EXHIBIT 99.1
| FOR IMMEDIATE RELEASE | ||
| Date: | April 18, 2005 | |
| Contact: | Donald F. Holt, EVP/CFO | |
| (717) 920-5801, Fax (717) 920-1683 | ||
COMMUNITY BANKS REPORTS PERFORMANCE IMPROVEMENT
Harrisburg, PA- Community Banks, Inc. (“Community”) (Listed on NASDAQ: CMTY) today announced improved earnings performance as it moves toward completion of its previously announced merger with PennRock Financial Services Corp. Community’s earnings per share for the first quarter of 2005 rose to $0.44, an increase of over 7% over the prior year’s first quarter, while net income reached $5.5 million. Results for the first quarter of 2004 reflected earnings per share of $0.41 and net income of $5.2 million. Previously-reported 2004 results had included $1.3 million of pretax gains from the sale of investments, primarily bank equity securities, while 2005 results included only modest gains from investment sales. Results in the first quarter of 2005 produced a return on average assets of 1.12% and a return on average equity of 14.23%.
The improvement in earnings during the quarter was especially significant considering the favorable trends reported in many of the key measures vital to achieving earnings improvement. Net interest income, the largest single source of revenue in financial institutions, improved nearly 9% when compared to the first quarter of 2004. Net interest margin, a measure of the difference between interest received on earning assets and interest paid on deposits and borrowings, grew to 3.55% from 3.40% a year earlier, a signal that pricing compression may be subsiding. Pricing compression has been a major obstacle to earnings improvement in the last several years as interest rates declined to the lowest levels in over 40 years. At the same time, revenue growth from service and fee income sources continued to be critical to Community’s revenue diversification initiatives. Excluding gains from investment transactions, total non-interest income grew by 20% from the first quarter of 2004 as Community continued to fully integrate financial services capabilities from non-bank acquisitions. Non-interest expenses remained under control despite the influence of core banking growth and the impact of acquired businesses on Community’s expense structure. The efficiency ratio, expressed as the ratio of operating expenses to tax-equivalent revenues, declined to 58.8%, the third straight quarterly decline in this important ratio. This return to an efficiency ratio more consistent with Community’s historical trends suggests that expenses are being well-managed, even with the effect of added expenses from volume increases in both traditional and complementary financial services.
“We are very pleased that our core operating results reflect the growing optimism that we have for the future of our franchise”, said Eddie L. Dunklebarger, President and CEO of Community. “It is particularly gratifying to report this solid foundation of performance as we move closer to our landmark merger with PennRock. Employees of both PennRock and Community are to be commended for their untiring efforts to bring these two fine organizations together. We are working together to create a franchise that we believe will be greater than the sum of its parts”, he added.
Growth continued to be a hallmark of Community’s balance sheet trends as total assets exceeded the $2 billion mark at the end of the first quarter of 2005. Average loan and deposit growth reached 12% and 7%, respectively, when compared to the first quarter of 2004. Importantly, the growth in loans over the last several years has been accompanied by steady improvement in most of the metrics critical to maintaining the highest levels of asset quality in the loan portfolio. Total nonperforming assets to period end loans remained below 1%, at .62%, while net charge-offs to loans were an almost negligible 0.07% on an annualized basis. Additionally, the coverage ratio of the allowance for credit losses to non-accrual loans was at 254%, substantially the same as the 266% at the end of 2004.
In late 2004, Community and PennRock Financial Services Corp. announced their intention to merge in a transaction that is expected to create the eighth-largest financial institution headquartered in Pennsylvania. PennRock is the parent company of Blue Ball National Bank, a Lancaster County, Pennsylvania-based bank with a strong presence in Berks and Chester Counties. The transaction has received approval from various banking regulators and is in the process of meeting the various requirements necessary for shareholder approval from both organizations. Pending these final approvals, consummation is expected to occur at or near the middle of 2005.
Community currently has over $2 billion in assets and 49 banking offices, and is headquartered in Harrisburg, Pennsylvania, which will remain the corporate offices. PennRock, with its 19 banking offices and approximately $1.2 billion in assets, operates 12 offices in Lancaster County; 5 in Berks County near Reading, Pennsylvania; and 2 additional offices in nearby Chester County.
