AROW » Topics » Summary of Other Expense

This excerpt taken from the AROW 10-Q filed Nov 6, 2007.

Summary of Other Expense

(Dollars in Thousands)


 

Quarter Ended

  
 

Sep 2007

Sep 2006

Change

% Change

Salaries and Employee Benefits

  $5,442 

  $5,546 

    $(104)

(1.9)%

Occupancy Expense of Premises, Net

     750 

     712 

     38 

5.3 

Furniture and Equipment Expense

     720 

     776 

   (56)

  (7.2)

Other Operating Expense

  2,311 

  2,168 

     143 

  6.6 

Total Other Expense

  $9,223 

  $9,202 

   $   21 

      0.2 

    

Efficiency Ratio

55.36%

56.42%

(1.06)%

 (1.9)




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Noninterest expense for the third quarter of 2007 was $9.2 million, an increase of $21 thousand, or 0.2%, over the expense for the third quarter of 2006.  For the third quarter of 2007, our efficiency ratio was 55.36%.  This ratio, which is a non-GAAP financial measure, is a comparative measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to net interest income (on a tax-equivalent basis) and noninterest income (excluding net securities gains or losses).  See the discussion on page 13 of this report under the heading “Use of Non-GAAP Financial Measures.”  The efficiency ratio included by the Federal Reserve Board in its "Peer Holding Company Performance Reports" excludes net securities gains or losses, but does not exclude intangible asset amortization, which may result in slightly higher ratios.   Although our efficiency ratio increased from 2006 to 2007, it still compares favorably to the June 30, 2007 peer group ratio of 63.40%.


Salaries and employee benefits expense decreased $104 thousand, or 1.9%, from the third quarter of 2006 to the third quarter of 2007.  The decrease is primarily attributable to a decrease in expenses for pension and post-retirement benefits from the reduction of covered postretirement benefits for new hires.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.38% for the third quarter of 2007, 22 basis points less than the ratio for our peer group of 1.60% at June 30, 2007.


The increase in occupancy expense was primarily in the area of building maintenance expenses and real estate taxes, while the decrease in furniture and equipment expense was primarily attributable to savings in data processing expenses.  


Other operating expense was $2.3 million for the third quarter of 2007, an increase of $143 thousand, or 6.6%, from the third quarter of 2006.  The increase was spread among several areas, including marketing, postage, telephone and supplies.


This excerpt taken from the AROW 10-Q filed May 10, 2007.

Summary of Other Expense

(Dollars in Thousands)

 

Quarter Ending

  
 

Mar 2007

Mar 2006

Change

% Change

Salaries and Employee Benefits

  $5,317

  $5,471

    $(154)

(2.8)%

Occupancy Expense of Premises, Net

     812

     805

     7 

0.9 

Furniture and Equipment Expense

     755

     757

     (2)

   (0.3)

Other Operating Expense

  2,477

  2,121

   356 

 16.8 

Total Other Expense

  $9,361

  $9,154

   $207 

      2.3 

    

Efficiency Ratio

58.11%

57.02%

1.08%

 1.9 


Other expense for the first quarter of 2007 was $9.4 million, an increase of $207 thousand, or 2.3%, over the expense for the first quarter of 2006.  For the first quarter of 2007, our efficiency ratio was 58.11%.  This ratio, which is a non-GAAP financial measure, is a comparative measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to net interest income (on a tax-equivalent basis) and other income (excluding net securities gains or losses).  See the discussion on page 12 of this report under the heading “Use of Non-GAAP Financial Measures.”  The efficiency ratio included by the Federal Reserve Board in its "Peer Holding Company Performance Reports" excludes net securities gains or losses, but does not exclude intangible asset amortization.   Although our efficiency ratio increased from 2006 to 2007, it still compares favorably to the December 31, 2006 peer group ratio of 61.32%.


Salaries and employee benefits expense decreased $154 thousand, or 2.8%, from the first quarter of 2006 to the first quarter of 2007.  The decrease is primarily attributable to a decrease in expenses for pension and post-retirement benefits.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.41% for the first quarter of 2007, 18 basis points less than the ratio for our peer group of 1.59% at December 31, 2006.


