-----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, UBM2jvMzb9ZaiocirSTjww2xdp51Tpm6HeAT1REF2+NfxmYNGYuJJqdzxqTAeqIK OrA+/VPdCTwqHr6BAnqnPQ== 0000946924-03-000049.txt : 20031113 0000946924-03-000049.hdr.sgml : 20031113 20031113152912 ACCESSION NUMBER: 0000946924-03-000049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030930 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KLAMATH FIRST BANCORP INC CENTRAL INDEX KEY: 0000946924 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 931180440 STATE OF INCORPORATION: OR FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26556 FILM NUMBER: 03997849 BUSINESS ADDRESS: STREET 1: 540 MAIN ST CITY: KLAMATH FALLS STATE: OR ZIP: 97601 BUSINESS PHONE: 5418823444 MAIL ADDRESS: STREET 2: 540 MAIN STREET CITY: KLAMATH STATE: OR ZIP: 97601 8-K 1 head_pg.txt HEADING PAGE FOR 9/30 EARNINGS RELEASE FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 12, 2003 Klamath First Bancorp, Inc. (Exact name of registrant as specified in its charter) Oregon 0-26556 93-1180440 State or other jurisdiction Commission (I.R.S. Employer of incorporation File Number Identification No.) 540 Main Street, Klamath Falls, Oregon 97601 (Address of principal executive offices) (Zip Code) Registrant's telephone number (including area code):(541)882-3444 Not Applicable (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. (c) The following exhibit is included with this report: 99.1 Press release of Klamath First Bancorp, Inc. dated November 12, 2003. Item 12. Results of Operations and Financial Condition. On November 12, 2003, Klamath First Bancorp, Inc. issued its earnings release for the fourth quarter ended September 30, 2003. A copy of the earnings release is attached hereto as Exhibit 99.1, which is incorporated herein by reference. SIGNATURES 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, thereunto duly authorized. KLAMATH FIRST BANCORP, INC. Date: November 12, 2003 By: /s/ Kermit K. Houser ------------------------------- Kermit K. Houser, President and Chief Executive Officer Date: November 12, 2003 By: /s/ Marshall Jay Alexander ------------------------------- Marshall Jay Alexander, Executive Vice President and Chief Financial Officer EX-99 4 earn_rel.txt EASNINGS RELEASE FOR 09/30/03 EXHIBIT 99.1 Contacts: Kermit K. Houser Marshall J. Alexander President and CEO Executive VP And CFO (541) 882-3444 X 7133 (541) 882-3444 X 7120 News Release ================================================================================ KLAMATH FIRST BANCORP ANNOUNCES FOURTH FISCAL QUARTER AND FISCAL YEAR-END NET INCOME Klamath Falls, OR - November 12, 2003 - Klamath First Bancorp, Inc. (Nasdaq: KFBI) (the "Company") today reported fiscal fourth quarter net income of $911,000 or $0.13 per diluted share compared to $2.4 million or $0.36 per diluted share for the same quarter last year, and fiscal year-end earnings of $2.4 million or $0.36 per diluted share compared to $6.8 million or $1.05 per diluted share for fiscal year-end earnings in 2002. Earnings continue to be impacted by the low interest rate environment and rapid loan prepayments and repricings, the expense associated with the Company transitioning to a balance sheet and operating structure more similar to those of a bank, last quarter's non-cash impairment charge, as well as merger related expenses from the announced merger with Sterling Financial Corporation (Nasdaq:STSA) ("Sterling"). "The Company has continued its strategy to reduce reliance on fixed rate one-to four- family loans and certificates of deposit by emphasizing commercial and consumer loans and core deposits. Management knew this would be a two to three year process and earnings would be impacted. The variable outside of the Company's control that contributed most to reduced earnings was the continued low interest rate environment throughout this same time period as well as the sluggish economy in our markets. The