This press release contains “forward looking” information as defined by the Private Securities Litigation Reform Act of 1995, which is based on Community’s current expectations, estimates and projections about future events and financial trends affecting the financial condition of its business. These statements are not historical facts or guarantees of future performance, events, or results. Such statements involve potential risks and uncertainties and, accordingly, actual performance results may differ materially. Community undertakes no obligation to publicly update or revise forward looking information, whether as a result of new, updated information, future events, or otherwise.
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COMMUNITY BANKS, INC.
Selected Financial Information
(Dollars in thousands, except per share data)
Three Months Ended March 31, | ||||||||
| 2005 | 2004 | |||||||
Consolidated summary of operations: | ||||||||
Interest income | $ | 26,183 | $ | 23,980 | ||||
Interest expense | 11,493 | 10,541 | ||||||
Net interest income | 14,690 | 13,439 | ||||||
Provision for loan losses | 550 | 850 | ||||||
Net interest income after provision for loan losses | 14,140 | 12,589 | ||||||
Non-interest income: | ||||||||
Investment management and trust services | 414 | 267 | ||||||
Service charges on deposit accounts | 1,793 | 1,405 | ||||||
Other service charges, commissions, and fees | 1,010 | 902 | ||||||
Investment security gains | 51 | 1,332 | ||||||
Insurance premium income and commissions | 902 | 654 | ||||||
Mortgage banking activities | 515 | 627 | ||||||
Earnings on investment in life insurance | 399 | 365 | ||||||
Other | 126 | 71 | ||||||
Total non-interest income | 5,210 | 5,623 | ||||||
Non-interest expenses: | ||||||||
Salaries and employee benefits | 7,293 | 6,835 | ||||||
Net occupancy | 2,148 | 2,033 | ||||||
Marketing expense | 445 | 420 | ||||||
Telecommunications expense | 304 | 317 | ||||||
Other | 2,469 | 2,278 | ||||||
Total non-interest expenses | 12,659 | 11,883 | ||||||
Income before income taxes | 6,691 | 6,329 | ||||||
Income taxes | 1,204 | 1,154 | ||||||
Net income | $ | 5,487 | $ | 5,175 | ||||
Net loan charge-offs | $ | 217 | $ | 166 | ||||
Net interest margin (FTE) | 3.55 | % | 3.40 | % | ||||
Efficiency ratio | 58.76 | % | 61.19 | % | ||||
Return on average assets | 1.12 | % | 1.10 | % | ||||
Return on average stockholders’ equity | 14.23 | % | 14.13 | % | ||||
Return on average realized equity2] | 14.53 | % | 14.98 | % | ||||
Consolidated per share data:1] | ||||||||
Basic earnings per share | $ | 0.45 | $ | 0.42 | ||||
Diluted earnings per share | $ | 0.44 | $ | 0.41 | ||||
Book value at end of period | $ | 12.33 | $ | 12.27 | ||||
Realized book value at end of period2] | $ | 12.52 | $ | 11.40 | ||||
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COMMUNITY BANKS, INC.
