TOWER FINANCIAL CORP - FORM 8-K - EX-99.3 - EXHIBIT 99.3 - February 26, 2010

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8-K - TOWER FINANCIAL 8-K 1-29-2010 - TOWER FINANCIAL CORPform8k.htm
EX-99.1 - EXHIBIT 99.1 - TOWER FINANCIAL CORPex99_1.htm
EX-99.2 - EXHIBIT 99.2 - TOWER FINANCIAL CORPex99_2.htm
Exhibit 99.3
 
Tower Financial Corporation
Consolidated Balance Sheets
At December 31, 2009 and December 31, 2008

   
(unaudited)
    
(unaudited)
  
   
December 31
    
December 31
  
   
2009
    
2008
  
ASSETS
            
Cash and due from banks
   $ 19,861,434     $ 19,418,905  
Short-term investments and interest-earning deposits
     1,259,197       9,525,414  
Federal funds sold
     3,543,678       2,632,054  
Total cash and cash equivalents
     24,664,309       31,576,373  
                 
Securities available for sale, at fair value
     85,179,160       77,792,255  
Securities held to maturity, at cost
     4,495,977       -  
FHLBI and FRB stock
     4,250,800       4,032,446  
Loans Held for Sale
     3,842,089       151,614  
                 
Loans
     527,333,461       561,011,675  
Allowance for loan losses
     (11,598,389 )     (10,654,879 )
Net loans
     515,735,072       550,356,796  
                 
Premises and equipment, net
     8,011,574       8,010,596  
Accrued interest receivable
     2,439,859       2,615,260  
Bank Owned Life Insurance
     13,046,573       12,589,699  
Other Real Estate Owned
     4,634,089       2,660,310  
Prepaid FDIC Insurance
     4,614,072       -  
Other assets
     9,137,426       6,798,774  
                 
Total assets
   $ 680,051,000     $ 696,584,123  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
LIABILITIES
                
Deposits:
                
Noninterest-bearing
   $ 95,027,233     $ 82,107,483  
Interest-bearing
     473,353,118       504,129,631  
Total deposits
     568,380,351       586,237,114  
                 
Short-term Borrowings
     -       -  
Federal Home Loan Bank advances
     43,200,000       39,200,000  
Junior subordinated debt
     17,527,000       17,527,000  
Accrued interest payable
     480,885       658,956  
Other liabilities
     3,634,713       3,342,913  
Total liabilities
     633,222,949       646,965,983  
                 
STOCKHOLDERS' EQUITY
                
Preferred stock, no par value, 4,000,000 shares authorized; 18,300 shares issued and outstanding
     1,788,000       -  
Common stock and paid-in-capital, no par value, 6,000,000 shares authorized; 4,155,432 and 4,149,432 shares issued; and 4,090,432 and 4,084,432 shares outstanding at December 31, 2009 and December 31, 2008
     39,835,648       39,766,742  
Treasury stock, at cost, 65,000 shares at December 31, 2009 and December 31, 2008
     (884,376 )     (884,376 )
Retained earnings
     5,178,750       10,895,724  
Accumulated other comprehensive income (loss), net of tax of $468,803 at December 31, 2009 and  ($82,399) at December 31, 2008
     910,029       (159,950 )
Total stockholders' equity
     46,828,051       49,618,140  
                 
Total liabilities and stockholders' equity
   $ 680,051,000     $ 696,584,123  
 
 
 
 
 
Tower Financial Corporation
Consolidated Statements of Operations
For the twelve and three months ended December 31, 2009 and 2008
(unaudited)

 
   
For the Three Months Ended
December 31
    
For the Twelve Months Ended
December 31
  
   
2009
    
2008
    
2009
    
2008
  
Interest income:
                        
Loans, including fees
   $ 6,928,347     $ 7,888,824     $ 28,035,871     $ 33,808,068  
Securities - taxable
     825,731       731,589       3,066,247       2,728,861  
Securities - tax exempt
     241,174       225,584       951,942       883,645  
Other interest income
     1,859       5,904       13,363       337,828  
Total interest income
     7,997,111       8,851,901       32,067,423       37,758,402  
Interest expense:
                                
Deposits
     2,176,852       3,091,860       10,315,149       14,489,483  
Fed Funds Purchased
     83       1,432       1,656       4,208  
FHLB advances
     158,026       304,143       801,803       1,161,902  
Trust preferred securities
     281,648       281,649       1,128,017       1,129,440  
Total interest expense
     2,616,609       3,679,084       12,246,625       16,785,033  
                                 
Net interest income
     5,380,502       5,172,817       19,820,798       20,973,369  
Provision for loan losses
     1,230,000       1,225,000       10,735,000       4,399,000  
                                 
Net interest income after provision for loan losses
     4,150,502       3,947,817       9,085,798       16,574,369  
                                 
Noninterest income:
                                
