-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WINklsr/rOnnjZejBIK/BKzFa6Wgoii2ZbBWgea0XbflDrknjMlaGMqgn2z/K0wO LGQgFH1YPsdRkTR433AHOA== 0001157523-08-003604.txt : 20080501 0001157523-08-003604.hdr.sgml : 20080501 20080501164550 ACCESSION NUMBER: 0001157523-08-003604 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20080501 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080501 DATE AS OF CHANGE: 20080501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEXITY FINANCIAL CORP CENTRAL INDEX KEY: 0001084727 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 631222937 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51273 FILM NUMBER: 08795316 BUSINESS ADDRESS: STREET 1: 3500 BLUE LAKE DRIVE STREET 2: SUITE 330 CITY: BIRMINGHAM STATE: AL ZIP: 35243 BUSINESS PHONE: 877-738-6391 MAIL ADDRESS: STREET 1: 3500 BLUE LAKE DRIVE STREET 2: SUITE 330 CITY: BIRMINGHAM STATE: AL ZIP: 35243 8-K 1 a5674063.htm NEXITY FINANCIAL CORPORATION 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 1, 2008

NEXITY FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware

000-51273

63-0523669

(State or other jurisdiction of
incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

3500 Blue Lake Drive, Suite 330
Birmingham, Alabama

35243

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (205) 298-6391

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02     Results of Operations and Financial Condition.

On May 1, 2008, Nexity Financial Corporation (“Nexity”) issued a press release (the “Press Release”) announcing its results of operations for the quarter ended March 31, 2008. A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits.

Exhibit No.

 

Description

 

99.1

Press Release dated May 1, 2008.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

Dated:

May 1, 2008

NEXITY FINANCIAL CORPORATION

 

 

 

 

/s/ John J. Moran

By:

John J. Moran

Its:

Executive Vice President and

Chief Financial Officer

EX-99.1 2 a5674063ex991.htm EXHIBIT 99.1

Exhibit 99.1

Nexity Financial Announces First Quarter Results

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Nexity Financial Corporation (NASDAQ: NXTY) today reported first quarter net income of $679,470, or $0.08 per diluted share compared with $1.16 million, or $0.14 per diluted share for the fourth quarter of 2007. Net income for the first quarter was also lower than the $1.57 million, or $0.18 per diluted share for the same period in 2007. The decrease in earnings was primarily related to lower net interest income, a higher provision for loan losses, and increased noninterest expense. Noninterest income was up $1,935,730 or 130.1% from the fourth quarter of 2007 primarily due to significantly increased revenue from our investment division.

Noninterest income was up $2.80 million or 451.5% from the same quarter last year primarily due to outstanding growth in our investment division. The increases in noninterest expense were primarily related to incentive pay increases related to the strong growth in investment division revenues and the costs associated with expansion of the investment division and start-up of our wealth management business during 2007.

“Our expansion during 2007 in the investment division has produced very strong results since the third quarter of 2007. Our revenue from this division was $3.0 million during the first quarter which is more than the $2.25 million that we produced during the entire year in 2007.” said Greg Lee, Chairman and CEO of Nexity Financial Corporation. “The net interest margin continues to be a challenge in this declining rate environment but should see improvement as alternate funding strategies produce lower costs and we reprice maturing CDs. We now have 370 community bank customers in 21 states and are committed to providing them superior products and services.”

Return on average assets and return on average equity were 0.29% and 3.95%, respectively, for the first quarter of 2008 compared with 0.50% and 6.85% during the fourth quarter in 2007 and 0.75% and 9.62% for the first quarter of 2007.

Total assets grew to $996.5 million at March 31, 2008, up $115.5 million or 13.1% from the $881.0 million reported at March 31, 2007. Total loans were $654.9 million at March 31, 2008, up $69.9 million or 12.0% from the $585.0 million reported at March 31, 2007. Total deposits were $561.1 million at March 31, 2008, down $70.4 million or 11.1% from the $631.5 million reported at March 31, 2007. Deposits were lower at March 31, 2008 primarily due to a decrease of $87.6 million in escrow deposits from start-up banks since December 31, 2007. Once these banks opened, their funds were moved to our federal funds program. At March 31, 2008, we used $150.4 million in federal funds from this program compared with $50.0 million at March 31, 2007.

