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(Mark
One)
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[X]
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ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Delaware
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95-4596322
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|
(State
or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer Identification No.)
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|
888
Prospect Street, Suite 110, La Jolla, California
|
92037
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|
(Address
of Principal Executive Offices)
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(Zip
Code)
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Title of Each Class
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Name of Exchange on Which
Registered
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|
Common
Stock, $.01 Par Value
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New
York Stock Exchange
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Page
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PART
I
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3
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13
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17
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18
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18
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18
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PART
II
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19
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21
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23
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40
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42
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68
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68
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68
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PART
III
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69
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71
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89
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91
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91
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PART
IV
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92
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93
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•
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Originating
and purchasing real estate loans secured by income producing properties
for retention in our loan
portfolio;
|
|
•
|
Originating
entertainment finance loans; and
|
|
•
|
Accepting
customer deposits through the following products: certificates of
deposits, money market, passbook and demand deposit accounts. Our deposit
accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to the legal limits.
|
|
•
|
Originating
and, to a lesser extent, purchasing real estate loans secured by income
producing properties, or properties under construction;
and
|
|
•
|
Originating
entertainment finance loans.
|
•Apartments
|
•Mini-storage
facilities
|
•Retail
centers
|
•Mobile
home parks
|
•Small
office and light industrial buildings
|
•Multi-family
real estate
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•Hotels
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•Other
mixed use or special purpose commercial
properties
|
•Changes
or continued weakness in general or local economic
conditions;
|
•Availability
of financing for investors/owners of income producing
properties;
|
•Changes
or continued weakness in specific industry segments;
|
•Other
factors beyond the control of the borrower or the
lender;
|
•Increases
in other operating expenses (including energy costs);
|
•Increases
in interest rates, real estate and personal property tax rates;
and
|
•Declines
in rental, room or occupancy rates in hotels, apartment complexes or
commercial properties;
•Declines
in real estate values;
|
•Changes
in governmental rules, regulations and fiscal policies, including rent
control ordinances, environmental
legislation and taxation.
|
•Chairman,
President, and Chief Executive Officer
•Vice
Chairman of the Board
|
•Deputy
Managing Director/Director of Portfolio Management
•Deputy
Managing Director/Eastern Area Manager
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•Executive
Managing Director/Chief Credit Officer
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•Deputy
Managing Director/Western Area Manager
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•Executive
Managing Director/Chief Operating Officer
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•Deputy
Managing Director/Chief Underwriter
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•Senior
Managing Director/Chief Lending Officer
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•First
Vice President/East Coast Credit Executive
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•Managing
Director/Business Lending Credit
|
|
|
•
|
acquiring,
directly or indirectly, ownership or control of any voting shares of
another bank or bank holding company if, after the acquisition, it would
own or control more than 5% of these shares (unless it already owns or
controls a majority of these
shares);
|
|
•
|
acquiring
all or substantially all of the assets of another bank or bank holding
company; or
|
|
•
|
merging
or consolidating with another bank holding
company.
|
•
|
the
risk characteristics of various classifications of
loans;
|
•
|
general
portfolio trends relative to asset and portfolio
size;
|
•
|
potential
credit and geographic
concentrations;
|
•
|
delinquency
trends and nonaccrual levels;
|
•
|
historical
loss and recovery experience and risks associated with changes in
economic, social and business
conditions;
|
•
|
the
amount and quality of the
collateral;
|
•
|
the
views of our regulators; and
|
•
|
the
underwriting standards in effect when the loan is
made.
|
•
|
changes
or continued weakness in general or local economic
conditions;
|
•
|
changes
or continued weakness in specific industry
segments;
|
•
|
declines
in real estate values;
|
•
|
declines
in rental, room or occupancy rates in hotels, apartment complexes or
commercial properties;
|
•
|
increases
in other operating expenses (including energy
costs);
|
•
|
the
availability of refinancing at lower interest rates or better loan
terms;
|
•
|
changes
in governmental rules, regulations and fiscal policies, including rent
control ordinances, environmental legislation and
taxation;
|
•
|
increases
in interest rates, real estate and personal property tax rates,
and
|
•
|
other
factors beyond the control of the borrower or the
lender.
|
Locations
|
Office
Uses
|
Square
Footage
|
Year
Current Lease Term
Expires
|
|||
La
Jolla, CA
|
Corporate
Headquarters
|
21,903 |
2008
|
|||
Glendale,
CA
|
Loan
Operations Division/Loan Administration/Asset Management/Operations
Support
|
28,467 |
2012
|
|||
New
York, NY
|
East
Coast Corporate Headquarters
|
3,810 |
2009
|
|||
Century
City, CA
|
ICB
Entertainment Finance
|
7,003 |
2008
|
|||
Glendale,
CA
|
Bank
Branch
|
4,791 |
2012
|
|||
Encino,
CA
|
Bank
Branch
|
5,145 |
2009
|
|||
San
Francisco, CA
|
Bank
Branch
|
5,005 |
2014
|
|||
Costa
Mesa, CA
|
Bank
Branch
|
3,850 |
2011
|
|||
San
Diego, CA
|
Bank
Branch
|
3,046 |
2011
|
|||
Beverly
Hills, CA
|
Bank
Branch
|
2,218 |
2010
|
|||
Carson
City, NV
|
Bank
Branch
|
3,000 |
2008
|
|||
Baltimore,
MD
|
Bank
Branch
|
3,467 |
2013
|
|||
Las
Vegas, NV (1)
|
Bank
Branch
|
5,400 |
2014
|
|||
Walnut
Creek, CA
|
Loan
Origination Office
|
2,220 |
2009
|
|||
Boston,
MA
|
Loan
Origination Office
|
3,309 |
2009
|
|||
Atlanta,
GA
|
Loan
Origination Office
|
3,148 |
2008
|
|||
Red
Bank, NJ
|
Loan
Origination Office
|
1,800 |
2009
|
|||
Houston,
TX
|
Loan
Origination Office
|
3,420 |
2011
|
Market
Price
|
Average
Daily
|
|||||||||||||||
High
|
Low
|
Close
|
Closing
Price
|
|||||||||||||
2007
4th
Quarter
|
$ | 28.29 | $ | 17.43 | $ | 18.30 | $ | 21.94 | ||||||||
3rd
Quarter
|
54.11 | 27.51 | 28.25 | 39.14 | ||||||||||||
2nd
Quarter
|
55.59 | 48.00 | 52.12 | 51.62 | ||||||||||||
1st
Quarter
|
61.95 | 47.50 | 52.02 | 54.94 | ||||||||||||
2006
4th
Quarter
|
$ | 58.96 | $ | 50.75 | $ | 57.91 | $ | 54.91 | ||||||||
3rd
Quarter
|
55.15 | 49.10 | 53.76 | 51.76 | ||||||||||||
2nd
Quarter
|
52.93 | 46.14 | 52.58 | 49.55 | ||||||||||||
1st
Quarter
|
50.20 | 44.65 | 48.22 | 47.28 |
Cash
dividends declared per share
|
2007
|
2006
|
||||||
1st
Quarter
|
$ | 0.16 | $ | 0.15 | ||||
2nd
Quarter
|
0.16 | 0.15 | ||||||
3rd
Quarter
|
0.16 | 0.15 | ||||||
4th
Quarter
|
0.16 | 0.15 | ||||||
Total
|
$ | 0.64 | $ | 0.60 |
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||||||||
October
1, 2007 to October
31, 2007
|
— | $ | — | — | 110,486 | |||||||||||
November
1, 2007 to November
30, 2007
|
— | — | — | 110,486 | ||||||||||||
December
1, 2007 to December
31, 2007
|
— | — | — | 110,486 | ||||||||||||
Total
|
— | $ | — | — | 110,486 |
(1)
|
There
were no repurchases under the twelfth extension of our stock repurchase
program during the three months ended December 31, 2007. The
twelfth extension was announced on March 14, 2006, and authorized the
repurchase of an additional 5% of the outstanding shares as of the
authorization date. At December 31, 2007, a total of 110,486
shares remained available for repurchase under this
extension.
|
12/31/02
|
12/31/03
|
12/31/04
|
12/31/05
|
12/31/06
|
12/31/07
|
|||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
100.00 | 150.77 | 176.92 | 147.01 | 176.28 | 56.86 | ||||||||||||||||||
NYSE
Composite
|
100.00 | 127.92 | 146.23 | 156.39 | 184.33 | 197.74 | ||||||||||||||||||
NASDAQ
Composite (1)
|
100.00 | 150.01 | 162.89 | 165.13 | 180.85 | 198.60 | ||||||||||||||||||
SNL
Bank Index
|
100.00 | 134.90 | 151.17 | 153.23 | 179.24 | 139.28 |
For
the years ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
Total
interest income
|
$ | 251,271 | $ | 226,501 | $ | 178,158 | $ | 124,954 | $ | 115,977 | ||||||||||
Total
interest expense
|
164,583 | 132,075 | 86,486 | 41,418 | 30,867 | |||||||||||||||
Net
interest income before provision for loan losses
|
86,688 | 94,426 | 91,672 | 83,536 | 85,110 | |||||||||||||||
Provision
for loan losses
|
11,077 | 5,000 | 10,250 | 4,725 | 7,760 | |||||||||||||||
Net
interest income after provision for loan losses
|
75,611 | 89,426 | 81,422 | 78,811 | 77,350 | |||||||||||||||
Non-interest
income (1)
|
3,133 | 2,772 | 6,574 | 14,508 | 15,240 | |||||||||||||||
Non-interest
expense:
|
||||||||||||||||||||
Compensation
and benefits
|
23,899 | 21,265 | 21,737 | 21,444 | 18,870 | |||||||||||||||
Occupancy
and equipment
|
7,832 | 7,439 | 7,177 | 5,924 | 4,839 | |||||||||||||||
Other
general and administrative expenses
|
19,633 | 17,743 | 17,344 | 14,666 | 13,006 | |||||||||||||||
Other
real estate and other assets owned expense, net
|
1,125 | 369 | 193 | 712 | 1,212 | |||||||||||||||
Total
non-interest expense
|
52,489 | 46,816 | 46,451 | 42,746 | 37,927 | |||||||||||||||
Income
before provision for income taxes and minority interest in income of
subsidiary
|
26,255 | 45,382 | 41,545 | 50,573 | 54,663 | |||||||||||||||
Minority
interest in income of subsidiary (2)(3)
|
— | — | — | — | 6,083 | |||||||||||||||
Income
before provision for income taxes
|
26,255 | 45,382 | 41,545 | 50,573 | 48,580 | |||||||||||||||
Provision
for income taxes
|
10,635 | 18,493 | 17,482 | 19,948 | 18,946 | |||||||||||||||
NET
INCOME
|
$ | 15,620 | $ | 26,889 | $ | 24,063 | $ | 30,625 | $ | 29,634 | ||||||||||
BASIC
EARNINGS PER SHARE
|
$ | 2.85 | $ | 4.83 | $ | 4.19 | $ | 5.04 | $ | 4.91 | ||||||||||
DILUTED
EARNINGS PER SHARE
|
$ | 2.81 | $ | 4.71 | $ | 4.04 | $ | 4.75 | $ | 4.55 |
As
of December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||||||
Condensed
Consolidated Statements of Financial Condition
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 8,944 | $ | 30,448 | $ | 93,747 | $ | 87,580 | $ | 178,318 | ||||||||||
Investment
securities available-for-sale, at fair value
|
117,924 | 99,527 | 92,563 | 66,845 | 53,093 | |||||||||||||||
Investment
securities held-to-maturity, at amortized cost
|
159,023 | 193,512 | 233,880 | 296,028 | — | |||||||||||||||
Stock
in Federal Home Loan Bank
|
53,497 | 48,984 | 43,802 | 23,200 | 17,966 | |||||||||||||||
Loans,
net
|
3,125,072 | 2,973,368 | 2,523,480 | 1,793,815 | 1,505,424 | |||||||||||||||
Interest
receivable
|
20,841 | 20,753 | 16,287 | 10,695 | 8,958 | |||||||||||||||
Other
real estate and other assets owned, net
|
19,396 | 6,729 | 3,960 | — | 7,048 | |||||||||||||||
Premises
and equipment, net
|
8,550 | 7,851 | 6,718 | 6,645 | 5,766 | |||||||||||||||
Deferred
income taxes
|
12,148 | 11,513 | 12,717 | 10,468 | 11,609 | |||||||||||||||
Goodwill
|
3,118 | 3,118 | 3,118 | 3,118 | 3,118 | |||||||||||||||
Other
assets
|
22,706 | 19,707 | 20,924 | 19,677 | 26,915 | |||||||||||||||
Total
Assets
|
$ | 3,551,219 | $ | 3,415,510 | $ | 3,051,196 | $ | 2,318,071 | $ | 1,818,215 | ||||||||||
Deposit
accounts
|
$ | 2,181,858 | $ | 2,059,405 | $ | 1,735,428 | $ | 1,432,032 | $ | 1,147,017 | ||||||||||
Federal
Home Loan Bank advances and other borrowings
|
1,021,235 | 1,010,000 | 992,557 | 584,224 | 378,003 | |||||||||||||||
Account
payable and other liabilities
|
33,959 | 38,168 | 32,130 | 20,491 | 19,696 | |||||||||||||||
Junior
subordinated debentures (3)
|
86,600 | 86,600 | 86,600 | 86,600 | 86,600 | |||||||||||||||
Shareholders’
equity
|
227,567 | 221,337 | 204,481 | 194,724 | 186,899 | |||||||||||||||
Total
Liabilities and Shareholders’ Equity
|
$ | 3,551,219 | $ | 3,415,510 | $ | 3,051,196 | $ | 2,318,071 | $ | 1,818,215 | ||||||||||
Book
value per share
|
$ | 44.22 | $ | 42.07 | $ | 37.85 | $ | 35.09 | $ | 31.30 |
(1)
|
For
2004 and 2003, includes fee income earned in connection with the tax
refund lending program pursuant to our strategic alliance with various
subsidiaries of Household International, Inc. (“Household”), a wholly
owned subsidiary of HSBC Holdings plc (NYSE-HBC). This program
was terminated by Household in 2004 subsequent to the tax filing
season.
|
(2)
|
Represents
distributions on our trust preferred
securities.
|
(3)
|
As
a result of our adoption of FASB Interpretation No. 46 (revised) issued by
the Financial Accounting Standards Board effective December 31, 2003, we
de-consolidated the trusts which issued our trust preferred
securities. The effect of this was to recognize investments in
the trusts in other assets, to report the amount of junior subordinated
debentures we issued to these trusts as a liability in our consolidated
balance sheets and, beginning on the date of adoption, to recognize the
interest expense on the junior subordinated debentures in our consolidated
statements of income. Prior to the de-consolidation, we
reported our trust preferred securities in the mezzanine section of our
balance sheet as “guaranteed preferred beneficial interests in the
Company’s junior subordinated deferrable interest debentures” and
recognized distributions paid to the holders of the trust preferred
securities as “minority interest in income of subsidiary” in our
consolidated statements of income.
|
As
of and for the years ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
Selected Performance Ratios | ||||||||||||||||||||
Return
on average assets
|
0.45 | % | 0.86 | % | 0.90 | % | 1.47 | % | 1.71 | % | ||||||||||
Return
on average shareholders’ equity
|
6.88 | % | 12.75 | % | 12.12 | % | 15.44 | % | 16.88 | % | ||||||||||
Net
interest margin (1)
|
2.51 | % | 3.06 | % | 3.43 | % | 4.12 | % | 5.03 | % | ||||||||||
Average
interest earning assets to average interest bearing
liabilities
|
107.74 | % | 108.21 | % | 109.32 | % | 127.50 | % | 135.03 | % | ||||||||||
Efficiency
ratio (2)
|
57.18 | % | 47.79 | % | 47.08 | % | 42.87 | % | 36.59 | % | ||||||||||
Total
general and administrative expense to average assets
|
1.47 | % | 1.49 | % | 1.73 | % | 2.02 | % | 2.29 | % | ||||||||||
Average
shareholders’ equity to average assets
|
6.52 | % | 6.78 | % | 7.39 | % | 9.51 | % | 11.16 | % | ||||||||||
Dividend
payout ratio (3)
|
22.78 | % | 12.74 | % | — | — | — | |||||||||||||
Nonperforming
assets to total assets
|
1.62 | % | 0.97 | % | 0.92 | % | 0.63 | % | 0.86 | % | ||||||||||
Allowance
for loan losses to loans held for investment, net (4)
|
1.51 | % | 1.53 | % | 1.71 | % | 1.94 | % | 2.14 | % | ||||||||||
Allowance
for loan loss to nonaccrual loans
|
125.87 | % | 175.40 | % | 180.59 | % | 242.17 | % | 392.26 | % | ||||||||||
Net
charge-offs to average loans held for investment, net
|
0.30 | % | 0.10 | % | 0.09 | % | 0.16 | % | 0.52 | % |
(1)
|
Net
interest margin represents net interest income divided by total average
interest earning assets.
|
(2)
|
Efficiency
ratio represents general and administrative expenses divided by
non-interest income and net interest income before provision for loan
losses.
|
(3)
|
Dividends
declared per common share as a percentage of net income per diluted
share.
|
(4)
|
Loans
held for investment, net, represent loans before allowance for loan
losses.
