TNCC Tennessee Commerce Bancorp (TN) (MM)

Net Income Jumps 85% to $1.3 million FRANKLIN, Tenn., Oct. 24 /PRNewswire-FirstCall/ -- Tennessee Commerce Bancorp, Inc. (NASDAQ:TNCC) today reported record net income, loans and deposits for the third quarter ended September 30, 2006. Net income rose 85% to $1.3 million, or $0.29 per diluted shares, for the third quarter ended September 30, 2006 compared with $720,000, or $0.21 per diluted share, for the same quarter in 2005. "Tennessee Commerce's record earnings benefited from strong growth in loans, interest income and improved operating efficiencies," stated Mike Sapp, President of Tennessee Commerce Bancorp. "Net loans grew 53% to a record $484.6 million in the third quarter of 2006 due to continued demand from local and national customers. Total assets rose 61% to $574.6 million at the end of the third quarter, exceeding our asset growth target for the entire year." Third Quarter Net interest income rose 42% to $5.1 million in the third quarter of 2006 compared with $3.6 million in the third quarter of 2005. The increase in net interest income was due primarily to growth in the loan portfolio, offset somewhat by a decline in net interest margin since the third quarter of 2005. Net interest margin was 3.99% in the third quarter of 2006 compared with 4.44% in the third quarter of 2005. "Our growth in net interest income has been fueled by our accelerating loan demand," noted Mr. Sapp. "The increase in loan demand was a major factor in exceeding our asset target for all of 2006 by the end of the third quarter. The increase has also expanded our opportunities to build income through loan syndications and loan sales. During the third quarter, we reported a 208% increase in gain on sale of loans to $567,000 compared with $184,000 in the third quarter of 2005." Asset quality remained strong at the end of the third quarter. For the first nine months of 2006, annualized net charge-offs were 0.44% of average loans. Provision for loan losses was $1.2 million in the third quarter of 2006, up from $1.0 million in the third quarter of last year. The increased provision for loan losses was due primarily to higher average loan balances compared with the prior year. At the end of the third quarter, the allowance for loan losses was $6.2 million, or 1.28% of net loans, compared with $4.2 million, or 1.32%, in the year prior period. Annualized return on average assets was 1.01% and annualized return on average equity rose to 12.30% in the third quarter of 2006. Tennessee Commerce's efficiency ratio was 42.04% in the third quarter of 2006 compared with 40.45% in the third quarter of 2005. "We have one of the best efficiency ratios in the industry," stated George Fort, Chief Financial Officer. "We have also benefited from the leverage of our business banking model. At the end of the third quarter, our average assets per employee of $11.7 million were over four times higher than the industry average of $2.9 million per employee." Nine Months Net income rose 58.3% to $3.2 million for the first nine months of 2006 compared with $2.0 million in the same period of 2005. Net income per diluted share increased 42% to $0.81 compared with $0.57 in the first nine months of 2005. Net interest income rose 38.3% to $13.8 million, up from $10.0 million in the first nine months of 2005 based on a 60% increase in earnings assets to $555 million. Net interest margin was 4.05% for the 2006 period compared with 4.63% for the same period in 2005. Provision for loan losses was $3.2 million for the first nine months of 2006 compared with $2.8 million for the same period in 2005. The increase was primarily related to the overall growth in the loan portfolio. About Tennessee Commerce Bancorp, Inc. Tennessee Commerce Bancorp, Inc. is the parent company of Tennessee Commerce Bank. The Bank provides a wide range of banking services and is primarily focused on business accounts. Its corporate and banking offices are located in Franklin, Tennessee and it has a loan production office in Birmingham, Alabama. Tennessee Commerce Bancorp's stock is traded on the NASDAQ Global Market under the symbol TNCC. Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Tennessee Commerce Bancorp's operating results, performance or financial condition are competition, changes in interest rates, the demand for its products and services, the ability to expand, and numerous other factors as set forth in the Corporation's filings with the Securities and Exchange Commission. TENNESSEE COMMERCE BANCORP, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2006 (UNAUDITED) AND DECEMBER 31, 2005 (dollars in thousands except share data) September 30, December 31, 2006 2005 ---------- ----------- ASSETS Cash and due from financial institutions $ 9,669 $ 6,877 Federal funds sold 19,168 12,535 ---------- ----------- Cash and cash equivalents 28,837 19,412 Securities available for sale 48,909 31,992 Loans 490,778 348,586 Allowance for loan losses (6,199) (4,399) ---------- ------------ Net loans 484,579 344,187 Premises and equipment, net 1,677 769 Accrued interest receivable 3,398 2,148 Restricted equity securities 623 383 Deferred tax assets 685 490 Other assets 5,856 4,659 ---------- ----------- Total assets $ 574,564 $ 404,040 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Deposits Noninterest-bearing $ 22,236 $ 33,372 Interest-bearing 492,107 334,333 ---------- ----------- Total deposits 514,343 367,705 Accrued interest payable 1,469 1,126 Accrued bonuses 477 430 Long-term subordinated debt 8,248 8,248 Other liabilities 756 101 ---------- ----------- Total liabilities 525,293 377,610 Shareholders' equity Preferred stock, no par value. Authorized 1,000,000 shares; none issued or outstanding at September 30, 2006 and December 31, 2005 --- --- Common stock, $0.50 par value. Authorized 10,000,000 shares at September 30, 2006 and 5,000,000 at December 31, 2005; Issued and outstanding 4,420,674 at September 30, 2006 and 3,238,674 at December 31, 2005 2,210 1,619 Additional paid-in capital 40,339 21,401 Retained earnings 6,951 3,781 Accumulated other comprehensive income (loss) (229) (371) ---------- ----------- Total shareholders' equity 49,271 26,430 ---------- ----------- Total liabilities and shareholders' equity $ 574,564 $ 404,040 ========== =========== TENNESSEE COMMERCE BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005 (UNAUDITED) (dollars in thousands except share data) Nine Months Ended Three Months Ended September 30, September 30, 2006 2005 2006 2005 ---- ---- ---- ---- Interest income Loans, including fees $ 26,943 $ 15,827 $ 10,284 $ 6,075 Securities 1,529 649 586 243 Federal funds sold 286 118 130 55 -------- -------- -------- -------- Total interest income 28,758 16,594 11,000 6,373 Interest Expense Deposits 14,421 6,309 5,698 2,628 Other 513 289 176 139 -------- -------- -------- -------- Total interest expense 14,934 6,598 5,874 2,767 -------- -------- -------- -------- Net interest income 13,824 9,996 5,126 3,606 Provision for loan losses 3,150 2,800 1,150 1,000 -------- -------- -------- -------- Net interest income after provision for loan losses 10,674 7,196 3,976 2,606 Net interest income Service charges on deposit accounts 80 79 58 25 Mortgage banking 61 75 25 36 Gain on sale of loans 1,179 624 567 184 Other (196) 6 (60) (36) -------- -------- --------- --------- Total non interest income 1,124 784 590 209 Non interest expense Salaries and employee benefits 3,854 2,644 1,349 856 Occupancy and equipment 628 447 238 159 Data processing fees 507 337 177 111 Professional fees 514 275 133 113 Other 1,134 828 506 304 -------- -------- -------- -------- Total non interest expense 6,637 4,531 2,403 1,543 -------- -------- -------- -------- Income before income taxes 5,161 3,449 2,163 1,272 Income tax expense 1,991 1,446 834 552 -------- -------- -------- -------- Net income $ 3,170 $ 2,003 $ 1,329 $ 720 Unrealized gains (losses) on securities, net 143 (88) 693 (149) -------- --------- -------- --------- Comprehensive income (loss) $ 3,313 $ 1,915 $ 2,022 $ 571 Earnings per share (EPS): Basic EPS $ 0.88 $ 0.62 $ 0.31 $ 0.22 Diluted EPS 0.81 0.57 0.29 0.21 Weighted average shares outstanding: Basic 3,611,077 3,238,674 4,339,913 3,238,674 Diluted 3,928,473 3,485,719 4,662,978 3,497,201 TENNESSEE COMMERCE BANCORP, INC. FINANCIAL HIGHLIGHTS (Dollars in thousands except ratios and share data) 2006 2005 % Change ---- ---- -------- For the Quarter ending 09/30 Earnings: Net Interest Income $ 5,126 $ 3,606 42.15% Non-Interest Income 590 209 182.30% Provision for Loan Losses 1,150 1,000 15.00% Operating Expense 2,403 1,543 55.74% Operating Income 2,163 1,272 70.05% Applicable Tax 834 552 51.09% -------- --------- Net Income $ 1,329 $ 720 84.58% ======== ========= At September 30 Total Assets $ 574,564 $ 356,009 61.39% Net Loans 484,579 316,398 53.15% Earning Assets 554,677 347,531 59.61% Allowance for Loan Losses 6,199 4,175 48.48% Deposits 514,343 321,012 60.23% Shareholders' Equity $ 49,271 $ 25,515 93.11% Total Shares Outstanding 4,420,674 3,238,674 36.50% Significant Ratios Net Interest Margin 3.99% 4.44% -10.14% Return on Average Assets * 1.01% 0.89% 13.67% Return on Average Equity * 12.30% 11.43% 7.61% Efficiency Ratio 42.04% 40.45% 3.94% Loan Loss Reserve/Net Loans 1.28% 1.32% -3.05% Basic Earnings per Share $ 0.31 $ 0.22 40.91% Diluted Earnings per Share $ 0.29 $ 0.21 38.10% * annualized DATASOURCE: Tennessee Commerce Bancorp, Inc. CONTACT: George Fort, Chief Financial Officer of Tennessee Commerce Bancorp, Inc., +1-615-599-2274

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