Net interest income, the major component of Nexity’s income statement was $5.2 million for the first quarter of 2008 down 9.4% from the fourth quarter of 2007 and down 14.5% from the same period in 2007. The decreases were due to a lower net interest margin in 2008. The net interest margin was 2.35% during the first quarter of 2008 compared with 2.54% in the fourth quarter of 2007 and 2.97% for the same period in 2007. The net interest margin was lower in 2008 primarily due to the declining interest rate environment and a lower level of noninterest bearing sources of funds. Nexity’s interest rate risk position is asset sensitive in the shorter time horizons, which means that it will reprice assets more quickly than liabilities when interest rates are changing. As interest rates have declined, loan rates have dropped more rapidly than deposit rates. When rates stabilize and we are able to reprice maturing deposits, the net interest margin should begin to improve.


Average interest-earning assets increased 8.1% from last year and are flat versus the fourth quarter of 2007. Average earning assets were higher than last year because of growth in loans outstanding. Average loans were up $50.5 million or 8.7% from last year. Average loans as a percentage of average earning assets improved from 69.9% during the first quarter of 2007 to 70.3% for the same period in 2008.

The provision for loan losses during the first quarter of 2008 was $900,000 versus $0 for the same period in 2007. The provision for loan losses was higher primarily because of an increased level of reserves for nonperforming loans. We had a net recovery for the first quarter of 2008 of $6,742 versus net charge-offs of $323,313 or 0.20% for the fourth quarter of 2007 and $53,917 or 0.04% for the same period in 2007.

Noninterest income for the first quarter of 2008 was $3,424,114, up $1.9 million or 130.1% from the $1,488,384 reported for the fourth quarter of 2007 and up $2.8 million or 451.5% from the $620,877 reported for the same period in 2007. Noninterest income was up significantly primarily because of an increase in income from the brokerage and investment services division. Income from this division reached an all-time high of $3.0 million during the first quarter of 2008, which was up 702.4% from the same quarter last year and 180.5% from the fourth quarter of 2007. This was the third quarter in a row that our quarter-to-quarter growth was nearly 100% or better. Income from bank-owned life insurance, service charges on deposit accounts and other fee income associated with our clearing and cash management business with correspondent banks were also up substantially during the first quarter of 2008.

Noninterest expense for the first quarter of 2008 was $6.93 million, which was up $1.3 million or 23.9% from the $5.59 million reported for the fourth quarter of 2007 and up $2.5 million or 57.0% from the $4.41 million reported for the same period in 2007. During the first quarter of 2008, we had $937,334 million in additional incentive pay earned in the investment division related to the significant increase in revenue versus the fourth quarter of 2007 and $1.1 million compared with the first quarter of 2007. Without these variable expenses, noninterest expense would have only increased 7.2% from the fourth quarter of 2008. Noninterest expense was higher in 2008 compared with 2007 due to increases related to expansion of the investment division and start-up costs related to the Wealth Management business and Nexity Capital Management.

The efficiency ratio was 80.17% for the first quarter of 2008, which was up from the 73.03% reported for the fourth quarter of 2007 and up from the 65.62% reported for the same period in 2007. While noninterest revenues have grown significantly over the last few quarters, lower net interest income and higher overhead expense have had an adverse effect on the efficiency ratio. We expect the efficiency ratio to improve during 2008 as the net interest margin begins to improve when rates stabilize and we control the growth of overhead expense.