Selected Financial Information
(Dollars in thousands, except per share data)
Consolidated balance sheet data:
Three Months Ended March 31, | ||||||
| 2005 | 2004 | |||||
Average total loans | $ | 1,231,192 | $ | 1,100,432 | ||
Average earning assets | 1,870,054 | 1,783,353 | ||||
Average assets | 1,983,119 | 1,896,781 | ||||
Average deposits | 1,326,760 | 1,242,594 | ||||
Average stockholders’ equity | 156,395 | 147,308 | ||||
Average diluted shares outstanding1] | 12,564,000 | 12,653,000 | ||||
March 31, 2005 | December 31, 2004 | March 31, 2004 | 3/31/2005 vs. 3/31/2004 % Change | ||||||||||||
Assets | $ | 2,012,653 | $ | 1,954,799 | $ | 1,944,555 | 4 | % | |||||||
Total loans | 1,245,904 | 1,215,951 | 1,112,557 | 12 | % | ||||||||||
Deposits | 1,348,250 | 1,305,537 | 1,282,410 | 5 | % | ||||||||||
Stockholders’ equity2] | 154,108 | 149,130 | 139,900 | 10 | % | ||||||||||
Accumulated other comprehensive income (loss) | (2,350 | ) | 3,211 | 10,604 | (122 | )% | |||||||||
Diluted shares outstanding1] | 12,555,000 | 12,549,000 | 12,625,000 | (1 | )% | ||||||||||
Non-accrual loans | $ | 5,807 | $ | 5,428 | $ | 7,541 | (23 | )% | |||||||
Foreclosed real estate | 1,935 | 2,094 | 2,057 | (6 | )% | ||||||||||
Total non-performing assets | 7,742 | 7,522 | 9,598 | (19 | )% | ||||||||||
Accruing loans 90 days past due | — | — | 98 | (100 | )% | ||||||||||
Total risk elements | $ | 7,742 | $ | 7,522 | $ | 9,696 | (20 | )% | |||||||
Allowance for loan losses | $ | 14,754 | $ | 14,421 | $ | 13,862 | 6 | % | |||||||
| Asset quality ratios: | |||||||||||||||
Allowance for loan losses to total loans outstanding | 1.18 | % | 1.19 | % | 1.25 | % | |||||||||
Allowance for loan losses to non-accrual loans | 254 | % | 266 | % | 184 | % | |||||||||
Non-accrual loans to total loans outstanding | 0.47 | % | 0.45 | % | 0.68 | % | |||||||||
Non-performing assets to total assets | 0.38 | % | 0.38 | % | 0.49 | % | |||||||||
| 1] | Per share data reflects stock splits and stock dividends |
| 2] | Excludes accumulated other comprehensive income (loss) |
4
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
KEY RATIOS
| 2005 | 2004 | |||||||||||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Annual | |||||||||||||||||||
Earnings per share - basic (1) | $ | 0.45 | $ | 0.45 | $ | 0.46 | $ | 0.45 | $ | 0.42 | $ | 1.78 | ||||||||||||
Earnings per share - diluted (1) | $ | 0.44 | $ | 0.44 | $ | 0.45 | $ | 0.43 | $ | 0.41 | $ | 1.73 | ||||||||||||
Return on average assets | 1.12 | % | 1.13 | % | 1.15 | % | 1.11 | % | 1.10 | % | 1.12 | % | ||||||||||||
Return on average equity | 14.23 | % | 14.54 | % | 15.84 | % | 15.37 | % | 14.13 | % | 14.96 | % | ||||||||||||
Return on average realized equity (2) | 14.53 | % | 14.99 | % | 15.70 | % | 15.54 | % | 14.98 | % | 15.30 | % | ||||||||||||
Net interest margin | 3.55 | % | 3.51 | % | 3.43 | % | 3.44 | % | 3.40 | % | 3.44 | % | ||||||||||||
Non-interest income/revenues (FTE excluding security gains) | 23.95 | % | 24.33 | % | 27.07 | % | 25.11 | % | 22.17 | % | 24.74 | % | ||||||||||||
Provision for loan losses/average loans (annualized) | 0.18 | % | 0.25 | % | 0.25 | % | 0.27 | % | 0.31 | % | 0.27 | % | ||||||||||||
Efficiency ratio | 58.76 | % | 58.96 | % | 59.29 | % | 61.55 | % | 61.19 | % | 60.22 | % | ||||||||||||