challenging economic environment of the last two years had a substantial negative impact on the success of our strategic plan," said Kermit K. Houser, President and Chief Executive Officer. For the year ended September 30, 2003, net income totaled $2.4 million, or $0.36 per diluted share, compared to $6.8 million, or $1.05 per diluted share, in fiscal 2002. Several factors have contributed to lower net income. Net interest income before provision for loan losses has decreased $5.8 million from $46.3 million for the twelve months ended September 30, 2002 to $40.5 million for the twelve months ended September 30, 2003. This was primarily a result of the low rate environment. Year-to-date earnings were also impacted by last quarter's non-cash charge of approximately $2.5 million after tax earnings in connection with "other-than-temporary" impairment (OTTI) on two Federal Home Loan Mortgage Corporation (FHLMC) and one Federal National Mortgage Association (FNMA) issues of variable rate non-cumulative preferred stock held in the Company's available-for-sale investment portfolio. Non-interest income improved to $4.1 million in the fourth quarter of fiscal 2003, compared to $3.7 million in the like quarter a year earlier, and $16.2 million for the year compared to $12.0 million in fiscal 2002. Income from fees and service charges on deposits improved $0.5 million from $1.4 million for the fourth fiscal quarter last year to $1.9 million for the fourth fiscal quarter this year, and improved $1.8 million for the fiscal year from $4.9 million in 2002 to $6.7 million in 2003. Fourth quarter net interest margin decreased to 2.73%, compared to 3.36% in the fourth quarter a year ago. For the year, net interest margin decreased to 2.91% for the fiscal year 2003 compared to 3.37% a year ago. Interest expense for the quarter and fiscal year decreased as a result of both historic low interest rates and the Company's pricing strategies and efforts to rely more on lower cost core deposits over higher cost certificates of deposit. However, the decrease in interest expense of 85 basis points did not keep pace with the decrease in yield on earnings assets of 123 basis points over the year. Total non-interest expense was $13.1 million for the quarter, compared to $16.5 million in the prior quarter and $12.2 million in the like quarter a year earlier. This quarter included direct "out-of-pocket" or incremental costs of $340,000 related to the Sterling merger, including consultant fees, accounting and legal fees, and the cost of the fairness opinion. Additionally, there was approximately $200,000 in expenses incurred in preparation for the potential Sterling merger. The Company adopted SFAS No. 147, "Acquisitions of Certain Financial Institutions," as of October 1, 2002. This statement makes the accounting for branch acquisitions by financial institutions consistent with the accounting principles applied to other acquisitions. As a result of adoption of this pronouncement, the Company discontinued amortization of goodwill related to branch acquisitions. This goodwill totaled $22.9 million at September 30, 2002 and 2003. During the year ended September 30, 2002, the Company expensed $1.6 million related to amortization of goodwill. Under SFAS No. 147, this expense will not be recorded in 2003 and future fiscal years, but the intangible asset will be subjected to impairment testing at least annually. As a result of this change for fiscal year 2003, amortization of intangibles decreased from $5.5 million in fiscal 2002 to $3.6 million in fiscal 2003. During the Company's transition from a traditional thrift balance sheet to a balance sheet more similar to that of a commercial bank, management has emphasized conservative loan underwriting standards. This emphasis is reflected in our strong loan quality ratios. Non-performing assets totaled $1.5 million at September 30, 2003 compared to $1.9 million a