Credit quality continues to be a challenge in the current credit environment. Nonperforming loans were $19.7 million or 3.01% of total loans at March 31, 2008 compared with $9.6 million or 1.49% of total loans at December 31, 2007, and $562,829 or 0.10% of total loans at March 31, 2007. Nonperforming assets were $23.1 million or 2.32% of total assets at March 31, 2008 compared with $13.0 million or 1.37% of total assets at December 31, 2007, and $5.2 million or 0.59% of total assets at March 31, 2007. Nonperforming loans and assets were up from the fourth quarter of 2008 primarily due to the addition of two real estate loans totaling $7.3 million located in the coastal area of South Carolina market. We believe we are well secured in each of these loans and anticipate any losses arising from the workout of these two credits to be at manageable levels. We also added a $2.9 million loan to an individual investor secured by stock in a bank holding company located in Atlanta, Georgia. We established a reserve for this loan in the fourth quarter of 2007 when the value of the collateral decreased substantially. We added to this reserve in the first quarter of 2008 as the value furthered deteriorated and believe that we are adequately reserved at this time.

Net charge-offs continue to be at a very favorable level. We had a net recovery during the first quarter of 2008 totaling $6,642 compared with net charge-offs of 0.04% of average loans for the same period in 2007. The allowance for loan losses was 1.36% of total loans at March 31, 2008 and 1.26% at March 31, 2007.

Nexity’s total risk-based capital, tier 1 risk-based capital, and leverage ratios at March 31, 2008 were 10.42%, 9.37%, and 8.51%, respectively, compared with 12.21%, 11.17%, and 9.28%, respectively, at March 31, 2007. On July 23, 2008, Nexity announced a stock repurchase program to acquire up to 800,000 shares, or approximately 9.9% of the total outstanding common shares. Nexity has repurchased 307,000 shares in this program since July 23, 2008. Nexity has repurchased a total of 957,000 shares or approximately 10.9% of total common shares outstanding since the beginning of last year under this program and similar programs.


Conference Call / Webcast Information

Nexity Financial Corporation will host a conference call on Friday, May 2, 2008 at 10:00 AM Eastern Daylight Time (EDT) to discuss the first quarter 2008 results. Additional material information, including forward-looking statements such as trends and projections, may be discussed during the presentation. To participate in the conference call or webcast, please follow the instructions listed below.

 
Webcast: Live via the Internet and Windows Media Player

http://www.nexitybank.com/ then to the Investor Relations

section, to conference in via the web
Then click on "First Quarter 2008 Earnings Release

Conference Call." The Webcast access will be "listen

only".

 
Webcast URL:

http://www.talkpoint.com/viewer/starthere.asp?Pres=121251

 
 

Live via teleconference. To call in, dial:

 
1-800-860-2442 (U.S. and Canada)
+1-412-858-4600 (International)
 

About Nexity Financial Corporation

Nexity Financial Corporation is a $997 million commercial bank offering deposit products nationwide consisting of money markets, checking accounts and online access. Nexity generates the majority of its income through wholesale correspondent banking activities. Nexity is headquartered in Birmingham, Alabama. Customer Service Representatives can be reached at 1-877-738-6391. To learn more about Nexity Bank please visit www.nexitybank.com.

CAUTION ABOUT FORWARD-LOOKING STATEMENTS

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Nexity Financial Corporation notes that any statements in this press release and elsewhere that are not historical facts are “forward-looking statements.” The words “expect”, “anticipate”, “intend”, “consider”, “plan”, “believe”, “seek”, ”should”, “estimate” and similar expressions are intended to identify such forward-looking statements, but other statements may constitute forward-looking statements. The forward-looking statements involve risks and uncertainties that may cause Nexity’s actual results of operations to differ materially from expected results. For a discussion of such risks and uncertainties, see Nexity’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008, as well as its other filings with the U.S. Securities and Exchange Commission. Nexity assumes no obligation to update any forward-looking statements contained in this document as a result of new information or future events or developments.


