ONEIDA, N.Y., Jan. 29 /PRNewswire-FirstCall/ -- Oneida Financial Corp. (Nasdaq: ONFC), the parent company of The Oneida Savings Bank, has announced its operating results the fourth quarter and full year ended December 31, 2006 . Net income for the year ended December 31, 2006 is $4.2 million or $0.54 diluted earnings per share, an increase of 8.8% compared with $3.9 million , or $0.50 diluted earnings per share, for the year ended December 31, 2005 . The increase in net income is primarily the result of an increase in non-interest income and a decrease in provision for loan losses, partially offset by an increase in non-interest expense and a decrease in net interest income during 2006 as compared with 2005. Net income for the three months ended December 31, 2006 is $1.4 million , or $0.18 diluted earnings per share, as compared to $1.0 million or $0.13 diluted earnings per share for the same period in 2005. The increase in net income in the fourth quarter of 2006 is primarily due to an increase in non-interest income.
Total assets increased $6.3 million , or 1.4% to $443.1 million at December 31, 2006 from $436.8 million at December 31, 2005 . The increase in the Company's assets is primarily due to an increase in loans receivable, partially offset by a decrease in investment securities. Loans receivable increased $11.4 million to $247.4 million at December 31, 2006 as compared with December 31, 2005 , after recording the sale of $17.0 million in fixed rate one-to-four family residential real estate loans. Investment securities decreased $20.7 million to $85.7 million at December 31, 2006 as compared with $106.4 million at December 31, 2005 . The decrease in investment securities also supported the $11.9 million reduction in borrowings at December 31, 2006 compared with December 31, 2005 . The acquisitions of an insurance agency and an employee benefit consulting and financial services firm completed in 2006 resulted in an increase in goodwill and other intangible assets of $5.5 million . In addition, total deposits increased $12.1 million to $313.3 million at December 31, 2006 from the prior year end.
Michael R. Kallet, President and Chief Executive Officer of Oneida
Financial Corp., said, 'Our Company's operating results continue to reflect
the successful execution of our business plan. The growth and diversification
of our asset mix, income sources and product offering has resulted in a record
level of net income earned during 2006.' Kallet continued, 'Net income is only
one measure of our Company's success; Oneida Savings reported a record level
of net loans receivable at December 31, 2006 , our insurance and financial
services subsidiary,
Net interest income decreased $510,000 , or 3.8%, for the year ended December 31, 2006 to $12.8 million compared with $13.3 million for the year ended December 31, 2005 . The decrease in net interest income is due primarily to a decrease in net earning assets and a decrease in net interest margin given the impact caused by rising short term rates and the flat to inverted yield curve. Average interest-earning assets decreased $8.6 million to $371.8 million for the year ended December 31, 2006 . Average interest-bearing deposits decreased $3.2 million while average borrowings outstanding increased by $356,000 . Net interest margin is 3.45% for the year ended December 31, 2006 compared with a net interest margin of 3.50% for 2005.
Interest income for the twelve-month period ending December 31, 2006 is $22.3 million , compared with $21.0 million for the twelve months ending December 31, 2005 an increase of 5.9%. The increase in interest income during the year ended December 31, 2006 resulted primarily from an increase in the yield on interest earning assets of 47 basis points, reflecting the increased yields earned on investments and loans during 2006 due to the increase in market interest rates. The increase in yield was partially offset by a decrease in the average balances of interest-earning assets during 2006.
Interest expense for the twelve-month period ending December 31, 2006 is $9.4 million , compared with $7.7 million for the twelve months ending December 31, 2005 , an increase of 22.9%. This increase was due to an increase in the cost of interest-bearing liabilities of 57 basis points partially offset by a decrease in the average balance of interest-bearing liabilities. Borrowed funds outstanding are $65.4 million at December 31, 2006 compared with $77.3 million at December 31, 2005 . Interest expense on deposits increased 31.2% for the year ended December 31, 2006 as compared with the same period in 2005. The increase in interest expense is primarily the result of the steady increase of short-term market interest rates during 2006 partially offset by the continued emphasis to increase the level of lower costing core savings and checking deposits.
Other non-interest income is $17.4 million for the twelve months ending December 31, 2006 compared with $11.9 million for the same 2005 period. The increase in other non-interest income is the result of increases in commissions and fees earned on the sale of non-banking products, an increase in services charges on deposit accounts and the gain on sale of investments and a bank property. Revenue derived from the Company's insurance agency subsidiary activities increased $1.4 million , or 17.6%, to $9.6 million during 2006 as compared with 2005 due in part to the February 2006 acquisition of a Syracuse , New York based insurance agency. During 2006 the Company also acquired a leading financial services and employee benefit consulting firm operating as Benefit Consulting Group, Inc. This new Company subsidiary provided non-interest income of $3.1 million during 2006, a revenue source and business activity that did not exist for the Company prior to 2006. The increase in non-interest income was further supported by an increased level of service charges on deposit accounts, increasing $217,000 , or 10.1% for the year ended December 31, 2006 compared with 2005. Net gains realized upon the sale of investment securities are $308,000 for the year ended December 31, 2006 compared with net gains on investment securities of $275,000 during 2005. In addition, the Company sold a bank property formerly used as a banking office in Chittenango, New York following the construction of a new banking facility at a more desirable location. The property was sold to the Sullivan Free Library and resulted in a gain on sale of $532,000 partially offset by a contribution to the library of $400,000 toward building renovations.