|
For
the Quarters Ended
|
||||||||||||||||
March
31
|
June
30
|
September
30
|
December
31
|
|||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
2007
|
||||||||||||||||
Interest
income
|
$ | 63,332 | $ | 62,983 | $ | 62,699 | $ | 62,257 | ||||||||
Interest
expense
|
39,343 | 41,166 | 42,021 | 42,053 | ||||||||||||
Net
interest income before provision for loan losses
|
23,989 | 21,817 | 20,678 | 20,204 | ||||||||||||
Provision
for loan losses
|
750 | 500 | 5,266 | 4,561 | ||||||||||||
Non-interest
income
|
716 | 843 | 949 | 625 | ||||||||||||
General
and administrative expense
|
12,421 | 11,903 | 13,255 | 13,785 | ||||||||||||
Total
real estate and other assets owned expense, net
|
163 | 195 | 199 | 568 | ||||||||||||
Provision
for income taxes
|
4,634 | 4,024 | 1,193 | 784 | ||||||||||||
Net
income
|
6,737 | 6,038 | 1,714 | 1,131 | ||||||||||||
Basic
earnings per share
|
$ | 1.22 | $ | 1.10 | $ | 0.31 | $ | 0.21 | ||||||||
Diluted
earnings per share
|
$ | 1.19 | $ | 1.08 | $ | 0.31 | $ | 0.21 | ||||||||
2006
|
||||||||||||||||
Interest
income
|
$ | 51,428 | $ | 55,760 | $ | 59,130 | $ | 60,183 | ||||||||
Interest
expense
|
28,518 | 31,776 | 34,840 | 36,941 | ||||||||||||
Net
interest income before provision for loan losses
|
22,910 | 23,984 | 24,290 | 23,242 | ||||||||||||
Provision
for loan losses
|
750 | 1,500 | 1,500 | 1,250 | ||||||||||||
Non-interest
income
|
717 | 607 | 578 | 870 | ||||||||||||
General
and administrative expense
|
12,037 | 11,833 | 11,474 | 11,103 | ||||||||||||
Total
real estate owned expense, net
|
106 | (177 | ) | 287 | 153 | |||||||||||
Provision
for income taxes
|
4,402 | 4,689 | 4,759 | 4,643 | ||||||||||||
Net
income
|
6,332 | 6,746 | 6,848 | 6,963 | ||||||||||||
Basic
earnings per share
|
$ | 1.13 | $ | 1.22 | $ | 1.24 | $ | 1.26 | ||||||||
Diluted
earnings per share
|
$ | 1.10 | $ | 1.18 | $ | 1.20 | $ | 1.22 |
Years
Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||||||||||||||
Average
Balance
|
Income/
Expense
|
Yield/
Rate
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate
|
Average
Balance
|
Income/
Expense
|
Yield/
Rate
|
||||||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Cash
and investment
securities
|
$ | 356,608 | $ | 17,522 | 4.91 | % | $ | 419,762 | $ | 19,181 | 4.57 | % | $ | 432,774 | $ | 18,438 | 4.26 | % | ||||||||||||||||||
Real
estate loans (1)
|
3,011,179 | 222,607 | 7.39 | % | 2,588,452 | 200,322 | 7.74 | % | 2,016,691 | 141,061 | 6.99 | % | ||||||||||||||||||||||||
Franchise
loans (1)
|
4,476 | 1,503 | 33.58 | % | 11,578 | 475 | 4.10 | % | 121,768 | 9,972 | 8.19 | % | ||||||||||||||||||||||||
Entertainment
finance loans (1)
|
73,947 | 8,587 | 11.61 | % | 59,262 | 5,620 | 9.48 | % | 89,420 | 7,724 | 8.64 | % | ||||||||||||||||||||||||
Commercial
and other loans (1)
|
11,053 | 1,052 | 9.52 | % | 8,962 | 903 | 10.08 | % | 11,382 | 963 | 8.46 | % | ||||||||||||||||||||||||
Total
loans receivable
|
3,100,655 | 233,749 | 7.54 | % | 2,668,254 | 207,320 | 7.77 | % | 2,239,261 | 159,720 | 7.13 | % | ||||||||||||||||||||||||
Total
interest earning assets
|
3,457,263 | $ | 251,271 | 7.27 | % | 3,088,016 | $ | 226,501 | 7.33 | % | 2,672,035 | $ | 178,158 | 6.67 | % | |||||||||||||||||||||
Non-interest
earning assets
|
70,491 | 70,936 | 51,549 | |||||||||||||||||||||||||||||||||
Allowance
for loan losses
|
(45,265 | ) | (46,366 | ) | (37,978 | ) | ||||||||||||||||||||||||||||||
Total
assets
|
$ | 3,482,489 | $ | 3,112,586 | $ | 2,685,606 | ||||||||||||||||||||||||||||||
Liabilities
and Shareholders’ Equity
|
||||||||||||||||||||||||||||||||||||
Interest
bearing demand accounts
|
$ | 25,381 | $ | 922 | 3.63 | % | $ | 29,047 | $ | 836 | 2.88 | % | $ | 51,684 | $ | 1,236 | 2.39 | % | ||||||||||||||||||
Money
market and passbook accounts
|
238,231 | 11,779 | 4.94 | % | 207,962 | 9,379 | 4.51 | % | 177,213 | 5,308 | 3.00 | % | ||||||||||||||||||||||||
Time
certificates
|
1,847,220 | 97,410 | 5.27 | % | 1,603,210 | 74,941 | 4.67 | % | 1,421,415 | 47,263 | 3.33 | % | ||||||||||||||||||||||||
Total
interest bearing deposit accounts
|
2,110,832 | 110,111 | 5.22 | % | 1,840,219 | 85,156 | 4.63 | % | 1,650,312 | 53,807 | 3.26 | % | ||||||||||||||||||||||||
FHLB
advances and other borrowings
|
1,011,461 | 46,134 | 4.56 | % | 926,916 | 38,722 | 4.18 | % | 707,391 | 25,508 | 3.61 | % | ||||||||||||||||||||||||
Junior
subordinated debentures
|
86,600 | 8,338 | 9.63 | % | 86,600 | 8,197 | 9.47 | % | 86,600 | 7,171 | 8.28 | % | ||||||||||||||||||||||||
Total
interest bearing liabilities
|
3,208,893 | $ | 164,583 | 5.13 | % | 2,853,735 | $ | 132,075 | 4.63 | % | 2,444,303 | $ | 86,486 | 3.54 | % | |||||||||||||||||||||
Non-interest
bearing demand accounts
|
10,657 | 12,738 | 27,671 | |||||||||||||||||||||||||||||||||
Other
non-interest bearing liabilities
|
35,988 | 35,173 | 15,086 | |||||||||||||||||||||||||||||||||
Shareholders’
equity
|
226,951 | 210,940 | 198,546 | |||||||||||||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 3,482,489 | $ | 3,112,586 | $ | 2,685,606 | ||||||||||||||||||||||||||||||
Net
interest spread (2)
|
2.14 | % | 2.70 | % | 3.13 | % | ||||||||||||||||||||||||||||||
Net
interest income before provisions for loan losses
|
$ | 86,688 | $ | 94,426 | $ | 91,672 | ||||||||||||||||||||||||||||||
Net
interest margin (3)
|
2.51 | % | 3.06 | % | 3.43 | % |
(1)
|
Before
allowance for loan losses and net of deferred loan fees and costs. Net
loan fee accretion of $2.4 million, $2.8 million and $2.9 million was
included in net interest income for 2007, 2006 and 2005,
respectively.
|
(2)
|
Average
yield on interest earning assets minus average rate paid on interest
bearing liabilities.
|
(3)
|
Net
interest income divided by total average interest earning
assets.
|
2007
vs. 2006
|
2006
vs. 2005
|
|||||||||||||||||||||||
Increase
(Decrease) Due to:
|
Increase
(Decrease) Due to:
|
|||||||||||||||||||||||
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Interest
and fees earned on:
|
||||||||||||||||||||||||
Loans,
net
|
$ | 32,725 | $ | (6,296 | ) | $ | 26,429 | $ | 32,413 | $ | 15,187 | $ | 47,600 | |||||||||||
Cash and investment
securities
|
(3,020 | ) | 1,361 | (1,659 | ) | (567 | ) | 1,310 | 743 | |||||||||||||||
Total increase (decrease) in
interest income
|
29,705 | (4,935 | ) | 24,770 | 31,846 | 16,497 | 48,343 | |||||||||||||||||
Interest
paid on:
|
||||||||||||||||||||||||
Deposit
accounts
|
13,370 | 11,585 | 24,955 | 6,739 | 24,610 | 31,349 | ||||||||||||||||||
FHLB advances and other
borrowings
|
3,712 | 3,700 | 7,412 | 8,758 | 4,456 | 13,214 | ||||||||||||||||||
Junior subordinated
debentures
|
— | 141 | 141 | — | 1,026 | 1,026 | ||||||||||||||||||
Total increase in interest
expense
|
17,082 | 15,426 | 32,508 | 15,497 | 30,092 | 45,589 | ||||||||||||||||||
Increase (decrease) in net
interest income
|
$ | 12,623 | $ | (20,361 | ) | $ | (7,738 | ) | $ | 16,349 | $ | (13,595 | ) | $ | 2,754 |
December
31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Real estate
loans
|
$ | 2,627,801 | $ | 2,524,182 | $ | 2,144,403 | $ | 1,386,042 | $ | 1,195,150 | ||||||||||
Construction and land
loans
|
421,110 | 370,473 | 312,901 | 185,138 | 131,119 | |||||||||||||||
Total
real estate loans
|
3,048,911 | 2,894,655 | 2,457,304 | 1,571,180 | 1,326,269 | |||||||||||||||
Entertainment finance
loans
|
76,342 | 74,204 | 66,514 | 99,729 | 98,630 | |||||||||||||||
Franchise loans
|
2,718 | 9,334 | 13,705 | 137,477 | 102,128 | |||||||||||||||
Commercial and other
loans
|
14,631 | 9,346 | 7,264 | 11,931 | 6,869 | |||||||||||||||
3,142,602 | 2,987,539 | 2,544,787 | 1,820,317 | 1,533,896 | ||||||||||||||||
Unamortized
premium
|
13,776 | 18,138 | 14,582 | 6,346 | 5,429 | |||||||||||||||
Deferred loan origination costs
(fees), net
|
16,477 | 13,740 | 7,928 | 2,635 | (500 | ) | ||||||||||||||
3,172,855 | 3,019,417 | 2,567,297 | 1,829,298 | 1,538,825 | ||||||||||||||||
Allowance for loan
losses
|
(47,783 | ) | (46,049 | ) | (43,817 | ) | (35,483 | ) | (33,401 | ) | ||||||||||
$ | 3,125,072 | $ | 2,973,368 | $ | 2,523,480 | $ | 1,793,815 | $ | 1,505,424 |
Loans
Maturing in
|
||||||||||||||||
Less
Than
One
Year
|
Between
One
and
Five
Years
|
Greater
Than
Five
Years
|
Total
|
|||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Real
estate
loans
|
$ | 118,100 | $ | 220,965 | $ | 2,288,736 | $ | 2,627,801 | ||||||||
Construction
and land
loans
|
276,662 | 144,448 | — | 421,110 | ||||||||||||
Entertainment
finance
loans
|
50,804 | 25,538 | — | 76,342 | ||||||||||||
Franchise
loans
|
— | 289 | 2,429 | 2,718 | ||||||||||||
Commercial
and other
loans
|
13,387 | 1,244 | — | 14,631 | ||||||||||||
$ | 458,953 | $ | 392,484 | $ | 2,291,165 | $ | 3,142,602 | |||||||||
Loans
with fixed interest
rates
|
$ | 9,667 | $ | 44,278 | $ | 25,099 | $ | 79,044 | ||||||||
Loans
with adjustable interest
rates
|
449,286 | 348,206 | 2,266,066 | 3,063,558 | ||||||||||||
$ | 458,953 | $ | 392,484 | $ | 2,291,165 | $ | 3,142,602 | |||||||||
Percentage with adjustable
interest rates
|
97.9 | % | 88.7 | % | 98.9 | % | 97.5 | % |
Number
of
|
Gross
Loan
|
Percent
of
|
Range
of Principal Balance
|
Nonaccrual
|
||||||||||||||||||||||||
Loans
|
Amount
|
Total
|
Min
|
Max
|
Average
|
Loans
|
||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||
Income
Producing Property Loans:
|
||||||||||||||||||||||||||||
Multi-family
(5 or more units)
|
2,689 | $ | 1,999,545 | 65.58 | % | $ | 3 | $ | 15,953 | $ | 744 | $ | 19,439 | |||||||||||||||
Retail
|
140 | 187,792 | 6.16 | % | 3 | 15,472 | 1,341 | 954 | ||||||||||||||||||||
Office
|
88 | 122,715 | 4.02 | % | 9 | 13,427 | 1,394 | — | ||||||||||||||||||||
Hotel
|
12 | 30,113 | 0.99 | % | 51 | 6,755 | 2,509 | — | ||||||||||||||||||||
Industrial/warehouse
|
51 | 67,316 | 2.21 | % | 69 | 7,000 | 1,320 | — | ||||||||||||||||||||
Mixed-use
|
87 | 93,310 | 3.06 | % | 7 | 12,302 | 1,073 | 1,138 | ||||||||||||||||||||
Mobile
home
parks
|
38 | 32,729 | 1.07 | % | 217 | 4,056 | 861 | 385 | ||||||||||||||||||||
Assisted
living
|
5 | 22,697 | 0.75 | % | 1,276 | 7,051 | 4,539 | — | ||||||||||||||||||||
Storage
|
10 | 30,860 | 1.01 | % | 682 | 5,950 | 3,086 | — | ||||||||||||||||||||
Other
|
35 | 25,350 | 0.83 | % | 1 | 10,069 | 724 | 6,847 | ||||||||||||||||||||
Total income
producing
|
3,155 | 2,612,427 | 85.68 | % | 28,763 | |||||||||||||||||||||||
Construction
and Land:
|
||||||||||||||||||||||||||||
Construction
|
88 | 359,977 | 11.81 | % | 19 | 22,137 | 4,498 | 8,804 | ||||||||||||||||||||
Land
|
14 | 61,133 | 2.00 | % | 368 | 17,075 | 4,202 | — | ||||||||||||||||||||
Total construction and
land
|
102 | 421,110 | 13.81 | % | 8,804 | |||||||||||||||||||||||
Single-family
mortgages:
|
||||||||||||||||||||||||||||
Single-family (1-4
units)
|
40 | 15,374 | 0.51 | % | 6 | 925 | 384 | 382 | ||||||||||||||||||||
3,297 | $ | 3,048,911 | 100.00 | % | $ | 37,949 |
Number
of
Loans
|
Gross
Loan
Amount
|
Percent
of
Total
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Southern
California:
|
||||||||||||
Los Angeles
County
|
687 | $ | 584,709 | 19.18 | % | |||||||
Riverside
County
|
38 | 92,230 | 3.03 | % | ||||||||
Orange
County
|
49 | 74,686 | 2.45 | % | ||||||||
San Diego
County
|
63 | 60,516 | 1.98 | % | ||||||||
San Bernardino
County
|
46 | 40,047 | 1.31 | % | ||||||||
All other Southern California
Counties
|
5 | 4,135 | 0.14 | % | ||||||||
Total Southern
California
|
888 | 856,323 | 28.09 | % | ||||||||
Northern
California:
|
||||||||||||
San Francisco
County
|
61 | 80,242 | 2.63 | % | ||||||||
Alameda
County
|
92 | 79,924 | 2.62 | % | ||||||||
Contra Costa
County
|
40 | 50,748 | 1.66 | % | ||||||||
Fresno
County
|
53 | 40,169 | 1.32 | % | ||||||||
Santa Clara
County
|
39 | 33,462 | 1.10 | % | ||||||||
Kern
County
|
33 | 23,663 | 0.78 | % | ||||||||
San Mateo
County
|
17 | 22,198 | 0.73 | % | ||||||||
San
Joaquin
|
31 | 21,526 | 0.71 | % | ||||||||
Monterey
|
5 | 17,180 | 0.56 | % | ||||||||
Sacramento
|
24 | 17,142 | 0.56 | % | ||||||||
San Luis
Obispo
|
5 | 12,096 | 0.40 | % | ||||||||
All other Northern California
Counties
|
82 | 79,804 | 2.61 | % | ||||||||
Total Northern
California
|
482 | 478,154 | 15.68 | % | ||||||||
Outside
California:
|
||||||||||||
Texas
|
280 | 338,812 | 11.11 | % | ||||||||
Arizona
|
166 | 170,435 | 5.59 | % | ||||||||
New
York
|
152 | 134,675 | 4.42 | % | ||||||||
Florida
|
110 | 131,816 | 4.32 | % | ||||||||
Georgia
|
66 | 103,642 | 3.40 | % | ||||||||
Ohio
|
101 | 77,805 | 2.55 | % | ||||||||
Massachusetts
|
120 | 61,280 | 2.01 | % | ||||||||
Nevada
|
66 | 55,839 | 1.83 | % | ||||||||
Tennessee
|
43 | 46,094 | 1.51 | % | ||||||||
Colorado
|
59 | 42,605 | 1.40 | % | ||||||||
Oklahoma
|
42 | 40,181 | 1.32 | % | ||||||||
Connecticut
|
101 | 37,864 | 1.24 | % | ||||||||
New
Hampshire
|
59 | 34,964 | 1.15 | % | ||||||||
North
Carolina
|
32 | 29,778 | 0.98 | % | ||||||||
New
Jersey
|
56 | 29,539 | 0.97 | % | ||||||||
Oregon
|
46 | 29,185 | 0.96 | % | ||||||||
Idaho
|
14 | 25,928 | 0.85 | % | ||||||||
Michigan
|
23 | 25,191 | 0.83 | % | ||||||||
Pennsylvania
|
36 | 25,121 | 0.82 | % | ||||||||
Washington
|
33 | 24,648 | 0.81 | % | ||||||||
Utah
|
23 | 23,189 | 0.76 | % | ||||||||
New
Mexico
|
31 | 20,611 | 0.68 | % | ||||||||
Mississippi
|
12 | 20,183 | 0.66 | % | ||||||||
Arkansas
|
19 | 19,707 | 0.65 | % | ||||||||
Illinois
|
21 | 18,429 | 0.60 | % | ||||||||
Other U.S.