 
Nexity Financial Corporation
Financial Summary (Unaudited)
     
Three Months Ended
March 31 Percent
Income Statement Data   2008   2007   Change
 
Interest income

$

13,943,194

$ 15,371,793 (9.3 ) %
Interest expense   8,727,996     9,271,346 (5.9 )
 
Net interest income 5,215,198 6,100,447 (14.5 )
Provision for loan losses   900,000     0 100.0
 

Net interest income after provision for loan losses

4,315,198 6,100,447 (29.3 )
Net gains on sales of securities 124,880 0 100.0
Noninterest income 3,424,114 620,877 451.5
Noninterest expense   6,925,722     4,410,305 57.0
 
Income before income taxes 938,470 2,311,019 (59.4 )
Applicable income tax expense   259,000     744,699 (65.2 )
Net income $ 679,470   $ 1,566,320 (56.6 ) %
 
Reconciliation of Non-GAAP measures to GAAP:
Net income $ 679,470 $ 1,566,320 (56.6 ) %
Non-recurring income (after-tax) (1)   (82,421 )   0 (100.0 )
Operating income $ 597,049   $ 1,566,320 (61.9 ) %
 
Net income per share - basic $ 0.09 $ 0.19 (53.2 ) %
Net income per share - diluted $ 0.08 $ 0.18 (52.0 )
 
Operating income per share - basic $ 0.08 $ 0.19 (58.9 )
Operating income per share - diluted $ 0.07 $ 0.18 (57.8 )
 
Weighted average shares outstanding - basic 7,769,394 8,373,973 (7.2 )
Weighted average shares outstanding - diluted     8,032,748         8,887,879     (9.6 )  
 
Performance Ratios
(Annualized a)
Return on average assets (a) 0.29

%

 

0.75 % (60.7 ) %
Return on average stockholders' equity (a) 3.95 9.62 (58.9 )

Net yield on average interest-earning assets (tax equivalent) (a)

2.35 2.97 (20.9 )
Efficiency ratio     80.17         65.62     22.2    
 
Selected Average Balances
(In thousands)
Total assets $ 932,447 $ 852,515 9.4 %
Interest-earning assets 900,086 832,921 8.1
Loans-net of unearned income 632,590 582,086 8.7
Investment securities 255,033 241,143 5.8
Deposits 634,758 639,763 (0.8 )
Noninterest-bearing deposits 6,373 7,262 (12.2 )
Interest-bearing deposits 628,385 632,501 (0.7 )
Interest-bearing liabilities 845,501 768,656 10.0
Stockholders' equity     69,103         66,034     4.6    
 
(1) Non-recurring income is gains on sales of investment securities.

 
Nexity Financial Corporation
Financial Summary (Unaudited)
     
Selected Financial Data

at Period-End

(In thousands) March 31, Percent
2008 2007 Change
 
Total assets $ 996,500 $ 881,015 13.1 %
Interest-earning assets 957,667 855,279 12.0
Loans-net of unearned income 654,915 584,965 12.0
Allowance for loan losses 8,875 7,358 20.6
Investment securities 290,910 242,874 19.8
Deposits 561,135 631,543 (11.1 )
Stockholders' equity 70,315 66,923 5.1
 
Average loans to average deposits 99.66 % 90.98 % 9.5 %

Total loans to interest-earning assets

68.39 68.39 (0.0 )

Average stockholders' equity to average assets

7.41 7.75 (4.3 )
Tier 1 capital to average assets
(Leverage ratio) 8.51 9.28 (8.3 )
Risk-based capital ratios:
Tier 1 capital 9.37 11.17 (16.1 )
Total capital 10.42 12.21 (14.7 )
Book value per common share $ 9.05 $ 8.02 12.8

Tangible book value per common share

$ 8.93 $ 7.91 12.9

Total common shares outstanding

7,769,394 8,340,680 (6.8 )
 
 
 
Credit Quality Data
 
Nonperforming assets 23,085,835 5,230,229 341.4 %
Nonperforming loans 19,708,365 562,829 3401.7
Net charge-offs (recoveries) (6,742 ) 53,917 (112.5 )
Nonperforming assets to total assets 2.32 % 0.59 % 290.2