Occupancy expense and furniture and equipment expense was essentially unchanged from the 2006 quarter.  


Other operating expense was $2.5 million for the first quarter of 2007, an increase of $356 thousand, or 16.8%, from the first quarter of 2006.  The increase was primarily attributable to an increase in legal fees and costs related to a commercial property in other real estate owned.



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This excerpt taken from the AROW 10-Q filed Nov 8, 2006.

Summary of Other Expense

(Dollars in Thousands)


 

Nine Months Ended

  
 

Sep 2006

Sep 2005

Change

% Change

Salaries and Employee Benefits

  $16,497

  $15,538

    $959 

6.2%

Occupancy Expense of Premises, Net

   2,332

   2,225

    107 

4.8

Furniture and Equipment Expense

   2,346

   2,271

     75 

   3.3

Other Operating Expense

   6,512

   6,627

     (115)

  (1.7)

Total Other Expense

  $27,687

  $26,661

   $1,026 

      3.8

    

Efficiency Ratio

56.66%

54.04%

2.62%

 4.8




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Other expense for the first nine months of 2006 was $27.7 million, an increase of $1.026 million, or 3.8%, over the expense for the first nine months of 2005.  For the first nine months of 2006, our efficiency ratio was 56.66%.  (See the discussion on efficiency ratios generally on page 14 of this Report under the heading “Use of Non-GAAP Financial Measures,” and the discussion of our efficiency ratio versus the ratio of our peer group in the “Other Expense” section of the quarter-to-quarter comparison, above.)


Salaries and employee benefits expense increased $959 thousand, or 6.2%, from the first nine months of 2005 to the first nine months of 2006.  The increase was primarily attributable to normal salary increases but also to an increase of 4.0 full-time equivalent employees resulting from the staffing of Saratoga’s new branch in January 2006 and an increase of 13.9 full-time equivalent employees resulting from the staffing of the three new branches acquired by us from HSBC in April 2005 which latter increase of staffing cost was only partially reflected in the 2005 period.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.45% for the first nine months of 2006, 16 basis points less than the ratio for our peer group of 1.61% at June 30, 2006.


Occupancy expense was $2.3 million for the first nine months of 2006, a $107 thousand, or 4.8%, increase over the first nine months of 2005.  The increase was primarily attributable to increases in expense for utilities and heating.  Furniture and equipment expense was $2.3 million for the first nine months of 2006, a $75 thousand, or 3.3%, increase from the first nine months of 2005.  The increase was primarily attributable to an increase in depreciation expense.  However, the increase in both of these expense areas was partially attributable to our acquisition in 2005 of the three HSBC branches whose added expenses were only partially reflected in the 2005 period.


Other operating expense was $6.5 million for the first nine months of 2006, a decrease of $115 thousand, or 1.7%, from the total for the first nine months of 2005.  The higher amount in the earlier year was primarily attributable to one-time expenses associated with the acquisition of three HSBC branches in April 2005.




This excerpt taken from the AROW 10-Q filed Aug 9, 2006.

Summary of Other Expense

(Dollars in Thousands)


 

Six Months Ending

  
 

Jun 2006

Jun 2005

Change

% Change

Salaries and Employee Benefits

  $10,951

  $10,343

    $  608 

5.9%

Occupancy Expense of Premises, Net

   1,620

   1,464

    156 

10.7

Furniture and Equipment Expense

   1,570

   1,511

     59 

    3.9

Other Operating Expense

   4,344

   4,342

     2 

  0.0

Total Other Expense

  $18,485

  $17,660

   $825 

      4.7

    

Efficiency Ratio

56.79%

54.44%

2.35%

 4.3


Other expense for the first six months of 2006 was $18.5 million, an increase of $825 thousand, or 4.7%, over the expense for the first six months of 2005.  For the first six months of 2006, our efficiency ratio was 56.79%.  This ratio, which is a non-GAAP financial measure, is a measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to the total of net interest income (on a tax-equivalent basis) and other income (excluding net securities gains or losses).  (See the discussion on page 13 of this report under the heading “Use of Non-GAAP Financial Measures,” and the discussion of our efficiency ratio versus the ratio of our peer group in the “Other Expense” section of the quarter-to-quarter comparison, above.)


