Trinity Capital Corporation

Reports Revision to Previously Released Year and Fourth Quarter 2008 Earnings

 

LOS ALAMOS, N.M., February 20, 2009 — Trinity Capital Corporation (“Trinity”), the holding company for Los Alamos National Bank (“LANB”) and Title Guaranty & Insurance Company, announced an adjustment to previously released preliminary unaudited earnings for the year ended December 31, 2008 and the fourth quarter of 2008.

 

The adjustment to earnings was due to an additional review of the adequacy of the reserve for loan losses, and management determined that an additional $1.443 million should be added to provision for loan losses. The tax-effected adjustment to net income was a reduction in net income by $872 thousand, resulting in net income for 2008 of $7.999 million, compared to net income for 2007 of $13.329 million. Trinity’s net income for the fourth quarter of 2008 was $122 thousand instead of $994 thousand as previously reported.

 

As recent news highlights, 2008 has brought difficult times to many financial service companies. The national economy continues to be strained. In many areas of the nation, real estate values have decreased and foreclosures have increased. Trinity and LANB did not engage in sub-prime lending and has limited non-traditional loans. We remain concerned about how general economic conditions in the nation and New Mexico have affected and potentially could affect our customers and markets, and have taken measures to properly manage these risks. As part of these risk management measures, and after a careful assessment of our loan portfolio, we have increased our provision for loan losses.

 

Despite the downturn in the economy, Trinity earned a total of $7.999 million in 2008, or 60.0% of the income earned in 2007, our most profitable year ever.

 

 

 

 

Unaudited net income for 2008 totaled $7.999 million or $1.23 diluted earnings per share, compared to $13.329 million or $2.03 diluted earnings per share for the same period in 2007, a decrease of $5.330 million in net income and a decrease of $0.80 in diluted earnings per share. This decrease in net income was primarily due to an increase in provision for loan losses of $3.983 million and an increase in non-interest expense of $3.438 million. The provision for loan losses increased pursuant to management’s loan loss reserve analysis, as a prudent measure to insure that possible losses inherent in the bank’s loan portfolio are adequately covered. The increase in non-interest expense was primarily due to an increase in the valuation allowance for mortgage servicing rights, caused by a lower interest rate environment. In addition, net interest income decreased $1.727 million and non-interest income increased $1.036 million. Net interest income decreased mainly due to a decrease in interest income. Non-interest income increased mainly due to gains on the sales of investment securities and loans. Income tax expenses decreased $2.782 million due to a lower pre-tax income.

 

 

Trinity’s unaudited net income for the fourth quarter of 2008 totaled $122 thousand or $0.02 diluted earnings per share, compared to $3.277 million or $0.50 diluted earnings per share for the same period in 2007, a decrease of $3.155 million in net income and a decrease of $0.48in diluted earnings per share. This decrease in net income was primarily due to an increase in provision for loan losses of $3.043 million and an increase in non-interest expense of $2.321 million. The provision for loan losses increased pursuant to management’s loan loss reserve analysis, as a prudent measure to insure that possible losses inherent in the bank’s loan portfolio are adequately covered. The increase in non-interest expense was mainly due to an increase in the valuation allowance for mortgage servicing rights, caused by a lower interest rate environment. In addition, net interest income increased $367 thousand and non-interest income decreased $35 thousand. Income tax expenses decreased $1.877 million due to a lower pre-tax income. A credit for income tax was recognized due to a change in the income tax treatment of forgone interest on non-performing loans.

 

Trinity is a bank holding company with $1.418 billion in total assets and has 280 employees. LANB is currently in its 46^th year of operation, and offers financial services at its main office in Los Alamos, an office in White Rock, two offices in Santa Fe and an office in Albuquerque. LANB also operates a network of 28 automatic teller machines throughout northern New Mexico. Title Guaranty & Insurance Company offers title services from its offices in Los Alamos and Santa Fe.

 

This document contains, and future oral and written statements of Trinity and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of Trinity. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of Trinity’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and Trinity undertakes no obligation to update any statement in light of new information or future events. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning Trinity and its business, including additional factors that could materially affect Trinity’s financial results, is included in Trinity’s filings with the Securities and Exchange Commission.