [$31.2 million] compared to 0.47% in Q2-06. During the first six months of 2007, Trustmark repurchased approximately 1.4 million shares of its common stock, including 954 thousand in the second quarter. Net loan charge-offs in Q2-07 were $1.246 million compared to a recovery of $.268 in Q1-07 and a charge of $1.514 million in Q2-06. TRMK Conference Call: Deposit were down - we are now picking and choosing our funding. We have not lost any public relationships. Personal CDs had high renewal while holding rates flat - so relative to the yield curve, we reduced our fund source. TRMK opened two branches in Memphis and SW Houston in Q2-07. A branch in Sugarland [Houston suburb] opened last quarter. Four more branches to open this year: Hattiesburg, Madison Miss [where we have a dominant market share], next to Compaq in Houston and Panama Florida. TRMK opened about a dozen branches in last year and six more branches on tap for Houston and Florida. In 1987 we had 120 branches, after closing more than 30 of those, TRMK today has 157 branches - 69 of those we did not have ten years ago. So 44% of the TRMK retail franchise is practically new. 15 year Mortgages being reduced [or being worked off] around $10 million per month. 954,000 shares or $25 million in share repurchase in Q2-07. Our capital growth has been flat by choice. We can generate equity quickly. Our loans are going to grow 5% to 6% per annum. We can buy millions in bonds to grow the balance sheet. Loans past due 90 days were in Q2 but that was due to two large loans. Also, GNMA loans sold [with an option to repurchase but not an obligation to repurchase] that became past due were put back on the balance sheet - which added to the number. Our core past dues did not increase that much. TRMK has virtually no exposure to Sub-prime and Alt-A loans. UB Reports Net Income of $1.19 vs. $1.26 in Q2-06 Business Wire 7-19 UnionBanCal Corporation reported Q2-07 net income of $165.4 million [$1.19/share] compared to $149.6 million [$1.07/share] in Q1-07 and $182.9 million [$1.26/share] in Q2-06. ROA in Q2-07 was 1.49% compared to 1.15% in Q1-07 and 1.25% in Q2-06. ROE in Q2-07 was 16.16% compared to 13.45% in Q1-07 and 14.46% in Q2-06. Book value at the end of Q2-07 was $32.34 compared to $32.98 at the end of Q1-07 and $33.45 at the end of Q2-06. Net interest income was $431.1 million in Q2-07, down $37.9 million, or 8.1%, from Q2-06, primarily due to a deposit mix shift from noninterest bearing and low-cost deposits into higher-cost deposits, partially offset by strong loan growth and higher yields on earning assets. Average earning assets increased $4.1 billion, or 9.2%, compared to 2006, primarily due to a $3.7 billion, or 10.5%, increase in average loans. Average noninterest bearing deposits represented 35.1% of average total deposits in Q2-07. The annualized average all-in cost of funds was 2.61%, reflecting UB's strong average core deposit-to-loan ratio of 86% and the high proportion of noninterest bearing deposits to total deposits. The average yield on earning assets of $48.4 billion was 6.11%, up 16 basis points over Q2-06, with the average loan yield increasing 13 basis points. The average rate on interest bearing liabilities of $32.2 billion was 3.83%, up 88 basis points compared with Q2-06, reflecting higher short-term interest rates, an unfavorable change in deposit mix, and heightened competition for deposits. The net interest margin in Q2-07 was 3.56%, compared with 4.23% in Q2-06. In Q2-07 noninterest income was $229.8 million, up $10.6 million [4.8%] from Q2-06. Service charges on deposit accounts decreased $4.6 million [5.6%] primarily due to lower account analysis fees, caused by lower noninterest bearing deposit balances. Trust and investment management fees increased $3.2 million [6.6%] primarily due to an increase in trust assets. Gain on private capital investments, net, was $20.2 million, compared with $3.7 million in Q2-06. Nonperforming assets at 6-30-07 were $30 million, or 0.06% of total assets. This compares with $42 million, or 0.08% of total assets, at 