Annualized net charge-offs to average total loans (YTD)

0.00 0.04 (97.2 )

Allowance for loan losses to total loans

1.36 1.26 7.7

Allowance for loan losses to nonperforming loans

45.03 1,307.30 (96.6 )
 
NM - not meaningful

 
Nexity Financial Corporation
Financial Summary (Unaudited)
         
Consolidated Balance Sheets
(In thousands)     3/31/08     12/31/07     9/30/07     6/30/07     3/31/07
 
ASSETS
Cash and due from banks $ 3,765 $ 9,841 $ 8,481 $ 7,404 $ 5,336
Interest-bearing deposits in other banks 5,484 10,121 2,946 13,429 2,575
Federal funds sold 3,562 8,487 24,089 11,778 24,865
Investment securities available-for-sale, at fair value 290,910 244,824 246,507 228,535 242,874
Trading securities, at fair value 2,796 0 198 989 0
 
Loans, net of unearned income 654,915 644,864 645,800 629,008 584,965
Allowance for loan losses (8,875 ) (7,969 ) (7,977 ) (7,775 ) (7,358 )
Net loans 646,040   636,895   637,823   621,233   577,607  
 
Premises and equipment, net 11,735 3,382 3,297 3,311 3,337
Deferred tax asset 3,049 4,037 3,944 5,656 3,677
Intangible assets 911 911 911 911 911
Other real estate owned 3,377 3,377 3,551 4,910 4,667
Bank owned life insurance 17,513 17,337 17,156 16,973 6,833
Other assets 7,358   8,001   8,128   8,166   8,333  
Total assets $ 996,500   $ 947,213   $ 957,031   $ 923,295   $ 881,015  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand Deposits $ 7,324 $ 4,813 $ 11,608 $ 8,607 $ 7,572
NOW and money market accounts 171,433 276,402 256,137 255,178 216,022
Time deposits $100,000 and over 141,860 158,712 159,708 148,039 139,480
Other time and savings deposits 240,518   269,230   284,058   281,270   268,469  
Total deposits 561,135 709,157 711,511 693,094 631,543
 

Federal funds purchased and securities sold under agreements to repurchase

150,383 16,930 35,256 34,986 50,000
Short-term borrowings 30,000 10,000 0 0 0
Long-term borrowings 161,400 121,400 120,000 110,000 110,000
Subordinated debentures 12,372 12,372 12,372 12,372 12,372
Accrued expenses and other liabilities 10,894   10,822   10,703   10,399   10,177  
Total liabilities 926,184   880,681   889,842   860,851   814,092  
 
Stockholders' Equity:
Preferred stock 0 0 0 0 0
Common stock 87 87 87 87 87
Surplus 62,425 62,339 62,298 62,258 62,222
Retained earnings 15,436 14,757 13,584 12,149 11,005
Accumulated other comprehensive loss 2,180 (839 ) (1,130 ) (4,678 ) (1,437 )
Less: Treasury stock (9,812 ) (9,812 ) (7,650 ) (7,372 ) (4,954 )
Total stockholders' equity 70,316   66,532   67,189   62,444   66,923  
Total liabilities and stockholders' equity $ 996,500   $ 947,213   $ 957,031   $ 923,295   $ 881,015  

       
Nexity Financial Corporation
Financial Summary (Unaudited)
 
Income Statement Data     3/31/08     12/31/07     9/30/07       6/30/07     3/31/07  
 
Interest income $ 13,943,194 $ 15,910,859 $ 16,742,788 $ 16,265,929 $ 15,371,793
Interest expense 8,727,996   10,153,904   10,533,553   9,934,285 9,271,346
 
Net interest income 5,215,198 5,756,955 6,209,235 6,331,644 6,100,447
Provision for loan losses 900,000   315,000   50,000   440,000 0
 

