TD Banknorth quarterly income drops
TD Banknorth’s mergers and acquisitions as well as restructuring charges drove results down 25 percent for the third quarter of 2006.
Net income for the three months ended Sept. 30 was $86.1 million, a $2.6 million decrease from an income of $88.7 million in the same period in 2005.
Diluted earnings per share were 38 cents per share for the three months ended Sept. 30, 2006 a 25 percent drop compared to 51 cents per share for the same period in 2005.
The bank said other issues contributing to the lower numbers include an eight basis-point decline in net interest margin, increased provisions for loan and lease losses, and the spread income on securities in the quarter ended Sept. 30, 2005, which were sold in 2006 as part of a balance sheet deleveraging program.
The results for the quarter also reflect the full impact of the acquisition of Hudson United Bancorp on Jan. 31, TD Banknorth said.
Year-to-date results trended similarly with the quarter figures with earnings for the nine-month period ended Sept. 30, 2006 of $1.15 per share, compared to $1.23 per share for the same period in 2005.
Deposits for the third quarter increased 33 percent to $27 billion from $20.3 billion in the third quarter of 2005, but again, this was primarily due to the bank’s acquisition of Hudson United.
The bank said it expected growth for the fourth quarter to be essentially unchanged and also said 2007 “will also be a challenging year.”
TD Banknorth went on to say, “We expect only single-digit loan growth and deposits to remain fairly flat in 2007. In addition, we expect our provision for loan and lease losses to be in the $15 million range per quarter in 2007.”
The bank outlined a plan to mitigate these challenges including reviewing fees for routine services and such broad steps as reviewing the performance of branches in “[their] entire market area.” — CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW