Cavalry Bancorp (CAVB) 8-K Cavalry Bancorp, Inc. Reports

Contact:

William S. Jones

Executive Vice President

and Chief Administrative Officer

615/849-2272

CAVALRY BANCORP, INC. REPORTS

FIRST QUARTER EARNINGS

Murfreesboro, Tennessee—April 30, 2004—Cavalry Bancorp, Inc. (the “Company”) (Nasdaq NMS:CAVB) announced today first quarter consolidated earnings for its wholly-owned subsidiary Cavalry Banking (“Bank”) and the Company.

Net income decreased from $1.2 million or $0.18 per share diluted for the quarter ended March 31, 2003 to $1.0 million or $0.15 per share diluted for the quarter ended March 31, 2004. Annualized return on average assets decreased from 1.06% for the quarter ended March 31, 2003 to 0.81% for the quarter ended March 31, 2004. Annualized return on average equity decreased from 9.44% for the quarter ended March 31, 2003 to 7.44% for the quarter ended March 31, 2004.

This decrease in earnings was a result of decreased gain on sale of loans, increased provision for loan losses and increased non-interest expense. These factors were partially offset by increased interest income, increased other non-interest income and a decline in interest expense. Net interest income increased 13.57% from $3.9 million for the quarter ended March 31, 2003, to $4.4 million for the same period in 2004. Gain on sale of loans decreased 55.67% from $1.3 million for the quarter ended March 31, 2003 to $586,000 for the same period in 2004. Other income increased 13.15% from $2.3 million for the quarter ended March 31, 2003, to $2.6 million for the same period in 2004. Other expenses increased 3.62% from $5.6 million for the quarter ended March 31, 2003, to $5.8 million for the same period in 2004.

Total assets of the Company decreased from $515.2 million at December 31, 2003 to $506.4 million at March 31, 2004. Net loans receivable increased from $350.4 million at December 31, 2003 to $378.2 million at March 31, 2004. Loans held-for-sale decreased from $2.6 million at December 31, 2003 to $1.6 million at March 31, 2004. Deposits decreased from $454.3 million at December 31, 2003 to $440.8 million at March 31, 2004.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Certain of these statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including the uncertainties inherent in the process of auditing and making end-of-year adjustments to a corporation’s financial statements. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

[Selected financial data follows]

Cavalry Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share data)
	March 31			December 31
	2004			2003
Assets
Cash and cash equivalents	$	49,199			70,913
Investment securities available-for-sale, at fair value		41,370			55,123
Loans held for sale, at estimated fair value		1,630			2,648
Loans receivable, net of allowances for loan losses of $4,576 at March 31, 2004 and $4,525 at December 31, 2003		378,233			350,412
Accrued interest receivable		1,593			1,668
Office properties and equipment, net		18,157			18,431
Required investments in stock of the Federal Home Loan Bank and Federal Reserve Bank stock at cost		3,033			2,992
Foreclosed assets		7			-
Bank owned life insurance		8,367			8,308
Goodwill		1,772			1,772
Other assets		3,063			2,905
Totalassets	$	506,424			515,172
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest-bearing	$	67,008			72,443
Interest-bearing		373,785			381,814
		440,793			454,257
Advances from Federal Home Loan Bank of Cincinnati		2,876			2,889
Accrued expenses and other liabilities		7,174			3,599
Total liabilities		450,843			460,745
Shareholders' Equity
Preferred Stock, no par value Authorized - 250,000 shares; none issued or outstanding at March 31, 2004 and December 31, 2003		-			-
Common Stock, no par value Authorized- 49,750,000 shares; issued and outstanding 6,833,473 and 6,834,873 at March 31, 2004, and December 31, 2003		10,438			10,175
Retained earnings		47,260			46,633
Unallocated ESOP shares		(2,195	)		(2,373	)
Accumulated other comprehensive income (loss), net of tax		78			(8	)
Total shareholders' equity		55,581			54,427
Total Liabilities and Shareholders' Equity	$	506,424			515,172

Cavalry Bancorp, Inc
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
	Three Months Ended
	March 31
	2004		2003
Interest income:
Loans	$	5,273		5,024
Investment securities		348		283
Other		90		126
Total interest income		5,711		5,433
Interest expense - deposits		1,269		1,519
Interest expense - borrowings		24		24
Total interest expense		1,293		1,543
Net interest income		4,418		3,890
Provision for loan losses		101		56
Net interest income after provision for loan losses		4,317		3,834
Non-interest income:
Servicing income		45		71
Gain on sale of loans, net		586		1,322
Gain on sale of investment securities, net		66		11
Deposit servicing fees and charges		1,224		1,055
Trust service fees		292		246
Commissions and other non-banking fees		655		616
Other operating income		317		298
Total non-interest income		3,185		3,619
Non-interest expenses:
Salaries and employee benefits		3,573		3,659
Occupancy expense		320		315
Supplies, communications, and other office expenses		219		253
Advertising expense		151		101
Equipment and service bureau expense		816		695
Other operating expense		680		535
Total non-interest expense		5,759		5,558
Income before income tax expense		1,743		1,895
Income tax expense		727		727
Net income	$	1,016		1,168
Basic Earnings Per Share	$	0.16		0.18
Diluted Earnings Per Share	$	0.15		0.18
Weighted average shares outstanding - Basic		6,486,988		6,365,767
Weighted average shares outstanding - Diluted		6,732,839		6,579,436

Cavalry Bancorp, Inc.
Consolidated Financial
Highlights
(unaudited)
(dollars in thousands)
	March31		December31
	2004		2003		% Change
FINANCIAL CONDITION DATA:
Total assets	$	506,424		515,172		-1.70	%
Loans receivable, net		378,233		350,412		7.94	%
Loans held-for-sale		1,630		2,648		-38.44	%
Investment securities available-for-sale		41,370		55,123		-24.95	%
Cash and cash equivalents		49,199		70,913		-30.62	%
Deposits		440,793		454,257		-2.96	%
Borrowings		2,876		2,889		-0.45	%
Shareholders' Equity		55,581		54,427		2.12	%
	For the quarters ending
	March 31
		2004		2003		%Change
OPERATING DATA:
Interest and dividend income	$	5,711		5,433		5.12	%
Interest expense		1,293		1,543		-16.20	%
Net interest income		4,418		3,890		13.57	%
Provision for loan losses		101		56		80.36	%
Net interest incomeafter provision for loan losses		4,317		3,834		12.60	%
Gains from sale of loans		586		1,322		-55.67	%
Other income		2,599		2,297		13.15	%
Other expenses		5,759		5,558		3.62	%
Income before income taxes		1,743		1,895		-8.02	%
Income tax expense		727		727		0.00	%
Net income	$	1,016		1,168		-13.01	%

	For the quarters ending
	March 31,
	2004			2003
KEY FINANCIAL RATIOS
Performance Ratios:
Return on average assets		0.81	%		1.06	%
Return on average shareholders' equity		7.44	%		9.44	%
Interest rate spread		3.74	%		3.73	%
Net interest margin		3.94	%		3.98	%
Average interest-earning assets to average interest-bearing liabilities		117.21	%		115.89	%
Non-interest expense as a percent of average total assets		4.57	%		5.04	%
Efficiency ratio		75.75	%		74.02	%
Asset Quality Ratios:
Nonaccrual and 90 days or more past due loans as a percent of total loans, net		0.28	%		0.15	%
Nonperforming assets as a percent of total assets		0.21	%		0.15	%
Allowance for loan losses as a percent of total loans receivable		1.20	%		1.45	%
Net charge-offs to average outstanding loans		0.01	%		0.03	%