year earlier. The allowance for loan losses was 1.21% of total loans outstanding and 868% of non-performing loans at September 30, 2003. A year ago, the allowance was 1.19% of loans outstanding. On July 15, 2003, the Company and Sterling jointly announced a definitive agreement for the merger of the Company into Sterling. Under the terms of the agreement, each share of the Company's common stock will be converted into 0.77 shares of Sterling common stock subject to certain conditions. Based upon Sterling's closing price on July 14, this is equivalent to approximately $20.44 per share of the Company's common stock. The transaction, valued at approximately $147 million, is expected to close in the first calendar quarter of 2004, pending shareholder and regulatory approval and the satisfaction of certain other closing conditions. Proxy materials for the shareholder vote on the Sterling merger are anticipated to be mailed in early November. On September 10, 2003, the Company announced the sale of seven branches located in northeastern Oregon to The Bank of Eastern Oregon. The sale includes deposit accounts of approximately $66 million, the fixed assets, branch offices and a small number of loans tied to deposit accounts. The transaction is scheduled to close on December 12, 2003, pending regulatory approval. Sterling was apprised of and concurred in the sale of these branches. About Klamath First Bancorp, Inc. Klamath First Bancorp, Inc. is the holding company for Klamath First Federal Savings and Loan Association, which operates 59 offices, 57 in 26 counties throughout Oregon and 2 in-store branches in South Central Washington. Klamath First serves the state of Oregon through these offices by offering a full range of products and services for both the consumer and business customer, including commercial, consumer and real estate loans, various checking and savings products, 24-hour telephone banking, and online banking with bill pay through its web site www.KlamathFirst.com. Customers have access to brokerage and investment services through the Company's subsidiary, Klamath First Financial Services. Additionally, customers may visit new in-store branches with extended banking hours six days a week. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) the proposed merger between Sterling and the Company.; (ii) the Company's plans, objectives, expectations and intentions and other statements contained in this presentation that are not historical facts; and (iii) other statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of the management of the Company and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of numerous possible uncertainties. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements (1) governmental approvals of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; (2) the shareholders of the Company or Sterling may fail to approve the merger; (3) changes in interest rates; (4) changes in tax laws; (5) changes in general economic conditions or (6) changes in the securities markets. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Sterling's and the Company's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission ("SEC") and available on the SEC's Internet site http://www.sec.gov. The Company disclaims any obligation to publicly announce future events or developments that may affect the forward-looking statements herein. ADDITIONAL INFORMATION The proposed merger with Sterling will be submitted to the Company's shareholders for their consideration. Sterling has filed a registration statement that contains a Joint Proxy Statement/Prospectus and other relevant documents concerning the proposed transaction with the SEC. the Company's shareholders are urged to read the Joint Proxy Statement/Prospectus and any other relevant documents filed with the SEC as well as any amendments or supplements to those documents, because they contain important information. Shareholders may obtain a free copy of the Joint Proxy Statement/Prospectus and other documents containing information about Sterling and the Company on the SEC's internet site at http://www.sec.gov. (tables follow) KFBI - Fourth Quarter Results November 12, 2003 (unaudited)
