Investor Contact:
David Morimoto
Media Contact:
Cedric Yamanaka
 
SVP & Treasurer
  
Public Relations/Communications Manager
 
(808) 544-0627
  
(808) 544-6898
 
david.morimoto@centralpacificbank.com
cedric.yamanaka@centralpacificbank.com

NEWS RELEASE­
 
CENTRAL PACIFIC FINANCIAL CORP. REPORTS THIRD QUARTER RESULTS

HONOLULU, October 30, 2007 – Central Pacific Financial Corp. (NYSE: CPF), parent company of Central Pacific Bank, today reported net income for the third quarter of 2007 of $9.1 million, or $0.30 per diluted share, compared to $20.6 million, or $0.67 per diluted share, reported in the third quarter of 2006 and $21.0 million, or $0.68 per diluted share, reported in the second quarter of 2007.

 “In light of the significant and rapid deterioration in the California residential construction market, combined with our commitment to proactively manage credit risk, we downgraded several loans which resulted in a provision for loan losses of $21.2 million in the quarter,” said Clint Arnoldus, President and Chief Executive Officer.

Third Quarter Highlights
§  
Loans and leases increased by $307.5 million, or 8.2% from a year ago.
§  
Provision for loan and lease losses of $21.2 million.
§  
Deposits increased by $160.3 million, or 4.2% from a year ago.
§  
Opened our 39th branch in Pearl Highlands.
 
Earnings Highlights
Net interest income for the third quarter of 2007 was $52.8 million, compared to $53.1 million in the year-ago quarter and $52.9 million in the second quarter of 2007.  The net interest margin for the current quarter was 4.29%, compared to 4.54% in the year-ago quarter and 4.36% in the second quarter of 2007.  The year-over-year compression in our net interest margin was primarily attributable to our increased funding costs resulting from a shift in the composition of our deposit base from lower-rate demand, money market, and savings accounts into higher-rate time deposit accounts.  The sequential-quarter compression was primarily attributable to lower yields on our interest earning assets.

The provision for loan and lease losses in the third quarter of 2007 was $21.2 million, compared to $0.3 million in the year-ago quarter and $1.0 million in the second quarter of 2007.  The current quarter increase was directly attributable to the aforementioned downgrades of 12 loans totaling $92.0 million with exposure to the California residential construction market.

Other operating income totaled $11.8 million for the third quarter of 2007, compared to $10.5 million in the year-ago quarter and $11.5 million in the second quarter of 2007.  The increase from the year-ago quarter was primarily due to increased income from bank-owned life insurance of $0.8 million and higher gains on sales of loans of $0.4 million.

The sequential-quarter increase was primarily due to higher income from bank-owned life insurance of $0.7 million, offset by lower gains on sales of loans of $0.3 million.

Other operating expense for the third quarter of 2007 was $31.6 million, compared to $31.2 million in the year-ago quarter and $31.3 million in the second quarter of 2007.  The increase from the year-ago quarter was primarily due to increased charges related to our reserves for unfunded commitments totaling $1.2 million and higher amortization expense related to high-technology investments of $0.3 million, offset by lower salaries and employee benefits of $1.2 million.  The sequential-quarter increase was primarily due to increased charges related to our reserves for unfunded commitments totaling $0.7 million, offset by lower salaries and employee benefits of $0.6 million.
 

The Company’s efficiency ratio for the third quarter of 2007 was 47.27%, compared with 47.03% for both the year-ago quarter and the second quarter of 2007.  The current quarter increase was primarily attributable to the higher operating expense items discussed above.

The effective tax rate was 23.01% for the third quarter of 2007, compared to 35.86% in the year-ago quarter and 34.51% in the second quarter of 2007.  The current quarter decrease was due to the disproportionate recognition of federal and state tax credits compared to taxable income.

Balance Sheet Highlights
Total assets of $5.6 billion at September 30, 2007 increased by $268.7 million, or 5.0%, from a year ago and by $84.0 million, or 1.5%, from June 30, 2007.

Total loans and leases of $4.1 billion at September 30, 2007 increased by $307.5 million, or 8.2%, from a year ago and by $135.5 million, or 3.4%, from June 30, 2007.  Our Hawaii lending operations accounted for approximately 65% of the current quarter’s loan growth, while our mainland loan production offices contributed the remaining 35%.

