TNCC Tennessee Commerce Bancorp (TN) (MM)

FRANKLIN, Tenn., Jan. 24 /PRNewswire-FirstCall/ -- Tennessee Commerce Bancorp, Inc. (NASDAQ:TNCC) today reported record net income, loans and deposits for the fourth quarter and year ended December 31, 2006. Fourth quarter net income rose 48.3% to $1.6 million, or $0.33 per diluted shares, for the quarter ended December 31, 2006 compared with $1.1 million, or $0.30 per diluted share, for the fourth quarter in 2005. "Tennessee Commerce reported record earnings in 2006 due to strong growth in loans, net interest income and improved operating efficiencies," stated Mike Sapp, President of Tennessee Commerce Bancorp. "Loan volume jumped 56.5% to $538.6 million in the fourth quarter of 2006 compared with the prior year and was a primary factor in net interest income rising 52.9% to $5.6 million. Our growth in loan volume also allowed us to sell a record amount of loans in 2006. We have been very successful in building income through loan sales and syndication of larger loans. "We continued to leverage our business banking model in 2006. We achieved an industry leading efficiency ratio of 39.08% in the fourth quarter. At the end of the fourth quarter, our average assets per employee of $12.5 million were over three and a half times higher than the Tennessee bank average of $3.5 million per employee," continued Mr. Sapp. Fourth Quarter Interest income rose 77.4% to $12.5 million, up from $7.0 million in the fourth quarter of 2005. The growth in interest income was primarily due to a 52.3% increase in average loans to $497.6 million for the fourth quarter of 2006. Net interest income rose 52.9% to $5.6 million for the fourth quarter of 2006 compared with $3.6 million for the fourth quarter of 2005. The growth in net interest income was due to an increase in loans offset somewhat by a decline in net interest margin. Net interest margin was 3.80% in the fourth quarter of 2006 compared with 3.97% in the fourth quarter of 2005. Provision for loan losses rose 33.3% to $1.2 million for the fourth quarter of 2006 compared with $0.9 million for the fourth quarter of 2005. Net interest income after the provision for loan losses increased 59.4% to $4.4 million, up from $2.7 million in the prior year's fourth quarter. "Asset quality remained strong in 2006," stated George Fort, Chief Financial Officer. "Our non-performing loans accounted for only 0.85% of total loans at year end and net charge offs to average loans were only 0.41% for 2006. Loan reserves to total loans were 1.28% at year-end 2006." Non-interest income grew 21.3% to $639,000 compared with $527,000 in the fourth quarter of 2005. Non-interest income benefited from growth in service charges on deposit accounts and gain on sale of loans. Gain on loan sales rose 75.5% to a record $846,000 in the fourth quarter of 2006 compared with $482,000 in the fourth quarter of 2005. The 2006 gain was offset somewhat by a $296,000 loss associated with the disposal of repossessed assets in other non-interest income. Average weighted diluted shares outstanding increased 33.8% to 4.9 million in the fourth quarter of 2006 from 3.6 million in the fourth quarter of 2005. The increase in shares was due to the Company's initial public stock offering of 1.15 million shares sold in June 2006. Annualized return on average assets was 1.05% and return on average equity was 12.58% for the fourth quarter of 2006. Tennessee Commerce's efficiency ratio was 39.08% in the fourth quarter of 2006 compared with 41.25% in the fourth quarter of 2005. 2006 Results Net income for 2006 rose 54.8% to a record $4.7 million, or $1.14 per diluted share, compared with $3.1 million, or $0.87 per diluted share, in 2005. Average weighted shares outstanding increased 18.2% to 4.2 million in 2006 compared with 3.5 million in 2005, primarily due to the Company's initial public stock offering. Total assets rose 54.4% to $623.6 million and net loans increased 56.5% to $538.5 million in 2006 compared with 2005. Return on average assets was 0.95% and return on average equity increased to 12.68% in 2006. "Strong loan demand was a major factor in our assets exceeding our goals for the year," stated Mr. Sapp. "We continue to benefit from our strong local economy and loans originated by our third-party associates. The increased loan demand allowed us to almost double our gain on sale of loans to $2.0 million in 2006. In addition, we benefited from higher fees from loans syndicated during the year." Net interest income rose 42.2% to $19.4 million in 2006 compared with $13.6 million in 2005. Net interest margin was 3.98% for the 2006 period compared with 4.44% for the same period in 2005. Provision for loan losses was $4.4 million in 2006 compared with $3.7 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 DECEMBER 31, 2006 (UNAUDITED) AND DECEMBER 31, 2005 (dollars in thousands except share data) December 31, December 31, 2006 2005 ----------- ------------ ASSETS Cash and due from financial institutions $ 177 $ 6,877 Federal