3-31-07, and $36 million, or 0.07% of total assets, at 6-30-06. Union Bank entered into a Memorandum of Understanding (MOU) in 2005 with its principal regulator, the Office of the Comptroller of the Currency (OCC). The MOU requires the Bank to strengthen its Bank Secrecy Act/Anti-Money Laundering (BSA/AML) controls and processes. The MOU prohibts UB from doing any M&A with other banks. UB has committed significant resources to strengthen its BSA/AML controls and processes. During the course of the Bank's efforts to resolve issues raised by its regulators, additional BSA/AML compliance issues arose. The OCC will institute a procedure for a cease and desist order against the Bank with respect to its BSA/AML controls and processes and will assess civil money penalties with respect to BSA/AML matters. Financial Crimes Enforcement Network (FinCEN), a part of the U.S. Treasury Department, will also assess civil money penalties with respect to BSA/AML matters. UB Conference Call: In your Loan portfolio there was a decline in commercial - was that due to tighter underwriting or paydowns? UB: There were some paydowns in the national portfolio - and some tightenings we are being conservative. You lowered the upper end to your guidance - why? UB: Non-interest bearing deposits are falling. Old guidance: $4.50 to $4.75. New guidance: $4.50 to $4.60. Are you projecting a return of pricing power in commercial loans? UB: Credit spreads have widened recently with secondary loans pricing moving up 100 basis points. Did you expect strong VC gains? [Gain on private capital investments, net, was $20.2 million in Q2-07 compared with $3.7 million in Q2-06.] UB: We had a large gain in Q2 on an investment made last year. The entire VC industry has had big gains for a while - and that will come to an end one day. UMBF Reports EPS of $0.48 vs. $0.35 in Q2-06 Business Wire 7-24 Kansas City-based UMB Financial announced Q2-07 earnings of $20.1 million [$0.48/share] compared to Q2-06 earnings of $14.9 million [$0.35/share]. ROA in Q2-07 was 0.94% in Q2-07 compared to 0.75% in Q2-06. ROE in Q2-07 was 8.76% compared to 6.79% in Q2-06. Book value at the end of Q2-07 was $20.44 compared to $19.28 at the end of Q2-06. Net interest income in Q2-07 was $56.855 million compared to $53.509 million in Q2-06. Net interest margin in Q2-07 was 3.43% compared to 3.43% in Q2-06. Total earning assets in Q2-07 was $7.141 billion with an average yield of 6.01% compared to 6.730 billion yielding 5.40% in Q2-06. Total interest-bearing liabilities in Q2-07 were $5.304 billion with an average yeild of 3.55% compared to $4.798 billion yielding 2.90% in Q2-06. Noninterest bearing deposits comprised 32.6% of total deposits as of 6-30-07. Total noninterest income in Q2-07 was $72.326 million compared to $65.709 million in Q2-06. Trust and securities processing in Q2-07 contributed $28.9 million [40% of total noninterest income]; Trading and investment banking $5.5 million [7%]; Service charges on deposits $20.6 million [28%]; Insurance commissions $.9 million [1%]; Brokerage fees $1.9 million [3%]; and Bankcard fees $9.9 million [13%]. Nonperforming loans at 6-30-07 totaled $7.9 million compared to $8.6 million a year earlier. As a percentage of total loans, nonperforming loans were 0.20% of loans as of 6-30-07 and 0.24% at 6-30-06. UMPQ Reports EPS of $0.35 vs. $0.42 in Q2-06 Business Wire 7-19 Umpqua Holdings announced Q2-07 operating earnings of $21.3 million, or $0.35 per diluted share, compared to $20.6 million, or $0.42 per diluted share, for Q2-06. Operating earnings exclude merger related expenses, net of tax. Including merger related expenses, net income for Q2-07 was $19.9 million [$0.32/share] compared to $19.6 million, [$0.40/share] for Q2-06. ROA in Q2-07 was 1.02% compared to 1.15% in Q1-07 and 1.31% in Q2-06. ROE in Q2-07 was 6.44% compared to 7.22% in Q1-07 and 9.18% in Q2-06. Book value per share at the end of Q2-07 was $20.48 compared to $20.07 at the end of Q1-07 and $19.31 at the end of Q2-06. Net interest income in Q2-07 was $72.316 million compared