Total deposits of $3.9 billion at September 30, 2007 increased by $160.3 million, or 4.2%, from a year ago and by $27.4 million, or 0.7%, from June 30, 2007.  Current quarter increases in time deposits of $30.5 million and noninterest-bearing demand deposits of $6.8 million were offset by decreases in interest-bearing demand deposits of $3.0 million and savings and money market deposits of $7.0 million.

“In an effort to drive deposit growth, we recently opened our 39th branch in Pearl Highlands and introduced an innovative new product called Choice Checking,” commented Arnoldus.  “Choice Checking is a checking account that allows customers to earn a CD-like interest rate if certain requirements are met, including direct deposit, using a check card to pay for daily purchases, and making payments online.  In addition, there are no minimum balance requirements, no monthly service fees, and surcharge fees charged by ATMs nationwide are reimbursed.”

Shareholders’ equity of $744.0 million at September 30, 2007 increased by $21.0 million from a year ago and decreased by $9.6 million from June 30, 2007.

Stock Repurchase Plan
In April 2007, the Company announced that its Board of Directors authorized the repurchase of up to 600,000 shares of the Company’s common stock.  In July 2007, the Company’s Board of Directors approved a new stock repurchase plan authorizing the Company to repurchase up to an additional 1,500,000 shares.  Through the third quarter of 2007, the Company repurchased 917,700 shares under these plans.

Asset Quality
Net loan charge-offs in the third quarter of 2007 totaled $0.1 million, compared to net loan charge-offs of $0.6 million in the year-ago quarter and $0.2 million in the second quarter of 2007.

At September 30, 2007, nonperforming assets totaled $30.8 million, or 0.55%, of total assets, compared to $8.0 million, or 0.15%, of total assets at September 30, 2006 and $1.4 million, or 0.02%, of total assets at June 30, 2007.  The sequential-quarter increase in nonperforming assets was primarily attributable to three California land loans totaling $29.6 million.

Loans delinquent for 90 days or more of $0.9 million declined by $1.9 million, or 67.9%, from a year ago, and increased by $0.6 million, or 173.3%, from June 30, 2007.

The allowance for loan and lease losses as a percentage of total loans and leases was 1.78% at September 30, 2007, compared to 1.40% a year ago and 1.31% at June 30, 2007.  The current quarter increase was directly attributable to the increased provision for loan and lease losses.
 

Business and Earnings Outlook
Based on current and anticipated economic and business conditions, management forecasts diluted earnings per share for 2007 in the range of $2.31 to $2.36.

Conference Call Information
Central Pacific Financial Corp. will conduct a conference call today at 4:00 p.m. Eastern Time (10:00 a.m. Hawaii Time) to discuss the quarterly results.  To participate in the conference call, please dial 1-888-233-7976 or visit the investor relations page of the Company’s website at http://investor.centralpacificbank.com.  A playback of the call will be available through November 6, 2007 by dialing 1-888-203-1112 (passcode: 8163476) and on the Company’s website.
 
About Central Pacific Financial Corp.
Central Pacific Financial Corp. is the fourth largest financial institution in Hawaii with more than $5.6 billion in assets.  Central Pacific Bank, its primary subsidiary, operates 39 branches and more than 90 ATMs throughout Hawaii.  For additional information, please visit our website at http://www.centralpacificbank.com.
 
 
  
 
     
 
 
  
 
**********
 
Forward-Looking Statements
This document may contain forward-looking statements concerning projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure, or other financial items, concerning plans and objectives of management for future operations, concerning future economic performance, or concerning any of the assumptions underlying or relating to any of the foregoing.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts, and may include the words “believes”, “plans”, “intends”, “expects”, “anticipates”, “forecasts” or words of similar meaning.  While we believe that our forward-looking statements and the assumptions underlying them are reasonably based, such statements and assumptions are by their nature subject to risks and uncertainties, and thus could later prove to be inaccurate or incorrect.  Accordingly, actual results could materially differ from projections for a variety of reasons, to include, but not limited to: the impact of local, national, and international economies and events, including natural disasters, on the Company’s business and operations and on tourism, the military, and other major industries operating within the Hawaii market and any other markets in which the Company does business; the impact of legislation affecting the banking industry; the impact of competitive products, services, pricing, and other competitive forces; movements in interest rates; loan delinquency rates and changes in asset quality generally; and the price of the Company’s stock.  For further information on factors that could cause actual results to materially differ from projections, please see the Company’s publicly available Securities and Exchange Commission filings, including the Company’s Form 10-K for the last fiscal year.  The Company does not update any of its forward-looking statements.
 