states
|
216 | 146,913 | 4.81 | % | ||||||||
Total Outside
California
|
1,927 | 1,714,434 | 56.23 | % | ||||||||
3,297 | $ | 3,048,911 | 100.00 | % |
As
of and for the Years Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Gross
real estate loans originated
|
$ | 1,052,138 | $ | 960,187 | $ | 846,685 | ||||||
Gross
entertainment finance loans originated
|
114,354 | 102,703 | 68,687 | |||||||||
Gross
franchise loans originated
|
— | — | 2,352 | |||||||||
Gross
commercial and other loans originated (1)
|
1,240 | 26,662 | 1,863 | |||||||||
Gross
real estate loans purchased
|
47,343 | 497,785 | 723,822 | |||||||||
Total
loan production
|
$ | 1,215,075 | $ | 1,587,337 | $ | 1,643,409 | ||||||
Gross
loans at end of period
|
$ | 3,142,602 | $ | 2,987,539 | $ | 2,544,787 | ||||||
Gross
loans weighted-average portfolio yield
|
7.54 | % | 7.68 | % | 7.13 | % | ||||||
Average
size of loans retained in the Company’s portfolio
|
$ | 1,184 | $ | 1,110 | $ | 803 |
(1)
|
Includes
$25.4 million of commercial real estate participation loans acquired
during 2006.
|
December
31,
|
||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Investment
securities available-for-sale
|
||||||||||||||||||||||||
U.S. agency
securities
|
$ | 9,997 | $ | 9,986 | $ | 62,554 | $ | 62,184 | $ | 89,897 | $ | 88,829 | ||||||||||||
Collateralized mortgage
obligations
|
83,260 | 84,264 | 34,991 | 35,127 | — | — | ||||||||||||||||||
Mortgage-backed
securities
|
4,453 | 4,489 | — | — | — | — | ||||||||||||||||||
Corporate bonds
|
13,437 | 12,582 | — | — | — | — | ||||||||||||||||||
Residual interest in
securitized loans
|
1,318 | 1,318 | 1,911 | 2,039 | 3,257 | 3,570 | ||||||||||||||||||
Equity
securities
|
5,013 | 5,285 | 13 | 177 | 16 | 164 | ||||||||||||||||||
Total investment securities
available-for-sale
|
$ | 117,478 | $ | 117,924 | $ | 99,469 | $ | 99,527 | $ | 93,170 | $ | 92,563 | ||||||||||||
Investment
securities held-to-maturity
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | 159,023 | $ | 158,509 | $ | 193,512 | $ | 190,475 | $ | 233,880 | $ | 229,025 |
Due
in One Year
or Less
|
Due
after One Year
through
Five
Years
|
Due
after Five Years
through
Ten
Years
|
Due
after Ten
Years
|
|||||||||||||||||||||||||||||
Balance
|
Weighted
Average
Yield
|
Balance
|
Weighted
Average
Yield
|
Balance
|
Weighted
Average
Yield
|
Balance
|
Weighted
Average
Yield
|
|||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||
Investment securities
available-for-sale
|
||||||||||||||||||||||||||||||||
U.S. agency
securities
|
$ | 9,986 | 4.60 | % | $ | — | — | $ | — | — | $ | — | — | |||||||||||||||||||
Collateralized mortgage
obligations
|
— | — | — | — | 22,494 | 5.53 | % | 61,770 | 5.43 | % | ||||||||||||||||||||||
Mortgage-backed
securities
|
— | — | — | — | — | — | 4,489 | 5.17 | % | |||||||||||||||||||||||
Corporate
bonds
|
— | — | — | — | — | — | 12,582 | 6.27 | % | |||||||||||||||||||||||
Residual interest in
securitized loans
|
— | — | 1,318 | — | — | — | — | — | ||||||||||||||||||||||||
Equity
securities
|
185 | — | — | — | — | — | 5,100 | 7.63 | % | |||||||||||||||||||||||
Total investment securities
available-for-sale
|
$ | 10,171 | $ | 1,318 | $ | 22,494 | $ | 83,941 | ||||||||||||||||||||||||
Investment securities
held-to-maturity
|
||||||||||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | — | — | $ | — | — | $ | — | — | $ | 159,023 | 4.24 | % |
December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Non-interest
demand
accounts
|
$ | 16,819 | $ | 23,171 | $ | 13,660 | ||||||
Interest
demand
accounts
|
26,518 | 24,523 | 38,197 | |||||||||
Money
market and passbook
accounts
|
251,660 | 210,236 | 186,453 | |||||||||
Time
certificates under
$100,000
|
784,697 | 784,732 | 763,701 | |||||||||
Time
certificates $100,000 and
over
|
1,102,164 | 1,016,743 | 733,417 | |||||||||
$ | 2,181,858 | $ | 2,059,405 | $ | 1,735,428 |
Certificates
of deposit $100,000 and over:
|
||||
Maturing within three
months
|
$ | 459,329 | ||
After three but within six
months
|
238,279 | |||
After six but within twelve
months
|
203,267 | |||
After twelve
months
|
201,289 | |||
$ | 1,102,164 |
Contractual
Obligations
|
Total
|
Less
Than
One
Year
|
One
Through
Three
Years
|
Three
Through
Five
Years
|
More
Than
Five
Years
|
|||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Long-term
FHLB advances and other
borrowings
|
$ | 1,021,235 | $ | 318,602 | $ | 472,561 | $ | 211,923 | $ | 18,149 | ||||||||||
Junior
subordinated debentures
|
86,600 | — | — | — | 86,600 | |||||||||||||||
Operating
lease obligations
|
12,089 | 3,657 | 4,651 | 3,053 | 728 | |||||||||||||||
Deposits
with stated maturity dates
|
1,886,861 | 1,655,065 | 186,629 | 45,167 | — | |||||||||||||||
Purchase
obligations
|
4,049 | 1,280 | 1,989 | 780 | — | |||||||||||||||
$ | 3,010,834 | $ | 1,978,604 | $ | 665,830 | $ | 260,923 | $ | 105,477 |
As
of and for the Years Ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Balance
at beginning of year
|
$ | 46,049 | $ | 43,817 | $ | 35,483 | $ | 33,401 | $ | 33,009 | ||||||||||
Provision
for loan losses
|
11,077 | 5,000 | 10,250 | 4,725 | 7,760 | |||||||||||||||
Charge-offs:
|
||||||||||||||||||||
Real
estate loans
|
(6,843 | ) | (1,634 | ) | (1,584 | ) | (189 | ) | (5,286 | ) | ||||||||||
Construction
and land loans
|
(1,530 | ) | — | — | — | — | ||||||||||||||
Entertainment
finance loans
|
(2,500 | ) | (2,500 | ) | (395 | ) | (2,180 | ) | (800 | ) | ||||||||||
Franchise
loans
|
— | — | (451 | ) | — | (661 | ) | |||||||||||||
Commercial
and other loans
|
— | — | — | (1,121 | ) | (700 | ) | |||||||||||||
Total
charge-offs
|
(10,873 | ) | (4,134 | ) | (2,430 | ) | (3,490 | ) | (7,447 | ) | ||||||||||
Recoveries:
|
||||||||||||||||||||
Real
estate loans
|
796 | 894 | 88 | 89 | 14 | |||||||||||||||
Entertainment
finance loans
|
470 | 472 | 426 | — | — | |||||||||||||||
Franchise
loans
|
264 | — | — | — | — | |||||||||||||||
Commercial
and other loans
|
— | — | — | 758 | 65 | |||||||||||||||
Total
recoveries
|
1,530 | 1,366 | 514 | 847 | 79 | |||||||||||||||
Net
charge-offs
|
(9,343 | ) | (2,768 | ) | (1,916 | ) | (2,643 | ) | (7,368 | ) | ||||||||||
Balance
at end of the year
|
$ | 47,783 | $ | 46,049 | $ | 43,817 | $ | 35,483 | $ | 33,401 | ||||||||||
Average
loans outstanding during the year
|
$ | 3,100,655 | $ | 2,668,254 | $ | 2,239,261 | $ | 1,606,125 | $ | 1,415,812 | ||||||||||
Loans,
net, at end of the year (1)
|
$ | 3,172,855 | $ | 3,019,417 | $ | 2,567,297 | $ | 1,829,298 | $ | 1,538,825 | ||||||||||
Selected
Ratios:
|
||||||||||||||||||||
Net
charge-offs to average loans outstanding
|
0.30 | % | 0.10 | % | 0.09 | % | 0.16 | % | 0.52 | % | ||||||||||
Net
charge-offs to loans, net (1)
|
0.29 | % | 0.09 | % | 0.07 | % | 0.14 | % | 0.48 | % | ||||||||||
Allowance
for loan losses to loans, net (1)
|
1.51 | % | 1.53 | % | 1.71 | % | 1.94 | % | 2.14 | % | ||||||||||
Allowance
for loan losses to nonaccrual loans
|
125.87 | % | 175.40 | % | 180.59 | % | 242.17 | % | 392.26 | % |
(1)
|
Loans,
before allowance for loan losses and net of premium, deferred loan
origination costs and deferred loan
fees.
|
December
31,
|
||||||||||||||||||||||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||||||||||||||||||||||
Loan Category:
|
Allowance
for
loan
losses
|
%
of loans
(1)
|
Allowance
for
loan
losses
|
%
of loans
(1)
|
Allowance
for
loan
losses
|
%
of loans
(1)
|
Allowance
for
loan
losses
|
%
of loans
(1)
|
Allowance
for
loan
losses
|
%
of loans
(1)
|
||||||||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Secured
by real estate
|
$ | 37,570 | 88 | % | $ | 31,666 | 84 | % | $ | 27,115 | 84 | % | $ | 21,993 | 76 | % | $ | 23,392 | 78 | % | ||||||||||||||||||||
Construction
and land loans
|
7,421 | 9 | % | 6,618 | 12 | % | 7,107 | 12 | % | 1,555 | 10 | % | 2,130 | 9 | % | |||||||||||||||||||||||||
Entertainment
finance
|
1,995 | 2 | % | 5,616 | 3 | % | 6,770 | 3 | % | 7,828 | 5 | % | 4,354 | 6 | % | |||||||||||||||||||||||||
Franchise
|
629 | — | 1,833 | — | 2,685 | 1 | % | 4,032 | 8 | % | 3,185 | 7 | % | |||||||||||||||||||||||||||
Commercial
and other
|
168 | 1 | % | 316 | 1 | % | 140 | — | 80 | 1 | % | 340 | — | |||||||||||||||||||||||||||
Total
|
$ | 47,783 | 100 | % | $ | 46,049 | 100 | % | $ | 43,817 | 100 | % | $ | 35,483 | 100 | % | $ | 33,401 | 100 | % |
(1)
|
Percentage
represents gross loans in category to total gross
loans.
|
|
•
|
the
risk characteristics of various classifications of
loans;
|
|
•
|
general
portfolio trends relative to asset and portfolio
size;
|
|
•
|
asset
categories;
|
|
•
|
potential
credit and geographic
concentrations;
|
|
•
|
delinquency
trends within the loan portfolio;
|
|
•
|
changes
in the volume and severity of past due loans, classified loans and other
loans of concern;
|
|
•
|
historical
loss experience and risks associated with changes in economic, social and
business conditions; and
|
|
•
|
the
underwriting standards in effect when the loan was
made.
|
December
31,
|
||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||
Amount
|
Percent
of
Gross
Portfolio
|
Amount
|
Percent
of
Gross
Portfolio
|
Amount
|
Percent
of
Gross
Portfolio
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
Period
of Delinquency
|
||||||||||||||||||||||||
30 – 59
days
|
$ | 18,886 | 0.60 | % | $ | 10,120 | 0.34 | % | $ | 5,060 | 0.20 | % | ||||||||||||
60 – 89
days
|
6,268 | 0.20 | % | 15,170 | 0.51 | % | 3,678 | 0.14 | % | |||||||||||||||
90 days or
more
|
31,334 | 1.00 | % | 23,937 | 0.80 | % | 22,533 | 0.89 | % | |||||||||||||||
Total
loans delinquent
|
$ | 56,488 | 1.80 | % | $ | 49,227 | 1.65 | % | $ | 31,271 | 1.23 | % |
December
31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Nonaccrual
loans:(1)
|
||||||||||||||||||||
Real
estate
|
$ | 29,145 | $ | 14,091 | $ | 6,117 | $ | 7,057 | $ | 4,686 | ||||||||||
Construction
and land
|
8,804 | — | — | — | — | |||||||||||||||
Franchise
|
— | 4,549 | 7,366 | 3,874 | 799 | |||||||||||||||
Entertainment
finance
|
13 | 7,614 | 10,780 | 3,721 | 3,030 | |||||||||||||||
Total nonaccrual
loans
|
37,962 | 26,254 | 24,263 | 14,652 | 8,515 | |||||||||||||||
Other
real estate and other assets owned, net
|
19,396 | 6,729 | 3,960 | — | 7,048 | |||||||||||||||
Total nonperforming
assets
|
57,358 | 32,983 | 28,223 | 14,652 | 15,563 | |||||||||||||||
Accruing
loans past-due 90 days or more with respect to principal or
interest
|
— | — | — | — | — | |||||||||||||||
Performing
troubled debt restructurings
|
7,802 | 7,994 | 10,758 | 3,096 | 4,709 | |||||||||||||||
$ | 65,160 | $ | 40,977 | $ | 38,981 | $ | 17,748 | $ | 20,272 | |||||||||||
Nonaccrual
loans to total gross loans
|
1.20 | % | 0.88 | % | 0.95 | % | 0.80 | % | 0.55 | % | ||||||||||
Allowance
for loan losses to nonaccrual loans
|
125.87 | % | 175.40 | % | 180.59 | % | 242.17 | % | 392.26 | % | ||||||||||
Nonperforming
assets to total assets
|
1.62 | % | 0.97 | % | 0.92 | % | 0.63 | % | 0.86 | % |
(1)
|
Includes
two loans with a net book balance of $6.3 million that were nonperforming
troubled debt restructurings in 2007, five loans with a net book balance
of $5.4 million that were nonperforming troubled debt restructurings in
2006, six loans with a net book balance of $8.5 million that were
nonperforming troubled debt restructurings in 2005, four loans with a net
book balance of $5.7 million that were nonperforming troubled debt
restructurings in 2004, and three loans with a net book balance of $3.8
million that were nonperforming troubled debt restructurings in
2003.
|
Changes
in Interest
rates (Basis
Points)
|
Percentage
Change in Net
Interest Income (12
Months)
|
|
+
200 Over One Year
|
-8.30%
|
|
+
100 Over One Year
|
-5.20%
|
|
-
100 Over One Year
|
7.06%
|
|
-
200 Over One Year
|
14.11%
|
Maturing
or Repricing in
|
||||||||||||||||||||||||
3
Months or
less
|
After
3 Months
But
Within
1 Year
|
After
1 Year But
Within 5
Years
|
After
5
Years
|
Non-Interest
Sensitive
|
Total
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Loans
(1)
|
$ | 991,738 | $ | 584,762 | $ | 1,521,876 | $ | 74,479 | $ | — | $ | 3,172,855 | ||||||||||||
Cash
and cash equivalents
|
6,310 | 200 | — | — | 2,434 | 8,944 | ||||||||||||||||||
Investment
securities available-for-sale
|
26,773 | 19,492 | 50,239 | 21,420 | — | 117,924 | ||||||||||||||||||
Investment
securities held-to-maturity
|
19,478 | 41,397 | 98,148 | — | — | 159,023 | ||||||||||||||||||
Stock
in Federal Home Loan Bank
|
53,497 | — | — | — | — | 53,497 | ||||||||||||||||||
Non-interest
earning assets less allowance for loan losses
|
— | — | — | — | 38,976 | 38,976 | ||||||||||||||||||
Total
assets
|
$ | 1,097,796 | $ | 645,851 | $ | 1,670,263 | $ | 95,899 | $ | 41,410 | $ | 3,551,219 | ||||||||||||
Liabilities
and Shareholders’ Equity
|
||||||||||||||||||||||||
Time
certificates under $100,000
|
$ | 347,620 | $ | 406,570 | $ | 30,507 | $ | — | $ | — | $ | 784,697 | ||||||||||||
Time
certificates $100,000 and more
|
459,329 | 441,546 | 201,289 | — | — | 1,102,164 | ||||||||||||||||||
Money
market and passbook accounts
|
251,660 | — | — | — | — | 251,660 | ||||||||||||||||||
Demand
deposit accounts
|
26,518 | — | — | — | 16,819 | 43,337 | ||||||||||||||||||
FHLB
advances and other borrowings
|
178,952 | 139,650 | 684,484 | 18,149 | — | 1,021,235 | ||||||||||||||||||
Other
liabilities
|
— | — | — | — | 33,959 | 33,959 | ||||||||||||||||||
Junior
subordinated debentures
|
25,800 | 30,900 | — | 29,900 | — | 86,600 | ||||||||||||||||||
Shareholders’
equity
|
— | — | — | — | 227,567 | 227,567 | ||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 1,289,879 | $ | 1,018,666 | $ | 916,280 | $ | 48,049 | $ | 278,345 | $ | 3,551,219 | ||||||||||||
Net
repricing assets over (under) repricing liabilities equals interest rate
sensitivity GAP
|
$ | (192,083 | ) | $ | (372,815 | ) | $ | 753,983 | $ | 47,850 | $ | (236,935 | ) | |||||||||||
Cumulative
interest rate sensitivity GAP
|
$ | (192,083 | ) | $ | (564,898 | ) | $ | 189,085 | $ | 236,935 | $ | — | ||||||||||||
Cumulative
GAP as a percentage of total assets
|
-5.41 | % | -15.91 | % | 5.32 | % | 6.67 | % | 0.00 | % |
(1)
|
Approximately
49.3% of our loan portfolio was comprised of adjustable rate loans at
December 31, 2007, and approximately 46.5% of the loan portfolio was
comprised of hybrid loans, which become adjustable rate loans after an
initial fixed rate period of three or five years. Our adjustable rate
loans generally re-price on a quarterly or semi-annual basis with
increases generally limited to maximum adjustments of 2% per year up to 5%
for the life of the loan. Nonaccrual loans of approximately $38.0 million
are assumed to reprice after five
years.
