Dollars And Nonsense

June 09, 2010, 1:52 AM EDT

June 9 (Bloomberg) — Estonia’s economy shrank in the first three months of the year, after exiting the European Union’s third-deepest recession in the previous quarter, as consumer spending weakened and inventory growth wasn’t repeated.

Output fell a seasonally adjusted 2 percent on the quarter, compared with a preliminary estimate of 2.3 percent and a revised expansion of 2.4 percent in the fourth quarter, the statistics office in Tallinn said on its website today.

the $17 billion economy of Estonia, which aims to adopt the euro in January, may grow 1 percent this year after shrinking 14.1 percent last year, the central bank forecasts. Budget cuts, record unemployment of 19.8 percent and private sector indebtedness will slow the recovery. Austerity measures of more than 9 percent of gross domestic product helped Estonia narrow its deficit last year to 1.7 percent of GDP and keep government debt at 7.2 percent of GDP, the lowest in the EU.

Fourth-quarter figures got a one-time boost from stock- building of alcohol, tobacco and fuel by retailers and wholesalers ahead of tax increases on these goods in January, part of the government’s efforts to reduce budget deficit.

Household spending dropped 8 percent from a year earlier, compared with 17 percent in the fourth quarter. gross fixed capital formation, or investments, shrank 23 percent, compared with a 35 percent decline in the previous quarter.

Exports of goods, led by wireless network gear and generators for wind turbines manufactured by local units of Ericsson AB and ABB ltd., rose 19 percent from a year earlier, after a 6 percent decline in the fourth quarter, the office said. the increase, the first in six quarters, was helped by a one-time jump in exports of refined oil products, it added.

Output shrank a revised 2 percent from a year earlier, compared with a preliminary estimate of 2.3 percent, and compared with a 9.5 percent contraction in the fourth quarter.

–Editors: Chris Kirkham

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net

Estonian Economy Shrank 2% in first Quarter on Domestic Demand

ONEIDA, N.Y., April 30, 2010 /PRNewswire via COMTEX/ –Oneida Financial Corp. /quotes/comstock/15*!onfc/quotes/nls/onfc (ONFC 9.30, 0.00, 0.00%) , the parent company of the Oneida Savings Bank, has announced first quarter operating results. Net income for the three months ended March 31, 2010 was $627,000, or $0.08 diluted earnings per share, compared to $1.1 million, or $0.14 diluted earnings per share, for the three months ended March 31, 2009. the decrease in net income during the respective first quarter periods is primarily the result of non-cash investment losses, an increase in the provision for loan losses and an increase in non-interest expenses, partially offset by an increase in net interest income, an increase in the fair value of trading securities, an increase in non-interest income and a decrease in income tax provisions. Net income from operations for the first quarter, excluded non-cash gains and losses, as referenced in the table below, was $1.3 million or $0.16 per diluted share. This compares to net income from operations for the 2009 first quarter of $1.4 million or $0.18 per diluted share. the decrease in net income from operations was primarily due to an increase in the provision for loan losses and an increase in non-interest expense, partially offset by an increase in net interest income, an increase in non-interest income, an increase in gains from the sale of investments and a decrease in the provision for income taxes.

Key items for first quarter 2010 include:

The Bank remains well capitalized at March 31, 2010 with a Tier 1 leverage ratio of 7.08% and a total risk-based capital ratio of 11.04%. the Company’s average equity ratio as a percent of average assets was 9.99% at March 31, 2010 compared to 9.89% at December 31, 2009.

Net interest income was $4.3 million for the three months ended March 31, 2010 compared to $4.1 million for the three months ended March 31, 2009. Net interest margin was 3.39% for the first quarter of 2010 compared to 3.56% for the first quarter of 2009.

Non-interest income was $5.8 million for the three months ended March 31, 2010 compared to $5.6 million for the three months ended March 31, 2009. This increase is primarily the result of an increase of $513,000 to $4.7 million in the first quarter of 2010 compared to $4.1 million in the comparable 2009 period in revenue derived from the Company’s insurance and other non-banking operations.

Non-cash increase in the fair value recognized on trading securities was $139,000 for the three months ended March 31, 2010 compared to a non-cash decrease of $429,000 for the three months ended March 31, 2009. Non-cash impairment charges of $990,000 were recorded in the first quarter 2010 on certain investment securities compared with no charge recorded in the first quarter of 2009.

Noninterest expense increased to $8.3 million for the three months ended March 31, 2010 compared to $7.9 million for the comparable period in 2009. This increase was primarily the result of an increase in compensation and employee benefits expense associated with the Company’s insurance and other non-banking operations.

Deposits increased $60.0 million to $505.5 million at March 31, 2010 compared to $445.5 million at March 31, 2009. Total borrowings outstanding decreased 46.6% to $23.5 million at March 31, 2010 from $44.0 million at March 31, 2009.