Salaries and employee benefits expense increased $608 thousand, or 5.9%, from the first six months of 2005 to the first six months of 2006.  The increase was primarily attributable to an increase of 4.0 full-time equivalent employees resulting from the staffing of Saratoga’s new branch in January 2006 and an increase of 13.9 full-time equivalent employees resulting from the staffing of the three new branches acquired by us from HSBC in April 2005 which was only partially reflected in the 2005 period, as well as normal salary increases.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.45% for the first six months of 2006, 18 basis points less than the ratio for our peer group of 1.63% at March 31, 2006.


Occupancy expense was $1.6 million for the first six months of 2006, a $156 thousand increase, or 10.7%, over the first six months of 2005.  The increase was primarily attributable to increases in real estate taxes, utilities and heating.  Furniture and equipment expense was $1.6 million for the first six months of 2006, a $59 thousand increase, or 3.9%, from the first six months of 2005.  The increase was primarily attributable to increases in depreciation and data processing expenses.  The increase in both of these expense areas also was at least partially attributable to our acquisition of the three HSBC branches in April 2005, which expenses were included in only half of the 2005 period but in all of the 2006 period.


Other operating expense was $4.3 million for the first six months of 2006, virtually unchanged from the first six months of 2005.  The small increase was primarily attributable to one-time expenses associated with the acquisition of three HSBC branches in April 2005.




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This excerpt taken from the AROW 10-Q filed May 9, 2006.

Summary of Other Expense

(Dollars in Thousands)


 

Quarter Ending

  
 

Mar 2006

Mar 2005

Change

% Change

Salaries and Employee Benefits

  $5,471

  $5,055

    $416 

8.2 %

Occupancy Expense of Premises, Net

     805

     707

     98 

13.9 

Furniture and Equipment Expense

     757

     765

     (8)

   (1.0)

Other Operating Expense

  2,121

  1,958

   163 

  8.3 

Total Other Expense

  $9,154

  $8,485

   $669 

      7.9 

    

Efficiency Ratio

57.02%

54.10%

2.92%

 5.4 


Other expense for the first quarter of 2006 was $9.2 million, an increase of $669 thousand, or 7.9%, over the expense for the first quarter of 2005.  For the first quarter of 2006, our efficiency ratio was 57.02%.  This ratio, which is a non-GAAP financial measure, is a comparative measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to net interest income (on a tax-equivalent basis) and other income (excluding net securities gains or losses).  See the discussion on page 13 of this report under the heading “Use of Non-GAAP Financial Measures.”  The efficiency ratio included by the Federal Reserve Board in its "Peer Holding Company Performance Reports" excludes net securities gains or losses, but does not exclude intangible asset amortization.   Although our efficiency ratio increased from 2005 to 2006, it still compares favorably to the December 31, 2005 peer group ratio of 60.12%.


Salaries and employee benefits expense increased $416 thousand, or 8.2%, from the first quarter of 2005 to the first quarter of 2006.  The increase is primarily attributable to an increase of 20.6 full-time equivalent employees resulting from our acquisition of three branches in April 2005 and Saratoga’s new branch in January 2006.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.46% for the first quarter of 2006, 14 basis points less than the ratio for our peer group of 1.60% at December 31, 2005.


Occupancy expense was $805 thousand for the first quarter of 2006, a $98 thousand increase, or 13.9%, over the first quarter of 2005.  The increase was primarily attributable to the April 2005 branch acquisition and the opening of Saratoga’s new branch in January 2006.  Furniture and equipment expense was $757 thousand for the first quarter of 2006, an $8 thousand decrease, or 1.0%, from the first quarter of 2005.  The decrease was primarily attributable to decreases in maintenance and data processing expenses, even though our physical facilities expanded as a result of the April 2005 branch acquisition and the opening of Saratoga’s new branch in January 2006.


Other operating expense was $2.1 million for the first quarter of 2006, an increase of $163 thousand, or 8.3%, from the first quarter of 2005.  These expenses were also affected by the April 2005 branch acquisition and the opening of Saratoga’s new branch in January 2006.




