Form 425

Filed by Alabama National BanCorporation

Pursuant to Rule 425 under the Securities Act of 1933 and

deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934

Subject Company: Alabama National BanCorporation

Commission File No. 0-25160

On October 23, 2007, Alabama National BanCorporation issued the attached press release

announcing its financial results for the nine months and quarter ended September 30, 2007.

 


Alabama National BanCorporation Announces

Third Quarter 2007 Earnings

FOR IMMEDIATE RELEASE – Birmingham, Alabama (October 23, 2007) – Alabama National BanCorporation (“ANB”) (NASDAQ/Global Select Market: ALAB) today announced earnings for the quarter and nine-month period ended September 30, 2007.

For the 2007 third quarter, ANB reported net income of $19.8 million, or $0.95 per diluted share. Nine months year-to-date net income was $61.8 million, or $2.96 per diluted share. As previously reported, ANB sold its ANB Insurance Services, Inc. subsidiary during the 2007 second quarter. Earnings from the operation of this subsidiary and the gain from its sale are carried as income from discontinued operations in the income statement.

Excluding the discontinued insurance operations from all periods, ANB reported earnings from continuing operations of $19.8 million in the 2007 third quarter, down 6.1% from the $21.1 million earned in the 2007 second quarter and down 1.4% from the 2006 third quarter’s $20.1 million in net income from continuing operations. Diluted earnings per share (continuing operations) of $0.95 in the 2007 third quarter were 5.6% below the $1.01 reported in the 2007 second quarter and 9.7% below the $1.06 reported in the year ago third quarter. Diluted cash earnings per share (continuing operations) were $0.99 in the 2007 third quarter, as compared with $1.05 and $1.10 in the 2007 second quarter and 2006 third quarter, respectively.

Total revenue from continuing operations in the 2007 third quarter was $85.1 million. This revenue total was down 0.9% from the $85.9 million reported in the 2007 second quarter, and up 10.6% from the 2006 third quarter’s $76.9 million.

For the nine months ended September 30, 2007, ANB’s $60.6 million in income from continuing operations equated to $2.91 in diluted earnings per share, down 5.8% from the $3.09 earned in the first nine months of 2006. Year-to-date revenue for the first nine months of 2007 was $253.7 million, up 13.1% from the 2006 nine months.

ANB’s third quarter 2007 taxable equivalent net interest margin declined to 3.63%, down from the 3.72% reported in the 2007 second quarter. On a year-to-date basis, the 2007 nine months net interest margin of 3.70% was 0.21% below levels for the same period in 2006. Ending loans (excluding loans held for sale) grew $56.5 million during the 2007 third quarter, representing a 4.0% annualized growth rate for the quarter. During the nine months ended September 30, 2007, ending loans grew $305.9 million, representing an annualized growth rate of 7.5%. Ending deposits of $5.68 billion at September 30, 2007 were down slightly from second quarter levels and grew at a 2.8% annualized rate for the first nine months of 2007. Ending total assets at September 30, 2007 were $7.97 billion.

On the credit quality front, ANB recognized $2.7 million in net charge-offs for the 2007 third quarter, representing 0.19% of loans on an annualized basis, bringing the nine month year-to-date annualized net charge-off rate to 0.13%. The company recorded a provision for loan losses of $3.3 million in the 2007 third quarter, up from $1.1 million recorded in the 2006 third quarter. Nonaccrual loans were $20.2 million at quarter end, or 0.35% of total loans. Other real estate owned at September 30, 2007 was $8.0 million, bringing total nonperforming assets to $28.2 million. As a percentage of period-end loans and other real estate owned, nonperforming assets rose to 0.49% as compared with 0.18% in the year ago quarter and 0.32% in the quarter ended June 30, 2007.

“We look forward to our forthcoming merger with RBC Centura Banks, Inc.,” said John H. Holcomb III, Chairman and CEO. “Our planning efforts with our new partner are focused on ensuring a smooth transition for our customers as we prepare to introduce additional products and services as part of the RBC family.”

ANB’s performance resulted in a return on average tangible assets of 1.04% and a return on average tangible equity of 14.25% for the 2007 third quarter, down from 1.22% and 17.00%, respectively, in the


2006 third quarter. On a 2007 year-to-date basis, these ratios were 1.10% and 15.04%, respectively. Tangible book value per share at September 30, 2007 was $27.29.