Non-performing assets to period-end loans | 0.62 | % | 0.62 | % | 0.69 | % | 0.69 | % | 0.86 | % | ||||||||||||||
90 day past due loans to period-end loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | ||||||||||||||
Total risk elements to period-end loans | 0.62 | % | 0.62 | % | 0.69 | % | 0.69 | % | 0.87 | % | ||||||||||||||
Allowance for loan losses to loans | 1.18 | % | 1.19 | % | 1.21 | % | 1.23 | % | 1.25 | % | 1.19 | % | ||||||||||||
Allowance for loan losses to non-accrual loans | 254 | % | 266 | % | 241 | % | 229 | % | 184 | % | 266 | % | ||||||||||||
Net charge-offs/average loans (annualized) | 0.07 | % | 0.25 | % | 0.21 | % | 0.11 | % | 0.06 | % | 0.16 | % | ||||||||||||
Equity to assets | 7.54 | % | 7.79 | % | 7.64 | % | 6.94 | % | 7.74 | % | 7.79 | % | ||||||||||||
| (1) | Per share data reflect stock splits and stock dividends |
| (2) | Excludes accumulated other comprehensive income (loss) items |
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COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
PER SHARE STATISTICS *
Diluted Earnings per Share
| Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Total | |||||||||||
2005 | $ | 0.44 | $ | 0.44 | |||||||||||
2004 | $ | 0.44 | $ | 0.45 | $ | 0.43 | $ | 0.41 | $ | 1.73 | |||||
2003 | $ | 0.41 | $ | 0.41 | $ | 0.40 | $ | 0.41 | $ | 1.63 | |||||
Average Diluted Shares Outstanding | |||||||||||||||
(in thousands) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Average for Year | ||||||||||
2005 | 12,564 | 12,564 | |||||||||||||
2004 | 12,553 | 12,508 | 12,587 | 12,653 | 12,575 | ||||||||||
2003 | 12,623 | 12,501 | 12,433 | 12,375 | 12,497 | ||||||||||
Book Value per Share
| Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||
2005 | $ | 12.33 | ||||||||||
2004 | $ | 12.45 | $ | 12.26 | $ | 11.15 | $ | 12.27 | ||||
2003 | $ | 11.73 | $ | 11.25 | $ | 11.73 | $ | 10.83 | ||||
Realized Book Value per Share (excludes accumulated other comprehensive income items)
| ||||||||||||
| Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||
2005 | $ | 12.52 | ||||||||||
2004 | $ | 12.19 | $ | 11.85 | $ | 11.61 | $ | 11.40 | ||||
2003 | $ | 11.19 | $ | 10.89 | $ | 10.60 | $ | 10.33 | ||||
| * | Per share data reflect stock splits and stock dividends |
6
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight – MARCH 31, 2005
QUARTER END INFORMATION
| 2005 | 2004 | ||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||||
Loans, net | $ | 1,231,150 | $ | 1,201,530 | $ | 1,173,844 | $ | 1,147,074 | $ | 1,098,695 | |||||||
Earning assets | 1,895,648 | 1,838,116 | 1,844,154 | 1,843,262 | 1,834,961 | ||||||||||||
Goodwill and identifiable intangible assets | 5,008 | 5,051 | 5,036 | 4,976 | 4,759 | ||||||||||||
Total assets | 2,012,653 | 1,954,799 | 1,955,811 | 1,961,061 | 1,944,555 | ||||||||||||
Deposits | 1,348,250 | 1,305,537 | 1,320,476 | 1,297,370 | 1,282,410 | ||||||||||||
Long-term debt | 427,942 | 404,662 | 406,370 | 373,066 | 399,750 | ||||||||||||
Subordinated debt | 30,928 | 30,928 | 30,928 | 30,928 | 30,928 | ||||||||||||
Total shareholder’s equity | 151,758 | 152,341 | 149,419 | 136,135 | 150,504 | ||||||||||||
Accumulated other comprehensive income (loss) (net of tax) | (2,350 | ) | 3,211 | 5,050 | (5,607 | ) | 10,604 | ||||||||||