Michael R. Kallet, President and Chief Executive Officer of Oneida Financial Corp., said, “Oneida Financial Corp. is pleased to report a record level of total assets and total deposits.” Kallet continued, “As a diversified banking and financial services company, Oneida Financial Corp. continues to manage risk through a diversified business model. our insurance and financial services subsidiaries, Bailey & Haskell Associates, inc. and Benefit Consulting Group, inc., reported a record level of revenue in the first quarter of 2010.” Kallet concluded, “As Oneida Financial Corp. has grown, we have actively managed our capital position while consistently returning a portion of our earnings to our stockholders in the form of cash dividends.”

Net Interest Income and Margin

First quarter 2010 compared with first quarter 2009

Net interest income was $4.3 million for the first quarter of 2010, a $222,000 increase from the first quarter of 2009. the net interest margin was 3.39% for the first quarter of 2010, compared to 3.56% for the first quarter of 2009. the yield on interest-earning assets has decreased 84 basis points to 4.62% partially offset by an increase in average interest-earning assets of $49.0 million. For the same period, the cost of interest-bearing deposits decreased 62 basis points to 1.13% while average interest-bearing deposits increased $64.4 million. the Company executed on its planned repayment of Federal Home Loan Bank borrowings upon the maturity of its advances resulting in a decrease of $20.2 million in average borrowings outstanding. the average cost of interest-bearing liabilities decreased 74 basis points to 1.35% for the first quarter of 2010 as compared to the first quarter of 2009.

First quarter 2010 compared with linked quarter ended December 31, 2009

Net interest income for the quarter ended March 31, 2010, decreased $354,000 from the quarter ended December 31, 2009. the decrease in net interest income reflects lower net interest income as a percent of our average interest earning assets and is expressed as a decrease in our net interest margin of 40 basis points from 3.79% for the quarter ended December 31, 2009 and two fewer calendar days in the current quarter. the yield on interest-earning assets decreased 55 basis points from 5.17% from the quarter ended December 31, 2009 while the cost of interest-bearing liabilities decreased 13 basis points from 1.48% during the fourth quarter of 2009.

Provision for loan losses

First quarter 2010 compared with first quarter 2009

During the first quarter of 2010, the Company made a $400,000 provision for loan losses as compared with no provision during the first quarter of 2009. during the first quarter of 2010, the Company increased a specific reserve to $1.1 million for an impaired unsecured commercial loan with a principal balance of $2.2 million. as of March 31, 2010, the borrower of the impaired loan has made all payments as agreed. Net charge-offs during the current quarter were less than $1,000. the Company continues to monitor the adequacy of the allowance for loan losses given the risk assessment of the loan portfolio and current economic conditions. the Company continues to report an overall low level of net loan charge-offs and non-performing loans as compared to its peers. the ratio of the loan loss allowance to loans receivable was 1.13% at March 31, 2010 compared to 0.86% at March 31, 2009.

First quarter 2010 compared with linked quarter ended December 31, 2009

The provision for loan losses increased by $200,000 during the first quarter of 2010 as compared with the linked prior quarter. the increase in the current quarter was due to the increase in the specific reserve for an impaired unsecured commercial loan. the ratio of the loan loss allowance to loans receivable was 1.13% at March 31, 2010 compared to 0.98% at December 31, 2009.

Noninterest Income

First quarter 2010 compared with first quarter 2009

Noninterest income totaled $5.8 million for the first quarter of 2010, an increase of $272,000 from $5.6 million in the first quarter of 2009. the increase was primarily due to an increase of $513,000 in commissions and fees on the sales of non-bank products through the Company’s insurance and financial service subsidiaries. Partially offsetting the increase was a decrease in loan sale and servicing income, which totaled $141,000 in the first quarter of 2010 as compared with $310,000 in the first quarter of 2009. the Bank sells substantially all of its fixed-rate residential mortgage loan originations on a servicing retained basis in the secondary market. these loan sales help the Bank to control interest rate risk. the volume of fixed-rate residential mortgage loan originations decreased in the current quarter as compared with the 2009 period. Service charges on deposit accounts decreased $26,000 in the first quarter of 2010 as compared with the first quarter of 2009 due in part to the higher account balances currently on deposit.

First quarter 2010 compared with linked quarter ended December 31, 2009

Noninterest income increased $295,000 from $5.5 million on a linked-quarter basis, reflecting an increase in commissions and fees on the sales of non-bank products partially offset by a decrease in service charges on deposit accounts in the first quarter of 2010.