#####
 
3
 
Financial Highlights - September 30, 2007
(Unaudited)
                                       
                                       
     
Three Months Ended
          
Nine Months Ended
        
     
September 30,
    
%
    
September 30,
    
%
  
(in thousands, except per share data)
  
2007
    
2006
    
Change
    
2007
    
2006
    
Change
  
                                       
INCOME STATEMENT
                                    
Net income
   $
9,107
     $
20,603
       -55.8 %   $
50,258
     $
60,380
       -16.8 %
Per share data:
                                                
 
Diluted earnings per share
    
0.30
      
0.67
       -55.2 %    
1.64
      
1.96
       -16.3 %
 
Cash dividends
    
0.25
      
0.23
       8.7 %    
0.73
      
0.65
       12.3 %
                                                   
PERFORMANCE RATIOS
                                                
Return on average assets (1)
     0.65 %     1.56 %             1.22 %     1.54 %        
Return on average shareholders' equity (1)
     4.80 %     11.52 %             8.84 %     11.50 %        
Net income to average tangible shareholders'                                                
        equity (1)
     8.35 %     21.44 %             15.45 %     21.92 %        
Efficiency ratio (2)
     47.27 %     47.03 %             46.58 %     48.41 %        
Net interest margin (1)
     4.29 %     4.54 %             4.39 %     4.58 %        
Dividend payout ratio
     83.33 %     34.33 %             44.24 %     32.83 %        
                                                   
                             
September 30,
    
%
  
                             
2007
    
2006
    
Change
  
BALANCE SHEET
                                                
Total assets
                           $
5,647,624
     $
5,378,890
       5.0 %
Loans and leases
                            
4,072,536
      
3,765,081
       8.2 %
Loans and leases, net
                            
4,000,019
      
3,712,470
       7.7 %
Deposits
                            
3,942,259
      
3,781,923
       4.2 %
Shareholders' equity
                            
743,972
      
722,938
       2.9 %
Book value per share
                            
24.87
      
23.58
       5.5 %
Market value per share
                            
29.20
      
36.58
       -20.2 %
Tangible equity ratio
                             7.92 %     7.76 %        
                                                   
     
Three Months Ended
            
Nine Months Ended
          
     
September 30,
    
%
    
September 30,
    
%
  
     
2007
    
2006
    
Change
    
2007
    
2006
    
Change
  
SELECTED AVERAGE BALANCES
                                                
Total assets
   $
5,575,099
     $
5,287,570
       5.4 %   $
5,510,680
     $
5,229,202
       5.4 %
Interest-earning assets
    
4,970,157
      
4,713,773
       5.4 %    
4,917,673
      
4,648,673
       5.8 %
Loans and leases, net of unearned interest
    
4,025,552
      
3,722,846
       8.1 %    
3,970,276
      
3,651,835
       8.7 %
Other real estate
    
-
      
-
      
-
      
130,403
      
-
      
-
  
Deposits
    
3,893,114
      
3,666,316
       6.2 %    
3,840,882
      
3,637,433
       5.6 %
Interest-bearing liabilities
    
4,132,159
      
3,874,087
       6.7 %    
4,076,066
      
3,800,528
       7.2 %
Shareholders' equity
    
758,817
      
715,312
       6.1 %    
757,917
      
700,202
       8.2 %
                                                   
                             
September 30,
    
%
  
                             
2007
    
2006
    
Change
  
NONPERFORMING ASSETS
                                                
Nonaccrual loans
                           $
30,825
     $
8,024
       284.2 %
Other real estate
                            
-
      
-
      
-
  
 
Total nonperforming assets
                            
30,825
      
8,024
       284.2 %
Loans delinquent for 90 days or more (still accruing interest)
              