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COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
CONDENSED CONSOLIDATED QUARTERLY AVERAGE STATEMENTS OF CONDITION
| 2005 | 2004 | |||||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||
Assets | ||||||||||||||||||||
Earning Assets: | ||||||||||||||||||||
Loans | $ | 1,231,192 | $ | 1,201,454 | $ | 1,175,562 | $ | 1,138,284 | $ | 1,100,432 | ||||||||||
Federal funds sold and other | 25,788 | 17,223 | 6,504 | 14,297 | 11,175 | |||||||||||||||
Taxable investment securities | 401,038 | 415,262 | 453,905 | 493,150 | 463,804 | |||||||||||||||
Tax-exempt investment securities | 212,036 | 210,736 | 209,248 | 208,754 | 207,942 | |||||||||||||||
Total Earning Assets | 1,870,054 | 1,844,675 | 1,845,219 | 1,854,485 | 1,783,353 | |||||||||||||||
Cash and due from banks | 37,994 | 40,689 | 38,144 | 34,366 | 36,065 | |||||||||||||||
Allowance for loan losses | (14,533 | ) | (14,551 | ) | (14,418 | ) | (14,172 | ) | (13,484 | ) | ||||||||||
Goodwill and other identifiable intangibles | 5,029 | 5,015 | 4,975 | 4,844 | 4,756 | |||||||||||||||
Premises, equipment and other assets | 84,575 | 81,412 | 84,015 | 82,351 | 86,091 | |||||||||||||||
Total assets | $ | 1,983,119 | $ | 1,957,240 | $ | 1,957,935 | $ | 1,961,874 | $ | 1,896,781 | ||||||||||
Liabilities and equity | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Savings and NOW accounts | $ | 501,945 | $ | 494,275 | $ | 515,917 | $ | 516,409 | $ | 457,269 | ||||||||||
Time | 641,767 | 621,810 | 615,023 | 629,837 | 621,030 | |||||||||||||||
Short-term borrowings | 31,106 | 48,926 | 59,464 | 83,333 | 52,020 | |||||||||||||||
Long-term debt | 425,318 | 405,615 | 399,085 | 367,757 | 410,148 | |||||||||||||||
Subordinated debt | 30,928 | 30,928 | 30,928 | 30,928 | 30,928 | |||||||||||||||
Total interest-bearing liabilities | 1,631,064 | 1,601,554 | 1,620,417 | 1,628,264 | 1,571,395 | |||||||||||||||
Noninterest-bearing deposits | 183,048 | 188,505 | 182,434 | 177,104 | 164,295 | |||||||||||||||
Other liabilities | 12,612 | 15,624 | 13,276 | 14,179 | 13,783 | |||||||||||||||
Total liabilities | 1,826,724 | 1,805,683 | 1,816,127 | 1,819,547 | 1,749,473 | |||||||||||||||
Stockholders’ equity | 156,395 | 151,557 | 141,808 | 142,327 | 147,308 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,983,119 | $ | 1,957,240 | $ | 1,957,935 | $ | 1,961,874 | $ | 1,896,781 | ||||||||||
CHANGE IN AVERAGE BALANCES *
| 2005 | 2004 | ||||||||||||||
| First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||
Loans | 11.9 | % | 12.5 | % | 14.5 | % | 16.2 | % | 20.2 | % | |||||
Total assets | 4.6 | % | 7.3 | % | 7.8 | % | 10.2 | % | 11.4 | % | |||||
Deposits | 6.8 | % | 7.4 | % | 9.7 | % | 13.1 | % | 10.1 | % | |||||
Shareholders’ equity | 6.2 | % | 8.9 | % | 3.8 | % | 4.3 | % | 12.6 | % | |||||
| * | Compares the current quarter to the comparable quarter of the prior year. |
8
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| 2005 | 2004 | |||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Annual | ||||||||||||
Interest income | $ | 26,183 | $ | 25,710 | $ | 25,227 | $ | 24,882 | $ | 23,980 | $ | 99,799 | ||||||