Other non-interest expense is $24.2 million for the twelve months ending December 31, 2006 compared with $19.6 million for 2005, an increase of 23.4%. The increase in other non-interest expense is primarily the result of an increase in compensation expense and employee benefits associated with an increase in revenue derived from non-banking operations. The business acquisitions completed in 2006 and associated increase in goodwill and other intangible assets resulted in the increase in intangible amortization of $270,000 during 2006, a non-cash charge. In addition, the donation made to Sullivan Free Library previously discussed also contributed to the increase in non-interest expense.
The provision for loan losses is $280,000 in 2006, down from $360,000 in 2005. Net loan charge-offs in 2006 totaled $158,000 , or 0.06% of average loans outstanding, decreasing from $383,000 or 0.17% of average loans in 2005. The ratio of non-performing assets to total assets is 0.01% at December 31, 2006 compared with 0.05% at December 31, 2005 . The decrease in net loan charge- offs and the decrease in non-performing assets supports the reduction in the provision for loan losses during 2006. The ratio of the loan loss allowance to loans receivable is 0.84% at December 31, 2006 compared with a ratio of 0.83% at December 31, 2005 . The level in the allowance as a percentage of loans reflects improvement in various credit factors, including the reduction in non-performing assets.
Net income for the three months ended December 31, 2006 was $1.4 million , or $0.18 diluted earnings per share, as compared to $1.0 million or $0.13 diluted earnings per share for the same period in 2005. The increase in net income for the quarter is primarily the result of an increase in non-interest income for the fourth quarter of 2006 as compared with fourth quarter of 2005. Partially offsetting this increase in revenue is an increase in non-interest expense associated with the Company's insurance, employee benefit and financial services activities, a decrease in net interest income and an increase in income tax provisions.
Shareholders' equity was $58.5 million , or 13.2% of assets at December 31, 2006 compared with $53.6 million , or 12.3% of assets, at December 31, 2005 . The increase in shareholders' equity was primarily a result of the contribution of net earnings for the period and positive valuation adjustments made for the Company's available for sale investment securities, mortgage- backed securities and minimum pension liability. Partially offsetting these increases is the payment of cash dividends during 2006.
This release may contain certain forward-looking statements, which are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products, and services.
All financial information provided at and for the year ended December 31, 2006 and all quarterly data is unaudited. Selected financial ratios have been annualized where appropriate. Operating data is presented in thousands of dollars, except for per share amounts.
At At At At At
Selected Financial
Data Dec 31, Sept 30, June 30, Mar 31, Dec 31,
(in thousands
except per
share data) 2006 2006 2006 2006 2005
(unaudited)(unaudited)(unaudited)(unaudited) (audited)
Total Assets $443,051 $434,232 $436,822 $426,231 $436,761
Loans receivable,
net 247,441 246,601 244,752 234,998 236,077
Mortgage-backed
securities 29,081 26,385 27,145 28,792 29,097
Investment
securities 85,717 88,902 93,075 98,598 106,432
Goodwill and other
intangibles 19,867 19,963 20,031 14,979 14,364
Interest bearing
deposits 260,173 251,088 255,247 254,528 250,142
Non-interest bearing
deposits 53,097 51,946 52,097 50,273 51,044
Borrowings 65,400 69,800 68,930 63,400 77,270
Shareholders' Equity 58,514 55,811 54,454 54,327 53,588
Book value per share
(end of period) $7.62 $7.31 $7.13 $7.12 $7.03
Tangible value per share
(end of period) $5.03 $4.70 $4.51 $5.16 $5.15
Selected Financial
Ratios
Non-Performing Assets
to Total Assets
(end of period) 0.01% 0.01% 0.03% 0.05% 0.05%