902
      
2,809
       -67.9 %
Restructured loans (still accruing interest)
              
-
      
-
       -  
 
Total nonperforming assets, loans delinquent for  90 days or more (still
                                  
 
        accruing interest) and restructured loans (still accruing interest)          
       $
31,727
     $
10,833
       192.9 %
                                                   
     
Three Months Ended
            
Nine Months Ended
          
     
September 30,
    
%
    
September 30,
    
%
  
     
2007
    
2006
    
Change
    
2007
    
2006
    
Change
  
Loan charge-offs
   $
835
     $
1,266
       -34.0 %   $
6,513
     $
3,599
       81.0 %
Recoveries
    
743
      
663
       12.1 %    
1,950
      
1,924
       1.4 %
 
Net loan charge-offs (recoveries)
   $
92
     $
603
       -84.7 %   $
4,563
     $
1,675
       172.4 %
Net loan charge-offs to average loans (1)
     0.01 %     0.06 %             0.15 %     0.06 %        
                                                   
                             
September 30,
          
                             
2007
    
2006
          
ASSET QUALITY RATIOS
                                                
Nonaccrual loans to total loans
                             0.76 %     0.21 %        
Nonperforming assets to total assets
                             0.55 %     0.15 %        
Nonperforming assets, loans delinquent for 90 days or more (still accruing interest)
                          
  and restructured loans (still accruing interest) to total loans & other real estate       0.78 %      0.29 %        
Allowance for loan and lease losses to total loans and leases
               1.78 %     1.40 %        
Allowance for loan and lease losses to nonaccrual loans
                 235.25 %     655.67 %        
                                                   
                                                   
(1)
Annualized
                                                
(2)
Efficiency ratio is derived by dividing other operating expense before amortization of intangible assets by net operating         
 
income (net interest income on a fully taxable equivalent basis plus other operating income before securities transactions).        
 
 
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                   
                   
 
  
September 30,
    
June 30,
    
September 30,
  
(in thousands, except per share data)
  
2007
    
2007
    
2006
  
                   
ASSETS
                  
Cash and due from banks
   $
90,161
     $
116,216
     $
110,554
  
Interest-bearing deposits in other banks
    
439
      
5,153
      
9,472
  
Federal funds sold
    
14,900
      
14,900
      
-
  
Investment securities:
                        
  Held to maturity, at cost (fair value of $46,977 at September 30, 2007,
                        
      $48,619 at June 30, 2007 and $65,821 at September 30, 2006)
    
47,465
      
49,495
      
66,918
  
  Available for sale, at fair value
    
801,640
      
811,085
      
832,255
  
      Total investment securities
    
849,105
      
860,580
      
899,173
  
                         
Loans held for sale
    
31,388
      
45,539
      
21,742
  
Loans and leases
    
4,072,536
      
3,937,023
      
3,765,081
  
  Less allowance for loan and lease losses
    
72,517
      
51,409
      
52,611
  
      Net loans and leases
    
4,000,019
      
3,885,614
      
3,712,470
  
                         
Premises and equipment
    
80,173
      
78,122
      
76,909
  
Accrued interest receivable
    
27,580
      
25,337
      
25,631
  
Investment in unconsolidated subsidiaries
    
16,333
      
14,134
      
11,160
  
Goodwill
    
292,453
      
291,985
      
298,121
  
Core deposit premium
    
29,844
      
30,529
      
32,872
  
Mortgage servicing rights
    
11,111
      
11,253
      
11,794
  
Bank-owned life insurance
    
130,089
      
104,597
      
101,101
  
Federal Home Loan Bank stock
    
48,797
      
48,797
      
48,797
  
Other assets
    
25,232
      
30,842
      
19,094
  
      Total assets
   $
5,647,624
     $
5,563,598
     $
5,378,890
  
                         
LIABILITIES AND SHAREHOLDERS' EQUITY
                        
Deposits:
                        