Net Investment Gains/(Losses)

First quarter 2010 compared with first quarter 2009

Net investment losses of $681,000 were recorded in the first quarter of 2010 compared with net investment gains of $238,000 in the first quarter of 2009. during the first quarter of 2010 eight trust preferred securities were determined to be other-than-temporarily-impaired. the Company recorded a non-cash charge of $938,000 representing the credit impairment of these securities. the trust preferred securities owned by the Company are diversified pools of collateralized debt obligations primarily issued by domestic financial institutions. in addition, the Company recorded a non-cash charge of $52,000 representing the other-than-temporary impairment of a privately-issued collateralized mortgage obligation. Partially offsetting the non-cash impairment charges were investment gains resulting from the Company’s decision to realize a portion of the appreciation in its mortgage-backed and investment securities portfolio, monetizing other comprehensive income and reducing prepayment risk during the first quarter of 2010. these factors resulted in net gains realized of $309,000.

First quarter 2010 compared with linked quarter ended December 31, 2009

During the linked quarter ended December 31, 2009, the Company realized net investment losses of $633,000 as the Company recorded a non-cash charge of $892,000 representing the credit impairment on five trust preferred securities owned by the Company offset in part by investment gains of $259,000 realized in its mortgage-backed and investment securities portfolio.

Change in the fair value of Investments

First quarter 2010 compared with first quarter 2009

The Company has identified the preferred and common equity securities it holds in the investment portfolio as trading securities and as such the change in fair value of these securities is reflected as a non-cash adjustment through the income statement. For the three months ended March 31, 2010, the market value of the Company’s trading securities increased $139,000 as compared with a decrease of $429,000 in the first quarter of 2009.

The table below summarizes the Company’s operating results excluding these cumulative non-cash charges related to the change in fair value of trading securities and the non-cash impairment charges recorded as net investment losses in each period.

Reported Results (including non-cash gains and losses recognized under ASC 320) (All amounts in thousands except net income per diluted share) First First Quarter Quarter 2010 2009 —- —- Net interest income $4,281 $4,059 Provision for loan losses 400 – Investment gains/ (losses) (681) 238 Change in fair value of investments 139 (429) Non-interest income 5,828 5,556 Non-interest expense 8,344 7,898 Income tax provision 196 412 Net income $627 $1,114 Net income per diluted share $0.08 $0.14 Operating Results / Non-GAAP (excluding non-cash gains and losses recognized under ASC 320) (All amounts in thousands except net income per diluted share) First First Quarter Quarter 2010 2009 —- —- Net interest income $4,281 $4,059 Provision for loan losses 400 – Investment gains 309 238 Non-interest income 5,828 5,556 Non-interest expense 8,344 7,898 Income tax provision 398 528 Net income $1,276 $1,427 Net income per diluted share $0.16 $0.18

The Company believes these non-GAAP financial measures provide a meaningful comparison of the underlying operational performance of the Company, and facilitate investors’ assessments of business and performance trends in comparison to others in the financial services industry. in addition, the Company believes this alternate presentation of these items enables management to perform a more effective evaluation and comparison of the Company’s results and to assess the overall performance of our business in relation to the Company’s ongoing operations.

First quarter 2010 compared with linked quarter ended December 31, 2009

During the linked quarter ended December 31, 2009, the Company recorded non-cash income of $417,000 reflecting the increase in market value of the Company’s trading securities at the end of the fourth quarter of 2009.

Noninterest Expense

First quarter 2010 compared with first quarter 2009

Noninterest expense was $8.3 million for the three months ended March 31, 2010 as compared with $7.9 million during the first quarter of 2009. the increase in noninterest expense was primarily due to the increase in sales of insurance and other non-banking products through our subsidiaries resulting in an increase in compensation, employee benefit and other operating expenses.

First quarter 2010 compared with linked quarter ended December 31, 2009

Noninterest expense decreased $3,000 in the first quarter of 2010 as compared with the linked prior quarter. Compensation and employee benefit expense decreased by $100,000 due to two less calendar days in the current quarter offset by the increase in sales of insurance and other non-banking products through our subsidiaries as compared with quarter ended December 31, 2009.

The Company’s effective tax rate was 23.8% for the first quarter of 2010 as compared with an effective tax rate of 27.0% for the first quarter of 2009. For the linked quarter ended December 31, 2009, the Company’s effective tax rate was 12.2%. the lower effective tax rate (for the quarter ended December 31, 2009) was due to changes in the bank’s tax exempt and tax preferred investment income and the overall tax rate in effect for the year. For the year ended December 31, 2009 the Company’s effective tax rate was 22.7%.

Key Balance Sheet changes at March 31, 2010

Deposit accounts were at the record level of $505.5 million at March 31, 2010, an increase of $16.1 million from December 31, 2009 and $60.0 million from March 31, 2009. the increase reflects an increase of $17.9 million in retail deposits combined with an increase of $42.1 million in municipal deposits over the past twelve months.