|
Page
|
|
Management’s
Report on Internal Control Over Financial Reporting
|
43
|
Reports
of Independent Registered Public Accounting Firm
|
44
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
46
|
Consolidated
Statements of Income for the Years Ended December 31, 2007, 2006 and
2005
|
47
|
Consolidated
Statements of Changes in Shareholders’ Equity and Comprehensive Income for
the Years Ended December 31, 2007, 2006 and 2005
|
48
|
Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and
2005
|
49
|
Notes
to Consolidated Financial Statements
|
50
|
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in thousands, except share
amounts)
|
||||||||
Assets | ||||||||
Cash
and cash
equivalents
|
$ | 8,944 | $ | 30,448 | ||||
Investment
securities available-for-sale, at fair value
|
117,924 | 99,527 | ||||||
Investment
securities held-to-maturity, at amortized cost (fair value approximates
$158,509 and $190,475 in 2007 and 2006, respectively)
|
159,023 | 193,512 | ||||||
Stock
in Federal Home Loan Bank
|
53,497 | 48,984 | ||||||
Loans,
net (net of allowance for loan losses of $47,783 and $46,049 in 2007 and
2006, respectively)
|
3,125,072 | 2,973,368 | ||||||
Interest
receivable
|
20,841 | 20,753 | ||||||
Other
real estate and other assets owned, net
|
19,396 | 6,729 | ||||||
Premises
and equipment, net
|
8,550 | 7,851 | ||||||
Deferred
income taxes
|
12,148 | 11,513 | ||||||
Goodwill
|
3,118 | 3,118 | ||||||
Other
assets
|
22,706 | 19,707 | ||||||
Total
assets
|
$ | 3,551,219 | $ | 3,415,510 | ||||
Liabilities
and Shareholders’ Equity
|
||||||||
Liabilities:
|
||||||||
Deposit
accounts
|
$ | 2,181,858 | $ | 2,059,405 | ||||
Federal
Home Loan Bank advances and other borrowings
|
1,021,235 | 1,010,000 | ||||||
Accounts
payable and other liabilities
|
33,959 | 38,168 | ||||||
Junior
subordinated debentures
|
86,600 | 86,600 | ||||||
Total
liabilities
|
3,323,652 | 3,194,173 | ||||||
Commitments
and contingencies (Note 13)
|
||||||||
Shareholders’
equity:
|
||||||||
Preferred
stock, 5,000,000 shares authorized, none issued
|
— | — | ||||||
Contributed
capital – common stock, $.01 par value; 20,000,000 shares authorized,
9,142,256 and 9,065,672 issued in 2007 and 2006,
respectively
|
85,009 | 82,073 | ||||||
Retained
earnings
|
255,947 | 243,823 | ||||||
Accumulated
other comprehensive income, net
|
267 | 35 | ||||||
341,223 | 325,931 | |||||||
Less
treasury stock, at cost – 3,995,634 and 3,803,969 shares in 2007 and 2006,
respectively
|
(113,656 | ) | (104,594 | ) | ||||
Total
shareholders’ equity
|
227,567 | 221,337 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 3,551,219 | $ | 3,415,510 |
Years
Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in thousands, except per share
amounts)
|
||||||||||||
Interest
income:
|
||||||||||||
Loans
receivable, including fees
|
$ | 233,749 | $ | 207,320 | $ | 159,720 | ||||||
Cash,
cash equivalents and investment securities
|
17,522 | 19,181 | 18,438 | |||||||||
Total
interest income
|
251,271 | 226,501 | 178,158 | |||||||||
Interest
expense:
|
||||||||||||
Deposit
accounts
|
110,111 | 85,156 | 53,807 | |||||||||
Federal
Home Loan Bank advances and other borrowings
|
46,134 | 38,722 | 25,508 | |||||||||
Junior
subordinated debentures
|
8,338 | 8,197 | 7,171 | |||||||||
Total
interest expense
|
164,583 | 132,075 | 86,486 | |||||||||
Net
interest income before provision for loan losses
|
86,688 | 94,426 | 91,672 | |||||||||
Provision
for loan losses
|
11,077 | 5,000 | 10,250 | |||||||||
Net
interest income after provision for loan losses
|
75,611 | 89,426 | 81,422 | |||||||||
Non-interest
income:
|
||||||||||||
Gain
on sale of loans, net
|
— | — | 4,911 | |||||||||
Late
and collection fees
|
1,119 | 970 | 536 | |||||||||
Other
|
2,014 | 1,802 | 1,127 | |||||||||
Total
non-interest income
|
3,133 | 2,772 | 6,574 | |||||||||
Non-interest
expense:
|
||||||||||||
Compensation
and benefits
|
23,899 | 21,265 | 21,737 | |||||||||
Occupancy
and equipment
|
7,832 | 7,439 | 7,177 | |||||||||
Other
|
19,633 | 17,743 | 17,344 | |||||||||
Total
general and administrative
|
51,364 | 46,447 | 46,258 | |||||||||
Other
real estate and other assets owned expense, net
|
780 | 334 | 204 | |||||||||
Provision
for losses on other real estate and other assets owned
|
300 | — | — | |||||||||
Loss
(gain) on sale of other real estate and other assets owned
|
45 | 35 | (11 | ) | ||||||||
Total
real estate and other assets owned expense
|
1,125 | 369 | 193 | |||||||||
Total
non-interest expense
|
52,489 | 46,816 | 46,451 | |||||||||
Income
before provision for income taxes
|
26,255 | 45,382 | 41,545 | |||||||||
Provision
for income taxes
|
10,635 | 18,493 | 17,482 | |||||||||
NET
INCOME
|
$ | 15,620 | $ | 26,889 | $ | 24,063 | ||||||
BASIC
EARNINGS PER SHARE
|
$ | 2.85 | $ | 4.83 | $ | 4.19 | ||||||
DILUTED
EARNINGS PER SHARE
|
$ | 2.81 | $ | 4.71 | $ | 4.04 |
|
See
accompanying notes to the consolidated financial
statements.
|
Comprehensive
Income
|
||||||||||||||||||||||||||||||||||||||||||||
Common
Stock
|
Reclassification
of
|
|||||||||||||||||||||||||||||||||||||||||||
Number
of shares
|
Shareholders’
Equity
|
Realized
Gains
|
||||||||||||||||||||||||||||||||||||||||||
Gross
|
Net
|
Contributed
Capital
|
Accumulated
|
Unrealized
|
Previously
|
|||||||||||||||||||||||||||||||||||||||
Shares
|
Shares
|
Total
|
Other
|
Treasury
|
Gain
(Loss)
|
Recognized
in
|
Total
|
|||||||||||||||||||||||||||||||||||||
Issued
and
|
Treasury
|
Issued
and
|
Share
|
Earned
|
Contributed
|
Retained
|
Comprehensive
|
Stock,
|
Net
|
on
Securities,
|
Comprehensive
|
Comprehensive
|
||||||||||||||||||||||||||||||||
Outstanding
|
Shares
|
Outstanding
|
Capital
|
Compensation
|
Capital
|
Earnings
|
Income
(Loss)
|
At
Cost
|
Total
|
Income
|
Net
of Tax
|
Income,
Net of Tax
|
Income
|
|||||||||||||||||||||||||||||||
(in
thousands except share amounts)
|
||||||||||||||||||||||||||||||||||||||||||||
Balance
at January 1, 2005
|
8,703,894 | (3,154,290 | ) | 5,549,604 | $ | 67,127 | $ | 2,200 | $ | 69,327 | $ | 196,032 | $ | 78 | $ | (70,713 | ) | $ | 194,724 | |||||||||||||||||||||||||
Issuance
of common stock - employee stock options
|
275,104 | — | 275,104 | 8,656 | — | 8,656 | — | — | — | 8,656 | ||||||||||||||||||||||||||||||||||
Earned
compensation from Supplemental Executive Retirement Plan /Recognition and
Retention Plan, net
|
— | 9,333 | 9,333 | — | 21 | 21 | — | — | 84 | 105 | ||||||||||||||||||||||||||||||||||
Common
stock repurchased
|
— | (431,738 | ) | (431,738 | ) | — | — | — | — | — | (22,625 | ) | (22,625 | ) | ||||||||||||||||||||||||||||||
Net
income
|
— | — | — | — | — | — | 24,063 | — | — | 24,063 | ||||||||||||||||||||||||||||||||||
Other
comprehensive income
|
— | — | — | — | — | — | — | (442 | ) | — | (442 | ) | $ | 24,063 | $ | (442 | ) | $ | — | $ | 23,621 | |||||||||||||||||||||||
Balance
at December 31, 2005
|
8,978,998 | (3,576,695 | ) | 5,402,303 | $ | 75,783 | $ | 2,221 | $ | 78,004 | $ | 220,095 | $ | (364 | ) | $ | (93,254 | ) | $ | 204,481 | ||||||||||||||||||||||||
Issuance
of common stock-employee stock options, net
|
86,674 | — | 86,674 | 3,692 | — | 3,692 | — | — | — | 3,692 | ||||||||||||||||||||||||||||||||||
Earned
compensation from Supplemental Executive Retirement Plan / Recognition and
Retention Plan, net
|
— | 1,735 | 1,735 | — | 111 | 111 | — | — | (75 | ) | 36 | |||||||||||||||||||||||||||||||||
Common
stock repurchased
|
— | (229,009 | ) | (229,009 | ) | — | — | — | — | — | (11,265 | ) | (11,265 | ) | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.60 per common share)
|
— | — | — | — | — | — | (3,161 | ) | — | — | (3,161 | ) | ||||||||||||||||||||||||||||||||
Stock
compensation expense recognized in earnings
|
— | — | — | — | 266 | 266 | — | — | — | 266 | ||||||||||||||||||||||||||||||||||
Net
income
|
— | — | — | — | — | — | 26,889 | — | — | 26,889 | ||||||||||||||||||||||||||||||||||
Other
comprehensive income
|
— | — | — | — | — | — | — | 399 | — | 399 | $ | 26,889 | $ | 399 | $ | — | $ | 27,288 | ||||||||||||||||||||||||||
Balance
at December 31, 2006
|
9,065,672 | (3,803,969 | ) | 5,261,703 | $ | 79,475 | $ | 2,598 | $ | 82,073 | $ | 243,823 | $ | 35 | $ | (104,594 | ) | $ | 221,337 | |||||||||||||||||||||||||
Issuance
of common stock- employee stock options, net
|
76,584 | — | 76,584 | 2,567 | — | 2,567 | — | — | — | 2,567 | ||||||||||||||||||||||||||||||||||
Earned
compensation from Supplemental Executive Retirement Plan / Recognition and
Retention Plan / Deferred Compensation Plan, net
|
— | (4,190 | ) | (4,190 | ) | — | 158 | 158 | — | — | (173 | ) | (15 | ) | ||||||||||||||||||||||||||||||
Common
stock repurchased
|
— | (187,475 | ) | (187,475 | ) | — | — | — | — | — | (8,889 | ) | (8,889 | ) | ||||||||||||||||||||||||||||||
Cash
dividends declared ($0.64 per common share)
|
— | — | — | — | — | — | (3,496 | ) | — | — | (3,496 | ) | ||||||||||||||||||||||||||||||||
Stock
compensation expense recognized in earnings
|
— | — | — | — | 211 | 211 | — | — | — | 211 | ||||||||||||||||||||||||||||||||||
Net
income
|
— | — | — | — | — | — | 15,620 | — | — | 15,620 | ||||||||||||||||||||||||||||||||||
Other
comprehensive income
|
— | — | — | — | — | — | — | 232 | — | 232 | $ | 15,620 | $ | 232 | $ | — | $ | 15,852 | ||||||||||||||||||||||||||
Balance
at December 31, 2007
|
9,142,256 | (3,995,634 | ) | 5,146,622 | $ | 82,042 | $ | 2,967 | $ | 85,009 | $ | 255,947 | $ | 267 | $ | (113,656 | ) | $ | 227,567 |
Years
Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Cash
Flows From Operating Activities:
|
||||||||||||
Net
Income
|
$ | 15,620 | $ | 26,889 | $ | 24,063 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Depreciation
and amortization of premises and equipment
|
2,973 | 2,690 | 2,682 | |||||||||
Amortization
of premium on purchased loans
|
4,946 | 4,732 | 3,114 | |||||||||
Accretion
of deferred loan origination fees, net of costs
|
(2,392 | ) | (2,846 | ) | (2,897 | ) | ||||||
Provision
for loan losses
|
11,077 | 5,000 | 10,250 | |||||||||
Provision
for losses on other real estate owned
|
300 | — | — | |||||||||
Gain
on sale of loans, net
|
— | — | (4,911 | ) | ||||||||
Deferred
income tax (benefit) expense
|
(799 | ) | 926 | (1,940 | ) | |||||||
Other,
net
|
(2,811 | ) | (2,020 | ) | 2,928 | |||||||
Increase
in interest receivable
|
(88 | ) | (4,466 | ) | (5,592 | ) | ||||||
(Increase)
decrease in other assets
|
(2,999 | ) | 1,198 | (1,247 | ) | |||||||
(Decrease)
increase in accounts payable and other liabilities
|
(4,247 | ) | 5,231 | 11,639 | ||||||||
Net
cash provided by operating
activities
|
21,580 | 37,334 | 38,089 | |||||||||
Cash
Flows From Investing Activities:
|
||||||||||||
Purchases
of investment securities available-for-sale
|
(82,195 | ) | (44,331 | ) | (42,770 | ) | ||||||
Proceeds
from the maturity and calls of investment securities
available-for-sale
|
65,334 | 38,159 | 16,238 | |||||||||
Purchases
of investment securities held-to-maturity
|
— | (7,771 | ) | — | ||||||||
Proceeds
from the maturity and redemption of investment securities
held-to-maturity
|
34,434 | 48,019 | 62,033 | |||||||||
Purchase
of stock in Federal Home Loan Bank
|
(1,887 | ) | (2,675 | ) | (19,252 | ) | ||||||
Purchase
of loans
|
(47,343 | ) | (497,785 | ) | (723,822 | ) | ||||||
Proceeds
from the sale of franchise loans
|
— | — | 115,508 | |||||||||
(Increase)
decrease in loans, net
|
(135,888 | ) | 38,072 | (130,937 | ) | |||||||
Proceeds
from sale of other real estate owned
|
4,400 | 135 | 81 | |||||||||
Cash
paid for capital expenditures
|
(3,832 | ) | (3,823 | ) | (2,755 | ) | ||||||
Net
cash used in investing
activities
|
(166,977 | ) | (432,000 | ) | (725,676 | ) | ||||||
Cash
Flows From Financing Activities:
|
||||||||||||
Proceeds
from exercise of employee stock options
|
2,567 | 3,692 | 4,650 | |||||||||
Cash
paid to acquire treasury stock
|
(9,062 | ) | (11,374 | ) | (22,625 | ) | ||||||
Cash
dividends paid
|
(3,300 | ) | (2,371 | ) | — | |||||||
Increase
in deposit accounts
|
122,453 | 323,977 | 303,396 | |||||||||
Net
(repayments of) proceeds from short-term borrowings
|
(77,498 | ) | 89,293 | (77,795 | ) | |||||||
Proceeds
from long-term borrowings
|
316,000 | 89,869 | 586,215 | |||||||||
Repayments
of long-term borrowings
|
(227,267 | ) | (161,719 | ) | (100,087 | ) | ||||||
Net
cash provided by financing
activities
|
123,893 | 331,367 | 693,754 | |||||||||
Net
(decrease) increase in cash and cash
equivalents
|
(21,504 | ) | (63,299 | ) | 6,167 | |||||||
Cash
and cash equivalents, beginning of
period
|
30,448 | 93,747 | 87,580 | |||||||||
Cash
and cash equivalents, end of
period
|
$ | 8,944 | $ | 30,448 | $ | 93,747 | ||||||
Supplemental
Cash Flow Information:
|
||||||||||||
Cash
paid during the period for interest
|
$ | 164,495 | $ | 124,755 | $ | 82,326 | ||||||
Cash
paid during the period for income taxes
|
$ | 11,089 | $ | 16,668 | $ | 10,033 | ||||||
Non-cash
Investing Transactions:
|
||||||||||||
Loans
transferred to other real estate and other assets owned
|
$ | 17,896 | $ | 3,499 | $ | 4,030 | ||||||
Loans
to facilitate the sale of other real estate owned
|
$ | — | $ | 560 | $ | — | ||||||
Cash
dividends declared but not yet paid
|
$ | 828 | $ | 790 | $ | — |
(in
thousands, except per share amounts)
|
||||
Net
income, as reported
|
$ | 24,063 | ||
Less:
Stock-based employee compensation expense determined under the fair value