Trust and brokerage fees
     880,841       749,710       3,373,635       3,519,425  
Service charges
     294,468       280,479       1,121,446       1,204,019  
Loan broker fees
     173,148       65,989       725,699       258,934  
Gain/(Loss) on sale of securities
     54,220       -       264,112       65,841  
Impairment on AFS securities
     (225,770 )     -       (750,770 )     -  
Other fees
     312,829       285,203       1,353,710       1,254,626  
Total noninterest income
     1,489,736       1,381,381       6,087,832       6,302,845  
                                 
Noninterest expense:
                                
Salaries and benefits
     2,927,892       2,509,009       10,947,014       11,460,652  
Occupancy and equipment
     735,483       765,296       2,905,929       2,974,697  
Marketing
     85,330       146,060       451,862       651,423  
Data processing
     293,199       303,147       1,172,625       1,050,275  
Loan and professional costs
     508,825       356,300       1,649,511       1,312,956  
Office supplies and postage
     90,681       114,054       348,230       402,485  
Courier service
     58,973       67,713       236,928       297,106  
Business Development
     101,879       170,558       456,483       639,707  
Communication Expense
     49,935       108,558       181,393       351,137  
FDIC Insurance Premiums
     529,651       149,272       1,845,587       697,063  
Costs and valuation expenses of other real estate owned
     609,282       122,325       1,724,626       (82,945 )
Other expense
     251,160       33,801       1,241,141       1,233,545  
Total noninterest expense
     6,242,290       4,846,093       23,161,329       20,988,101  
                                 
Income/(loss) before income taxes/(benefit)
     (602,052 )     483,105       (7,987,699 )     1,889,113  
Income taxes expense/(benefit)
     707,513       476       (2,272,304 )     23,004  
                                 
Net income/(loss)
   $ (1,309,565 )   $ 482,629     $ (5,715,395 )   $ 1,866,109  
Less: Preferred Stock Dividends
     -       -       1,579       -  
Net income/(loss) available to common shareholders
   $ (1,309,565 )   $ 482,629     $ (5,716,974 )   $ 1,866,109  
                                 
Basic earnings/(loss) per common share
   $ (0.32 )   $ 0.12     $ (1.40 )   $ 0.46  
Diluted earnings/(loss) per common share
   $ (0.32 )   $ 0.12     $ (1.40 )   $ 0.46  
Average common shares outstanding
     4,090,432       4,084,432       4,090,432       4,070,311  
Average common shares and dilutive potential common shares outstanding
     4,090,432       4,086,757       4,090,432       4,074,053  
                                 
Dividends declared per common share
   $ -     $ -     $ -     $ 0.044  

 
 
 


 
Tower Financial Corporation
Consolidated Financial Highlights

(unaudited)

 
   
Quarterly
    
Year-To-Date
  
   
4th Qtr
    
3rd Qtr
    
2nd Qtr
    
1st Qtr
    
4th Qtr
    
3rd Qtr
    
2nd Qtr
    
1st Qtr
              
($ in thousands except for share data)
  
2009
    
2009
    
2009
    
2009
    
2008
    
2008
    
2008
    
2008
    
2009
    
2008
  
                                                             
EARNINGS
                                                            
Net interest income
   $ 5,381       5,077       4,822       4,541       5,172       5,426       5,295       5,080       19,821       15,801  
Provision for loan loss
   $ 1,230       1,995       6,550       960       1,225       1,999       875       300       10,735       3,174  
NonInterest income
   $ 1,490       1,210       1,599       1,789       1,381       1,812       1,469       1,641       6,088       4,922  
NonInterest expense
   $ 6,242       5,468       6,458       4,993       4,846       5,043       5,620       5,479       23,161       16,142  
Net income/(loss)
   $ (1,310 )     (721 )     (4,095 )     410       506       330       342       711       (5,716 )     1,383  
Basic earnings per share
   $ (0.32 )     (0.18 )     (1.00 )     0.10       0.12       0.08       0.08       0.18       (1.40 )     0.34  
Diluted earnings per share
   $ (0.32 )     (0.18 )     (1.00 )     0.10       0.12       0.08       0.08       0.17       (1.40 )     0.33  
Average shares outstanding
     4,090,432       4,090,432       4,090,432       4,090,365       4,075,696       4,084,432       4,078,934       4,062,145       4,090,432       4,084,432  
Average diluted shares outstanding
     4,090,432       4,090,432       4,090,432       4,090,365       4,079,438       4,086,757       4,081,245       4,088,684       4,090,432       4,086,757  
                                                                                 
PERFORMANCE RATIOS
                                                                                
Return on average assets *
     -0.77 %     -0.42 %     -2.32 %     0.24 %     0.29 %     0.19 %     0.20 %     0.41 %     -0.83 %     0.20 %
Return on average common equity *
     -10.71 %     -6.13 %     -32.65 %     3.33 %     4.15 %     2.69 %     2.79 %     5.91 %     -11.70 %     2.83 %
Net interest margin (fully-tax equivalent) *
     3.47 %     3.24 %     3.02 %     2.85 %     3.28 %     3.43 %     3.36 %     3.15 %     3.15 %     3.31 %
Efficiency ratio
     90.85 %     86.97 %     100.58 %     78.88 %     73.95 %     69.67 %     83.09 %     81.52 %     89.39 %     77.89 %
Full-time equivalent employees
     146.25       159.25       172.75       176.50       173.75       176.50       181.25       184.25       146.25       176.50  
                                                                                 
