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Kent Commerce Bank

Kentwood, MI · Cert 34609

FDIC

Q4 2008

$79.9MAssets
$71.1MLoans
$69.0MDeposits
$7.2MEquity
Loan mix
68%RE $40.8M32%C&I $19.0M0%Consumer $0.0MQ4 2007Q4 2008
Deposit mix
89%Interest-bearing $61.2M11%Noninterest $7.8MQ4 2007Q4 2008

NIM

7.53%Q4 ’067.45%Q4 ’076.29%Q4 ’08-7%-17%

Non-interest income vs. expense

3.26%Q4 ’063.54%Q4 ’073.57%Q4 ’08+9%+22%

Executive Summary

  • Earnings: ROA of -2.34%, down 239 bps year over year; NIM at 3.25%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 2.26%.
  • Funding: loans stand at 103.12% of deposits as of Q4 2008.

Financial Results

Return on Assets (YTD, annualized)

-2.34%-239 bps YoY

Net Interest Margin (YTD, annualized)

3.25%-66 bps YoY

Efficiency Ratio (YTD, annualized)

118.42%+3,676 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ4 2007Q1 2008Q2 2008Q3 2008Q4 2008YoY ΔTrend
Earnings
Return on Assets0.05%-0.26%-2.81%-2.27%-2.34%-239 bps
Return on Equity0.47%-2.79%-31.75%-25.66%-26.36%-2,683 bps
Net Interest Margin3.90%3.21%3.30%3.16%3.25%-66 bps
Efficiency Ratio81.65%81.06%97.59%114.51%118.42%+3,676 bps
Non-Interest Burden3.11%2.50%3.22%3.58%3.80%+69 bps
Growth
Asset Growth (YoY)0.37%3.76%6.83%3.88%-8.20%-857 bps
Loan Growth (YoY)0.62%3.49%0.98%-3.19%-14.66%-1,528 bps
Deposit Growth (YoY)-3.72%1.68%21.24%11.74%-4.60%-88 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.45%1.51%2.77%1.96%2.26%+181 bps
Allowance / Loans1.83%1.88%2.98%3.14%3.46%+162 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital9.97%10.45%9.00%9.76%9.64%-33 bps
Equity / Assets9.23%9.49%7.87%8.85%9.05%-18 bps
Liquidity & Funding
Loans / Deposits115.28%107.88%101.78%102.99%103.12%-1,216 bps
Liquid Assets / Assets0.03%0.05%0.11%0.07%6.39%+636 bps
CRE / Total Capitaln/an/an/an/an/an/an/a