Net loans receivable totaled $293.0 million at March 31, 2010 compared to $295.8 million at December 31, 2009 and $295.9 million at March 31, 2009. the decrease in net loan balances reflects the Company’s continued loan sales activity. the Company has sold $42.4 million in fixed rate residential loans during the trailing twelve months ended March 31, 2010. While we experienced lower loan demand during the current quarter compared to a year ago, the Company has continued to maintain balanced loan production; residential mortgage loan originations were $6.6 million, consumer loan originations were $6.4 million and commercial loan originations were $5.5 million during the first quarter of 2010.

Investment and mortgage-backed securities totaled $170.8 million at March 31, 2010, an increase of $8.6 million from December 31, 2009, and an increase of $34.0 million from March 31, 2009. the increase in investment and mortgage-backed securities is primarily the result of the increase in collateral for municipal deposit accounts and a decrease in loans receivable.

The Company continued to repay maturing Federal Home Loan Bank advances with proceeds from investment securities maturities, calls and other cash flows. Borrowings outstanding were $23.5 million at March 31, 2010, a decrease of $7.5 million from December 31, 2009 and a decrease of $20.5 million from March 31, 2009.

Total equity at March 31, 2010 was $59.7 million, an increase of $583,000 from December 31, 2009 and an increase of $6.7 million from March 31, 2009. the Company paid a semiannual cash dividend on February 9, 2010 totaling $844,000. our mutual holding company parent waived its receipt of this cash dividend. the increase in total equity is primarily a result of the contribution of net earnings combined with valuation adjustments made for the Company’s available for sale investment and mortgage-backed securities, partially offset by the payment of $1.7 million in cash dividends during the trailing twelve month period.

About Oneida Financial Corp.

The Company’s wholly owned subsidiaries include the Oneida Savings Bank, a New York State chartered FDIC insured stock savings bank; State Bank of Chittenango, a state chartered limited-purpose commercial bank; Bailey, Haskell & LaLonde Agency, an insurance and risk management company; Benefit Consulting Group, an employee benefits consulting and retirement plan administration firm; and Workplace Health Solutions, a risk management company specializing in workplace injury claims management. Oneida Savings Bank was established in 1866 and operates twelve full-service banking offices in Madison, Oneida and Onondaga counties. For more information, visit the Company’s web site at www.oneidafinancial.com.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS

In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company’s actual results to differ materially from those contemplated by such forward-looking statements. the Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

All financial information provided at and for the quarter ended March 31, 2010 and all quarterly data is unaudited. Selected financial ratios have been annualized where appropriate. Operating data is presented in thousands of dollars, except for per share amounts.