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This excerpt taken from the AROW 10-Q filed Nov 9, 2005.

Summary of Other Expense

(Dollars in Thousands)


 

Nine Months Ending

  
 

Sep 2005

Sep 2004

Change

% Change

Salaries and Employee Benefits

  $15,538

  $14,642

    $  896 

6.1%

Occupancy Expense of Premises, Net

   2,225

   2,068

    157 

7.6

Furniture and Equipment Expense

   2,271

   2,044

     227 

   11.1

Other Operating Expense

   6,627

   5,835

     792 

  13.6

Total Other Expense

  $26,661

  $24,589

   $2,072 

      8.4

    

Efficiency Ratio

54.04%

50.89%

3.15%

 6.2




35






Other expense for the first nine months of 2005 was $26.7 million, an increase of $2.1 million, or 8.4%, over the expense for the first nine months of 2004.  For the first nine months of 2005, our efficiency ratio was 54.04%.  This ratio, which is a non-GAAP financial measure, is a comparative measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to net interest income (on a tax-equivalent basis) and other income (excluding net securities gains or losses).  See the discussion on page 13 of this report under the heading “Use of Non-GAAP Financial Measures.”  Although our efficiency ratio increased from 2004 to 2005, it still compares favorably to the June 30, 2005 peer group ratio of 60.46%.


The November 2004 acquisition of an insurance agency, Capital Financial Group, and the April 2005 acquisition of three bank branches from HSBC led to increases in all expense categories.  However, approximately $100,000 of these increased expenses, primarily in the areas of advertising and supplies, are not expected to be experienced in future periods.


Salaries and employee benefits expense increased $896 thousand, or 6.1%, from the first nine months of 2004 to the first nine months of 2005.  The increase is primarily attributable to increases in personnel, including 12.8 full-time equivalent employees in our newly acquired insurance agency and 13.9 full-time equivalent employees in the acquired branches as well as normal merit increases.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.44% for the first nine months of 2005, 18 basis points less than the ratio for our peer group of 1.62% at June 30, 2005.


Occupancy expense was $2.2 million for the first nine months of 2005, a $157 thousand increase, or 7.6%, over the first nine months of 2004.  The increase was primarily attributable to building maintenance expenses.  Furniture and equipment expense was $2.3 million for the first nine months of 2005, a $227 thousand increase, or 11.1%, above the first nine months of 2004.  The increase was primarily attributable to increases in data processing and depreciation expenses.


Other operating expense was $6.6 million for the first nine months of 2005, an increase of $792 thousand, or 13.6% from the first nine months of 2004.  An increase of $230 in intangible asset amortization was related to both the acquisition of the insurance agency and the three branches.  The other areas of significant increases included advertising, postage and supplies, which were primarily attributable to the branch acquisition.



This excerpt taken from the AROW 10-Q filed Aug 9, 2005.

Summary of Other Expense

(Dollars in Thousands)


 

Six Months Ending

  
 

Jun 2005

Jun 2004

Change

% Change

Salaries and Employee Benefits

  $10,343

  $ 9,583

    $  760 

7.9%

Occupancy Expense of Premises, Net

   1,464

   1,394

     70 

5.0

Furniture and Equipment Expense

   1,511

   1,389

     122 

    8.8

Other Operating Expense

   4,342

   3,933

     409 

  10.4

Total Other Expense

  $17,660

  $16,299

   $1,361 

      8.4

    

Efficiency Ratio

55.97%

51.11%

4.86%

 9.5




35






Other expense for the first six months of 2005 was $17.7 million, an increase of $1.4 million, or 8.4%, over the expense for the first six months of 2004.  For the first six months of 2005, our efficiency ratio was 55.97%.  This ratio, which is a non-GAAP financial measure, is a comparative measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to net interest income (on a tax-equivalent basis) and other income (excluding net securities gains or losses).  See the discussion on page 13 of this report under the heading “Use of Non-GAAP Financial Measures.”  The efficiency ratio included by the Federal Reserve Board in its "Peer Holding Company Performance Reports" excludes net securities gains or losses, but does not exclude intangible asset amortization from this calculation.   Although our efficiency ratio increased from 2004 to 2005, it still compares favorably to the March 31, 2005 peer group ratio of 61.78%.