  Noninterest-bearing demand
   $
630,586
     $
623,778
     $
608,229
  
  Interest-bearing demand
    
441,884
      
444,875
      
433,437
  
  Savings and money market
    
1,216,991
      
1,223,943
      
1,204,488
  
  Time
    
1,652,798
      
1,622,261
      
1,535,769
  
      Total deposits
    
3,942,259
      
3,914,857
      
3,781,923
  
                         
Short-term borrowings
    
72,245
      
1,903
      
58,773
  
Long-tem debt
    
816,535
      
817,067
      
730,784
  
Minority interest
    
13,110
      
13,117
      
13,515
  
Other liabilities
    
59,503
      
63,111
      
70,957
  
      Total liabilities
    
4,903,652
      
4,810,055
      
4,655,952
  
                         
Shareholders' equity:
                        
  Preferred stock, no par value, authorized 1,000,000 shares, none issued
    
-
      
-
      
-
  
  Common stock, no par value, authorized 100,000,000 shares; issued and
                        
       outstanding 29,914,586 shares at September 30, 2007,  30,446,160 shares
                        
       at June 30, 2007, and 30,659,972 shares at September 30, 2006
    
419,463
      
427,153
      
430,204
  
  Surplus
    
54,686
      
53,932
      
50,612
  
  Retained earnings
    
281,682
      
290,353
      
258,880
  
  Accumulated other comprehensive loss
     (11,859 )     (17,895 )     (16,758 )
      Total shareholders' equity
    
743,972
      
753,543
      
722,938
  
                         
      Total liabilities and shareholders' equity
   $
5,647,624
     $
5,563,598
     $
5,378,890
  
 
 
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                       
                       
   
Three Months Ended
  
Nine Months Ended
  
   
September 30,
 
June 30,
  
September 30,
  
September 30,
  
(in thousands, except per share data)
  
2007
  
2007
  
2006
  
2007
  
2006
  
                       
Interest income:
                      
  Interest and fees on loans and leases
   $
78,325
   $
77,070
   $
72,444
   $
231,561
   $
204,603
  
  Interest and dividends on investment securities:
                                
        Taxable interest
    
8,386
    
8,866
    
8,486
    
25,964
    
25,996
  
        Tax-exempt interest
    
1,343
    
1,365
    
1,227
    
4,071
    
3,822
  
        Dividends
    
83
    
60
    
153
    
176
    
264
  
  Interest on deposits in other banks
    
82
    
39
    
79
    
156
    
306
  
  Interest on federal funds sold and securities
                                
     purchased under agreements to resell
    
125
    
109
    
31
    
244
    
85
  
  Dividends on Federal Home Loan Bank stock
    
73
    
24
      -    
195
    
-
  
                                 
      Total interest income
    
88,417
    
87,533
    
82,420
    
262,367
    
235,076
  
                                 
Interest expense:
                                
  Demand
    
139
    
141
    
136
    
418
    
428
  
  Savings and money market
    
6,321
    
6,167
    
4,969
    
18,773
    
11,667
  
  Time
    
17,925
    
17,423
    
14,050
    
51,182
    
37,329
  
  Interest on short-term borrowings
    
302
    
303
    
1,221
    
1,110
    
2,035
  
  Interest on long-term debt
    
10,900
    
10,616
    
8,949
    
31,484
    
26,163
  
                                 
      Total interest expense
    
35,587
    
34,650
    
29,325
    
102,967
    
77,622
  
                                 
      Net interest income
    
52,830
    
52,883
    
53,095
    
159,400
    
157,454
  
Provision for loan and lease losses
    
21,200
    
1,000
    
300
    
24,800
    
1,350
  
      
                                
      Net interest income after provision for                                
           loan and lease losses
    
31,630
    
51,883
    
52,795
    
134,600
    
156,104
  
                                 
Other operating income:
                                
  Service charges on deposit accounts
    
3,581
    
3,463
    
3,570
    
10,488
    
10,563
  
  Other service charges and fees
    
3,281
    
3,414
    
2,994
    
10,052
    
8,993
  
  Income from fiduciary activities
    
968
    
854
    
740
    
2,583
    
2,157
  
  Equity in earnings of unconsolidated subsidiaries
    
169
    
167
    
90
    
593
    
421
  
  Fees on foreign exchange
    
149
    
171
    
207
    
541
    
601
  
  Investment securities losses
    
-
    
-
    
-
    
-
     (19 )
  Income from bank-owned life insurance
    
1,861
    
1,183
    
1,085
    
4,075
    
2,794
  
  Loan placement fees
    
248
    
283
    
464
    
790
    
1,256
  
  Gains on sales of loans
    
1,116
    
1,403
    
680
    
3,886
    
4,133
  
  Other
    
379
    
600
    
715
    
1,434
    
2,770
  
                                 
      Total other operating income
    
11,752
    
11,538
    
10,545
    
34,442
    
33,669
  
                                 
Other operating expense:
                                