Tax equivalent adjustment | 1,689 | 1,664 | 1,613 | 1,639 | 1,623 | 6,539 | ||||||||||||
| 27,872 | 27,374 | 26,840 | 26,521 | 25,603 | 106,338 | |||||||||||||
Interest expense | 11,493 | 11,089 | 10,934 | 10,678 | 10,541 | 43,242 | ||||||||||||
Net interest income | 16,379 | 16,285 | 15,906 | 15,843 | 15,062 | 63,096 | ||||||||||||
Provision for loan losses | 550 | 750 | 750 | 750 | 850 | 3,100 | ||||||||||||
Net interest income after provision | 15,829 | 15,535 | 15,156 | 15,093 | 14,212 | 59,996 | ||||||||||||
Non-interest income | 4,644 | 4,584 | 5,346 | 4,484 | 3,664 | 18,078 | ||||||||||||
Investment security gains income | 51 | 186 | 108 | 844 | 1,332 | 2,470 | ||||||||||||
Mortgage banking activities income | 515 | 652 | 558 | 828 | 627 | 2,665 | ||||||||||||
Non-interest expenses | 12,659 | 12,618 | 12,530 | 12,962 | 11,883 | 49,993 | ||||||||||||
Income before income taxes | 8,380 | 8,339 | 8,638 | 8,287 | 7,952 | 33,216 | ||||||||||||
Income taxes | 1,204 | 1,135 | 1,379 | 1,211 | 1,154 | 4,879 | ||||||||||||
Tax equivalent adjustment | 1,689 | 1,664 | 1,613 | 1,639 | 1,623 | 6,539 | ||||||||||||
NET INCOME | $ | 5,487 | $ | 5,540 | $ | 5,646 | $ | 5,437 | $ | 5,175 | $ | 21,798 | ||||||
Tax effect of security transactions | $ | 18 | $ | 65 | $ | 38 | $ | 295 | $ | 466 | $ | 865 | ||||||
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COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
ANALYSIS OF NON-INTEREST INCOME
| 2005 | 2004 | |||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Annual | ||||||||||||
Investment management and trust services | $ | 414 | $ | 391 | $ | 443 | $ | 409 | $ | 267 | $ | 1,510 | ||||||
Service charges on deposit accounts | 1,793 | 2,012 | 1,996 | 1,707 | 1,405 | 7,120 | ||||||||||||
Other service charges, commissions and fees | 1,010 | 792 | 888 | 775 | 902 | 3,357 | ||||||||||||
Insurance premium income and commissions | 902 | 873 | 708 | 1,025 | 654 | 3,260 | ||||||||||||
Earnings on investment in life insurance | 399 | 383 | 433 | 412 | 365 | 1,593 | ||||||||||||
Other income | 126 | 133 | 878 | 156 | 71 | 1,238 | ||||||||||||
Total non-interest income | $ | 4,644 | $ | 4,584 | $ | 5,346 | $ | 4,484 | $ | 3,664 | $ | 18,078 | ||||||
ANALYSIS OF NON-INTEREST EXPENSES
| 2005 | 2004 | |||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Annual | ||||||||||||
Salaries and employee benefits | $ | 7,293 | $ | 7,486 | $ | 6,975 | $ | 7,041 | $ | 6,835 | $ | 28,337 | ||||||
Net occupancy expense | 2,148 | 1,990 | 1,962 | 1,995 | 2,033 | 7,980 | ||||||||||||
Marketing expense | 445 | 425 | 611 | 869 | 420 | 2,325 | ||||||||||||
Telecommunications expense | 304 | 306 | 318 | 344 | 317 | 1,285 | ||||||||||||
Other operating expenses | 2,469 | 2,411 | 2,664 | 2,713 | 2,278 | 10,066 | ||||||||||||
Total non-interest expenses | $ | 12,659 | $ | 12,618 | $ | 12,530 | $ | 12,962 | $ | 11,883 | $ | 49,993 | ||||||
10
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
RISK ELEMENTS ANALYSIS
| 2005 | 2004 | |||||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||
Non-performing assets: | ||||||||||||||||||||
Non-accrual loans | $ | 5,807 | $ | 5,428 | $ | 5,990 | $ | 6,244 | $ | 7,541 | ||||||||||
Troubled debt restructurings | — | — | — | — | — | |||||||||||||||