Net interest income after provision for loan losses

4,315,198 5,441,955 6,159,235 5,891,644 6,100,447
Net gains (losses) on sales of securities 124,880 292,051 0 0 0
Noninterest income 3,424,114

1,488,386

941,092 588,697 620,877
Noninterest expense 6,925,722   5,588,526   5,048,998   4,928,169 4,410,305
 
Income before income taxes 938,470

1,633,866

2,051,329

1,552,172 2,311,019
Applicable income tax expense 259,000   461,127   616,199   408,566 744,699
Net income $ 679,470   $

1,172,739

  $

1,435,130

  $ 1,143,606 $ 1,566,320
 
Reconciliation of Non-GAAP measures to GAAP:
Net income $ 679,470 $

1,172,739

$

1,435,130

$ 1,143,606 $ 1,566,320
Non-recurring (income) expense (after-tax) (1) (82,421 ) (9,361 ) 0   0 0
Operating income $ 597,049   $

1,163,378

  $

1,435,130

  $ 1,143,606 $ 1,566,320
 
Net income per share - basic $ 0.09 $ 0.15 $ 0.18 $ 0.14 $ 0.19
Net income per share - diluted $ 0.08 $ 0.14 $ 0.17 $ 0.13 $ 0.18
 
Operating income per share - basic $ 0.08 $ 0.15 $ 0.18 $ 0.14 $ 0.19
Operating income per share - diluted $ 0.07 $ 0.14 $ 0.17 $ 0.13 $ 0.18
 
Weighted average shares outstanding - basic 7,769,394 8,014,473 8,115,669 8,307,779 8,373,973
Weighted average shares outstanding - diluted     8,032,748       8,357,538       8,513,723       8,799,494     8,887,879  
 
Performance Ratios
(Annualized a)
Return on average assets (a) 0.29

%

0.50

%

 

0.61

%

 

 

0.51

%

 

0.75 %
Return on average stockholders' equity (a) 3.95 6.85 8.84 6.91 9.62

Net yield on average interest-earning assets (tax equivalent) (a)

2.35 2.54 2.76 2.95 2.97
Efficiency ratio     80.17       73.03       70.61       71.21     65.62  
 

(1) Non-recurring (income) expense is gains on sales of investment securities and legal settlement expense of $297,500 recorded as noninterest expense during the 4th quarter of 2007.


 
Nexity Financial Corporation
Financial Summary (Unaudited)
 

 

Summary of Capital and Capital Ratios

 

    3/31/08     12/31/07     9/30/07     6/30/07     3/31/07
         
Regulatory Capital (In thousands)
Tier 1 Capital $ 79,226 $ 78,460 $ 79,408 $ 78,200 $ 79,450
Tier 2 Capital 8,875 7,969 7,977 7,775   7,358
Total risk-based capital 88,101 86,429 87,385 85,975   86,808
Total risk-weighted assets 845,449 803,777 797,300 786,896 710,990
 
Capital Ratios
Total risk-based capital 10.42

%

 

10.75

%

 

10.96

%

 

10.93

%

 

12.21 %
Tier 1 risk-based capital 9.37 9.76 9.96 9.94 11.17
Leverage ratio 8.51 8.37 8.50 8.72 9.28
 
Book value per common share $ 9.05 $ 8.55 $ 8.31 $ 7.69 $ 8.02

Tangible book value per common share

$ 8.93 $ 8.43 $ 8.20 $ 7.58 $ 7.91

Total common shares outstanding

7,769,394 7,783,680 8,086,680 8,120,680 8,340,680
 
Credit Quality Data
Nonperforming assets $ 23,085,835 $ 12,963,411 $ 6,786,310 $ 4,910,004 $ 5,230,229
Nonperforming loans 19,708,365 9,585,941 3,234,910 0 562,829
Net charge-offs (recoveries) (6,742 ) 323,313 23,007 23,231 53,917
 
Nonperforming loans to total loans 3.01

%

 

1.49

%

 