to $68.310 million in q1-07 and $60.757 million in Q2-06. UMPQ reported a tax equivalent net interest margin of 4.34% for Q2-07 [4.41% without the interest reversal], compared to 4.68% for Q2-06, and 4.47% for Q1-07. The decrease in net interest margin over these time periods resulted from increases in short-term market interest rates and the competitive climate, characterized by increasing deposit costs combined with declining earning asset yields, which was partially attributed to the interest reversal on non-performing loans of $1.2 million [which subtracted 4 cents/share from EPS]. Total yield on earning assets averaged 7.33% in Q2-07 compared to 7.42% in Q1-07 and 7.22% in Q2-06. Total cost of interest bearing liabilities had an average cost of 3.84% in Q2-07 compared to 3.78% in Q1-07 and 3.27% in Q2-06. Total non-interest income in Q2-07 was $15.930 million compared to $13.965 million in Q1-07 and $13.806 million in Q2-06. Service charges contributed $8.1 million [51%] to noniterest income in Q2-07; Brokerage fees $2.6 million [16%]; and Mortgage banking revenue $2.6 million [16%]. Non-performing loans and leases were $48.0 million at the end of Q2-07, representing 0.80% of total loans and leases compared to $13.296 million or 0.25% in Q1-07 and $7.330 million or 0.14% in Q2-06. The allowance for credit losses was 1.17% of total loans and leases at 6-30-07. Loan Charge-offs in Q2-07 were $870 thousand compared to $713 thousand in Q1-07 and $947 thousand in Q2-06. UMPQ Conference Call: UMPQ is now the largest bank in Napa and Salina Counties - so we are newly competing in loans to the wine business. California housing market is stressed - California makes up 42% of UMOPQ mortgage loans, but 65% of problem loans. NorthBay acquisition added only one large NPA. UB had the slowest growth in cost of deposits in several years UB has no sub-prime exposure in loan portfolio. In Q2-07 2.4 million shares of stock repurchased. Three new stores are in development. The $35 million increase in NPA's can mostly be broken down into four large credits: [1] a land acquisition in Oregon at $10 million [2] a condo project in south Sacramento at $13 million. It is being built in phases with some units complete and some in process. We are actively managing that and working for quick resolution [3] a land and development loan in Lumas at $3.8 million. That development is started and more work needs to be done to complete it [4] a timber porperty in Washington for $6 million. Was it coincidence that they happened at same time? Yes. They originated late 2005 or early 2006. They popped into NPA within 30 days of each other. What is LTV for these? Three of four have adequate collateral - with the timber we took impairment charge of $1.3 million. What gives you confidence that you will get back on track with the NPAs? The percentage increases look big but the dollars are not. And we are roughly where we are historically. This would have been one of best quarter if it was not for the non-accruals. We have incredibly good loan officers and I have confidence they can work through it. We have a track record that says we know what we are doing. We can not control the economy in California. But we will not do stupid things. Average LTV in construction portfolio is 75%, For condos in Sacramento - UB is doing an updated appraisal - going in it was 67%. There is 20 month supply in Sacramento - sales down 43%. New inventory is 22,000 units. Sacramento downturn could persist for several more quarters. Where will loan growth come from? Our California loan portfolio is moving away from real estate. In 2007: 59% real estate and 41% CNI. We are encouraged by the amount of CNI loans in our pipeline - that should make us less reliant on real estate. UB's total loan pipeline is $1.2 billion. With your stock at this low valuation - do you feel vulnerable to acquisition? UB: Our stock is under-valued - but we do not feel vulnerable. There were loan paydowns in the quarter - for the last two years certain clients with maturing term loans and want to lock in