  Salaries and employee benefits
    
16,240
    
16,888
    
17,451
    
49,534
    
54,128
  
  Net occupancy
    
2,624
    
2,593
    
2,399
    
7,721
    
6,974
  
  Equipment
    
1,255
    
1,325
    
1,171
    
3,810
    
3,624
  
  Amortization of core deposit premium
    
684
    
685
    
974
    
2,054
    
2,922
  
  Amortization of mortgage servicing rights
    
478
    
500
    
547
    
1,488
    
1,697
  
  Communication expense
    
1,032
    
938
    
1,186
    
3,118
    
3,562
  
  Legal and professional services
    
2,223
    
2,110
    
1,985
    
6,660
    
6,174
  
  Computer software expense
    
869
    
893
    
716
    
2,561
    
1,956
  
  Advertising expense
    
661
    
635
    
515
    
1,919
    
1,789
  
  Other
    
5,487
    
4,764
    
4,272
    
14,495
    
13,627
  
                                 
      Total other operating expense
    
31,553
    
31,331
    
31,216
    
93,360
    
96,453
  
                                 
      Income before income taxes
    
11,829
    
32,090
    
32,124
    
75,682
    
93,320
  
Income taxes
    
2,722
    
11,074
    
11,521
    
25,424
    
32,940
  
                                 
      Net income
   $
9,107
   $
21,016
   $
20,603
   $
50,258
   $
60,380
  
                                 
Per share data:
                                
  Basic earnings per share
   $
0.30
   $
0.69
   $
0.67
   $
1.65
   $
1.98
  
  Diluted earnings per share
    
0.30
    
0.68
    
0.67
    
1.64
    
1.96
  
  Cash dividends declared
    
0.25
    
0.24
    
0.23
    
0.73
    
0.65
  
                                 
Basic weighted average shares outstanding 
  
30,192
    
30,555
    
30,532
    
30,480
    
30,465
  
Diluted weighted average shares outstanding 
  
30,378
    
30,798
    
30,838
    
30,707
    
30,790
  
 
 
CENTRAL PACIFIC FINANCIAL CORP. AND SUBSIDIARIES
Average Balances, Interest Income & Expense, Yields and Rates (Taxable Equivalent)
                           
                           
 
Three Months Ended
  
Three Months Ended
(dollars in thousands)
September 30, 2007
  
September 30, 2006
 
Average
  
Average
      
Average
  
Average
    
 
Balance
  
Yield/Rate
  
Interest
  
Balance
  
Yield/Rate
  
Interest
                           
Assets:
                          
Interest earning assets:
                          
Interest-bearing deposits in other banks
 $
6,362
     5.14 %   $
82
   $
6,537
     4.77 %   $
79
Federal funds sold & securities purchased
                                      
   under agreements to resell
  
9,761
     5.10 %    
125
    
2,332
     5.26 %    
31
Taxable investment securities, excluding
                                      
   valuation allowance
  
726,971
     4.66 %    
8,469
    
797,742
     4.33 %    
8,639
Tax-exempt investment securities, excluding
                                      
   valuation allowance
  
152,714
     5.41 %    
2,066
    
135,519
     5.58 %    
1,888
Loans and leases, net of unearned income
  
4,025,552
     7.73 %    
78,325
    
3,722,846
     7.73 %    
72,444
   Federal Home Loan Bank stock
  
48,797
     0.60 %    
73
    
48,797
     -      
-
Total interest earning assets
  
4,970,157
     7.13 %    
89,140
    
4,713,773
     7.01 %    
83,081
Nonearning assets
  
604,942
                  
573,797
              
Total assets
 $
5,575,099
                 $
5,287,570
              
                                       
Liabilities & Stockholders' Equity:
                                      