Allowance for Loan
Losses to Loans
Receivable, net 0.84% 0.85% 0.85% 0.88% 0.83%
Average Equity to
Average Assets 12.58% 12.52% 12.66% 12.42% 12.21%
Quarter Ended Year to Date %
Selected Operating Data Dec 31, Dec 31, Dec 31, Dec 31, Change
(in thousands except 2006 2005 2006 2005 '06 vs '05
per share data) (unaudited)(unaudited)(unaudited)(audited)
Interest income:
Interest and fees
on loans $4,136 $3,795 $16,165 $14,197 13.9%
Interest and dividends
on investments 1,458 1,655 5,918 6,766 (12.5%)
Interest on fed funds 137 8 178 49 263.3%
Total interest income 5,731 5,458 22,261 21,012 5.9%
Interest expense:
Interest on deposits 1,736 1,315 5,964 4,546 31.2%
Interest on borrowings 817 840 3,482 3,141 10.9%
Total interest expense 2,553 2,155 9,446 7,687 22.9%
Net interest income 3,178 3,303 12,815 13,325 (3.8%)
Provision for loan
losses 40 100 280 360 (22.2%)
Net interest income
after provision for
loan losses 3,138 3,203 12,535 12,965 (3.3%)
Other income:
Net investment gains 310 222 308 275 12.0%
Service charges on
deposit accts 634 586 2,362 2,145 10.1%
Commissions and fees on
sales of non-banking
products 3,369 1,992 12,661 8,163 55.1%
Other revenue from
operations 924 329 2,047 1,309 56.4%
Total non-interest
income 5,236 3,129 17,378 11,892 46.1%
Other expense
Salaries and employee
benefits 4,038 3,108 15,496 12,413 24.8%
Equipment and net
occupancy 866 842 3,647 3,315 10.0%
Intangible amortization 96 28 383 113 238.9%
Other costs of
operations 1,403 954 4,666 3,768 23.8%
Total non-interest
expense 6,403 4,932 24,192 19,609 23.4%
Income before income
taxes 1,971 1,400 5,721 5,248 9.0%
Income tax provision 563 369 1,523 1,390 9.6%
Net income $1,408 $1,031 $4,198 $3,858 8.8%
Net income per common
share ( EPS - Basic ) $0.18 $0.14 $0.55 $0.51 7.8%
Net income per common
share ( EPS - Diluted) $0.18 $0.13 $0.54 $0.50 8.0%
Cash Dividends Paid $0.00 $0.00 $0.45 $0.41 9.8%
Return on Average
Assets 1.28% 0.94% 0.96% 0.89%
Return on Average Equity 10.03% 7.74% 7.67% 7.30%
Return on Average
Tangible Equity 15.55% 10.61% 11.26% 9.85%
Net Interest Margin 3.42% 3.42% 3.45% 3.50%
Fourth Third Second First Fourth
Selected Operating Data Quarter Quarter Quarter Quarter Quarter
(in thousands except 2006 2006 2006 2006 2005
per share data) (unaudited)
Interest income:
Interest and fees
on loans $4,136 $4,197 $4,027 $3,805 $3,795
Interest and
dividends on
investments 1,458 1,446 1,487 1,527 1,655
Interest on fed
funds 137 13 15 13 8
Total interest
income 5,731 5,656 5,529 5,345 5,458
Interest expense:
Interest on deposits 1,736 1,534 1,391 1,303 1,315
Interest on
borrowings 817 908 903 854 840
Total interest
expense 2,553 2,442 2,294 2,157 2,155
Net interest income 3,178 3,214 3,235 3,188 3,303
Provision for loan
losses 40 80 80 80 100
Net interest income
after provision for
loan losses 3,138 3,134 3,155 3,108 3,203
Other income:
Net investment gains
(losses) 310 (24) (9) 31 222
Service charges on
deposit accts 633 605 585 539 586
Commissions and fees
on sales of non-
banking products 3,369 2,944 3,942 2,406 1,992
Other revenue from
operations 924 350 325 448 329
Total non-interest
income 5,236 3,875 4,843 3,424 3,129
Other expense:
Salaries and employee
benefits 4,038 3,773 4,311 3,374 3,108
Equipment and net
occupancy 866 933 963 885 842
Intangible amortization 96 96 159 32 28
Other costs of
operations 1,403 1,094 1,164 1,005 954
Total non-interest
expense 6,403 5,896 6,597 5,296 4,932
Income before income
taxes 1,971 1,113 1,401 1,236 1,400
Income tax provision 563 298 354 308 369
Net income $1,408 $815 $1,047 $928 $1,031
Net income per common
share ( EPS - Basic ) $0.18 $0.11 $0.14 $0.12 $0.14
Net income per common
share ( EPS - Diluted ) $0.18 $0.11 $0.14 $0.12 $0.13
Cash Dividends Paid $0.00 $0.23 $0.00 $0.22 $0.00
Return on Average Assets 1.28% 0.75% 0.97% 0.86% 0.94%
Return on Average Equity 10.03% 5.98% 7.66% 6.92% 7.74%
Return on Average
Tangible Equity 15.55% 9.44% 10.67% 9.50% 10.61%
Net Interest Margin 3.42% 3.48% 3.49% 3.40% 3.42%
SOURCE Oneida Financial Corp.