rates that are not attractive to us - they received financing from insurance companies. WTNY Reports EPS of $.51 vs. $.60 in Q2-06 PRNewswire 7-24 Whitney Holding Corporation earned $35.1 million [$0.51/share] in Q2-07 compared with net income of $39.4 million [$0.60/share] in Q2-06. ROA in Q2-07 was 1.33% compared to 1.50% in Q2-06. ROE in Q2-07 was 11.61% compared to 14.90% in Q2-06. Book value per share at the end of Q2-07 was $17.88 compard to $17.76 at the end of Q1-07 and $16.31 at the end of Q2-06. Whitney's FTE net interest income for Q2-07 was $118.444 million compared to $122.804 million in Q2-06. FTE net interest margin in Q2-07 was 4.91%, down from 5.09$ in Q2-06. Total interest-earning assets had an average yield of 6.99% in Q2-07 compared to 7.00% in Q1-07 and 6.54% in Q2-06. Total interest-bearing deposits had an average cost of 2.91% in Q2-07 compared to 2.75% in Q1-07 and 2.10% in Q2-06. Average noninterest-bearing deposits funded approximately 28% of average earning assets in Q2-07, and the percentage of funding from all noninterest-bearing sources was 33% for the period. These percentages, while down from 33% and 36% in Q2-06. Noninterest income in Q2-07 were $24.097 million compared to $21.243 million in Q2-06, with improvement noted in most recurring revenue sources. Deposit service charge income in Q2-07 was up 9%, or $.6 million. Bank card fees, both credit and debit cards, increased a combined 7%, or $.3 million. The addition of trust business from acquired operations, ongoing customer development efforts and generally favorable market conditions helped increase trust service fees by 18%, or $.5 million. Nonperforming assets as a percentage of loans plus foreclosed assets and surplus property at the end of Q2-07 was .81% compared to .83% at the end of Q2-06. ZION Reports EPS of $1.43 vs. $1.35 in Q2-06 PRNewswire 7-19 Zions Bancorporation reported Q2-07 net earnings applicable to common shareholders of $155.6 million, or $1.43 per diluted common share, an increase of 7.1% and 5.9%, respectively, over the $145.3 million or $1.35 per diluted common share for Q2-06. ROE was 12.50% compared to 12.25% for Q1-07 and 13.20% for Q2-06. ROA in Q2-07 was 1.33% compared to 1.33% in Q2-06. Book value per common share at the end of Q2-07 was $46.14 compared to $41.72 at the end of Q2-06. Net interest income for Q2-07 increased $12.3 million or 10.7% annualized to $469.3 million compared to $457.1 million for Q1-07, and increased $33.0 million or 7.6% compared to $436.3 million for Q2-06. Taxable-equivalent net interest income for Q2-07 was $476.1 million compared to $463.7 million for Q1-07 and $442.3 million for Q2-06. The net interest margin was 4.53% for Q2-07 compared to 4.51% for Q1-07 and 4.64% for Q2-06. Total interest-earning assets in Q2-07 were $38.251 billion and earned $692.550 million at an average yield of 7.26%. Total interest-bearing liabilities in Q2-07 were $29.085 billion and cost $250.289 million at an average yield of 3.45%. Noninterest-bearing deposits in Q2-07 were $9.584 billion and Interest-bearing deposits and NOW accounts totaled $4.305 billion at and average cost of 0.68%. Noninterest income for Q2-07 was $141.3 million compared to $145.4 million for Q1-07 and $137.5 million for Q2-06. Loan sales and servicing income for Q2-07 included a pretax impairment charge of $5.1 million on retained interests from certain previous small business loan securitizations due to accelerated prepayment speeds and increased interest rates. A pretax impairment charge of $4.2 million was included in Q1-07. Other service charges, commissions and fees were higher during Q2-07 mainly because of increased debit card interchange, ATM and public finance fees. Net securities gains were de minimis during Q2-07 compared to $8.9 million during Q1-07. Service charges and fees on deposit accounts contributed $45.1 million [32%] in Q2-07; Loan sales and servicing income $8.9 million [6%]; Trust and wealth management income $9.1 million [6%]; Income from securities conduit $5.9 million [4%]; and Trading and nonhedge