0.50

%

 

0.00

%

 

0.10

%

Nonperforming assets to total assets 2.32 1.37 0.71 0.53 0.59

Annualized net charge-offs to average total loans (QTD)

0.00 0.20 0.01 0.02 0.04

Allowance for loan losses to total loans

1.36 1.24 1.24 1.24 1.26

Allowance for loan losses to nonperforming loans

45.03 83.13 246.59 NM 1,307.30
 
NM - not meaningful

 
Nexity Financial Corporation
Financial Summary (Unaudited)
               
Comparative Average Balance Sheets
- Yields and Costs Three Months Ended
3/31/08 12/31/07 09/30/07
Average Revenue/ Yield/ Average Revenue/ Yield/ Average Revenue/ Yield/
Balance   Expense   Rate Balance   Expense   Rate Balance   Expense   Rate
Interest-earning assets:
Loans (1) $ 632,589,505 $ 10,486,183 6.67 % $ 636,141,637 $ 12,570,444 7.84 % $ 631,254,233 $ 13,441,971 8.45 %
Investment securities (2)
Taxable 246,129,764 3,233,370 5.28 242,832,254 3,055,520 4.99 240,934,188 2,998,839 4.94
Non Taxable (3) 8,903,268 132,792 6.00 3,333,670 52,685 6.27 2,651,838 41,755 6.25

Interest-bearing balances due from banks

8,848,479 104,665 4.76 7,604,652 108,377 5.65 7,703,039 111,867 5.76
Trading securities 1,257,603 10,578 3.38 825,068 6,545 3.15 1,332,373 5,895 1.76

Federal funds sold and securities purchased under agreements to resell

  2,357,511     20,756   3.54     10,278,715     135,200   5.22     11,680,810     156,658   5.32  
Total interest-earning assets   900,086,130     13,988,344   6.25 %   901,015,996    

15,928,771

  7.01 %   895,556,481     16,756,985   7.42 %
 
Noninterest-earning assets:
Cash and due from banks 3,477,210 6,134,184 9,052,949
Premises and equipment 3,489,835 3,322,698 3,280,370

Other, less allowance for loan losses

  25,393,882   24,253,831   21,783,319
Total noninterest-earning assets   32,360,927   33,710,713   34,116,638
 
TOTAL ASSETS $ 932,447,057 $ 934,726,709 $ 929,673,119
 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 3,966,194 9,616 0.98 % $ 4,073,639 11,989 1.17 % $ 3,656,848 11,194 1.21 %
Savings 270,535 834 1.24 259,588 808 1.24 279,810 872 1.24
Money market 220,454,537 1,589,015 2.90 259,789,203 2,638,547 4.03 259,856,523 3,028,658 4.62
Time deposits   403,694,010     5,070,106   5.05     441,116,821     5,831,097   5.24     434,692,025     5,813,465   5.31  
Total interest-bearing deposits 628,385,276 6,669,571 4.27 705,239,251 8,482,441 4.77 698,485,206 8,854,189 5.03

Federal funds purchased and securities sold under agreements to repurchase

68,508,565 459,765 2.70 11,245,069 128,278 4.53 15,523,477 209,574 5.36
Short-term debt 439,561 2,744 2.51 108,696 978 3.57 0 0 0.00
Long-term debt 135,795,604 1,375,176 4.07 120,091,304 1,286,209 4.25 116,521,739 1,208,808 4.12
Subordinated debentures   12,372,000     220,739   7.18     12,372,000     255,998   8.21     12,372,000     260,982   8.37  
Total interest-bearing liabilities   845,501,006     8,727,995   4.15 %   849,056,320     10,153,904   4.74 %   842,902,422     10,533,553   4.96 %
 
Noninterest-bearing liabilities:
Demand deposits 6,373,042 6,249,349 10,786,506
Other liabilities   11,469,537   11,449,378   11,550,231
Total noninterest-bearing liabilities   17,842,579   17,698,727   22,336,737
Stockholders' equity   69,103,472   67,971,662   64,433,960
 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 932,447,057 $ 934,726,709 $ 929,673,119
 
Net interest income $ 5,260,349 $ 5,774,867 $ 6,223,431
 
Interest income/earning assets 6.25 % 7.01 % 7.42 %
Interest expense/earning assets 3.90   4.47   4.67  
 
Net interest income/earning assets 2.35 % 2.54 % 2.76 %
 
(1) Average loan balances are stated net of unearned income and include nonaccrual loans.