At At At At At Selected Financial Condition Data: Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, (in thousands except per share data) 2010 2009 2009 2009 2009 —- —- —- —- —- (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Total Assets $596,265 $590,506 $574,126 $557,513 $549,246 Cash and cash equivalents 42,282 39,537 26,914 21,143 27,327 Loans receivable, net 293,024 295,839 295,384 292,814 295,860 Mortgage- backed securities 65,401 65,737 75,605 76,257 78,821 Investment securities 105,403 96,487 88,608 76,716 57,972 Trading securities 7,757 7,627 7,220 6,491 5,503 Goodwill and other intangibles 24,822 24,813 24,929 25,045 25,076 Interest bearing deposits 444,627 426,368 417,401 398,339 386,889 Non- interest bearing deposits 60,889 62,997 61,574 62,186 58,650 Borrowings 23,500 31,000 31,000 32,000 44,000 Total Stockholders’ Equity 59,699 59,116 57,133 55,620 52,971 Book value per share (end of period) $7.63 $7.57 $7.01 $6.82 $6.81 Tangible book value per share (end of period) $4.46 $4.39 $3.81 $3.60 $3.60 Quarter Ended Selected Operating Data: Mar 31, Mar 31, (in thousands except per share data) 2010 2009 —- —- (unaudited) (unaudited) Interest income: Interest and fees on loans $4,318 $4,481 Interest and dividends on investments 1,512 1,737 Interest on fed funds 7 14 — — Total interest income 5,837 6,232 Interest expense: Interest on deposits 1,227 1,617 Interest on borrowings 329 556 — — Total interest expense 1,556 2,173 —– —– Net interest income: 4,281 4,059 Provision for loan losses 400 – — — Net interest income after provision for loan losses 3,881 4,059 —– —– Net investment (losses)/gains (681) 238 —- — Change in fair value of investments 139 (429) — —- Non-interest income: Service charges on deposit accts 622 648 Commissions and fees on sales of non-banking products 4,662 4,149 Other revenue from operations 544 759 — — Total non-interest income 5,828 5,556 Non-interest expense: Salaries and employee benefits 5,237 4,987 Equipment and net occupancy 1,274 1,229 Intangible amortization 108 123 Other costs of operations 1,725 1,559 —– —– Total non-interest expense 8,344 7,898 —– —– Income before income taxes 823 1,526 Income tax provision 196 412 — — Net income $627 $1,114 ==== ====== Net income per common share ( EPS – Basic ) $0.08 $0.14 Net income per common share ( EPS – Diluted) $0.08 $0.14 Cash Dividends Paid $0.24 $0.24 First Fourth third Selected Operating Data: Quarter Quarter Quarter (in thousands except per share data) 2010 2009 2009 —- —- —- (unaudited) (unaudited) (unaudited) Interest income: Interest and fees on loans $4,318 $4,452 $4,418 Interest and dividends on investments 1,512 1,854 1,809 Interest on fed funds 7 5 7 — — — Total interest income 5,837 6,311 6,234 Interest expense: Interest on deposits 1,227 1,310 1,425 Interest on borrowings 329 366 367 — — — Total interest expense 1,556 1,676 1,792 —– —– —– Net interest income: 4,281 4,635 4,442 Provision for loan losses 400 200 400 — — — Net interest income after provision for loan losses 3,881 4,435 4,042 —– —– —– Net investment (losses) gains (681) (633) (658) —- —- —- Change in fair value of investments 139 417 739 — — — Non-interest income: Service charges on deposit accts 622 709 645 Commissions and fees on sales of non-banking products 4,662 4,243 3,539 Other revenue from operations 544 581 610 — — — Total non-interest income 5,828 5,533 4,794 Non-interest expense: Salaries and employee benefits 5,237 5,337 5,107 Equipment and net occupancy 1,274 1,197 1,145 Intangible amortization 108 116 116 Other costs of operations 1,725 1,697 1,623 —– —– —– Total non-interest expense 8,344 8,347 7,991 —– —– —– Income before income taxes 823 1,405 926 Income tax provision 196 171 230 — — — Net income $627 $1,234 $696 ==== ====== ==== Net income per common share ( EPS – Basic ) $0.08 $0.16 $0.09 Net income per common share ( EPS – Diluted) $0.08 $0.16 $0.09 Cash Dividends Paid(1) $0.24 $0.00 $0.24 ———————- Second First Selected Operating Data: Quarter Quarter (in thousands except per share data) 2009 2009 —- —- (unaudited) (unaudited) Interest income: Interest and fees on loans $4,411 $4,481 Interest and dividends on investments 1,803 1,737 Interest on fed funds 11 14 — — Total interest income 6,225 6,232 Interest expense: Interest on deposits 1,526 1,617 Interest on borrowings 408 556 — — Total interest expense 1,934 2,173 —– —– Net interest income: 4,291 4,059 Provision for loan losses 160 – — — Net interest income after provision for loan losses 4,131 4,059 —– —– Net investment (losses) gains (454) 238 —- — Change in fair value of investments 998 (429) — —- Non-interest income: Service charges on deposit accts 614 648 Commissions and fees on sales of non-banking products 3,906 4,149 Other revenue from operations 481 759 — — Total non-interest income 5,001 5,556 Non-interest expense: Salaries and employee benefits 4,994 4,987 Equipment and net occupancy 1,178 1,229 Intangible amortization 116 123 Other costs of operations 1,921 1,559 —– —– Total non-interest expense 8,209 7,898 —– —– Income before income taxes 1,467 1,526 Income tax provision 398 412 — — Net income $1,069 $1,114 ====== ====== Net income per common share ( EPS – Basic ) $0.14 $0.14 Net income per common share ( EPS – Diluted) $0.14 $0.14 Cash Dividends Paid(1) $0.00 $0.24 ———————- (1) Dividends to our mutual holding company parent have been waived. At At At Selected Financial Ratios (1) Mar 31, Dec 31, Sep 30, and Other Data 2010 2009 2009 —- —- —- (unaudited) (unaudited) (unaudited) Performance Ratios: Return on Average Assets 0.42% 0.86% 0.49% Return on Average Equity 4.21% 8.54% 5.00% Return on Average Tangible Equity 7.22% 14.95% 9.07% Interest rate spread (2) 3.26% 3.69% 3.60% Net Interest Margin (3) 3.39% 3.79% 3.73% Efficiency ratio (4) 86.09% 82.71% 84.52% Non-interest income to 3.55% 3.69% 3.46% average assets Non-interest expense to 5.60% 5.79% 5.66% average assets Average interest-earning assets as a ratio of average interest-bearing liabilities 108.51% 108.78% 109.32% Average equity to average 9.99% 10.02% 9.87% total assets Equity to total assets (end of period) 10.01% 10.01% 9.95% Tangible equity to tangible assets 6.10% 6.06% 5.86% Asset Quality Ratios: Nonperforming assets to total assets (5) 0.90% 0.41% 0.40% Nonperforming loans to total loans 0.11% 0.18% 0.09% Net charge-offs to average loans 0.00% 0.06% 0.06% Allowance for loan losses to loans receivable, net 1.13% 0.98% 0.97% Allowance for loan losses to nonperforming loans 1,041.01% 526.50% 1.110.04% Bank Regulatory Capital Ratios: Total Capital to Risk Weighted Assets 11.04% 10.73% 10.30% Tier 1 Capital to Risk Weighted Assets 10.21% 10.00% 9.58% Tier 1 Capital to Average Assets 7.08% 7.19% 7.03% —————– At At Selected Financial Ratios (1) Jun 30, Mar 31, and Other Data 2009 2009 —- —- (unaudited) (unaudited) Performance Ratios: Return on Average Assets 0.77% 0.82% Return on Average Equity 8.03% 8.07% Return on Average Tangible Equity 15.15% 14.76% Interest rate spread (2) 3.52% 3.37% Net Interest Margin (3) 3.66% 3.56% Efficiency ratio (4) 80.43% 82.50% Non-interest income to 3.98% 3.93% average assets Non-interest expense to 5.90% 5.79% average assets Average interest-earning assets as a ratio of average interest-bearing liabilities 108.55% 108.26% Average equity to average 9.57% 10.12% total assets Equity to total assets (end of period) 9.98% 9.64% Tangible equity to tangible assets 5.74% 5.33% Asset Quality Ratios: Nonperforming assets to total assets (5) 0.19% 0.10% Nonperforming loans to total loans 0.20% 0.19% Net charge-offs to average loans 0.03% 0.02% Allowance for loan losses to loans receivable, net 0.90% 0.86% Allowance for loan losses to nonperforming loans 420.51% 433.40% Bank Regulatory Capital Ratios: Total Capital to Risk Weighted Assets 10.16% 10.35% Tier 1 Capital to Risk Weighted Assets 9.49% 9.66% Tier 1 Capital to Average Assets 6.95% 6.86% —————– (1) Ratios are annualized where appropriate (2) the average interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period. (3) the net interest margin represents net interest income as a percentage of average interest-earning assets for the period. (4) the efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income, excluding net impairment losses, net investment gains (losses) and changes in fair value of trading securities. (5) Non-performing assets include non-performing loans and non- accrual trust preferred securities.