method, net of tax
|
(4,189 | ) | ||
Pro
forma net income
|
$ | 19,874 | ||
Earnings
per share:
|
||||
Basic
– as reported
|
$ | 4.19 | ||
Basic
– pro forma
|
$ | 3.46 | ||
Diluted
– as reported
|
$ | 4.04 | ||
Diluted
– pro forma
|
$ | 3.33 |
Weighted-Average
Assumptions for Option Grants
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Dividend
Yield
|
1.87 | % | 1.17 | % | 0.00 | % | ||||||
Expected
Volatility
|
24.31 | % | 22.86 | % | 37.59 | % | ||||||
Risk-Free
Interest
Rates
|
4.67 | % | 4.94 | % | 4.33 | % | ||||||
Expected
Lives
|
5
Years
|
5
Years
|
5.5
Years
|
|||||||||
Weighted-Average
Fair Value
|
$ | 9.12 | $ | 13.68 | $ | 20.69 |
|
|
Gross
Unrealized
|
||||||||||||||
Amortized
Cost
|
Fair
Value
|
Gains
|
Losses
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
December
31, 2007:
|
||||||||||||||||
Investment securities
available-for-sale:
|
||||||||||||||||
U.S. agency
securities
|
$ | 9,997 | $ | 9,986 | $ | 2 | $ | 13 | ||||||||
Collateralized mortgage
obligations
|
83,260 | 84,264 | 1,046 | 42 | ||||||||||||
Mortgage-backed
securities
|
4,453 | 4,489 | 36 | — | ||||||||||||
Corporate
bonds
|
13,437 | 12,582 | — | 855 | ||||||||||||
Residual interest in
securitized loans
|
1,318 | 1,318 | — | — | ||||||||||||
Equity
securities
|
5,013 | 5,285 | 281 | 9 | ||||||||||||
Total investment securities
available-for-sale
|
$ | 117,478 | $ | 117,924 | $ | 1,365 | $ | 919 | ||||||||
Investment securities
held-to-maturity:
|
||||||||||||||||
Mortgage-backed
securities
|
$ | 159,023 | $ | 158,509 | $ | 305 | $ | 819 | ||||||||
December
31, 2006:
|
||||||||||||||||
Investment securities
available-for-sale:
|
||||||||||||||||
U.S. agency
securities
|
$ | 62,554 | $ | 62,184 | $ | 3 | $ | 373 | ||||||||
Collateralized mortgage
obligations
|
34,991 | 35,127 | 163 | 27 | ||||||||||||
Residual interest in
securitized loans
|
1,911 | 2,039 | 128 | — | ||||||||||||
Equity
securities
|
13 | 177 | 170 | 6 | ||||||||||||
Total investment securities
available-for-sale
|
$ | 99,469 | $ | 99,527 | $ | 464 | $ | 406 | ||||||||
Investment securities
held-to-maturity:
|
||||||||||||||||
Mortgage-backed
securities
|
$ | 193,512 | $ | 190,475 | $ | 105 | $ | 3,142 |
Available-for-Sale
|
Held-to-Maturity
|
|||||||||||||||
Amortized
Cost
|
Estimated
Fair
Value
|
Amortized
Cost
|
Estimated
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Due
in one year or
less
|
$ | 9,998 | $ | 10,171 | $ | — | $ | — | ||||||||
Due
after one year through five years
|
1,331 | 1,318 | — | — | ||||||||||||
Due
after five years through ten years
|
22,182 | 22,494 | — | — | ||||||||||||
Due
after ten
years
|
83,967 | 83,941 | 159,023 | 158,509 | ||||||||||||
$ | 117,478 | $ | 117,924 | $ | 159,023 | $ | 158,509 |
Less
than 12 months
|
More
than 12 months
|
Total
|
||||||||||||||||||||||
Estimated
Fair
Value
|
Unrealized
Losses
|
Estimated
Fair
Value
|
Unrealized
Losses
|
Estimated
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
December
31, 2007:
|
(in
thousands)
|
|||||||||||||||||||||||
Investment
securities available-for-sale:
|
||||||||||||||||||||||||
U.S. agency
securities
|
$ | 3,986 | $ | 13 | $ | — | $ | — | $ | 3,986 | $ | 13 | ||||||||||||
Collateralized mortgage
obligations
|
17,062 | 42 | — | — | 17,062 | 42 | ||||||||||||||||||
Corporate bonds
|
12,582 | 855 | — | — | 12,582 | 855 | ||||||||||||||||||
Equity
securities
|
— | — | 2 | 9 | 2 | 9 | ||||||||||||||||||
Total investment securities
available-for-sale
|
$ | 33,630 | $ | 910 | $ | 2 | $ | 9 | $ | 33,632 | $ | 919 | ||||||||||||
Investment
securities held-to-maturity:
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | 24,438 | $ | 2 | $ | 81,921 | $ | 817 | $ | 106,359 | $ | 819 |
December
31, 2006:
|
||||||||||||||||||||||||
Investment
securities available-for-sale:
|
||||||||||||||||||||||||
U.S. agency
securities
|
$ | — | $ | — | $ | 56,214 | $ | 373 | $ | 56,214 | $ | 373 | ||||||||||||
Collateralized mortgage
obligations
|
9,022 | 27 | — | — | 9,022 | 27 | ||||||||||||||||||
Equity
securities
|
— | — | 4 | 6 | 4 | 6 | ||||||||||||||||||
Total investment securities
available-for-sale
|
$ | 9,022 | $ | 27 | $ | 56,218 | $ | 379 | $ | 65,240 | $ | 406 | ||||||||||||
Investment
securities held-to-maturity:
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
$ | — | $ | — | $ | 182,953 | $ | 3,142 | $ | 182,953 | $ | 3,142 |
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Real
estate
loans
|
$ | 2,627,801 | $ | 2,524,182 | ||||
Construction
and land
loans
|
421,110 | 370,473 | ||||||
Entertainment
finance
loans
|
76,342 | 74,204 | ||||||
Franchise
loans
|
2,718 | 9,334 | ||||||
Commercial
and other
loans
|
14,631 | 9,346 | ||||||
3,142,602 | 2,987,539 | |||||||
Unamortized
premium
|
13,776 | 18,138 | ||||||
Deferred
loan origination costs,
net
|
16,477 | 13,740 | ||||||
3,172,855 | 3,019,417 | |||||||
Allowance
for loan
losses
|
(47,783 | ) | (46,049 | ) | ||||
$ | 3,125,072 | $ | 2,973,368 |
As
of and for the Years Ended
December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Balance
at beginning of year
|
$ | 46,049 | $ | 43,817 | $ | 35,483 | ||||||
Provision
for loan losses
|
11,077 | 5,000 | 10,250 | |||||||||
Charge-offs:
|
||||||||||||
Real
estate loans
|
(6,843 | ) | (1,634 | ) | (1,584 | ) | ||||||
Construction
and land loans
|
(1,530 | ) | — | — | ||||||||
Entertainment
finance loans
|
(2,500 | ) | (2,500 | ) | (395 | ) | ||||||
Franchise
loans
|
— | — | (451 | ) | ||||||||
Total
charge-offs
|
(10,873 | ) | (4,134 | ) | (2,430 | ) | ||||||
Recoveries:
|
||||||||||||
Real
estate loans
|
796 | 894 | 88 | |||||||||
Entertainment
finance loans
|
470 | 472 | 426 | |||||||||
Franchise
loans
|
264 | — | — | |||||||||
Total
recoveries
|
1,530 | 1,366 | 514 | |||||||||
Net
charge-offs
|
(9,343 | ) | (2,768 | ) | (1,916 | ) | ||||||
Balance
at end of year
|
$ | 47,783 | $ | 46,049 | $ | 43,817 |
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Other
real estate owned held for
sale
|
$ | 14,317 | $ | 6,729 | ||||
Other
assets owned held for
sale
|
5,079 | — | ||||||
Less:
valuation
allowance
|
— | — | ||||||
Other
real estate owned,
net
|
$ | 19,396 | $ | 6,729 |
As
of and for the Years Ended
December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Balance
at beginning of year
|
$ | — | $ | — | $ | — | ||||||
Provision
for losses on other real estate owned
|
300 | — | — | |||||||||
Charge-offs
on other real estate owned
|
(300 | ) | — | — | ||||||||
Balance
at end of year
|
$ | — | $ | — | $ | — |
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Furniture,
fixtures and equipment
|
$ | 15,277 | $ | 16,876 | ||||
Leasehold
improvements
|
4,551 | 6,327 | ||||||
Automobiles
|
1,579 | 1,476 | ||||||
21,407 | 24,679 | |||||||
Accumulated
depreciation and amortization
|
(12,857 | ) | (16,828 | ) | ||||
$ | 8,550 | $ | 7,851 |
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Non-interest
demand accounts
|
$ | 16,819 | $ | 23,171 | ||||
Interest
demand accounts
|
26,518 | 24,523 | ||||||
Money
market and passbook accounts
|
251,660 | 210,236 | ||||||
Time
certificates under $100,000
|
784,697 | 784,732 | ||||||
Time
certificates $100,000 and over
|
1,102,164 | 1,016,743 | ||||||
$ | 2,181,858 | $ | 2,059,405 |
Year
of Maturity
|
Amount
|
|||
(in
thousands)
|
||||
2008
|
$ | 1,655,065 | ||
2009
|
53,905 | |||
2010
|
132,724 | |||
2011
|
41,271 | |||
2012
|
3,896 | |||
$ | 1,886,861 |
Year
of Maturity
|
Amount
|
|||
(in
thousands)
|
||||
2008
|
$ | 318,602 | ||
2009
|
164,646 | |||
2010
|
307,915 | |||
2011
|
145,002 | |||
2012
|
66,921 | |||
Thereafter
|
18,149 | |||
$ | 1,021,235 |
December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Short-Term
Borrowings:
|
||||||||||||
Maximum
amount outstanding at any month-end during the year
|
$ | 228,000 | $ | 177,498 | $ | 112,000 | ||||||
Weighted-average
daily balance outstanding
|
$ | 145,458 | $ | 15,094 | $ | 38,566 | ||||||
Weighted-average
rate paid during the year
|
5.14 | % | 4.96 | % | 3.19 | % | ||||||
Weighted-average
rate on balance at year-end
|
4.57 | % | 5.40 | % | 4.18 | % | ||||||
Balance
at
year-end
|
$ | 130,000 | $ | 177,498 | $ | 88,205 | ||||||
Interest
expense
|
$ | 7,470 | $ | 749 | $ | 1,230 | ||||||
Long-Term
Borrowings:
|
||||||||||||
Maximum
amount outstanding at any month-end during the year
|
$ | 899,224 | $ | 973,571 | $ | 906,457 | ||||||
Weighted-average
daily balance outstanding
|
$ | 866,003 | $ | 911,822 | $ | 668,825 | ||||||
Weighted-average
rate paid during the year
|
4.46 | % | 4.17 | % | 3.63 | % | ||||||
Weighted-average
rate on balance at year-end
|
4.64 | % | 4.25 | % | 4.00 | % | ||||||
Balance
at
year-end
|
$ | 891,235 | $ | 832,502 | $ | 904,352 | ||||||
Interest
expense
|
$ | 38,664 | $ | 37,973 | $ | 24,278 |
Number
of Options
|
Weighted-Average
Exercise
Price
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Options
outstanding at the beginning of the year
|
545,984 | 630,818 | $ | 35.73 | $ | 35.61 | ||||||||||
Options
granted during the year
|
103,000 | 7,250 | $ | 36.34 | $ | 51.10 | ||||||||||
Options
exercised during the year
|
(76,584 | ) | (86,674 | ) | $ | 21.79 | $ | 35.36 | ||||||||
Options
forfeited during the year
|
(2,000 | ) | (5,410 | ) | $ | 47.92 | $ | 48.11 | ||||||||
Options
outstanding at the end of the year
|
570,400 | 545,984 | $ | 37.67 | $ | 35.73 | ||||||||||
Options
exercisable at the end of the year
|
464,068 | 538,484 | $ | 37.87 | $ | 35.50 |
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Components
of the deferred tax asset:
|
||||||||
Allowance
for loan losses
|
$ | 20,091 | $ | 18,933 | ||||
Accrued
expenses
|
3,641 | 3,462 | ||||||
State
income taxes
|
661 | 1,314 | ||||||
Other
|
3,752 | 939 | ||||||
Total
deferred tax assets
|
28,145 | 24,648 | ||||||
Components
of the deferred tax liability:
|
||||||||
Deferred
loan origination costs
|
10,761 | 9,167 | ||||||
FHLB
stock dividends
|
5,049 | 3,945 | ||||||
Unrealized
gain on investment securities available-for-sale
|
187 | 23 | ||||||
Total
deferred tax liabilities
|
15,997 | 13,135 | ||||||
Net
deferred tax asset
|
$ | 12,148 | $ | 11,513 |
Years
Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Current
provision:
|
||||||||||||
Federal
|
$ | 8,927 | $ | 13,678 | $ | 14,709 | ||||||
State
|
2,507 | 3,889 | 4,713 | |||||||||
11,434 | 17,567 | 19,422 | ||||||||||
Deferred
(benefit) provision:
|
||||||||||||
Federal
|
(468 | ) | 540 | (1,448 | ) | |||||||
State
|
(331 | ) | 386 | (492 | ) | |||||||
(799 | ) | 926 | (1,940 | ) | ||||||||
$ | 10,635 | $ | 18,493 | $ | 17,482 |
Years
Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Federal
statutory income tax rate
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
State
income tax, net of federal income tax benefit
|
7.0 | % | 7.0 | % | 7.0 | % | ||||||
State
income tax credit and other benefits
|
(1.5 | )% | (1.3 | )% | — | |||||||
Effective
income tax rate
|
40.5 | % | 40.7 | % | 42.0 | % |
Amount
|
||||
(in
thousands)
|
||||
Unrecognized
tax benefit at adoption, January 1
|
$ | — | ||
Gross
increases — tax positions in prior period
|
1,007 | |||
Gross
decreases — tax positions in prior period
|
— | |||
Gross
increases — tax positions in current period
|
233 | |||
Gross
decreases — tax positions in current period
|
— | |||
Settlements
|
— | |||
Lapse
of statute of limitations
|
— | |||
Unrecognized
tax benefit, December 31
|
$ | 1,240 |
(in
thousands)
|
||||
2008
|
$ | 3,657 | ||
2009
|
2,587 | |||
2010
|
2,064 | |||
2011
|
1,887 | |||
2012
|
1,166 | |||
Thereafter
|
728 | |||
Total
|
12,089 | |||
Sub-Lease
income
|
(556 | ) | ||
Net
future minimum lease payments
|
$ | 11,533 |
Actual
|
Minimum
Requirement
for
Capital Adequacy Purposes
|
Capital
Required to
Maintain
“Well
Capitalized” Designation
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
As of December 31, 2007
|
||||||||||||||||||||||||
Total
capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
$ | 346,687 | 11.3 | % | $ | 245,654 | 8.0 | % | $ | 307,068 | 10.0 | % | ||||||||||||
Imperial
Capital Bank
|
$ | 331,141 | 10.9 | % | $ | 244,095 | 8.0 | % | $ | 305,119 | 10.0 | % | ||||||||||||
Tier
I capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
$ | 298,909 | 9.7 | % | $ | 122,828 | 4.0 | % | $ | 184,242 | 6.0 | % | ||||||||||||
Imperial
Capital Bank
|
$ | 292,879 | 9.6 | % | $ | 122,048 | 4.0 | % | $ | 183,072 | 6.0 | % | ||||||||||||
Tier
I capital (to average total assets)
|
||||||||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
$ | 298,909 | 8.4 | % | $ | 141,680 | 4.0 | % | $ | 177,100 | 5.0 | % | ||||||||||||
Imperial
Capital Bank
|
$ | 292,879 | 8.3 | % | $ | 140,919 | 4.0 | % | $ | 176,149 | 5.0 | % | ||||||||||||
As of December 31, 2006
|
||||||||||||||||||||||||
Total
capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
$ | 337,868 | 11.9 | % | $ | 227,517 | 8.0 | % | $ | 284,396 | 10.0 | % | ||||||||||||
Imperial
Capital Bank
|
$ | 325,500 | 11.5 | % | $ | 226,322 | 8.0 | % | $ | 282,903 | 10.0 | % | ||||||||||||
Tier
I capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
$ | 290,912 | 10.2 | % | $ | 113,759 | 4.0 | % | $ | 170,639 | 6.0 | % | ||||||||||||
Imperial
Capital Bank
|
$ | 290,013 | 10.3 | % | $ | 113,162 | 4.0 | % | $ | 169,743 | 6.0 | % | ||||||||||||
Tier
I capital (to average total assets)
|
||||||||||||||||||||||||
Imperial
Capital Bancorp, Inc.
|
$ | 290,912 | 9.0 | % | $ | 128,696 | 4.0 | % | $ | 160,870 | 5.0 | % | ||||||||||||
Imperial
Capital Bank
|
$ | 290,013 | 9.1 | % | $ | 127,974 | 4.0 | % | $ | 159,968 | 5.0 | % |
Net
Income
|
Weighted-Average
Shares
Outstanding
|
Per
Share Amount
|
||||||||||
(in
thousands, except per share data)
|
||||||||||||
Year ended December 31,
2007
|
||||||||||||
Basic
earnings per share
|
$ | 15,620 | 5,473 | $ | 2.85 | |||||||
Dilutive
effect of stock options
|
— | 94 | (0.04 | ) | ||||||||
Diluted
earnings per share
|
$ | 15,620 | 5,567 | $ | 2.81 | |||||||
Year
ended December 31, 2006
|
||||||||||||
Basic
earnings per share
|
$ | 26,889 | 5,562 | $ | 4.83 | |||||||
Dilutive
effect of stock options
|
— | 150 | (0.12 | ) | ||||||||
Diluted
earnings per share
|
$ | 26,889 | 5,712 | $ | 4.71 | |||||||
Year
ended December 31, 2005
|
||||||||||||
Basic
earnings per share
|
$ | 24,063 | 5,749 | $ | 4.19 | |||||||
Dilutive
effect of stock options
|
— | 214 | (0.15 | ) | ||||||||
Diluted
earnings per share
|
$ | 24,063 | 5,963 | $ | 4.04 |
December
31,
|
||||||||||||||||
2007
|
2006
|
|||||||||||||||
Cost
or
Carrying
Amount
|
Estimated
Fair
Value
|
Cost
or
Carrying
Amount
|
Estimated
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 8,944 | $ | 8,944 | $ | 30,448 | $ | 30,448 | ||||||||
Investment
securities available-for-sale
|
117,924 | 117,924 | 99,527 | 99,527 | ||||||||||||
Investment
securities held-to-maturity
|
159,023 | 158,509 | 193,512 | 190,475 | ||||||||||||
Stock
in Federal Home Loan Bank
|
53,497 | 53,497 | 48,984 | 48,984 | ||||||||||||
Loans,
net
|
3,125,072 | 3,145,088 | 2,973,368 | 3,008,621 | ||||||||||||
Accrued
interest receivable
|
20,841 | 20,841 | 20,753 | 20,753 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Deposit
accounts
|
$ | 2,181,858 | $ | 2,191,930 | $ | 2,059,405 | $ | 2,061,922 | ||||||||
Federal
Home Loan Bank advances and other borrowings
|
1,021,235 | 1,041,398 | 1,010,000 | 998,219 | ||||||||||||
Junior
subordinated
debentures
|
86,600 | 91,889 | 86,600 | 90,425 |
Lending
Operations
|
All
Other
|
Eliminations
|
Consolidated
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
As of and for the Year
Ended December 31,
2007
|
||||||||||||||||
Revenues
from external customers
|
$ | 253,296 | $ | 1,108 | $ | — | $ | 254,404 | ||||||||
Total
interest income
|
250,436 | 835 | — | 251,271 | ||||||||||||
Total
interest expense
|
156,245 | 8,338 | — | 164,583 | ||||||||||||
Depreciation
and amortization expense
|
2,497 | 476 | — | 2,973 | ||||||||||||
Provision
(benefit) for income taxes
|
14,525 | (3,890 | ) | — | 10,635 | |||||||||||
Capital
expenditures
|
3,351 | 481 | — | 3,832 | ||||||||||||
Total
assets
|
3,527,164 | 327,373 | (303,318 | ) | 3,551,219 | |||||||||||
Income
(loss) before provision for income taxes
|
36,798 | (10,543 | ) | — | 26,255 | |||||||||||
As of and for the Year
Ended December 31,
2006
|
||||||||||||||||
Revenues
from external customers
|
$ | 228,057 | $ | 1,216 | $ | — | $ | 229,273 | ||||||||
Total
interest income
|
225,376 | 1,125 | — | 226,501 | ||||||||||||
Total
interest expense
|
123,878 | 8,197 | — | 132,075 | ||||||||||||
Depreciation
and amortization expense
|
2,305 | 393 | — | 2,698 | ||||||||||||
Provision
(benefit) for income taxes
|
22,513 | (4,020 | ) | — | 18,493 | |||||||||||
Capital
expenditures
|
2,286 | 325 | — | 2,611 | ||||||||||||
Total
assets
|
3,396,079 | 319,554 | (300,123 | ) | 3,415,510 | |||||||||||
Income
(loss) before provision for income taxes
|
55,410 | (10,028 | ) | — | 45,382 | |||||||||||
As of and for the Year
Ended December 31,
2005
|
||||||||||||||||
Revenues
from external customers
|
$ | 182,580 | $ | 2,152 | $ | — | $ | 184,732 | ||||||||
Total
interest income
|
175,855 | 2,303 | — | 178,158 | ||||||||||||
Total
interest expense
|
79,315 | 7,171 | — | 86,486 | ||||||||||||
Depreciation
and amortization expense
|
2,290 | 392 | — | 2,682 | ||||||||||||
Provision
(benefit) for income taxes
|
20,113 | (2,631 | ) | — | 17,482 | |||||||||||
Capital
expenditures
|
2,232 | 523 | — | 2,755 | ||||||||||||
Total
assets
|
3,029,118 | 302,351 | (280,273 | ) | 3,051,196 | |||||||||||
Income
(loss) before provision for income taxes
|
49,362 | (7,817 | ) | — | 41,545 |
December
31,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Assets
|
||||||||
Cash
and cash
equivalents
|
$ | 972 | $ | 1,401 | ||||
Investment
securities available-for-sale, at fair value
|
1,503 | 2,216 | ||||||
Investments
in wholly-owned subsidiaries:
|
||||||||
Imperial Capital
Bank
|
296,161 | 292,990 | ||||||
Imperial Capital Real Estate
Investment Trust
|
1,764 | 1,504 | ||||||
Other
subsidiaries
|
108 | 177 | ||||||
Investments
in unconsolidated
subsidiaries
|
2,600 | 2,600 | ||||||
Other
assets
|
24,116 | 18,393 | ||||||
Total
assets
|
$ | 327,224 | $ | 319,281 | ||||
Liabilities
and Shareholders’ Equity
|
||||||||
Junior
subordinated
debentures
|
$ | 86,600 | $ | 86,600 | ||||
Other
liabilities
|
13,057 | 11,344 | ||||||
Shareholders’
equity
|
227,567 | 221,337 | ||||||
Total liabilities and
shareholders’
equity
|
$ | 327,224 | $ | 319,281 |
Years
Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Interest
income
|
$ | 835 | $ | 1,125 | $ | 2,303 | ||||||
Interest
expense
|
8,338 | 8,197 | 7,171 | |||||||||
Net
interest expense
|
(7,503 | ) | (7,072 | ) | (4,868 | ) | ||||||
Provision
for loan losses
|
(3 | ) | (4 | ) | (64 | ) | ||||||
Non-interest
expense:
|
||||||||||||
General
and administrative expense
|
3,316 | 3,052 | 2,809 | |||||||||
Other
|
(273 | ) | (91 | ) | 140 | |||||||
Total
non-interest expense
|
3,043 | 2,961 | 2,949 | |||||||||
Loss
before income tax benefit and equity in net income of
subsidiaries
|
(10,543 | ) | (10,029 | ) | (7,753 | ) | ||||||
Income
tax benefit
|
(3,890 | ) | (4,021 | ) | (2,609 | ) | ||||||
Loss
before equity in net income of subsidiaries
|
(6,653 | ) | (6,008 | ) | (5,144 | ) | ||||||
Equity
in net income of subsidiaries
|
22,273 | 32,897 | 29,207 | |||||||||
Net
income
|
$ | 15,620 | $ | 26,889 | $ | 24,063 |
Years
Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
thousands)
|
||||||||||||
Cash
Flows From Operating Activities:
|
||||||||||||
Net
income
|
$ | 15,620 | $ | 26,889 | $ | 24,063 | ||||||
Adjustments to net
income:
|
||||||||||||
Equity in undistributed net
income of subsidiaries
|
(22,227 | ) | (32,897 | ) | (29,207 | ) | ||||||
Provision for loan
losses
|
(3 | ) | (4 | ) | (64 | ) | ||||||
Other,
net
|
(688 | ) | 29 | 3,465 | ||||||||
Increase in other
assets
|
(4,373 | ) | (1,506 | ) | (335 | ) | ||||||
Increase (decrease) in other
liabilities
|
1,675 | (445 | ) | 524 | ||||||||
Net cash used in operating
activities
|
(9,996 | ) | (7,934 | ) | (1,554 | ) | ||||||
Cash
Flows From Investing Activities:
|
||||||||||||
Capital distribution received
from Imperial Capital REIT
|
— | 1,857 | 11,065 | |||||||||
Dividends received from Imperial
Capital Bank
|
18,400 | 8,500 | 3,000 | |||||||||
Dividends received from Imperial
Capital REIT
|
700 | 251 | 3,756 | |||||||||
Other,
net
|
262 | 906 | 1,376 | |||||||||
Net cash provided by investing
activities
|
19,362 | 11,514 | 19,197 | |||||||||
Cash
Flows From Financing Activities:
|
||||||||||||
Proceeds from exercise of
employee stock options
|
2,567 | 3,692 | 4,650 | |||||||||
Cash paid to acquire treasury
stock
|
(9,062 | ) | (11,374 | ) | (22,625 | ) | ||||||
Cash dividends
paid
|
(3,300 | ) | (2,371 | ) | — | |||||||
Net cash used in financing
activities
|
(9,795 | ) | (10,053 | ) | (17,975 | ) | ||||||
Net decrease in cash and cash
equivalents
|
(429 | ) | (6,473 | ) | (332 | ) | ||||||
Cash and cash equivalents at
beginning of period
|
1,401 | 7,874 | 8,206 | |||||||||
Cash and cash equivalents at
end of period
|
$ | 972 | $ | 1,401 | $ | 7,874 |
Name
|
Age
|
Position
|
George
W. Haligowski
|
53
|
Chairman
of the Board, President and Chief Executive Officer of ICB and the
Bank
|
Norval
L. Bruce
|
66
|
Vice
Chairman of the Board of ICB and the Bank
|
Timothy
M. Doyle
|
51
|
Executive
Managing Director and Chief Financial Officer of ICB and the
Bank
|
Lyle
C. Lodwick
|
53
|
Executive
Managing Director and Chief Operating Officer of ICB and the
Bank
|
Phillip
E. Lombardi
|
51
|
Executive
Managing Director and Chief Credit Officer of ICB and the
Bank
|
•
|
George
W. Haligowski, Chairman, President and Chief Executive
Officer
|
|
•
|
Norval
L. Bruce, Vice Chairman of the Board
|
|
•
|
Timothy
M. Doyle, Executive Managing Director and Chief Financial
Officer
|
|
•
|
Lyle
C. Lodwick, Executive Managing Director and Chief Operating
Officer
|
|
•
|
Phillip
E. Lombardi, Executive Managing Director and Chief Credit
Officer
|
Event
|
Award
Vesting
|
Exercise
Term
|
Termination
by Us Other than Cause; Disability, Retirement or
Death
|
Forfeit
Unvested
|
Earlier
of: (1) three (3) months or (2) Remaining Option
Period
|
Disability,
Retirement or Death
|
Forfeit
Unvested
|
Earlier
of: (1) six (6) months or (2) Remaining Option
Period
|
Termination
for Cause
|
Forfeit
Vested and Unvested
|
Expire
|
Other
Termination
|
Forfeit
Unvested
|
Earlier
of: (1) Remaining Option Period or (2) 30 Days from Date of
Termination
|
Change
in Control
|
Accelerated*
|
*
|
______________
*In
the event of a change in control as defined in the ESIP, any outstanding
awards that are unexercisable or otherwise unvested will become fully
vested and immediately exercisable. If there is a termination of
employment, the
applicable termination provisions regarding exercise term will
apply.
|
Executive
Benefit
|
Description
|
|
Automobile
Plan
|
|
Certain
executives are provided with a Company-owned automobile or an automobile
allowance pursuant to our automobile policy.
|
Reimbursed
Life Insurance Premiums
|
|
We
reimburse certain executives for certain life insurance premium
payments.
|
Computer
Equipment and Internet Connection Service
|
|
We
provide certain executives with computer equipment and an internet
connection for use in their homes.
|
Club
Memberships
|
Certain
executives have their club membership dues
reimbursed.
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards (1)
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Non-qualified Deferred Compensation
Earnings
|
All
Other Compensation (2)
|
Total
Compensation
|
|||||||||||||||||||||||||
George
W. Haligowski
|
2007
|
$ | 590,000 | $ | 482,451 | $ | — | $ | 24,644 | $ | — | $ | 33,862 | $ | 440,774 | (3) | $ | 1,571,731 | |||||||||||||||
Chairman
of the
Board,
President
|
2006
|
$ | 590,000 | $ | 969,750 | $ | — | $ | — | $ | — | $ | 33,451 | $ | 394,523 | $ | 1,987,724 | ||||||||||||||||
and
Chief Executive Officer
|
|||||||||||||||||||||||||||||||||
Norval
L. Bruce
|
2007
|
$ | 196,200 | $ | 31,025 | $ | — | $ | 988 | $ | — | $ | 32,116 | $ | 68,537 | (4) | $ | 328,866 | |||||||||||||||
Vice
Chairman of the Board
|
2006
|
$ | 248,200 | $ | 124,100 | $ | — | $ | — | $ | — | $ | 23,718 | $ | 82,832 | $ | 478,850 | ||||||||||||||||
Timothy
M. Doyle
|
2007
|
$ | 259,900 | $ | 64,969 | $ | — | $ | 9,862 | $ | — | $ | — | $ | 37,306 | (5) | $ | 372,037 | |||||||||||||||
Executive
Managing Director and Chief
|
2006
|
$ | 247,500 | $ | 123,750 | $ | — | $ | — | $ | — | $ | — | $ | 33,371 | $ | 404,621 | ||||||||||||||||
Financial
Officer
|
|||||||||||||||||||||||||||||||||
Lyle
C. Lodwick
|
2007
|
$ | 247,200 | $ | 61,800 | $ | — | $ | 9,862 | $ | — | $ | — | $ | 24,451 | (6) | $ | 343,313 | |||||||||||||||
Executive Managing
Director and Chief
|
2006
|
$ | 235,000 | $ | 117,498 | $ | — | $ | — | $ | — | $ | — | $ | 23,700 | $ | 376,198 | ||||||||||||||||
Operating
Officer
|
|||||||||||||||||||||||||||||||||
Phillip
E. Lombardi
|
2007
|
$ | 192,600 | $ | 51,250 | $ | — | $ | 9,862 | $ | — | $ | — | $ | 15,430 | (7) | $ | 269,142 | |||||||||||||||
Executive
Managing Director and Chief
|
2006
|
$ | 170,000 | $ | 85,000 | $ | — | $ | — | $ | — | $ | — | $ | 13,482 | $ | 268,482 | ||||||||||||||||
Credit
Officer
|
(1)
|
Reflects
the dollar amount recognized for financial statement reporting purposes,
in accordance with SFAS No. 123(R), of stock options awarded under our
ESIP (disregarding
for this purpose the estimate of forfeitures related to service-based
vesting conditions). The assumptions we used in calculating
this amount are set forth in Item 8. Financial Statements and
Supplementary Data--Condensed Consolidated Financial Statements—Notes to
Financial Statements—Note 1—Summary of Significant Accounting
Policies—Stock-Based Compensation.
|
(2)
|
Included
within this column is the incremental cost to the Company associated with
the named executive’s personal use of a Company-owned automobile, based on
the depreciation expense incurred by the Company for the
year.
|
(3)
|
For
2007, represents the aggregate incremental cost to us of perquisites and
other personal benefits, and other compensation provided, totaling
$440,774, including: (a) $42,000 in supplemental housing payments, (b)
$155,887 in preferential interest on employee savings accounts in 2007
(available to all employees), (c) $66,720 for Mr. Haligowski’s personal
use of chartered air transportation service paid for by the Company, and
(d) $104,000 for club memberships and meeting attendance related
expenses. Additional amounts included within “All Other
Compensation” for 2007 include life insurance premiums, imputed income
related to the split dollar life insurance policy, employer contributions
to ICB’s 401(k) plan, financial counseling and tax preparation fees, home
computer equipment and internet service, and reimbursements for tax
obligations incurred by Mr. Haligowski.
|
(4)
|
For
2007, represents the aggregate incremental cost to us of perquisites and
other personal benefits, and other compensation provided, totaling
$68,537, including $39,835 in preferential interest on employee savings
accounts. Additional amounts included within “All Other
Compensation” for 2007 include life insurance premiums, employer
contributions to ICB’s 401(k) plan, home computer equipment and internet
service, and club memberships.
|
(5)
|
For
2007, represents the aggregate incremental cost to us of perquisites and
other personal benefits, and other compensation provided, totaling
$37,306, including $14,635 in preferential interest on employee savings
accounts. Additional amounts included within “All Other
Compensation” for 2007 include life insurance premiums, employer
contributions to ICB’s 401(k) plan, and home computer
equipment.
|
(6)
|
For
2007, represents the aggregate incremental cost to us of perquisites and
other personal benefits, and other compensation provided, totaling
$24,451, including $13,781 in preferential interest on employee savings
accounts. Additional amounts included within “All Other
Compensation” for 2007 include life insurance premiums, and employer
contributions to ICB’s 401(k) plan.
|
(7)
|
For
2007, represents the aggregate incremental cost to us of perquisites and
other personal benefits, and other compensation provided, totaling
$15,430. Amounts included within “All Other Compensation” for
2007 include life insurance premiums, employer contributions to ICB’s
401(k) plan, and preferential interest on employee savings
accounts.
|
|
Agreements
with Mr. Haligowski
|
Name
|
Grant
Date
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($/Sh)
|
Grant
Date Fair Value of Stock and Option Awards (1)
|
|||||||||
George
W. Haligowski
|
8/8/2007
|
25,000 | $ | 30.75 | $ | 185,795 | |||||||
Norval
L. Bruce
|
8/8/2007
|
1,000 | $ | 30.75 | $ | 7,432 | |||||||
Timothy
M. Doyle
|
8/8/2007
|
10,000 | $ | 30.75 | $ | 74,318 | |||||||
Lyle
C. Lodwick
|
8/8/2007
|
10,000 | $ | 30.75 | $ | 74,318 | |||||||
Phillip
E. Lombardi
|
8/8/2007
|
10,000 | $ | 30.75 | $ | 74,318 |
(1)
|
Represents the grant date fair
value determined in accordance with SFAS No. 123(R). The assumptions we used in
calculating this amount are set forth in Item 8. Financial Statements and
Supplementary Data--Condensed Consolidated Financial Statements—Notes
to Financial Statements—Note
1—Summary of Significant Accounting Policies—Stock-Based
Compensation.
