Peninsula Bank Posts Earnings for the Year Ending December 31, 2007

March 14, 2008

Englewood, Florida – Peninsula Bank reported net income for the year ending December 31, 2007 of $6,417,000, compared to a net loss of $737,000 as of December 31, 2006. During 2006, the bank suffered a loss for the first time in 12 years, due to an extraordinary charge-off of a liability judgment which affected net earnings by $7.2 million. Considering extraordinary non recurring expense, the following income comparisons are to earnings before this charge-off. Net income for the year ending December 31, 2007 was $6,417,000 which represents a .2% increase over the $6,403,000 before the non-recurring extraordinary cost as of December 31, 2006.

Net Interest Income increased 9%, to $20,154,000 for the year ending December 31, 2007 from $18,429,000 for the year ending December 31, 2006.  Interest Income was $47,349,000 for the year ending December 31, 2007 which represents a 15% increase over the $41,245,000 for the same period in 2006.  For the year ending December 31, 2007, Interest Expense increased 19%, to $27,195,000 from $22,816,000 for the year ending December 31, 2006.  An increase in volume of higher cost CDs for liquidity purposes in late 2006 contributed to the increase in interest expense in 2007, but interest income from investments and loans in 2007 more than offset the cost increase.  

Non-interest Income decreased by 29%, to $2,527,000 from $3,549,000, while non-interest expense decreased 2% to $10,909,000 from $10,668,000 for the year ending December 31, 2007 and 2006, respectively.  

Net income for the fourth quarter of 2007 was $931,000, a 49% decrease from the net income of $1,812,000 for the fourth quarter of 2006 before the non recurring expense.   Net interest income decreased 11%, to $4,750,000 from $5,312,000 for the fourth quarter of 2007 and 2006, respectively. Non-interest Income for the fourth quarter of 2007 was $680,000, a decrease of 26% from $913,000 for the fourth quarter of 2006, while non-interest expense decreased 1% to $2,983,000 from $3,016,000 for the fourth quarter of 2007 and 2006 before the extraordinary expense, respectively.  

Total assets were $619,176,000 as of December 31, 2007, a 7% decrease over the $667,248,000 as of December 31, 2006.  In the third quarter of 2006, an extremely successful CD campaign resulted in higher interest cost and higher liquidity.  During the second half of 2007, approximately $50,000,000 of the aforementioned high cost CD’s were permitted to “run off” as a result of a slow down in the real estate economy.  

Total earning assets decreased 8%, to $582,584,000 from $631,328,000 as of December 31, 2007 and December 31, 2006, respectively. As of December 31, 2007, net loans were $426,366,000, a decrease of 4% from the $443,429,000 as of December 31, 2006.  Peninsula Bank believes it has positioned itself to maintain loan levels despite industry-wide challenges in the real estate market.  Investment Securities increased 11%, to $91,353,000 from $82,615,000 as of December 31, 2007 and 2006, respectively. Total Deposits decreased 8% to $548,985,000 as of December 31, 2007 from $597,112,000 as of December 31, 2006.  

Shareholder’s equity was $56,892,000 which is a 10% increase from $51,329,000 as of December 31, 2006.  The number of shares outstanding at December 31, 2007 was 3,889,468 versus 3,849,897 as of December 31, 2006.  At December 31, 2007, book value per share was $14.63, an increase of approximately 10% from $13.33 at December 31, 2006. For shareholders of record as of December 31, 2007, a cash dividend of 7.5 cents per share was declared, payable on January 18, 2008.  This dividend reduced shareholder’s equity by approximately $292,000 at December 31, 2007.   

The bank continues to pursue its appeal concerning the liability judgment of $13 million ($7.2 million after insurance and taxes) written off in the last quarter of 2006.