SOURCE Oneida Financial Corp.

Copyright (C) 2010 PR Newswire. all rights reserved

Oneida Financial Corp. Reports 2010 First Quarter Operating Results (unaudited)

RISMEDIA, March 4, 2010—Younger people are more than twice as likely as older age groups to have been turned down for loans, mortgages and credit cards within the last year, according to a new national survey by FindLaw.com, one of the most popular legal information websites.

The FindLaw.com survey found that more than one in five (22%) people between the ages of 18 and 34 say that they have been refused a mortgage, loan or credit card within the last year. That’s more than twice the percentage of any other age group, and they are four times more likely to say they’ve been turned down than people age 55 and up.

According to the FindLaw survey, people between the ages of 18 and 34 say that they have been turned down for the following within the last year:

Credit card – 15%
Home mortgage – 4%
Home equity loan – 4%
Car loan – 4%
Student loan – 4%
Mortgage refinance – 2%
Small-business loan – 2%
Home improvement loan – 1%

“Borrowing money–whether a mortgage, loan or even a credit card–often involves meeting strict standards set by the financial institution,” said Stephanie Rahlfs, an attorney and editor with FindLaw.com. “And it can be particularly difficult for younger people, who often have had less time and opportunity to establish a credit history, work history, etc. Monitoring your credit score, correcting any errors in your credit report, and building a good history of managing credit and loans can help increase the chances of being approved for a loan, mortgage or credit card down the road.”

For more information, visit www.findlaw.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Younger People more likely to Be Refused Loans, Mortgages and Credit Cards

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February 04, 2010, 11:58 PM EST

Feb. 5 (Bloomberg) — PT Bank Tabungan Pensiunan Nasional, controlled by TPG, said lending rose more than 50% last year, about 10 times the industry average, as it gained access to the “mass market” in Indonesia.

Loans growth in 2010 “will still be strong” and continue to outpace the Indonesian banking industry, where lending rose about 10 percent last year, Jerry Ng, chief executive officer of BTPN, said in an interview in Jakarta. Deposits rose more than 60 percent in 2009 from the previous year, he said yesterday.

Fourth-quarter earnings were “strong,” he said, without providing a figure. The bank had net income of 266 billion rupiah ($28 million) in the first nine months of last year.