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested (#)
|
Market
Value of Shares or Units of Stock That Have Not Vested
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That Have Not Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
|
||||||||||||||||||||||||
George
W. Haligowski
|
10,000 | — | — | $ | 14.00 |
2/2/2009
|
— | — | — | — | |||||||||||||||||||||||
37,500 | — | — | $ | 23.00 |
2/19/2012
|
— | — | — | — | ||||||||||||||||||||||||
50,000 | — | — | $ | 48.46 |
12/19/2015
|
— | — | — | — | ||||||||||||||||||||||||
— | 25,000 | (1) | — | $ | 30.75 |
8/8/2017
|
— | — | — | — | |||||||||||||||||||||||
Total
|
97,500 | 25,000 | |||||||||||||||||||||||||||||||
Norval
L. Bruce
|
10,500 | — | — | $ | 23.00 |
2/19/2012
|
— | — | — | — | |||||||||||||||||||||||
12,500 | — | — | $ | 48.46 |
12/19/2015
|
— | — | — | — | ||||||||||||||||||||||||
— | 1,000 | (1) | — | $ | 30.75 |
8/8/2017
|
— | — | — | — | |||||||||||||||||||||||
Total
|
23,000 | 1,000 | |||||||||||||||||||||||||||||||
Timothy
M. Doyle
|
15,000 | — | — | $ | 14.00 |
2/2/2009
|
— | — | — | — | |||||||||||||||||||||||
5,000 | — | — | $ | 11.00 |
1/31/2010
|
— | — | — | — | ||||||||||||||||||||||||
15,000 | — | — | $ | 23.00 |
2/19/2012
|
— | — | — | — | ||||||||||||||||||||||||
25,000 | — | — | $ | 48.46 |
12/19/2015
|
— | — | — | — | ||||||||||||||||||||||||
— | 10,000 | (1) | — | $ | 30.75 |
8/8/2017
|
— | — | — | — | |||||||||||||||||||||||
Total
|
60,000 | 10,000 | |||||||||||||||||||||||||||||||
Lyle
C. Lodwick
|
35,000 | — | — | $ | 54.25 |
8/8/2015
|
— | — | — | — | |||||||||||||||||||||||
12,500 | — | — | $ | 48.46 |
12/19/2015
|
— | — | — | — | ||||||||||||||||||||||||
— | 10,000 | (1) | — | $ | 30.75 |
8/8/2017
|
— | — | — | — | |||||||||||||||||||||||
Total
|
47,500 | 10,000 | |||||||||||||||||||||||||||||||
Phillip
E. Lombardi
|
22,500 | — | — | $ | 53.33 |
6/24/2015
|
— | — | — | — | |||||||||||||||||||||||
7,500 | — | — | $ | 48.46 |
12/19/2015
|
— | — | — | — | ||||||||||||||||||||||||
— | 10,000 | (1) | — | $ | 30.75 |
8/8/2017
|
— | — | — | — | |||||||||||||||||||||||
Total
|
30,000 | 10,000 | |||||||||||||||||||||||||||||||
(1)
|
The
vesting schedule of this option is as follows: one-third on August 8,
2008, one-third on August 8, 2009 and one-third on August 8,
2010.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Name
|
Number
of Shares Acquired on Exercise (#)
|
Value
Realized
on
Exercise
|
Number
of Shares Acquired on Vesting (#)
|
Value
Realized
on
Vesting
|
||||||||||||
George
W. Haligowski
|
45,000 | $ | 1,551,600 | — | — | |||||||||||
Norval
L. Bruce
|
— | — | — | — | ||||||||||||
Timothy
M. Doyle
|
15,000 | $ | 517,853 | — | — | |||||||||||
Lyle
C. Lodwick
|
— | — | — | — | ||||||||||||
Phillip
E. Lombardi
|
— | — | — | — |
Name
|
Executive
Contributions
in
Last FY
|
Registrant
Contributions
in
Last FY
|
Aggregate
Earnings
in
Last FY (2)
|
Aggregate
Withdrawals/ Distributions
|
Aggregate
Balance
at
Last FYE
|
|||||||||||||||
George
W. Haligowski
|
$ | — | $ | — | $ | (1,000,900 | ) | $ | — | $ | 3,385,200 | |||||||||
Norval
L. Bruce
|
$ | 161,250 | (1) | $ | — | $ | 119,900 | $ | — | $ | 1,755,000 | |||||||||
Timothy
M. Doyle
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Lyle
C. Lodwick
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Phillip
E. Lombardi
|
$ | — | $ | — | $ | — | $ | — | $ | — |
(1)
|
The
entire amount is reported as compensation for 2007 in the Summary
Compensation Table under the “Salary” and “Bonus”
column.
|
(2)
|
Based
on the performance during 2007 of the investment options (including, among
others, our Common Stock). Of the amounts shown, $33,862 and $32,116,
representing the portion of the preferential interest credited to the
accounts of Mr. Haligowski and Mr. Bruce, respectively, were reported as
compensation for 2007 in the Summary Compensation Table under the “Change
in Pension Value and Non-qualified Deferred Compensation Earnings”
column.
|
Name
|
Executive
Contributions
in
Last FY
|
Registrant
Contributions
in
Last FY
|
Aggregate
Earnings
in
Last FY (1)
|
Aggregate
Withdrawals/ Distributions
|
Aggregate
Balance
at
Last FYE
|
|||||||||||||||
George
W. Haligowski
|
$ | — | $ | — | $ | (6,423,290 | ) | $ | — | $ | 3,036,888 | |||||||||
Norval
L. Bruce
|
$ | — | $ | — | $ | (1,490,132 | ) | $ | — | $ | 704,541 | |||||||||
Timothy
M. Doyle
|
$ | — | $ | — | $ | (1,243,312 | ) | $ | — | $ | 587,802 | |||||||||
Lyle
C. Lodwick
|
$ | — | $ | — | $ | (128,707 | ) | $ | — | $ | 60,948 | |||||||||
Phillip
E. Lombardi
|
$ | — | $ | — | $ | (109,991 | ) | $ | — | $ | 52,100 |
(1)
|
Includes
value of additional shares allocated pursuant to dividend reinvestment, as
well as the change in fair value during the year related to SERP shares
maintained within each participants’ respective trust
account. None of these amounts were reported as compensation
for 2007 in the Summary Compensation
Table.
|
Termination
Scenario
|
Lump
Sum Prorated Bonus (1)
|
Salary/Bonus
Continuation and Non-Compete (2)
|
Health
Coverage Continuation (3)
|
Accelerated
Vesting of Stock and Option Awards (4)
|
Death
Benefit Under Life Insurance Policies (5)
|
Other
Benefits (6)
|
Payment
of 299% of “Base Amount” (7)
|
Tax
Gross Up Payment (8)
|
||||||||||||||||||||||||
If
termination for cause occurs
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
If
voluntary termination (not constituting “Involuntary Termination” under
Employment Agreement) occurs
|
$ | — | $ | 4,441,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
If
“Involuntary Termination” under Employment Agreement (not in connection
with or within five years after change in control) occurs
|
$ | 970,000 | $ | 9,135,000 | $ | 63,000 | $ | — | $ | — | $ | 837,000 | $ | — | $ | — | ||||||||||||||||
If
“Involuntary Termination” under Employment Agreement in connection with or
after change in control occurs
|
$ | — | $ | 7,941,000 | $ | — | $ | — | $ | — | $ | — | $ | 10,578,700 | $ | — | ||||||||||||||||
If
termination occurs as a result of disability
|
$ | 970,000 | $ | 9,135,000 | $ | 63,000 | $ | — | $ | — | $ | 587,000 | $ | — | $ | — | ||||||||||||||||
If
termination occurs as a result of death
|
$ | 970,000 | $ | 9,135,000 | $ | 63,000 | $ | — | $ | 2,460,000 | $ | 587,000 | $ | — | $ | — |
(1)
|
Payable
to Mr. Haligowski (or to his estate or designated beneficiary, in the
event of death) under his employment agreement if his employment is
“Involuntarily Terminated” not in connection with or after a change in
control or due to disability or
death.
|
(2)
|
Payable to Mr. Haligowski
under his employment agreement and non-competition and non-solicitation
agreement and the Salary Continuation Plan for the applicable period
described under “Agreements with Mr. Haligowski-Employment Agreement,”
“-Non-Competition and Non-Solicitation Agreement” and “-Salary
Continuation Plan.” These payments are comprised of the
following: (i) in the case of voluntary termination not constituting
“Involuntary Termination” under Mr. Haligowski’s employment agreement, the
present value of the total payments that would be made to him under the
Salary Continuation Plan, using a discount rate of 5% ($4,441,000); (ii)
in the case of Involuntary Termination not in connection with or after a
change in control, or termination due to disability or death (A) the
present value of the total payments that would be made to him (or his
beneficiary, in the event of his death) under the Salary Continuation
Plan, using a discount rate of 5% ($4,441,000) and (B) the aggregate
amount of the total monthly salary and bonus continuation payments
(through December 29, 2010) under his employment agreement ($4,694,000, or
$130,390 per month); and (iii) in the case of Involuntary Termination in
connection with or after a change in control, (A) the present value of the
total payments that would be made to him under the Salary Continuation
Plan, using a discount rate of 5% ($4,441,000) and (B) the total payments
that would be made under his non-competition and non-solicitation
agreement ($3,500,000).
|
(3)
|
Represents
the cost of providing the medical, dental and disability benefits
described under “Agreements with Mr. Haligowski-Employment
Agreement.”
|
(4)
|
Represents
the benefit, if any, associated with accelerating of unvested options
outstanding at December 31, 2007, based on the closing price of the
Company’s stock on that date.
|
(5)
|
Represents
aggregate of death benefit under supplemental life insurance policy
maintained for Mr. Haligowski of $1,700,000 and death benefit under split
dollar life insurance policy, net of proceeds paid to the Company, of
$760,000.
|
(6)
|
Represents
the cost or value of $250,000 for continued use of office space and
secretarial support, $146,000 for the transfer to Mr. Haligowski of title
to his leased vehicle, and $441,000 representing the transfer to Mr.
Haligowski of our interest in life insurance policies on his
life. The cost of office space and secretarial support are
excluded if termination occurs as a result of disability or death as these
benefits would not be provided under such
circumstances.
|
(7)
|
Represents
lump sum amount payable to Mr. Haligowski under his employment agreement
in the event his employment is Involuntarily Terminated in connection with
or following a change in control of the Company, as described under
“Agreements with Mr. Haligowski-Employment
Agreement.”
|
(8)
|
Based
on the amounts shown in the table, no tax gross up payment would be
payable to Mr. Haligowski under his employment agreement. See “Agreements
with Mr. Haligowski – Employment
Agreement.”
|
Termination
Scenario
|
Payment
of 299% of “Base Amount” (1)
|
Health
Coverage and Life Insurance Continuation (2)
|
Accelerated
Vesting of Stock and Option Awards (3)
|
Other
Benefits (4)
|
||||||||||||
If
“Termination Without Cause” under his Change of Control Agreement in
connection with or within 36 months after change in control
occurs
|
$ | 1,000,000 | $ | 24,017 | $ | — | $ | 71,833 |
(1)
|
Represents
lump sum amount payable to Mr. Bruce under his change of control agreement
in the event his employment is terminated in connection with or following
a change in control of the Company, as described under “Change of Control
Agreements.”
|
(2)
|
Represents
the cost of providing the health, dental and life insurance benefits
described under “Change of Control
Agreements.”
|
(3)
|
Represents
the benefit, if any, associated with accelerating of unvested options
outstanding at December 31, 2007, based on the closing price of the
Company’s stock on that date.
|
(4)
|
Represents
the cost or value of $48,400 for the transfer to Mr. Bruce of title to his
leased vehicle, $5,430 for the transfer to Mr. Bruce of home-based
computer equipment and $18,000 for the transfer to Mr. Bruce of our
interest in a golf club membership.
|
Termination
Scenario
|
Payment
of 299% of “Base Amount” (1)
|
Health
Coverage and Life Insurance Continuation (2)
|
Accelerated
Vesting of Stock and Option Awards (3)
|
Death
Benefit under Supplemental Life Insurance Policy (4)
|
Other
Benefits (5)
|
|||||||||||||||
If
“Termination Without Cause” under his Change of Control Agreement in
connection with or within 36 months after change in control
occurs
|
$ | 1,250,000 | $ | 47,198 | $ | — | $ | — | $ | 60,056 | ||||||||||
If
termination occurs as a result of death
|
$ | — | $ | — | $ | — | $ | 250,000 | $ | — |
(1)
|
Represents
lump sum amount payable to Mr. Doyle under his change of control agreement
in the event his employment is terminated in connection with or following
a change in control of the Company, as described under “Change of Control
Agreements.”
|
(2)
|
Represents
the cost of providing the health, dental and life insurance benefits
described under “Change of Control
Agreements.”
|
(3)
|
Represents
the benefit, if any, associated with accelerating of unvested options
outstanding at December 31, 2007, based on the closing price of the
Company’s stock on that date.
|
(4)
|
Represents
death benefit payable under supplemental life insurance policy maintained
by the Company for Mr. Doyle’s
benefit.
|
(5)
|
Represents
the cost or value of $52,740 for the transfer to Mr. Doyle of title to his
leased vehicle and $7,320 for the transfer to Mr. Doyle of home-based
computer equipment.
|
Termination
Scenario
|
Lump
Sum Payment (1)
|
Health
Coverage and Life Insurance Continuation (2)
|
Accelerated
Vesting of Stock and Option Awards (3)
|
Other
Benefits (4)
|
||||||||||||
If
“Involuntary Termination” under Change in Control Severance Agreement in
connection with or within 24 months after change in control
occurs
|
$ | 412,488 | $ | 17,463 | $ | — | $ | 35,900 |
(1)
|
Represents
lump sum amount payable to Mr. Lodwick under his change of control
agreement in the event his employment is “Involuntarily Terminated” in
connection with or following a change in control of the Company, as
described under “Change of Control
Agreements.”
|
(2)
|
Represents
the cost of providing the health, dental and life insurance benefits
described under “Change of Control
Agreements.”
|
(3)
|
Represents
the benefit, if any, associated with accelerating of unvested options
outstanding at December 31, 2007, based on the closing price of the
Company’s stock on that date.
|
(4)
|
Represents
the cost or value of $35,900 for the transfer to Mr. Lodwick of title to
his leased vehicle.
|
Termination
Scenario
|
Lump
Sum Payment (1)
|
Health
Coverage and Life Insurance Continuation (2)
|
Accelerated
Vesting of Stock and Option Awards (3)
|
Other
Benefits (4)
|
||||||||||||
If
“Involuntary Termination” under Change in Control Severance Agreement in
connection with or within 24 months after change in control
occurs
|
$ | 392,500 | $ | 10,214 | $ | — | $ | 23,220 |
(1)
|
Represents
lump sum amount payable to Mr. Lombardi under his change of control
agreement in the event his employment is “Involuntarily Terminated” in
connection with or following a change in control of the Company, as
described under “Change of Control
Agreements.”
|
(2)
|
Represents
the cost of providing the health, dental and life insurance benefits
described under “Change of Control
Agreements.”
|
(3)
|
Represents
the benefit, if any, associated with accelerating of unvested options
outstanding at December 31, 2007, based on the closing price of the
Company’s stock on that date.
|
(4)
|
Represents
the cost or value of $23,220 for the transfer to Mr. Lombardi of title to
his leased vehicle.
|
Name
|
Fees
Earned or
Paid
in Cash
|
Stock
Awards
|
Option
Awards (1)
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Non-qualified Deferred Compensation
Earnings
|
All
Other Compensation (2)
|
Total
|
|||||||||||||||||||||
Jeffrey
L. Lipscomb
|
$ | 44,000 | — | — | — | — | $ | 5,000 | $ | 49,000 | ||||||||||||||||||
Preston
Martin (3)
|
$ | 16,250 | — | $ | 12,380 | — | — | $ | 6,250 | $ | 34,880 | |||||||||||||||||
Sandor
X. Mayuga
|
$ | 39,000 | — | — | — | — | $ | — | $ | 39,000 | ||||||||||||||||||
Hirotaka
Oribe
|
$ | 47,000 | — | — | — | — | $ | 15,000 | $ | 62,000 | ||||||||||||||||||
Robert
R. Reed
|
$ | 47,000 | — | — | — | — | $ | 7,500 | $ | 54,500 |
(1)
|
Amount
in the table represent the compensation cost of stock options recognized
for 2007 for financial statement reporting purposes pursuant to SFAS No.