Interest-bearing liabilities:
                                      
Interest-bearing demand deposits
 $
437,150
     0.13 %   $
139
   $
424,611
     0.13 %   $
136
Savings and money market deposits
  
1,216,407
     2.06 %    
6,321
    
1,170,817
     1.68 %    
4,969
Time deposits under $100,000
  
621,215
     3.91 %    
6,127
    
578,530
     3.17 %    
4,628
Time deposits $100,000 and over
  
1,018,347
     4.60 %    
11,798
    
878,472
     4.26 %    
9,422
Short-term borrowings
  
22,279
     5.39 %    
302
    
85,843
     5.65 %    
1,221
Long-term debt
  
816,761
     5.29 %    
10,900
    
735,814
     4.83 %    
8,949
Total interest-bearing liabilities
  
4,132,159
     3.42 %    
35,587
    
3,874,087
     3.00 %    
29,325
Noninterest-bearing deposits
  
599,995
                  
613,886
              
Other liabilities
  
84,128
                  
84,285
              
Stockholders' equity
  
758,817
                  
715,312
              
Total liabilities & stockholders' equity
 $
5,575,099
                 $
5,287,570
              
                                       
Net interest income
               $
53,553
                 $
53,756
                                       
Net interest margin
         4.29 %                 4.54 %      
                                       
 
Nine Months Ended
  
Nine Months Ended
(dollars in thousands)
September 30, 2007
  
September 30, 2006
 
Average
  
Average
        
Average
  
Average
      
 
Balance
  
Yield/Rate
  
Interest
  
Balance
  
Yield/Rate
  
Interest
                                       
Assets:
                                      
Interest earning assets:
                                      
Interest-bearing deposits in other banks
 $
4,063
     5.14 %   $
156
   $
9,595
     4.26 %   $
306
Federal funds sold & securities purchased
                                      
   under agreements to resell
  
6,304
     5.18 %    
244
    
2,384
     4.75 %    
85
Taxable investment securities, excluding
                                      
   valuation allowance
  
734,260
     4.75 %    
26,140
    
800,546
     4.37 %    
26,260
Tax-exempt investment securities, excluding
                                      
   valuation allowance
  
153,973
     5.42 %    
6,263
    
135,516
     5.79 %    
5,880
Loans and leases, net of unearned income
  
3,970,276
     7.79 %    
231,561
    
3,651,835
     7.49 %    
204,603
Federal Home Loan Bank stock
  
48,797
     0.53 %    
195
    
48,797
     -      
-
Total interest earning assets
  
4,917,673
     7.19 %    
264,559
    
4,648,673
     6.81 %    
237,134
Nonearning assets
  
593,007
                  
580,529
              
Total assets
 $
5,510,680
                 $
5,229,202
              
                                       
Liabilities & Stockholders' Equity:
                                      
Interest-bearing liabilities:
                                      
Interest-bearing demand deposits
 $
437,345
     0.13 %   $
418
   $
426,299
     0.13 %   $
428
Savings and money market deposits
  
1,218,547
     2.06 %    
18,773
    
1,129,638
     1.38 %    
11,667
Time deposits under $100,000
  
629,146
     3.85 %    
18,114
    
580,574
     2.90 %    
12,598
Time deposits $100,000 and over
  
966,326
     4.58 %    
33,068
    
858,420
     3.85 %    
24,731
Short-term borrowings
  
27,037
     5.49 %    
1,110
    
51,302
     5.30 %    
2,035
Long-term debt
  
797,665
     5.28 %    
31,484
    
754,295
     4.64 %    
26,163
Total interest-bearing liabilities
  
4,076,066
     3.38 %    
102,967
    
3,800,528
     2.73 %    
77,622
Noninterest-bearing deposits
  
589,518
                  
642,502
              
Other liabilities
  
87,179
                  
85,970
              
Stockholders' equity
  
757,917
                  
700,202
              
Total liabilities & stockholders' equity
 $
5,510,680
                 $
5,229,202
              
                                       
Net interest income
               $
161,592
                 $
159,512
                                       
Net interest margin
         4.39 %                 4.58 %