CAPITAL
                                                                                
Equity to assets
     6.89 %     7.14 %     6.70 %     7.03 %     7.12 %     6.96 %     7.01 %     7.15 %     6.89 %     6.96 %
Regulatory leverage ratio
     9.03 %     9.04 %     8.56 %     9.52 %     9.69 %     9.62 %     9.52 %     9.33 %     9.03 %     9.62 %
Tier 1 capital ratio
     10.87 %     11.00 %     10.38 %     11.47 %     11.66 %     11.69 %     11.55 %     11.35 %     10.87 %     11.69 %
Total risk-based capital ratio
     12.43 %     12.53 %     11.96 %     12.77 %     12.99 %     13.04 %     12.92 %     12.51 %     12.43 %     13.04 %
Book value per share
   $ 11.01       11.87       11.24       12.29       12.15       11.86       11.92       12.18       11.01       11.86  
Cash dividend per share
   $ 0.000       0.000       0.000       0.000       0.00       0.00       0.00       0.044       0.000       0.000  
                                                                                 
ASSET QUALITY
                                                                                
Net charge-offs
   $ 4,537       2,045       3,092       117       (27 )     1,570       936       (527 )     9,791       1,979  
Net charge-offs to average loans *
     3.38 %     1.49 %     2.21 %     0.08 %     -0.02 %     1.13 %     0.67 %     -0.37 %     1.78 %     0.47 %
Allowance for loan losses
   $ 11,598       14,905       14,105       11,498       10,655       9,278       8,974       9,035       11,598       9,278  
Allowance for loan losses to total loans
     2.20 %     2.78 %     2.53 %     2.06 %     1.90 %     1.67 %     1.62 %     1.61 %     2.20 %     1.67 %
Other real estate owned (OREO)
   $ 4,634       3,990       4,060       5,080       2,660       2,432       2,500       1,527       4,634       2,432  
Non-accrual Loans
   $ 13,466       20,219       19,016       11,708       15,675       17,066       19,412       19,726       13,466       17,066  
90+ Day delinquencies
   $ 561       1,477       2,509       1,304       1,020       982       1,840       547       561       982  
Restructured Loans
   $ 1,915       163       184       191       198       366       624       633       1,915       366  
Total Nonperforming Loans
     15,942       21,859       21,709       13,203       16,893       18,414       21,876       20,906       15,942       18,414  
Total Nonperforming Assets
     20,576       25,849       25,769       18,283       19,553       20,846       24,376       22,433       20,576       20,846  
NPLs to Total loans
     3.02 %     4.08 %     3.89 %     2.37 %     3.01 %     3.32 %     3.95 %     3.72 %     3.02 %     3.32 %
NPAs (w/o 90+) to Total assets
     2.94 %     3.59 %     3.39 %     2.37 %     2.66 %     2.85 %     3.24 %     3.17 %     2.94 %     2.85 %
NPAs+90 to Total assets
     3.03 %     3.80 %     3.75 %     2.55 %     2.81 %     2.99 %     3.51 %     3.25 %     3.03 %     2.99 %
                                                                                 
END OF PERIOD BALANCES
                                                                                
Total assets
   $ 680,051       679,394       686,307       715,634       696,584       696,061       695,427       691,208       680,051       696,061  
Total earning assets
   $ 629,904       633,742       651,946       681,688       655,145       658,963       648,345       653,906       629,904       658,963  
Total loans
   $ 527,333       536,074       557,530       558,148       561,012       554,760       553,843       562,235       527,333       554,760  
Total deposits
   $ 568,380       592,731       594,594       618,705       586,237       573,221       600,118       587,735       568,380       573,221  
Stockholders' equity
   $ 46,828       48,541       45,962       50,280       49,618       48,449       48,753       49,405       46,828       48,449  
                                                                                 
AVERAGE BALANCES
                                                                                
Total assets
   $ 678,445       686,752       708,282       696,431       684,669       682,958       685,547       701,423       692,478       689,975  
Total earning assets
   $ 628,983       636,503       657,539       662,712       642,213       642,852       646,745       663,522       645,421       651,306  
Total loans
   $ 532,627       542,921       561,828       559,607       555,558       551,407       562,165       570,010       549,242       561,205  
Total deposits
   $ 581,018       597,792       612,649       598,807       566,193       580,589       580,563       607,402       597,566       589,517  
Stockholders' equity
   $ 48,507       46,678       50,303       49,942       48,540       48,875       49,252       48,427       48,858       49,057  

* annualized for quarterly data
 
 

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