ANB is a bank holding company operating 103 banking locations through ten bank subsidiaries in Alabama, Florida and Georgia. Alabama subsidiaries include: First American Bank in north central Alabama; and Alabama Exchange Bank in Tuskegee. Florida subsidiaries are: Indian River National Bank in Vero Beach; First Gulf Bank, N.A. in Escambia County, Florida and Baldwin County, Alabama; Florida Choice Bank in metropolitan Orlando and central Florida; Community Bank of Naples, N.A.; CypressCoquina Bank in Ormond Beach; and Millennium Bank in Gainesville. ANB has two subsidiaries in Georgia: Georgia State Bank and The Peachtree Bank, both in metropolitan Atlanta. ANB provides full banking services to individuals and businesses. Commercial mortgage services, including the origination of permanent commercial real estate mortgage loans for various lenders, are provided by Byars and Company, a division of First American Bank. Brokerage services are provided to customers through First American Bank’s wholly owned subsidiary, NBC Securities, Inc. Investments are not bank guaranteed, not FDIC insured and may lose value.

Alabama National BanCorporation common stock is traded on the NASDAQ Global Select Market under the symbol “ALAB.”

Conference Call:

Alabama National will not be holding a conference call this quarter to discuss these results.

Many of the comparisons of financial data from period to period presented in the narrative of this release have been rounded from actual values reported in the attached selected unaudited financial tables. The percentage changes presented above are based on a comparison of the actual values recorded in the attached tables, not the rounded values.

This press release, including the attached selected unaudited financial tables which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). These “non-GAAP” financial measures are “cash earnings” (cash earnings per share), “tangible book value” (tangible book value per share), “return on average tangible equity” and “return on average tangible assets.” ANB’s management uses these non-GAAP measures in its analysis of ANB’s performance. Cash earnings is defined as net income plus amortization expense (net of tax) applicable to intangible assets that do not qualify as regulatory capital. Cash earnings per basic and diluted share is defined as cash earnings divided by basic and diluted common shares outstanding. ANB’s management includes cash earnings measures to compare the company’s earnings exclusive of non-cash amortization expense and because it is a measure used by many investors as part of their analysis of ANB’s performance. Tangible book value is defined as total equity reduced by recorded intangible assets. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace that are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Alabama National that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Return on average tangible equity is defined as annualized earnings for the period divided by average equity reduced by average goodwill and other intangible assets. Return on average tangible assets is defined as annualized earnings for the period divided by average assets reduced by average goodwill and other intangible assets. ANB’s management includes these measures because it believes that they are important when measuring the company’s performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and these measures are used by many investors as part of their analysis of ANB. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the “Reconciliation Table” in the attached unaudited financial tables for a more detailed analysis of these non-GAAP performance measures and the most directly comparable GAAP measures.


This press release contains forward-looking statements as defined by federal securities laws. Statements contained in this press release which are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. ANB undertakes no obligation to update these statements following the date of this press release. In addition, ANB, through its senior management, may make from time to time forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of ANB’s senior management based upon current information and involve a number of risks and uncertainties. Certain factors which could affect the accuracy of such forward-looking statements are identified in the public filings made by ANB with the Securities and Exchange Commission, and forward looking statements contained in this press release or in other public statements of ANB or its senior management should be considered in light of those factors. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

Where You Can Find Additional Information About ANB’s Proposed Merger with RBC Centura Banks, Inc.

The proposed merger of ANB with RBC Centura Banks, Inc., a wholly-owned subsidiary of Royal Bank of Canada (“RBC”), will be submitted to ANB’s stockholders for consideration. RBC will file with the SEC a Registration Statement on Form F-4 that includes a preliminary version of a proxy statement of ANB that also constitutes a preliminary prospectus of RBC. RBC intends to file the F-4 with the SEC on or about November 30, 2007. Following the F-4 being declared effective by the SEC, ANB intends to mail the final proxy statement/prospectus to its stockholders. ANB stockholders are urged to read the final proxy statement/prospectus regarding the proposed transaction when it becomes available because it will contain important information. You may obtain a free copy of the F-4 (when it becomes available) and the final proxy statement/prospectus (when it becomes available) and other documents related to the merger filed by ANB and RBC with the SEC at the SEC’s website at www.sec.gov. You may also obtain documents filed with the SEC by RBC free of charge from RBC’s website (www.rbc.com) under the heading “News and Information – Investor Relations” and then under the heading “Regulatory Filings” and then under the heading “Link to EDGAR Information and Filings” and then, once it is filed, to the F-4 (or the most recent amendment thereto). You may also obtain documents filed with the SEC by ANB free of charge from ANB’s website (www.alabamanational.com) under the heading “Financial Reports” and then under the item “SEC Filings.”