(2) The weighted average yields on securities are calculated on the basis of the yield to maturity based on the book cost of each security.

(3) Non-taxable income has been adjusted to a tax-equivalent basis using a federal tax rate of approximately 34%

 
Nexity Financial Corporation
Financial Summary (Unaudited)
           
Comparative Average Balance Sheets
- Yields and Costs Three Months Ended
6/30/07 3/31/07
Average Revenue/ Yield/ Average Revenue/ Yield/
Balance   Expense   Rate Balance   Expense   Rate
Interest-earning assets:
Loans (1) $ 600,404,019 $ 12,958,613 8.66 % $ 582,085,635 $ 12,247,043 8.53 %
Investment securities, taxable (2)
Taxable 241,272,975 3,015,548 5.01 241,143,443 2,968,329 4.99
Non Taxable (3) 0 0 0.00 0 0 0.00

Interest-bearing balances due from banks

8,177,955 132,678 6.51 4,364,636 82,506 7.67
Trading securities 1,110,207 32,927 11.90 0 0 0.00

Federal funds sold and securities purchased under agreements to resell

  9,609,706     126,163   5.27     5,326,968     73,915   5.63  
Total interest-earning assets   860,574,862     16,265,929   7.58 %   832,920,682     15,371,793   7.48 %
 
Noninterest-earning assets:
Cash and due from banks 7,216,686 4,994,972
Premises and equipment 3,344,524 1,939,128
Other, less allowance for loan losses   21,733,792   12,660,510
Total noninterest-earning assets   32,295,002   19,594,610
 
TOTAL ASSETS $ 892,869,864 $ 852,515,292
 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 3,648,428 11,028 1.21 % $ 3,465,673 10,352 1.21 %
Savings 320,070 952 1.19 313,474 952 1.23
Money market 234,125,073 2,686,820 4.60 218,937,543 2,450,202 4.54
Time deposits   418,271,659     5,508,570   5.28     409,784,371     5,288,694   5.23  
Total interest-bearing deposits 656,365,230 8,207,370 5.02 632,501,061 7,750,200 4.97

Federal funds purchased and securities sold under agreements to repurchase

28,429,229 365,067 5.15 13,783,056 177,756 5.23
Short-term debt 0 0 0.00 0 0 0.00
Long-term debt 110,000,000 1,103,783 4.02 110,000,000 1,090,516 4.02
Subordinated debentures   12,372,000     258,065   8.37     12,372,000     252,874   8.29  
Total interest-bearing liabilities   807,166,459     9,934,285   4.94 %   768,656,117     9,271,346   4.89 %
 
Noninterest-bearing liabilities:
Demand deposits 8,311,537 7,261,923
Other liabilities   10,996,625   10,562,862
Total noninterest-bearing liabilities   19,308,162   17,824,785
Stockholders' equity   66,395,243   66,034,390
 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 892,869,864 $ 852,515,292
 
Net interest income $ 6,331,644 $ 6,100,447
 
Interest income/earning assets 7.58 % 7.48 %
Interest expense/earning assets 4.63   4.51  
 
Net interest income/earning assets 2.95 % 2.97 %
 
(1) Average loan balances are stated net of unearned income and include nonaccrual loans.

(2) The weighted average yields on securities are calculated on the basis of the yield to maturity based on the book value of each security.

CONTACT:
Nexity Financial Corporation
John J. Moran, EVP & CFO, 843-213-0999

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