derivative income $5.2 million [4%]. Nonperforming assets were $95.4 million at June 30, 2007 compared to $82.5 million at March 31, 2007 and $73.5 million at June 30, 2006. The ratio of nonperforming assets to net loans and leases and other real estate owned was 0.26% at June 30, 2007 compared to 0.23% at 3-31-07 and 0.22% at 6-30-06. ZION Conference Call: Credit Quality: NPAs had a modest increase. Loans past due 90 days are more were down. There is a $17 million loan for land in Las Vegas. The borrower has agreed to auction the property in November - the loan will remain in past due but accruing - no losses anticipated. One condo project in Las Vegas is now current that in Q1 was past due - this helped that category decline in dollars. CNI line up $500 million and 'commercial occupied' real estate was up $250 million. Consumer loans were flat in quarter. ZION's 4.53% margin up - driven by $371 million decrease in securities which helped our mix. Guidance: Loan growth is projected to be from commercial portfolio and to be stronger in Texas and Mountain states than in the west. Deposit growth projected at modest levels. We do not project strong DDA growth in this environment. Shift to more expensive deposits will pressure margins. Thus we will pay down securities portfolio. Credit Quality - NPA will continue slow growth. Residential loans will soften in credit quality. Modest deterioration - not sharp deterioration. June of last year LTV was 58.6% across the whole portfolio with many riskier portfolios at even lower [thus better] ratios. We have been conservative in our underwriting in the good times to prepare for the current more difficult time. FDIC expenses will increase and higher premiums will cause an increase of $11.5 million in expenses for ZION in 2008 - this will happen industry wide. What is the trend in the quality of loans over last three months - which types or locations have shown the most stress? ZION: It is not concentrated in any type or area. Loans for land inventory are showing some deterioration. Arizona, Southern California and Nevada are potential problems. Typical size? Two different levels - largest amount that we would lend to any one project is $35 million. Largest to any one developer is $75-$80 million. That is the largest - which tends to be the strongest developers. Any market having good deposit growth? ZION: No. There are some OK markets in the Pacific Northwest, Colorado, Texas and Utah. Weakest in deposit growth is in California, Arizona and Nevada. M&A - regional banks have not appreciated in 2007. Are you seeing opportunities? ZION: Regional banks are out there looking. But their pricing has not come down. Because of the real estate market being illiquid, some of your banking peers are getting wide bid/ask spreads on their appraisals. Are you seeing that? ZION: No. [They were confused by the question.] Ratings & Dividend Changes On 7-12 UBS Initiated coverage of RF at Neutral. On 7-26 Citigroup Upgraded CFR from Sell to Hold. On 7-18 CNB declared a dividend of $0.1875/share to be paid 8-10-07 to shareholders of record as of the close of business on 7-27-07. On 7-19 RF declared a quarterly cash dividend of 36 cents/share, payable Oct. 1, 2007, to stockholders of record as of 9-17-07. On 7-20 ZION announced a dividend of 43 cents/share payable 8-22-07 to shareholders of 8-08-07. On 7-23 BOH declared a dividend of $0.41/ share payable 9-14-07 to shareholders of 8-31-07. On 7-25 CYN announced a dividend of $0.46 per share, payable on August 22, 2007 to stockholders of record on August 8, 2007. On 7-25 UB announced a dividend of 52 cents/share to be paid on October 5, 2007, to shareholders of record as of September 7, 2007. On 7-26 BXS announced a dividend of 21 cents per share to be paid Oct. 1 to shareholders of record Sept. 14. On 7-26 CFR declared a dividend of $.40 per share payable September 14, 2007 to shareholders of record on August 31. On 7-27 CBSH declared a dividend of 25 cents per share on Sept. 26 to shareholders of record on Sept. 13. Home Page Factoids Previous Update |