This excerpt taken from the FCCO 10-Q filed Nov 14, 2007.
Comparison of Results of Operations for Three Months Ended September 30, 2007 to the Three Months Ended September 30, 2006:
Our net income for the third quarter of 2007 was $1.1 million or $0.35 per diluted share, as compared to $903,000, or $0.27 per diluted share during the comparable period in 2006. Net interest income increased by $158,000 for the three months ended September 30, 2007 from $3.8 million in 2006 to $3.9 million in 2007. The increase in net interest income is primarily due to an increase in the level of average earning assets. Average earning assets equaled $454.5 million during the third quarter of 2006 as compared to $483.7 million during the third quarter of 2007. Please refer to the table at the end of this Item 2 for the yield and rate data for interest-bearing balance sheet components during the three month periods ended September 30, 2007 and 2006, along with average balances and the related interest income and interest expense amounts. The yield on average earning assets increased to 6.56% in the third quarter of 2007 as compared to 6.36% in the third quarter of 2006. The cost of interest bearing liabilities also increased to 3.88% in third quarter of 2007 as compared to 3.46% in the third quarter of 2006. The net interest margin was 3.21% for the three months ended September 30, 2007 and 3.27% for the three months ended September 30, 2006. On an FTE basis, we had a net interest margin of 3.29% and 3.36% for the three months ended September 30, 2007 and 2006, respectively.
Non-interest Income and Non-interest Expense
We earned $1.4 million and $1.1 million in non-interest income for the three months ended September 30, 2007 and 2006, respectively. An increase in deposit service charges of $62,000 was offset by a $56,000 decrease in mortgage origination fees. There has been a softening of new home sales and refinancing in our market area that has resulted in the lower mortgage origination fees during most recent quarter. Non interest income Other increased by $75,000 in the third quarter of 2007 as compared to the same period of 2006. The increase primarily relates an increase of $40,000 in ATM/Debit card surcharge
and exchange fees as well as increases in other check sales, and loan late charge fees.
Total non-interest expense increased by $66,000 in the third quarter of 2007 as compared to the same quarter of 2006. This increase was primarily due to increases of $74,000 in salary and benefits and $64,000 in occupancy expense. These increases were partially offset by a decrease in Other Non-interest expense of $63,000 including a $25,000 decrease in supplies and a $46,000 decrease in professional fees. Supplies expense was inflated in the third quarter of 2006 as a result of an increase relative to moving into the new administrative center. The increased professional fees in the third quarter of 2006 primarily related to the initial review by the firm engaged to perform the efficiency study in late 2006 and early 2007.