BTPN’s shares rose fivefold in the past 12 months to close at an all-time high of 5,550 rupiah yesterday, compared with a 95 percent gain in Indonesia’s benchmark Jakarta Composite index. The bank’s growth “could outpace the sector significantly,” boosted by its micro-lending expansion in the world’s fourth- most populous nation, Mulya Chandra, a Jakarta-based analyst at CIMB-GK Securities Pte, said in a research note dated Dec. 17.

“The potential is big and quite immune from volatility, or what happens in the global economy,” said Ng, who has helmed BTPN since July 2008. “Given that the penetration is low, the opportunity is interesting.”

Microfinance Expansion

BTPN’s gross non-performing loan rate stood at 0.5 percent in 2009, as the bank maintains a “very healthy asset quality,” said Ng, who joined TPG in 2007 after resigning as vice president director of PT Bank Danamon Indonesia, among the biggest micro lenders in Indonesia.

BTPN plans to sell rupiah-denominated bonds this year to expand the microfinance business it started at the end of 2008, after TPG and its Indonesian affiliate bought a 71.6 percent stake in the bank earlier in the year.

at the end of last year, the bank had 539 micro banking branches that were fully operational across Indonesia, providing loans averaging about $3,000 each to more than 100,000 customers, including food hawkers and street traders.

BTPN, with assets of more than 22 trillion rupiah, was founded in 1959 in Bandung, Java’s third-largest city, to provide loans and deposit services to retired civil servants.

about 85 percent of BTPN’s business went to retirees last year, and 15 percent comprised microcredit. The portion coming from its microcredit business is set to grow to 25 percent at the end of this year and 40 percent in three years, Ng said.

Higher Margins

Research estimates show that there are potentially more than 40 million self-employed Indonesians in the “mass market” segment, of which less than 30 percent have access to “formal forms of financing,” Ng said.

Because of the less competitive environment, micro loans offer the highest margin compared with other loans, said Henry Pranoto, analyst at PT Andalan Artha Advisindo Sekuritas in Jakarta in a report dated Jan. 25. For borrowers, it is still cheaper than the annual rates of as much as 312 percent charged by loan sharks, Pranoto said, citing a World Bank survey.

“Micro loans will be the greatest loan growth engine” in 2010, Pranoto said in the report.

BTPN, which plans to add 30 to 40 more microbanking branches this year, is expanding into providing pawnshop services that comply with Islamic law, or Shariah, which bans the payment and receipt of interest, he said.

“The potential is quite sizeable,” Ng said. “It is very consistent with our mass market.”

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–Editors: Malcolm Scott, Greg Ahlstrand

To contact the reporter on this story: Netty Ismail in Singapore +65-6212-1106 or nismail3@bloomberg.net.

To contact the editor responsible for this story: Andreea Papuc at +852-2977-6641 or apapuc1@bloomberg.net

TPG's Bank Tabungan Loans Grow 50% as it Taps Indonesia's Poor

With a slumping economy, falling dollar and banks tightening up their lending practices, consumers are finding it harder and harder to get loans at decent rates, if at all. Financial planners are abuzz with the fact that people are quickly turning to family and friends for help with financial issues. Combining the growing need and technology a new solution is on the horizon for people in need. The social networking world of the Internet has slowly been providing a solution through sites that allow consumers to get loans from other people instead of banks or credit cards.

The numbers speak for themselves that the trend of lending to your neighbor, family members or even strangers is becoming a fast alternative to suffering in debt, fighting foreclosure or just trying to make ends meet. The largest person-to-person lending website, Virgin Money, has managed a total of over $200 million in loans. The next largest site, Prosper.com just made an announcement on November 27th, 2007 that they had hit the benchmark of $100 million in funded loans through their marketplace.

While these two companies are the biggest, they only scratch the surface on all of the new services offering peer-to-peer lending. Other services launching soon or already running are Lending Club, UK’s Zopa.com, GlobeFunder.com, Loanio and Community Lend. Big or small, these sites all generally operate the same way.

The organizations behind these websites provide a marketplace for borrowers and lenders to find the best combination weighing credit risks, identification and verification and way for people to tell their story. One leap these websites allow people to do when loaning money is to do it in a professional manner by proper documentation and loan issuing. after everything has been squared away in a documented loan with terms and conditions a repayment schedule and tax issues are covered and worked out with both parties. if it couldn’t get any more streamlined than this, you can also setup ACH payments directly from borrowers bank accounts. The cost for this is a percentage fee of up to 1% of the loan for the lender and the borrower can pay anywhere form .75% – 2% dependent upon their credit rating.

According to a research firm, Online Banking Report, the future looks bright for person-to-person lending. by 2010 the person-to-person lending market is expected to jump to $1 billion in total funding. by 2017, the market is expected to catapult to $9 billion dollars in total funding. if the trends develop as predicted these peer-to-peer lending organizations could rival some lending institutions.