Participants in the Merger

RBC, RBC Centura Banks, Inc., ANB and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from ANB stockholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of ANB stockholders in connection with the merger will be set forth in the final proxy statement/prospectus when it becomes available. You can find information about RBC’s executive officers and directors in its management proxy circular filed with the SEC as an exhibit to its Form 6-K on February 9, 2007. You can find information about ANB’s executive officers and directors in its definitive proxy statement filed with the SEC on April 12, 2007. You can obtain free copies of these documents from the websites of RBC, ANB or the SEC.

Contacts: Alabama National BanCorporation

 

John H. Holcomb III

Chairman of the Board and

Chief Executive Officer

(205) 583-3648

  

William E. Matthews, V

Executive Vice President and

Chief Financial Officer

(205) 583-3650

# # #


ALABAMA NATIONAL BANCORPORATION

(Unaudited Financial Highlights)

(in thousands, except per share amounts and percentages)

 

     Three Months Ended
September 30,
    Percentage
Change (b)
 
     2007     2006    

Net interest income

   $ 63,731     $ 58,196     9.5 %

Noninterest income

     21,354       18,736     14.0  

Total revenue

     85,085       76,932     10.6  

Provision for loan and lease losses

     3,267       1,130     189.1  

Noninterest expense

     52,182       45,288     15.2  

Income from continuing operations before taxes

     29,636       30,514     (2.9 )

Income taxes

     9,852       10,446     (5.7 )

Net income from continuing operations

     19,784       20,068     (1.4 )

Income from discontinued operations (net of tax)

     2       45     (95.6 )

Net income

   $ 19,786     $ 20,113     (1.6 )%

Weighted average common and common equivalent shares outstanding

      

Basic

     20,604       18,834     9.4 %

Diluted

     20,751       19,012     9.1  

Net income per common share from continuing operations

      

Basic

   $ .96     $ 1.07     (9.9 )%

Diluted

     .95       1.06     (9.7 )

Net income per common share

      

Basic

   $ .96     $ 1.07     (10.1 )%

Diluted

     .95       1.06     (9.9 )

Cash earnings per share from continuing operations (a)

      

Total

   $ 20,632     $ 20,943     (1.5 )%

Basic

     1.00       1.11     (9.9 )

Diluted

     .99       1.10     (9.7 )

Cash dividends declared on common stock

   $ .41     $ .375    

Return on average assets

     1.00 %     1.18 %  

Return on average tangible assets

     1.04       1.22    

Return on average equity

     8.96       11.41    

Return on average tangible equity

     14.25       17.00    
Noninterest Income  

Service charge income

   $ 4,903     $ 4,042     21.3 %

Investment services income

     1,189       1,292     (8.0 )

Wealth management income

     6,373       5,371     18.7  

Gain on sale of mortgages

     2,945       2,774     6.2  

Commercial mortgage banking income

     363       518     (29.9 )

Gain on disposal of assets

     131       13     907.7  

Bank owned life insurance

     1,142       988     15.6  

Other

     4,308       3,738     15.2  
                  

Total noninterest income

   $ 21,354     $ 18,736     14.0 %
                  

(a) Cash earnings exclude the effect on earnings of amortization expense applicable to intangible assets that do not qualify as regulatory capital.
(b) Percentage change based on actual not rounded values.


     Nine Months Ended
September 30,
    Percentage
Change (b)
 
     2007     2006    

Net interest income

   $ 190,988     $ 169,714     12.5 %

Noninterest income

     62,706       54,546     15.0  

Total revenue

     253,694       224,260     13.1  

Provision for loan and lease losses

     8,302       4,293     93.4  

Noninterest expense

     153,983       132,704     16.0  

Income from continuing operations before taxes

     91,409       87,263     4.8  

Income taxes

     30,791       30,110     2.3  

Net income from continuing operations

     60,618       57,153     6.1  

Income from discontinued operations (net of tax)

     1,151       150     667.3  

Net income

   $ 61,769     $ 57,303     7.8 %

Weighted average common and common equivalent shares outstanding

      

Basic

     20,702       18,336     12.9 %

Diluted

     20,861       18,521     12.6  

Net income per common share from continuing operations

      

Basic

   $ 2.93     $ 3.12     (6.1 )%

Diluted

     2.91       3.09     (5.8 )

Net income per common share

      

Basic

   $ 2.98     $ 3.13     (4.5 )%

Diluted

     2.96       3.09     (4.3 )

Cash earnings per share from continuing operations (a)

      

Total

   $ 63,275     $ 59,454     6.4 %

Basic

     3.06       3.24     (5.7 )

Diluted

     3.03       3.21     (5.5 )

Cash dividends declared on common stock

   $ 1.23     $ 1.125    

Return on average assets

     1.06 %     1.18 %  

Return on average tangible assets

     1.10       1.22    

Return on average equity

     9.49       11.71    

Return on average tangible equity

     15.04       17.08    
Noninterest Income  

Service charge income

   $ 13,015     $ 11,753     10.7 %

Investment services income

     3,914       3,122     25.4  

Wealth management income

     18,409       16,102     14.3  

Gain on sale of mortgages

     9,811       8,046     21.9  

Commercial mortgage banking income

     1,159       1,534     (24.4 )

Gain on disposal of assets

     624       552     13.0  

Securities (losses) gains

     —         (1,250 )   NM  

Bank owned life insurance

     3,367       2,528     33.2  

Other

     12,407       12,159     2.0  
                  

Total noninterest income

   $ 62,706     $ 54,546     15.0 %
                  

(a) Cash earnings exclude the effect on earnings of amortization expense applicable to intangible assets that do not qualify as regulatory capital.
(b) Percentage change based on actual not rounded values.
NM – Not meaningful


     September 30,
2007
   December 31,
2006
   Percentage
Change
 

Total assets

   $ 7,967,331    $ 7,671,274    3.9 %

Earning assets

     7,152,863      6,856,309    4.3  

Securities (a)

     1,253,681      1,265,774    (1.0 )

Loans held for sale

     22,018      27,652    (20.4 )

Loans and leases, net of unearned income

     5,761,997      5,456,136    5.6  

Allowance for loan and lease losses

     71,026      68,246    4.1  

Deposits

     5,682,313      5,567,603    2.1  

Short-term borrowings

     149,300      161,830    (7.7 )

Long-term debt

     460,339      402,399    14.4  

Stockholders’ equity

     880,956      853,623    3.2  

 

(a) Excludes trading securities

ASSET QUALITY ANALYSIS

(in thousands, except percentages)

 

     As of / For the Three Months Ended  
     Sept 30, 2007     June 30, 2007     Sept 30, 2006  

Nonaccrual loans

   $ 20,239     $ 10,686     $ 8,344  

Restructured loans

     —         —         —    

Loans past due 90 days or more and still accruing

     -0-       -0-       -0-  

Total nonperforming loans

     20,239       10,686       8,344  

Other real estate owned

     7,969       7,678       381  

Total nonperforming assets

     28,208       18,364       8,725  

Total non performing assets as a percentage of period-end loans and other real estate (a)

     0.49 %     0.32 %     0.18 %

Allowance for loan and lease losses

   $ 71,026     $ 70,474     $ 61,354  

Provision for loan and lease losses

     3,267       3,273       1,130  

Loans charged off

     2,981       2,799       848  

Loan recoveries

     266       323       333  

Net loan and lease losses

     2,715       2,476       515  

Allowance for loan and lease losses as a percentage of period-end loans and leases (a)

     1.23 %     1.24 %     1.26 %

Allowance for loan and lease losses as a percentage of period-end nonperforming loans

     350.94       659.50       735.31  

Net losses to average loans and leases (annualized)

     0.19       0.18       0.04  
     For the Nine Months Ended
September 30,
    Percentage
Change
 
     2007     2006    
      

Provision for loan and lease losses

   $ 8,302     $ 4,293       93.4 %

Loans charged off

     6,281       1,866       236.60  

Loan recoveries

     759       1,033       (26.5 )

Net loan and lease losses

     5,522       833       562.9  

Net losses to average loans and leases (annualized)

     0.13 %     0.02 %  

(a) Excludes loans held for sale


TAXABLE EQUIVALENT YIELDS/RATES

 

     Three Months Ended  
     Sept 30, 2007     June 30, 2007     Sept 30, 2006  

Interest income:

      

Interest and fees on loans

     8.03 %     8.09 %   7.95 %

Interest on securities:

      

Taxable

     4.61       4.61     4.46  

Non-taxable

     6.30       6.08     6.38  

Total interest earning assets

     7.44       7.48     7.27  

Interest expense:

      

Interest on deposits

     4.19 %     4.17 %   3.72 %

Interest on short-term borrowing

     5.46       5.49     5.62  

Interest on long-term debt

     5.05       5.09     5.22  

Total interest bearing liabilities

     4.34       4.32     4.03  

Net interest spread

     3.10       3.16     3.24  

Net interest margin

     3.63       3.72     3.81  
     Nine Months Ended
September 30,
       
     2007     2006        

Interest income:

      

Interest and fees on loans

     8.08 %     7.72 %  

Interest on securities:

      

Taxable

     4.61       4.43    

Non-taxable

     6.21       6.43    

Total interest earning assets

     7.46       7.06    

Interest expense:

      

Interest on deposits

     4.15 %     3.39 %  

Interest on short-term borrowing

     5.34       5.25    

Interest on long-term debt

     5.17       4.98    

Total interest bearing liabilities

     4.31       3.68    

Net interest spread

     3.15       3.38    

Net interest margin

     3.70       3.91    
STOCKHOLDERS’ EQUITY AND CAPITAL RATIOS  
     September 30,
2007
    December 31,
2006
       

Stockholders’ Equity:

      

Equity to assets

     11.06 %     11.13 %  

Leverage ratio

     8.04       7.99    

Book value per common share (a)

   $ 43.19     $ 41.51    

Tangible book value per common share (a)(b)

     27.29       25.55    

Ending shares outstanding

     20,397       20,562    

(a) Includes a cumulative mark to market adjustment to equity of $(0.25) and $(0.29) per share at September 30, 2007 and December 31, 2006, respectively.
(b) Total equity reduced by intangible assets divided by common shares outstanding.


RECONCILIATION TABLE

(in thousands, except per share amounts and percentages)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2007     2006     2007     2006  

Net income from continuing operations

   $ 19,784     $ 20,068     $ 60,618     $ 57,153  

Amortization of intangibles, net of tax

     848       875       2,657       2,301  

Cash earnings from continuing operations

   $ 20,632     $ 20,943     $ 63,275     $ 59,454  

Net income per common share from continuing operations—basic

   $ 0.96     $ 1.07     $ 2.93     $ 3.12  

Effect of amortization of intangibles per share

     0.04       0.04       0.13       0.12  

Cash earnings per common share from continuing operations—basic

   $ 1.00     $ 1.11     $ 3.06     $ 3.24  

Net income per common share from continuing operations—diluted

   $ 0.95     $ 1.06     $ 2.91     $ 3.09  

Effect of amortization of intangibles per share

     0.04       0.04       0.12       0.12  

Cash earnings per common share from continuing operations—diluted

   $ 0.99     $ 1.10     $ 3.03     $ 3.21  

Average assets

   $ 7,884,691     $ 6,752,745     $ 7,812,661     $ 6,470,383  

Average intangible assets

     (324,921 )     (230,011 )     (321,419 )     (205,795 )

Average tangible assets

   $ 7,559,770     $ 6,522,734     $ 7,491,242     $ 6,264,588  

Return on average assets

     1.00 %     1.18 %     1.06 %     1.18 %

Effect of average intangible assets

     0.04       0.04       0.04       0.04  

Return on average tangible assets

     1.04 %     1.22 %     1.10 %     1.22 %

Average equity

   $ 875,842     $ 699,333     $ 870,475     $ 654,280  

Average intangible assets

     (324,921 )     (230,011 )     (321,419 )     (205,795 )

Average tangible equity

   $ 550,921     $ 469,322     $ 549,056     $ 448,485  

Return on average equity

     8.96 %     11.41 %     9.49 %     11.71 %

Effect of average intangible assets

     5.29       5.59       5.55       5.37  

Return on average tangible equity

     14.25 %     17.00 %     15.04 %     17.08 %
       As of    
      
 
September 30,
2007
 
 
   
 
December 31,
2006
 
 
 
                    

Book value

     $ 880,956     $ 853,623    

Intangible assets

       (324,279 )     (328,166 )  

Tangible book value

     $ 556,677     $ 525,457    

Book value per common share

     $ 43.19     $ 41.51    

Effect of intangible assets per share

       (15.90 )     (15.96 )  

Tangible book value per common share

     $ 27.29     $ 25.55    


Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Financial Condition (Unaudited)

(In thousands, except share amounts)

 

     September 30,
2007
    December 31,
2006
 

Assets

    

Cash and due from banks

   $ 164,103     $ 200,153  

Interest-bearing deposits in other banks

     27,983       16,350  

Federal funds sold and securities purchased under resell agreements

     86,364       89,865  

Trading securities, at fair value

     820       532  

Investment securities (fair values of $729,561 and $705,460)

     737,780       716,406  

Securities available for sale, at fair value

     515,901       549,368  

Loans held for sale

     22,018       27,652  

Loans and leases

     5,766,151       5,461,400  

Unearned income

     (4,154 )     (5,264 )
                

Loans and leases, net of unearned income

     5,761,997       5,456,136  

Allowance for loan and lease losses

     (71,026 )     (68,246 )
                

Net loans and leases

     5,690,971       5,387,890  

Property, equipment and leasehold improvements, net

     173,666       155,001  

Assets to be disposed of

     —         3,549  

Goodwill

     311,658       311,583  

Other intangible assets, net

     12,621       16,583  

Cash surrender value of life insurance

     108,384       104,992  

Receivable from investment division customers

     13,998       1,114  

Other assets

     101,064       90,236  
                

Totals

   $ 7,967,331     $ 7,671,274  
                

Liabilities and Stockholders’ Equity

    

Deposits:

    

Noninterest bearing

   $ 755,248     $ 849,127  

Interest bearing

     4,927,065       4,718,476  
                

Total deposits

     5,682,313       5,567,603  

Federal funds purchased and securities sold under repurchase agreements

     719,823       627,297  

Liabilities to be disposed of

     —         1,019  

Accrued expenses and other liabilities

     59,782       56,057  

Payable for securities purchased for investment division customers

     14,818       1,446  

Short-term borrowings

     149,300       161,830  

Long-term debt

     460,339       402,399  
                

Total liabilities

     7,086,375       6,817,651  

Common stock, $1 par; 50,000,000 shares authorized; 20,626,500 and 20,562,467 shares issued at September 30, 2007 and December 31, 2006, respectively

     20,627       20,562  

Additional paid-in capital

     577,064       573,756  

Retained earnings

     302,594       266,668  

Treasury stock at cost, 230,000 shares at September 30, 2007

     (14,221 )     —    

Accumulated other comprehensive loss, net of tax

     (5,108 )     (7,363 )
                

Total stockholders’ equity

     880,956       853,623  
                

Totals

   $ 7,967,331     $ 7,671,274  
                


Alabama National BanCorporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)

 

     For the Three Months
Ended September 30,
   For the Nine Months
Ended September 30,
 
     2007    2006    2007    2006  

Interest income:

           

Interest and fees on loans and leases

   $ 116,151    $ 97,279    $ 342,816    $ 266,374  

Interest on securities

     14,436      13,275      42,402      38,329  

Interest on deposits in other banks

     265      225      819      450  

Interest on trading securities

     8      15      32      34  

Interest on federal funds sold and securities purchased under resell agreements

     888      806      2,682      2,531  
                             

Total interest income

     131,748      111,600      388,751      307,718  

Interest expense:

           

Interest on deposits

     52,806      38,019      153,347      99,059  

Interest on federal funds purchased and securities sold under repurchase agreements

     7,534      8,142      22,353      21,207  

Interest on short-term borrowings

     1,912      2,117      5,587      3,238  

Interest on long-term debt

     5,765      5,126      16,476      14,500  
                             

Total interest expense

     68,017      53,404      197,763      138,004  
                             

Net interest income

     63,731      58,196      190,988      169,714  

Provision for loan and lease losses

     3,267      1,130      8,302      4,293  
                             

Net interest income after provision for loan and lease losses

     60,464      57,066      182,686      165,421  

Noninterest income:

           

Securities losses

     —        —        —        (1,250 )

Gain on disposition of assets

     131      13      624      552  

Service charges on deposit accounts

     4,903      4,042      13,015      11,753  

Investment services income

     1,189      1,292      3,914      3,122  

Wealth management income

     6,373      5,371      18,409      16,102  

Gain on sale of mortgages

     2,945      2,774      9,811      8,046  

Commercial mortgage banking income

     363      518      1,159      1,534  

Bank owned life insurance

     1,142      988      3,367      2,528  

Other

     4,308      3,738      12,407      12,159  
                             

Total noninterest income

     21,354      18,736      62,706      54,546  

Noninterest expense:

           

Salaries and employee benefits

     26,695      23,582      78,950      68,989  

Commission based compensation

     5,198      4,586      15,131      13,143  

Occupancy and equipment expenses

     5,845      5,160      17,364      14,843  

Amortization of intangibles

     1,262      1,262      3,961      3,290  

Other

     13,182      10,698      38,577      32,439  
                             

Total noninterest expense

     52,182      45,288      153,983      132,704  
                             

Income before provision for income taxes from continuing operations

     29,636      30,514      91,409      87,263  

Provision for income taxes

     9,852      10,446      30,791      30,110  
                             

Net income from continuing operations

     19,784      20,068      60,618      57,153  

Income from discontinued operations, including a gain on disposal of $1,462,000 for the nine months ended September 30, 2007 (net of tax)

     2      45      1,151      150  
                             

Net income

   $ 19,786    $ 20,113    $ 61,769    $ 57,303  
                             

Weighted average common shares outstanding:

           

Basic

     20,604      18,834      20,702      18,336  
                             

Diluted

     20,751      19,012      20,861      18,521  
                             

Earnings per common share from continuing operations:

           

Basic

   $ 0.96    $ 1.07    $ 2.93    $ 3.12  
                             

Diluted

   $ 0.95    $ 1.06    $ 2.91    $ 3.09  
                             

Earnings per common share:

           

Basic

   $ 0.96    $ 1.07    $ 2.98    $ 3.13  
                             

Diluted

   $ 0.95    $ 1.06    $ 2.96    $ 3.09  
                             


AVERAGE BALANCES, INCOME AND EXPENSES AND RATES

(Amounts in thousands, except yields and rates)

 

     Three Months 09/30/07     Three Months 09/30/06  
     Average
Balance
    Income/
Expense
   Yield/
Cost
    Average
Balance
    Income/
Expense
   Yield/
Cost
 

Assets:

              

Earning assets:

              

Loans and leases (1)

   $ 5,747,873     $ 116,327    8.03 %   $ 4,861,167     $ 97,415    7.95 %

Securities:

              

Taxable

     1,087,449       12,624    4.61       1,095,864       12,312    4.46  

Tax exempt

     172,851       2,746    6.30       90,761       1,459    6.38  

Cash balances in other banks

     21,320       265    4.93       17,796       225    5.02  

Funds sold

     59,031       888    5.97       57,876       806    5.53  

Trading account securities

     587       8    5.41       1,245       15    4.78  
                                  

Total earning assets (2)

     7,089,111       132,858    7.44       6,124,709       112,232    7.27  
                                  

Cash and due from banks

     168,465            168,449       

Premises and equipment

     168,834            139,617       

Other assets

     529,332            381,126       

Allowance for loan and lease losses

     (71,051 )          (61,156 )     
                          

Total assets

   $ 7,884,691          $ 6,752,745       
                          

Liabilities:

              

Interest-bearing liabilities:

              