RESULTS OF OPERATIONS Quarter Ended Years Ended ----------------------------------------- --------------------------- (In thousands except shares and per share data) Sep 30, 2003 June 30, 2003 Sep 30, 2002 Sep 30, 2003 Sep 30, 2002 ------------ ------------- ------------ ------------ ------------ INTEREST INCOME : Loans receivable $ 9,751 $ 10,438 $ 12,271 $ 42,902 $ 52,179 Mortgage-backed securities 5,609 5,212 6,685 21,864 26,369 Securities and deposits 1,586 1,697 1,890 6,525 8,745 ------------ ----------- ------------ ------------ ------------ 16,946 17,347 20,846 71,291 87,293 INTEREST EXPENSE : Deposits 3,780 4,145 6,230 18,173 29,782 Federal Home Loan Bank advances 2,953 2,656 2,433 10,886 9,609 Mandatorily redeemable preferred securities 390 395 459 1,620 1,424 Other borrowings 3 19 44 74 140 ------------ ----------- ------------ ------------ ------------ ------------ ----------- ------------ ------------ ------------ 7,126 7,215 9,166 30,753 40,955 ------------ ----------- ------------ ------------ ------------ Net Interest Income Before Provision For Loan Losses 9,820 10,132 11,680 40,538 46,338 PROVISION FOR LOAN LOSSES - - - - - - - - 156 ------------ ----------- ------------ ------------ ------------ Net Interest Income After Provision For Loan Losses 9,820 10,132 11,680 40,538 46,182 NON-INTEREST INCOME : Fees and service charges on deposit accounts 1,944 1,623 1,353 6,669 4,943 Other fees and service charges 954 1,053 793 3,646 2,934 Gain on sale of securities, net - - 76 527 556 1,078 Brokerage and annuity commissions 441 603 549 1,952 1,368 Gain on sale of mortgage loans 510 614 308 2,141 1,077 Other 286 387 200 1,240 585 ------------ ----------- ------------ ------------ ------------ 4,135 4,356 3,730 16,204 11,985 NON-INTEREST EXPENSE : Salary and employee benefits 5,967 6,405 5,501 24,455 22,125 Occupancy and equipment 1,502 1,345 1,235 5,423 4,811 Information / computer data services 493 397 337 1,583 1,499 Deposit insurance 43 44 48 182 181 Amortization of intangibles 912 912 1,382 3,648 5,521 Other 4,156 7,414 3,653 18,477 13,981 ------------ ----------- ------------ ------------ ------------ 13,073 16,517 12,156 53,768 48,118 ------------ ----------- ------------ ------------ ------------ Income Before Provision For Income Taxes 882 (2,029) 3,254 2,974 10,049 PROVISION FOR INCOME TAXES 178 (667) 886 784 3,260 ------------ ----------- ------------ ------------ ------------ NET EARNINGS $ 704 $ (1,362) $ 2,368 $ 2,190 $ 6,789 ============ =========== ============ ============ ============ Earnings Per Share Basic $ 0.10 $ (0.20) $ 0.37 $ 0.33 $ 1.06 Diluted $ 0.10 $ (0.20) $ 0.36 $ 0.32 $ 1.05 Cumulative Dividend Per Share $ 0.13 $ 0.13 $ 0.13 $ 0.52 $ 0.52 Weighted Average Shares Outstanding Basic 6,721,918 6,645,230 6,391,124 6,562,515 6,411,351 Diluted 6,972,489 6,795,457 6,506,840 6,743,220 6,495,498 Shares repurchased during the period - - - - 48,800 - - 340,800
KFBI - Fourth Quarter Results November 12, 2003 (unaudited)
FINANCIAL CONDITION (In thousands except shares and per share data) Sep 30, 2003 Jun 30, 2003 Sep 30, 2002 ----------- ----------- ----------- ASSETS Cash and due from banks 47,305 $ 58,989 $ 45,791 Mortgage-backed securities 680,720 591,058 650,796 Investment securities 140,939 141,804 119,999 Federal Home Loan Bank stock 17,190 14,152 13,510 Loans receivable: Held for portfolio 564,485 562,346 614,841 Allowance for loan losses (6,934) (7,059) (7,376) ----------- ----------- ----------- 557,551 555,287 607,465 Accrued interest receivable 7,164 6,821 8,177 Real estate held for sale, net 651 538 759 Property and equipment, net 23,331 23,496 23,411 