123(R), and includes the cost attributable to grants made in 2007 and in
prior years. The assumptions we used in calculating this amount are set
forth in Item 8. Financial Statements and Supplementary Data--Condensed
Consolidated Financial Statements—Notes to Financial Statements—Note
1—Summary of Significant Accounting Policies—Stock-Based
Compensation. As of December 31, 2007, total shares underlying stock
options held by the directors were as follows: Mr. Lipscomb - 6,500
shares; Mr. Martin - 10,000 shares; Mr. Mayuga - 6,500 shares; Mr. Oribe -
6,500 shares; and Mr. Reed - 5,500 shares.
|
(2)
|
Amounts
in this column represent honorariums earned during 2007 to Mr.
Lipscomb, Mr. Oribe, and Mr. Reed, as well as an annual retainer fee for
Mr. Martin, as explained below.
|
(3)
|
Mr.
Martin passed away in May 2007. Under the terms of the Director
Option Plan, the stock options outstanding, referenced above in (1), will
be exercisable for 12 months following his
passing.
|
Beneficial
Owner
|
Shares
Beneficially Owned
|
Percent
of Class
|
||||||
Thomson
Horstmann & Bryant, Inc.
|
478,209 | (1) | 8.81 | % | ||||
Park
80 West, Plaza One
Saddle
Brook, NJ 07663
Dimensional
Fund Advisors, LP
|
449,658 | (2) | 8.29 | % | ||||
1299
Ocean Avenue, 11th
Floor
Santa
Monica, CA 90401
Franklin
Mutual Advisers, LLC
|
445,796 | (3) | 8.21 | % | ||||
51
John F. Kennedy Parkway
Short
Hills, NJ 07078
George
W. Haligowski
|
335,711 | (4) | 6.08 | % | ||||
888
Prospect Street, Suite 110
La
Jolla, CA 92037
Barclays
Global Advisors, NA, et. al
|
321,121 | (5) | 5.92 | % | ||||
45
Fremont Street
San
Francisco, CA 94105
Wellington
Management Company, LLP
|
313,130 | (6) | 5.77 | % | ||||
75
State Street
Boston,
MA 02109
|
(1)
|
As
reported by Thomson Horstmann & Bryant, Inc., ("Thomson") on a
Schedule 13G amendment filed on February 6, 2008 with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended. Thomson reported sole voting power as to 259,006
shares, sole dispositive power as to all of the 478,209 shares, and shared
voting and dispositive power as to none of the 478,209 shares covered by
the report.
|
(2)
|
As
reported by Dimensional Fund Advisors, LP ("Dimensional") on a Schedule
13G amendment filed on February 6, 2008 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as
amended. Dimensional reported sole voting and dispositive
powers as to all of the 449,658 shares, and shared voting and dispositive
powers as to none of the 449,658 shares covered by the
report.
|
(3)
|
As
reported by Franklin Mutual Advisers, LLC ("Franklin") on a Schedule 13G
amendment filed on February 11, 2005 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as
amended. Franklin reported sole voting and dispositive powers
as to all of the 445,796 shares, and shared voting and dispositive powers
as to none of the 445,796 shares covered by the
report.
|
(4)
|
Includes
97,500 shares underlying stock options which were exercisable as of March
3, 2008, 167,528 shares held in Mr. Haligowski’s SERP account in the rabbi
trust established by the Company, 70,383 shares held in Mr. Haligowski’s
deferred compensation plan account in the rabbi trust and 300 shares held
in Mr. Haligowski’s personal
account.
|
(5)
|
As
reported by Barclays Global Investors, NA., Barclays Global Fund Advisors,
Barclays Global Investors, Ltd., Barclays Global Investors Japan Trust and
Banking Company Limited, Barclays Global Investors Japan Limited, Barclays
Global Investors Canada Limited, Barclays Global Investors Australia
Limited and Barclays Global Investors (Deutschland) AG on a Schedule 13G
filed on February 5, 2008 with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended. With
respect to the 321,121 shares listed, Barclays Global Investors, NA.,
reported sole voting power as to 186,939 shares, sole dispositive power as
to 230,516 shares and shared voting and dispositive powers as to none of
such shares, and Barclays Global Fund Advisors reported sole voting and
dispositive powers as to 90,605 shares, and shared voting and dispositive
powers as to none of such shares.
|
(6)
|
As
reported by Wellington Management Company, LLP ("WMC") on a Schedule 13G
amendment filed on February 14, 2008 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as
amended. WMC reported sole voting and dispositive powers as to
none of the 313,130 shares, shared voting power as to 217,100 shares, and
shared dispositive power as to all of the 313,130 shares covered by the
report.
|
Beneficial
Owner
|
Shares
Beneficially
Owned
(1)(2)(3)
|
Percent
of
Class
|
||||||
George
W.
Haligowski
|
335,711 | 6.08 | % | |||||
Timothy
M.
Doyle
|
92,421 | 1.68 | ||||||
Norval
L.
Bruce
|
63,127 | 1.16 | ||||||
Lyle
C.
Lodwick
|
60,849 | 1.11 | ||||||
Phillip
E.
Lombardi
|
34,211 | 0.63 | ||||||
Sandor
X.
Mayuga
|
11,300 | 0.21 | ||||||
Robert
R.
Reed
|
9,000 | 0.17 | ||||||
Jeffrey
L.
Lipscomb
|
7,600 | 0.14 | ||||||
Hirotaka
Oribe
|
7,600 | 0.14 | ||||||
All
Directors and Executive Officers as a Group (9
Persons)
|
621,819 | 10.90 |
(1)
|
Includes
shares held directly, as well as shares held in retirement accounts or by
certain members of the named individual's families or corporations for
which an individual is an officer or director or held by trust of which an
individual is trustee or a substantial beneficiary, over which shares the
individual may be deemed to have sole or shared voting and/or dispositive
power.
|
(2)
|
Includes
shares underlying exercisable options and options exercisable within 60
days of March 3, 2008 as follows: Chairman Haligowski – 97,500
shares; Director Lipscomb – 5,500 shares; Director Mayuga – 5,500 shares;
Director Oribe – 5,500 shares; Director Reed – 5,500 shares; Vice Chairman
Bruce – 23,000 shares; Timothy M. Doyle – 60,000 shares; Lyle C. Lodwick –
47,500 shares; Phillip E. Lombardi – 30,000 shares; and all directors and
executive officers as a group – 280,000
shares.
|
(3)
|
Includes
vested SERP account shares held in the rabbi trust established by the
Company, as follows: Chairman Haligowski –167,528 shares; Vice Chairman
Bruce – 38,861 shares; Timothy M. Doyle – 32,421 shares; Lyle C. Lodwick –
3,349 shares; Phillip E. Lombardi – 2,861 shares and all directors and
executive officers as a group – 245,020 shares. Also includes
shares held in deferred compensation plan account in the rabbi trust as
follows: Mr. Haligowski – 70,383 shares; Mr. Bruce – 1,066 shares and all
directors and executive officers as a group – 71,449
shares.
|
Plan
Category
|
Number
of Shares to
be
issued upon
Exercise
of
Outstanding
Options,
Warrants
and
Rights
|
Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants
And
Rights
|
Number
of Shares Remaining Available for Future Issuance Under Equity
Compensation Plans (Excluding Shares Reflected in the First Column) (1)
|
|||||||||
Equity
compensation plans approved by stockholders
|
464,068 | $ | 37.67 | 163,344 | ||||||||
Equity
compensation plans not approved by stockholders
|
N/A | N/A | N/A | |||||||||
Total
|
464,068 | $ | 37.67 | 163,344 |
(1)
|
This
amount includes 125,000 shares issuable under our 1996 Voluntary Retainer
Stock and Deferred Compensation Plan for Outside Directors, described
under “Item 11. Executive Compensation — Directors Compensation.” Under
the Company’s 2005 Re-Designated, Amended and Restated Employee Stock
Incentive Plan, up to 14,922 of the 29,844 shares remaining available for
issuance under that plan as of December 31, 2007 could be issued to plan
participants pursuant to awards of restricted stock, restricted stock
units, performance shares and/or performance
units.
|
|
(a)
|
Audit
Fees: Aggregate fees billed for professional services rendered for the
audits of the Company’s annual financial statements and internal controls
over financial reporting, and reviews of financial statements included in
the Company’s Quarterly Reports on Form 10-Q for those fiscal years:
$360,000 - 2007; $332,000 - 2006.
|
|
(b)
|
Audit
Related Fees: Aggregate fees billed for professional services rendered
related to audits of employee benefit plans, consultation related to the
implementation of the Sarbanes-Oxley Act, and consultation on accounting
matters: $21,000 - 2007; $20,000 -
2006.
|
|
(c)
|
Tax
Fees: Aggregate fees billed for professional services rendered related to
tax compliance, tax advice and tax return preparation: $105,000 - 2007;
$95,000 - 2006.
|
|
(d)
|
All
other fees: Aggregate fees billed for professional services rendered in
connection with the review and consultation on various issues relating to
employment and other benefit related contracts: $5,000 - 2007; $22,000 -
2006.
|
Page
|
|
Management’s
Report on Internal Control Over Financial Reporting
|
43
|
Reports
of Independent Registered Public Accounting Firm
|
44
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
46
|
Consolidated
Statements of Income for the Years Ended December 31, 2007, 2006 and
2005
|
47
|
Consolidated
Statements of Changes in Shareholders’ Equity and Comprehensive Income for
the Years Ended December 31, 2007, 2006 and 2005
|
48
|
Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and
2005
|
49
|
Notes
to Consolidated Financial Statements
|
50
|
Date:
March 17, 2008
|
By:
|
/s/ George W.
Haligowski
|
George
W. Haligowski
|
||
Chairman
of the Board, President
|
||
and
Chief Executive Officer
|
||
(Duly
Authorized Representative)
|
Signature
|
Title
|
Date
|
||
/s/ George
W. Haligowski
|
Chairman
of the Board, President and
|
March
17, 2008
|
||
George
W. Haligowski
|
Chief
Executive Officer
|
|||
(Principal
Executive Officer)
|
||||
/s/ Timothy
M. Doyle
|
Executive
Managing Director and
|
March
17, 2008
|
||
Timothy
M. Doyle
|
Chief
Financial Officer
|
|||
(Principal
Financial and Accounting Officer)
|
||||
/s/ Norval
L. Bruce
|
Director
|
March
17, 2008
|
||
Norval
L. Bruce
|
||||
/s/ Jeffrey
L. Lipscomb
|
Director
|
March
17, 2008
|
||
Jeffrey
L. Lipscomb
|
||||
/s/ Sandor
X. Mayuga
|
Director
|
March
17, 2008
|
||
Sandor
X. Mayuga
|
||||
/s/ Robert
R. Reed
|
Director
|
March
17, 2008
|
||
Robert
R. Reed
|
||||
/s/ Hirotaka
Oribe
|
Director
|
March
17, 2008
|
||
Hirotaka
Oribe
|
Regulation
S-K Exhibit Number
|
Document
|
Reference
to Prior Filling or Exhibit Number Attached Hereto
|
||
3.1
|
Certificate
of Incorporation
|
************
|
||
3.2
|
Bylaws,
as amended
|
***
|
||
4
|
Instruments
Defining the Rights of Security Holders, Including
Indentures
|
**********
|
||
10.1
|
2005
Re-Designated, Amended and Restated Stock Option Plan For Nonemployee
Directors (“NEDP”)
|
*****
|
||
10.2
|
2005
Re-Designated, Amended and Restated Employee Stock Incentive Plan
(“ESIP”)
|
********
|
||
10.3a
|
409A
Consolidated Nonqualified (Employer Securities Only) 2005 Deferred
Compensation Plan
|
***
|
||
10.3b
|
409A
Consolidated Nonqualified (Non-Employer Securities) 2005 Deferred
Compensation Plan
|
***
|
||
10.3c
|
Consolidated
Nonqualified (Employer Securities Only) Deferred Compensation
Plan
|
***
|
||
10.3d
|
Consolidated
Nonqualified (Non-Employer Securities) Deferred Compensation
Plan
|
***
|
||
10.4
|
Supplemental
Salary Savings Plan
|
*
|
||
10.5a
|
Amended
and Restated Employment Agreement with George W.
Haligowski
|
********
|
||
10.5b
|
Non-Competition
and Non-Solicitation Agreement with George W. Haligowski
|
********
|
||
10.6
10.7
10.8
10.9
|
Change
in Control Severance Agreement with Norval L. Bruce
Change
in Control Severance Agreement with Timothy M. Doyle
Change
in Control Severance Agreement with Lyle C. Lodwick
Change
in Control Severance Agreement with Phillip E. Lombardi
|
********
********
********
***********
|
||
10.10
|
Recognition
and Retention Plan
|
**
|
||
10.11
|
Voluntary
Retainer Stock and Deferred Compensation Plan for Outside
Directors
|
****
|
||
10.12
|
Amended
and Restated Supplemental Executive Retirement Plan
|
********
|
||
10.13
|
Amended
and Restated ITLA Capital Corporation Rabbi Trust
Agreement
|
*********
|
||
10.14
|
Amended
and Restated Salary Continuation Plan
|
********
|
||
10.15
|
Form
of Incentive Stock Option Agreement under ESIP
|
******
|
||
10.16
10.17
|
Form
of Non-Qualified Stock Option Agreement under the ESIP
Form
of Non-Qualified Stock Option Agreement under the NEDP
|
******
*******
|
||
10.18
|
Description
of Named Executive Officer Salary, Bonus and Perquisite Arrangements
for 2008
|
10.18
|
||
10.19
|
Description
of Director Fee Arrangements
|
10.19
|
||
10.20
|
Split Dollar Agreement |
10.20
|
||
11
|
Statement
Regarding Computation of Per Share Earnings
|
Not
Required
|
||
13
|
Annual
Report to Security Holders
|
None
|
||
18
|
Letter
Regarding Change in Accounting Principles
|
None
|
||
21
|
Subsidiaries
of the Registrant
|
21
|
||
22
|
Published
Report Regarding Matters Submitted to Vote of Security
Holders
|
None
|
||
23.1
|
Consent
of Ernst & Young LLP
|
23.1
|
||
24
|
Power
of Attorney
|
None
|
||
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive
Officer
|
31.1
|
||
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial
Officer
|
31.2
|
||
32
|
Section
1350 Certifications of Chief Executive Officer and Chief Financial
Officer
|
32
|
*
|
Filed
as an exhibit to Imperial’s Registration Statement on Form S-1 (File No.
33-96518) filed with the Commission on September 1, 1995, pursuant to
Section 5 of the Securities Act of 1933.
|
*
*
|
Filed
as an exhibit to the Company’s Registration Statement on Form S-4 (File
No. 333-03551) filed with the Commission on May 10, 1996, pursuant to
Section 5 of the Securities Act of 1933.
|
* *
*
|
Filed
as an exhibit to the Company’s Current Report on Form 8-K filed on
December 7, 2007.
|
* *
* *
|
Filed
as an exhibit to Amendment No. Two to the Company’s Registration Statement
on Form S-4 (File No. 333-03551) filed with the Commission on June 19,
1996.
|
* *
* * *
|
Filed
as an appendix to the Company’s definitive proxy materials filed on June
27, 2005.
|
* *
* * * *
|
Filed
as an exhibit to the Company’s Current Report on Form 8-K filed on August
9, 2005.
|
* *
* * * * *
|
Filed
as an exhibit to the Company’s Current Report on Form 8-K filed on
November 4, 2005.
|
* *
* * * * * *
|
Filed
as an exhibit to the Company’s Current Report on Form 8-K filed on
February 24, 2006.
|
* *
* * * * * * *
|
Filed
as an exhibit to the Company’s Form 10-Q for the quarter ended June 30,
2006.
|
* *
* * * * * * * *
|
The
Company hereby agrees to furnish the SEC, upon request, copies of the
instruments defining the rights of the holders of each issue of the
Company's long-term debt.
|
* *
* * * * * * * * *
|
Filed
as an exhibit to the Company’s Form 10-K for the year ended December 31,
2006.
|
* *
* * * * * * * * * *
|
Filed
as an exhibit to the Company’s Form 10-Q for the quarter ended June 30,
2007 (File No. 01-33199).
|