Even with strong growth prospects in mind, the loans do have a funding limit on most sites currently. As of now, Prosper.com and Lending club both put funding caps on their loans at $25,000. Virgin Money operates a little differently by not putting limits on loans, with the CEO Asheesh Advani stating their personal loans average $20,000 and first mortgages average about $250,000.

Virgin Money USA was formerly known as CircleLending. As the strength of the industry became obvious, British billionaire Richard Branson purchased a majority stake of CircleLending and spun it into another Virgin subsidiary now called Virgina Money USA. Virgin demographic is tightly focused on family and friends lending to each other while providing the formalized loans and documents in the process.

Other sites like Prosper.com encourage friends and family to lend to each other but they also open their market to strangers with stories and in need of help. Prosper boasts 480,000 members in their network. The functionality behind peer-to-peer lending programs are generally the same. a good analogy is the eBay bidding market where average consumers can list products for sale and have others bid on them. The lending markets work the same way by allowing a borrower to post their loan, description and any other information and allow lenders to bid on the loan. The loan listing allows the borrower to state the maximum interest rate they are willing to pay for any loan up to $25,000. once the loan is up for bid, as many hundreds of people can actually lend to the final loan amount.

Loan increments are usually set at $50 and helps lenders spread their risk. Someone in a tight crunch with a credit card that is facing over-the-limit fees, late fees and more could get a loan to consolidate their credit card debt and find it funded by 50 – 100 lenders. The process is even simpler once funding has been completed. Prosper.com and other peer-to-peer lending institutions act as the middle-man and complete all loan administration throughout the life of the loan. things that are taken care of by the institutions are things like loan repayment, collections for the life of the loan and reporting to the credit bureaus. after 30 days go by without payment the loans are assigned to a collection agency.

With all of the talk about growth, lending amounts and success it makes you wonder about the dirty side of the business. Defaults and non-payment. The CEO of Prosper.com has publicly stated that Prosper’s default rate hovers around 2.7 percent. a Deutsche Bank report published in July of 2007 states Prosper’s default rate at 5 percent when looking at 6 months of activity. Late payments run at about 10 percent of all the loans in Prosper’s funding history.

With the risk of defaults and late payments comes the reward for lenders. Lenders can earn rates anywhere from 7% – 18% on the money they loan. many users of the social lending websites boast better returns on their investment than the typical places people invest for their future or retirement.

There is a strong social trend that is driving the success of these peer-to-peer lending websites. With news constantly coming out about Facebook and MySpace and how these sites are changing the world, their effect is now shaking up the peer-to-peer lending idea. Another company that started in peer-to-peer lending in May 2007 has grabbed onto the power of FaceBook and is driving their business growth through a Facebook App. The site uses the proprietary Facebook application platform to connect lenders with borrowers, due in part to Facebook’s Viral nature and the fact that friends trust lending to other friends. whether Facebook users need to consolidate credit card debt, pay for vacations or wedding dresses they can now beg friends in the social network.
Have you used peer-to-peer lending yet? Do you think this is a future solution to America’s credit crunch or just another way for American’s to get in debt? We’d like to hear from you at our submission form. if you want to speak your mind or you are involved in Peer-to-Peer Lending and want to speak your mind we want to hear from you. tell us your story and thoughts at our submission form.

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Social Networks help Peer-to-peer lending loan $300 million

Indonesian central bank (BI) is finalizing a draft of incentives to kickstart corporate lending and ensure that the economic recovery gathers pace in the coming years, the Jakarta Globe reported here on Wednesday.

The acting BI governor, Darmin Nasution, said that the key incentive will allow banks that lend more to reduce the size of their minimum statutory reserves (GWM), which lenders are obliged to deposit in the central bank.

“We are currently finalizing a policy package to push the bank intermediation function [provide more lending],” Darmin said on Wednesday.

“For example, we will make the calculation of GWM on the basis of the loan-to-deposit ratio, or LDR, so lenders who lend more can provide lower GWM,” he added.

Before the credit crisis, Bank Indonesia used LDR to calculate GWM.

at the end of 2008, BI changed the GWM regulation into a level of 7.5 percent from total public funds held in a bank.

Details of the policy will be unveiled at the Bankers Dinner scheduled to be held on Jan. 15.

Despite the low lending rate benchmark set by BI at 6.5 percent in the past five months, banks have been reluctant to pass on the reduced borrowing costs to their corporate debtors.

Overall lending grew just 10.7 percent last year, below BI’s target of 15 percent, as many companies were reluctant to take on further debt and many lenders were wary of adding risk.

The BI hopes it can drive credit growth to 20 percent this yearby providing incentives to lend.

Source: Xinhua

Indonesian central bank to provide incentives for banks to boost loans