Interest-bearing transaction accounts

   $ 1,169,311     $ 8,604    2.92 %   $ 1,114,186     $ 8,135    2.90 %

Savings deposits

     1,058,083       9,138    3.43       955,355       7,217    3.00  

Time deposits

     2,771,279       35,064    5.02       1,987,488       22,667    4.52  

Funds purchased

     624,192       7,534    4.79       662,649       8,142    4.87  

Other short-term borrowings

     139,054       1,912    5.46       149,362       2,117    5.62  

Long-term debt

     453,231       5,765    5.05       389,516       5,126    5.22  
                                  

Total interest-bearing liabilities

     6,215,150       68,017    4.34       5,258,556       53,404    4.03  
                                  

Demand deposits

     729,799            748,486       

Accrued interest and other liabilities

     63,900            46,371       

Stockholders’ equity

     875,842            699,333       
                          

Total liabilities and stockholders’ equity

   $ 7,884,691          $ 6,752,745       
                          

Net interest spread

        3.10 %        3.24 %
                      

Net interest income/margin on a taxable equivalent basis

       64,841    3.63 %       58,828    3.81 %
                      

Tax equivalent adjustment (2)

       1,110          632   
                      

Net interest income/margin

     $ 63,731    3.57 %     $ 58,196    3.77 %
                              

(1) Average loans include nonaccrual loans. All loans and deposits are domestic.
(2) Tax equivalent adjustments are based on the assumed rate of 34%, and do not give effect to the disallowance for Federal income tax purposes of interest expense related to certain tax-exempt assets.


AVERAGE BALANCES, INCOME AND EXPENSES AND RATES

(Amounts in thousands, except yields and rates)

 

     Nine Months 09/30/07     Nine Months 09/30/06  
     Average
Balance
    Income/
Expense
   Yield/
Cost
    Average
Balance
    Income/
Expense
   Yield/
Cost
 

Assets:

              

Earning assets:

              

Loans and leases (1)

   $ 5,681,298     $ 343,406    8.08 %   $ 4,617,531     $ 266,759    7.72 %

Securities:

              

Taxable

     1,094,154       37,722    4.61       1,084,872       35,939    4.43  

Tax exempt

     152,762       7,091    6.21       75,278       3,621    6.43  

Cash balances in other banks

     22,128       819    4.95       12,718       450    4.73  

Funds sold

     65,444       2,682    5.48       65,844       2,531    5.14  

Trading account securities

     849       32    5.04       1,019       34    4.46  
                                  

Total earning assets (2)

     7,016,635       391,752    7.46       5,857,262       309,334    7.06  
                                  

Cash and due from banks

     179,679            179,982       

Premises and equipment

     164,062            128,875       

Other assets

     522,462            362,587       

Allowance for loan and lease losses

     (70,177 )          (58,323 )     
                          

Total assets

   $ 7,812,661          $ 6,470,383       
                          

Liabilities:

              

Interest-bearing liabilities:

              

Interest-bearing transaction accounts

   $ 1,183,641     $ 25,709    2.90 %   $ 1,096,629     $ 21,580    2.63 %

Savings deposits

     1,095,800       28,562    3.48       930,326       18,391    2.64  

Time deposits

     2,657,424       99,076    4.98       1,885,467       59,088    4.19  

Funds purchased

     626,632       22,353    4.77       626,496       21,207    4.53  

Other short-term borrowings

     139,975       5,587    5.34       82,390       3,238    5.25  

Long-term debt

     425,933       16,476    5.17       388,959       14,500    4.98  
                                  

Total interest-bearing liabilities

     6,129,405       197,763    4.31       5,010,267       138,004    3.68  
                                  

Demand deposits

     754,311            736,455       

Accrued interest and other liabilities

     58,470            69,381       

Stockholders’ equity

     870,475            654,280       
                          

Total liabilities and stockholders’ equity

   $ 7,812,661          $ 6,470,383       
                          

Net interest spread

        3.15 %        3.38 %
                      

Net interest income/margin on a taxable equivalent basis

       193,989    3.70 %       171,330    3.91 %
                      

Tax equivalent adjustment (2)

       3,001          1,616   
                      

Net interest income/margin

     $ 190,988    3.64 %     $ 169,714    3.87 %
                              

(1) Average loans include nonaccrual loans. All loans and deposits are domestic.
(2) Tax equivalent adjustments are based on the assumed rate of 34%, and do not give effect to the disallowance for Federal income tax purposes of interest expense related to certain tax-exempt assets.