Bank-owned life insurance 16,325 15,344 - - Intangible assets 36,651 37,563 40,299 Deferred income tax receivable, net 2,034 832 - - Other assets 7,545 4,003 3,288 ----------- ----------- ---------- $ 1,537,406 $ 1,449,887 $ 1,513,495 =========== =========== =========== LIABILITIES Deposits: Non-interest bearing checking 161,451 $ 148,689 $ 142,773 Interest-bearing checking 136,557 135,770 125,867 Statement savings 93,311 92,281 86,001 Money market 326,631 332,405 330,646 Certificates of deposit 350,113 371,865 456,719 ----------- ----------- ----------- 1,068,063 1,081,010 1,142,006 Borrowings: Advances from Federal Home Loan Bank 308,000 208,000 205,250 Mandatorily redeemable preferred securities 27,338 27,305 27,206 Other borrowings - - - - 1,700 ----------- ----------- ----------- 335,338 235,305 234,156 Accrued expenses and other liabilities 12,187 11,295 15,087 Pension liabilities 929 801 842 Deferred income tax liability, net - - - - 1,467 ----------- ----------- ----------- 1,416,517 1,328,411 1,393,558 STOCKHOLDERS' EQUITY Common stock and additional paid in capital 35,161 33,901 30,038 Retained earnings 86,005 86,183 87,576 Accumulated other comprehensive income 2,465 4,423 6,257 Unearned shares of common stock issued to ESOP (1,957) (2,201) (2,935) Unearned shares issued to MRDP (785) (829) (999) ----------- ----------- ----------- 120,889 121,477 119,937 ----------- ----------- ----------- $ 1,537,406 $ 1,449,888 $ 1,513,495 =========== =========== =========== Shares Issued : (1) Shares issued at end of period 6,982,634 6,980,635 6,744,040 Less unearned ESOP and MRDP shares at end of period 243,470 346,980 377,494 ----------- ----------- ----------- Shares outstanding at end of period excluding the unearned shares 6,739,164 6,633,655 6,366,546 =========== =========== =========== Book Value Per Share (1) 17.94 $ 18.31 $ 18.84 Tangible Book Value Per Share (1) 12.50 $ 12.65 $ 12.51 (1)Calculation is based on number of shares outstanding at the end of the period rather than weighted average shares outstanding and excludes unallocated shares in the employee stock ownership plan (ESOP) and Management Recognition and Development Plan (MRDP).
KFBI - Fourth Quarter Results November 12, 2003 (unaudited)
ADDITIONAL FINANCIAL INFORMATION (Dollars in thousands) LOANS (including loans held for sale): Sep 30, 2003 Jun 30, 2003 Sep 30, 2002 --------------- --------------- --------------- Secured by real estate 1-4 family $ 195,785 $ 218,198 $ 339,403 Construction 16,650 15,276 15,223 Commercial, multi-family, and other 175,220 169,482 122,353 Non-real estate loans Home improvement and home equity 112,248 96,134 65,092 Other consumer 17,367 17,875 18,188 Commercial business 57,975 59,153 62,102 --------------- --------------- --------------- Total Gross Loans Outstanding $ 575,245 $ 576,118 $ 622,361 =============== =============== =============== NON - PERFORMING ASSETS : Sep 30, 2003 Jun 30, 2003 Sep 30, 2002 --------------- --------------- --------------- Loans on Non - Accrual Status $ 799 $ 1,192 $ 1,091 Delinquent Loans on Accrual Status - - - - - - --------------- --------------- --------------- Total Non - Performing Loans 799 1,192 1,091 Real Estate Owned (REO) / Repossessed assets 651 539 759 --------------- --------------- --------------- Total Non - Performing Assets $ 1,450 $ 1,731 $ 1,850 =============== =============== =============== Total Non - Performing Assets / Total Assets 0.09% 0.12% 0.12%
Quarter Ended Years Ended -------------------------------------------------- -------------------------- CHANGE IN THE Sep 30, 2003 Jun 30, 2003 Sep 30, 2002 Sep 30, 2003 Sep 30, 2002 --------------- --------------- --------------- ----------- ------------ ALLOWANCE FOR LOAN LOSSES : Balance at beginning of period $ 7,059 $ 7,234 $ 7,865 $ 7,376 $ 7,951 Provision for loan losses - - - - - - 156 Recoveries 15 5 9 65 16 Charge offs (140) (180) (498) (507) (747) --------------- --------------- --------------- ----------- ------------ Net charge offs (125) (175) (489) (442) (731) --------------- --------------- --------------- ----------- ------------ --------------- --------------- --------------- ----------- ------------ Balance at end of period $ 6,934 $ 7,059 $ 7,376 $ 6,934 $ 7,376 =============== =============== =============== =========== ============ Net Charge-offs / Average Loans Outstanding 0.02% 0.03% 0.08% Allowance for Loan Losses / Total Loans Outstanding 1.21% 1.23% 1.19% Allowance for Loan Losses / Non - Performing Loans 868% 592% 676%
KFBI - Fourth Quarter Results November 12, 2003 (unaudited)
ADDITIONAL FINANCIAL INFORMATION (Dollars in thousands) (Rates / Ratios Annualized) Quarters Ended Year to Date OPERATING PERFORMANCE : 9/30/2003 6/30/2003 9/30/2002 9/30/2003 9/30/2002 Average loans $ 567,229 $ 574,299 $ 631,587 $ 585,737 $ 660,246 Average securities and deposits 871,805 787,932 758,281 807,337 713,593 Average non - interest - earning assets 117,795 129,831 123,310 126,539 114,405 Total Average Assets $ 1,556,829 $ 1,492,062 $ 1,513,178 $ 1,519,613 $ 1,488,244 Average deposits $ 925,699 $ 946,652 $ 1,015,542 $ 956,949 $ 1,022,690 Average borrowings 330,788 210,109 172,413 259,753 190,612 Average non - interest earning - liabilities 183,321 214,032 206,997 183,568 160,190 Total Average Liabilities 1,439,808 1,370,793 1,394,952 1,400,270 1,373,492 Total average equity 117,021 121,269 118,226 119,343 114,752 Total Average Liabilities And Equity $ 1,556,829 $ 1,492,062 $ 1,513,178 $ 1,519,613 $ 1,488,244 Interest rate yield on loans 6.88% 7.27% 7.77% 7.32% 7.90% Interest rate yield on securities and deposits 3.30% 3.51% 4.52% 3.52% 4.92% Interest Rate Yield On Interest Earning Assets 4.71% 5.15% 6.00% 5.12% 6.35% Interest rate expense on deposits 1.63% 1.75% 2.46% 1.90% 2.92% Interest rate expense on borrowings 4.04% 5.09% 5.70% 4.84% 5.83% Interest Rate Expense On Interest Bearing Liabiliti2.27% 2.36% 2.93% 2.53% 3.38% Interest rate spread 2.44% 2.79% 3.07% 2.59% 2.97% Net interest margin 2.73% 3.14% 3.49% 2.91% 3.37% Other operating income / Average assets Includes gains (losses) from sales of securities 1.06% 1.17% 0.99% 1.07% 0.81% Excludes gains (losses) from sales of securities 1.06% 1.15% 0.85% 1.03% 0.73% Other operating expense / Average assets Includes non-cash items (GAAP) 3.36% 4.43% 3.21% 3.54% 3.23% Excludes non-cash items (1) 2.98% 4.06% 2.73% 3.17% 2.84% Efficiency ratio (other operating expense / revenue) Includes non-cash items (GAAP) 93.68% 114.00% 78.88% 94.76% 82.50% Excludes non-cash items (1) 83.21% 80.81% 68.70% 85.16% 71.86% Return on average assets Includes non-cash items (GAAP) 0.18% -0.37% 0.63% 0.14% 0.46% Excludes non-cash items (1) 0.45% -0.11% 0.91% 0.41% 77.00% Return on average equity Includes non-cash items (GAAP) 2.41% -4.49% 8.01% 1.84% 5.92% Excludes non-cash items (1) 5.97% -1.30% 11.95% 5.18% 10.04% Average equity / Average assets 7.52% 8.13% 7.81% 7.85% 7.71% (1)This press release includes information relating to non-interest expense that is calculated on a non-GAAP basis. Management uses this non-GAAP information internally, and has disclosed it to investors, based on its belief that the information provides a more accurate picture of its operating results for purposes of comparisons to prior periods and other entities. Items considered non-cash items are amortization of core deposit and other intangibles and expense related to the company's Management Recognition and Development Plan and Employee Stock Ownership Plan. These expenses have been reflected net of the related tax benefit.
Reconciliation to GAAP financial measures Net earnings - GAAP $ 704 $ (1,362) $ 2,368 $ 2,190 $ 6,789 Add back: non-cash items, net of tax 1,043 968 1,415 3,991 5,547 Net earnings - excluding non-cash items $ 1,747 $ (394) $ 3,783 $ 6,181 $ 12,336
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