funds sold 13,820 12,535 ---------- ----------- Cash and cash equivalents 13,997 19,412 Securities available for sale 56,943 31,992 Loans 545,518 348,586 Allowance for loan losses (6,968) (4,399) ---------- ----------- Net loans 538,550 344,187 Premises and equipment, net 1,633 769 Accrued interest receivable 4,116 2,148 Restricted equity securities 633 383 Deferred tax asset 720 490 Other assets 7,011 4,659 ---------- ----------- Total assets $ 623,603 $ 404,040 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Deposits Noninterest-bearing $ 17,001 $ 33,372 Interest-bearing 543,566 334,333 ---------- ----------- Total deposits 560,567 367,705 Accrued interest payable 1,728 1,126 Accrued bonuses 623 430 Long-term subordinated debt 8,248 8,248 Other liabilities 1,213 101 ---------- ----------- Total liabilities 572,379 377,610 Shareholders' equity Preferred stock, no par value. Authorized 1,000,000 shares; none issued or outstanding at December 31, 2006 and December 31, 2005 -- -- Common stock, $0.50 par value. Authorized 10,000,000 shares at December 31, 2006 and 5,000,000 at December 31, 2005; Issued and outstanding 4,451,674 at December 31, 2006 and 3,238,674 at December 31, 2005 2,226 1,619 Additional paid-in capital 40,755 21,401 Retained earnings 8,530 3,781 Accumulated other comprehensive income (loss) (287) (371) ---------- ----------- Total shareholders' equity 51,224 26,430 ---------- ----------- Total liabilities and shareholders' equity $ 623,603 $ 404,040 ========== =========== TENNESSEE COMMERCE BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME TWELVE MONTHS ENDED DECEMBER 31, 2006 AND 2005 THREE MONTHS ENDED DECEMBER 31, 2006 AND 2005 (UNAUDITED) (dollars in thousands except share data) Twelve Months Ended Three Months Ended December 31, December 31, 2006 2005 2006 2005 ---- ---- ---- ---- Interest income Loans, including fees $ 38,382 $ 22,488 $ 11,439 $ 6,661 Securities 2,216 967 687 318 Federal funds sold 647 178 361 60 --------- -------- --------- --------- Total interest income 41,245 23,633 12,487 7,039 Interest Expense Deposits 21,216 9,567 6,795 3,258 Other 652 439 139 150 --------- -------- --------- --------- Total interest expense 21,868 10,006 6,934 3,408 --------- -------- --------- --------- Net interest income 19,377 13,627 5,553 3,631 Provision for loan losses 4,350 3,700 1,200 900 --------- -------- --------- --------- Net interest income after provision for loan losses 15,027 9,927 4,353 2,731 Non interest income Service charges on deposit accounts 202 114 61 35 Mortgage banking 89 105 28 30 Gain on sale of loans 2,025 1,106 846 482 Other (553) (14) (296) (20) --------- --------- --------- --------- Total non interest income 1,763 1,311 639 527 Non interest expense Salaries and employee benefits 5,047 3,700 1,194 1,056 Occupancy and equipment 844 629 216 182 Data processing fees 701 474 194 137 Professional fees 786 398 272 123 Other 1,678 1,045 544 217 --------- -------- --------- --------- Total non interest expense 9,056 6,246 2,420 1,715 --------- -------- --------- --------- Income before income taxes 7,734 4,992 2,572 1,543 Income tax expense 2,985 1,925 994 479 --------- -------- --------- --------- Net income $ 4,749 $ 3,067 $ 1,578 $ 1,064 Unrealized gains (losses) on securities, net 84 (237) (58) (149) --------- --------- --------- --------- Comprehensive income (loss) $ 4,833 $ 2,830 $ 1,520 $ 915 Earnings per share (EPS): Basic EPS $ 1.24 $ 0.95 $ 0.36 $ 0.33 Diluted EPS 1.14 0.87 0.33 0.30 Weighted average shares outstanding: Basic 3,822,655 3,238,674 4,450,489 3,238,674 Diluted 4,160,683 3,520,432 4,850,413 3,624,574 TENNESSEE COMMERCE BANCORP, INC. FINANCIAL HIGHLIGHTS (Dollars in thousands except ratios and share data) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 -------- -------- --------- -------- Earnings: Net Interest Income $ 5,553 $ 3,631 $ 19,377 $ 13,627 Non-Interest Income 639 527 1,763 1,311 Provision for Loan Losses 1,200 900 4,350 3,700 Operating Expense 2,420 1,715 9,056 6,246 Operating Income 2,572 1,543 7,734 4,992 Applicable Tax 994 479 2,985 1,925 -------- -------- -------- -------- Net Income $ 1,578 $ 1,064 $ 4,749 $3,067 ======== ======== ======== ======== Total Assets $623,603 $404,040 $623,603 $404,040 Net Loans 538,550 344,187 538,550 344,187 Earning Assets 610,322 388,714 610,322 388,714 Allowance for Loan Losses 6,968 4,399 6,968 4,399 Deposits 560,567 367,705 560,567 367,705 Shareholders' Equity $ 51,224 $ 26,430 $ 51,224 $ 26,430 Total Shares Outstanding 4,451,674 3,238,674 4,451,674 3,238,674 Significant Ratios: Net Interest Margin 3.80% 3.97% 3.98% 4.44% Return on Average Assets 1.05%* 1.13%* 0.95% 0.97% Return on Average Equity 12.58%* 16.46%* 12.68% 12.29% Efficiency Ratio 39.08% 41.25% 42.84% 41.81% Loan Loss Reserve/Net Loans 1.29% 1.28% 1.29% 1.28% Basic Earnings per Share $ 0.36 $ 0.33 $ 1.24 $ 0.95 Diluted Earnings per Share $ 0.33 $ 0.30 $ 1.14 $ 0.87 * 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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