The November 2004 acquisition of an insurance agency, Capital Financial Group, and the April 2005 acquisition of three branches led to increases in all expense categories, however, approximately $100,000 of these increased expenses, primarily in the areas of advertising and supplies, are not expected to be experienced in future periods.


Salaries and employee benefits expense increased $760 thousand, or 7.9%, from the first six months of 2004 to the first six months of 2005.  The increase is primarily attributable to increases in personnel, including 11.8 full-time equivalent employees in our newly acquired insurance agency and 14.6 full-time equivalent employees in the branch acquisition as well as normal merit increases.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.47% for the first six months of 2005, 15 basis points less than the ratio for our peer group of 1.62% at March 31, 2005.


Occupancy expense was $1.5 million for the first six months of 2005, a $70 thousand increase, or 5.0%, over the first six months of 2004.  The increase was primarily attributable to building maintenance expenses.  Furniture and equipment expense was $1.5 million for the first six months of 2005, a $122 thousand increase, or 8.8%, above the first six months of 2004.  The increase was primarily attributable increases in data processing and depreciation expenses.


Other operating expense was $4.3 million for the first six months of 2005, an increase of $409 thousand, or 10.4% from the first six months of 2004.  An increase of $123 in intangible asset amortization was related to both the acquisition of the insurance agency and the three branches.  The other areas of significant increases included advertising and supplies, which were primarily attributable to the branch acquisition.



This excerpt taken from the AROW 10-Q filed May 9, 2005.

Summary of Other Expense

(Dollars in Thousands)


 

Quarter Ending

  
 

Mar 2005

Mar 2004

Change

% Change

Salaries and Employee Benefits

  $5,055

  $4,805

    $250

5.2%

Occupancy Expense of Premises, Net

     707

     695

      12

1.7

Furniture and Equipment Expense

     765

     694

     71

   10.2

Other Operating Expense

  1,958

  1,932

    26 

  1.3

Total Other Expense

  $8,485

  $8,126

   $359

      4.4

    

Efficiency Ratio

54.10%

50.88%

3.22%

 6.3


Other expense for the first quarter of 2005 was $8.5 million, an increase of $359 thousand, or 4.4%, over the expense for the first quarter of 2004.  For the first quarter of 2005, our efficiency ratio was 54.10%.  This ratio which is a non-GAAP financial measure, is a comparative measure of a financial institution's operating efficiency.  The efficiency ratio (a ratio where lower is better) is the ratio of noninterest expense (excluding intangible asset amortization) to net interest income (on a tax-equivalent basis) and other income (excluding net securities gains or losses).  See the discussion on page 13 of this report under the heading “Use of Non-GAAP Financial Measures.”  The efficiency ratio included by the Federal Reserve Board in its "Peer Holding Company Performance Reports" excludes net securities gains or losses, but does not exclude intangible asset amortization from this calculation.   Although our efficiency ratio increased from 2004 to 2005, it still compares favorably to the December 31, 2004 peer group ratio of 61.06%.


Salaries and employee benefits expense increased $250 thousand, or 5.2%, from the first quarter of 2004 to the first quarter of 2005.  The increase is primarily attributable to an increase of 11.7 full-time equivalent employees from our newly acquired insurance agency, the Capital Financial Group, and normal merit increases.  On an annualized basis, the ratio of total personnel expense (salaries and employee benefits) to average assets was 1.47% for the first quarter of 2005, 14 basis points less than the ratio for our peer group of 1.61% at December 31, 2004.


Occupancy expense was $707 thousand for the first quarter of 2005, a $12 thousand increase, or 1.7%, over the first quarter of 2004.  Furniture and equipment expense was $765 thousand for the first quarter of 2005, a $71 thousand increase, or 10.2%, above the first quarter of 2004.  The increase was primarily attributable to increases in depreciation and data processing expenses.


Other operating expense was $2.0 million for the first quarter of 2005, an increase of $26 thousand, or 1.3%, from the first quarter of 2004.




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