Foreclosed real estate | 1,935 | 2,094 | 2,203 | 1,788 | 2,057 | |||||||||||||||
Total non-performing assets | 7,742 | 7,522 | 8,193 | 8,032 | 9,598 | |||||||||||||||
Accruing loans 90 days or more past due | — | — | 16 | 32 | 98 | |||||||||||||||
Total risk elements | $ | 7,742 | $ | 7,522 | $ | 8,209 | $ | 8,064 | $ | 9,696 | ||||||||||
Non-performing assets to period-end loans | 0.62 | % | 0.62 | % | 0.69 | % | 0.69 | % | 0.86 | % | ||||||||||
90 day past due loans to period-end loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | ||||||||||
Total risk elements to period-end loans | 0.62 | % | 0.62 | % | 0.69 | % | 0.69 | % | 0.87 | % | ||||||||||
11
COMMUNITY BANKS, INC. & SUBSIDIARIES
FISCAL INSIGHT - MARCH 31, 2005
ALLOWANCE FOR LOAN LOSSES
| 2005 | 2004 | |||||||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||||||
Balance at beginning of period | $ | 14,421 | $ | 14,436 | $ | 14,294 | $ | 13,862 | $ | 13,178 | ||||||||||
Loans charged off | (460 | ) | (922 | ) | (786 | ) | (752 | ) | (450 | ) | ||||||||||
Recoveries | 243 | 157 | 178 | 434 | 284 | |||||||||||||||
Net loans charged off | (217 | ) | (765 | ) | (608 | ) | (318 | ) | (166 | ) | ||||||||||
Provision for loan losses | 550 | 750 | 750 | 750 | 850 | |||||||||||||||
Balance at end of period | $ | 14,754 | $ | 14,421 | $ | 14,436 | $ | 14,294 | $ | 13,862 | ||||||||||
Net loans charged-off to average loans* | 0.07 | % | 0.25 | % | 0.21 | % | 0.11 | % | 0.06 | % | ||||||||||
Provision for loan losses to average loans* | 0.18 | % | 0.25 | % | 0.25 | % | 0.27 | % | 0.31 | % | ||||||||||
Allowance for loan losses to loans | 1.18 | % | 1.19 | % | 1.21 | % | 1.23 | % | 1.25 | % | ||||||||||
| * | Annualized |
12
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
OTHER RATIOS
| 2005 | 2004 | ||||||||||||||
First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||||
Investment portfolio – fair value to amortized cost | 100.0 | % | 101.4 | % | 101.7 | % | 99.2 | % | 102.8 | % | |||||
Dividend payout ratio | 38.1 | % | 37.5 | % | 36.7 | % | 38.2 | % | 38.4 | % | |||||
Net loans to deposits ratio, average | 91.7 | % | 91.0 | % | 88.4 | % | 84.9 | % | 87.5 | % | |||||
MARKET PRICE AND DIVIDENDS DECLARED *
| Closing Bid Price Range | Dividends Declared | ||||||||
Year / Quarter | High | Low | |||||||
2005 | |||||||||
First | $ | 28.51 | $ | 23.70 | $ | 0.1700 | |||
Second | — | ||||||||
Third | — | ||||||||
Fourth | — | ||||||||
| $ | 0.1700 | ||||||||
2004 | |||||||||
First | $ | 34.52 | $ | 28.41 | $ | 0.1619 | |||
Second | $ | 31.58 | $ | 27.02 | $ | 0.1700 | |||
Third | $ | 29.73 | $ | 25.35 | $ | 0.1700 | |||
Fourth | $ | 31.47 | $ | 28.77 | $ | 0.1700 | |||
| $ | 0.6719 | ||||||||
2003 | |||||||||
First | $ | 22.51 | $ | 20.79 | $ | 0.1512 | |||
Second | $ | 23.81 | $ | 22.11 | $ | 0.1586 | |||
Third | $ | 26.59 | $ | 23.69 | $ | 0.1586 | |||
Fourth | $ | 32.14 | $ | 26.67 | $ | 0.1586 | |||
| $ | 0.6270 | ||||||||
| * | Per share data reflect stock splits and dividends |
13
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
NET INTEREST MARGIN - YEAR-TO-DATE
| March 31, 2005 | March 31, 2004 | |||||||||||||||||
(dollars in thousands) | Average Balance | FTE Interest Expense | Average Rate Earned/Paid | Average Balance | FTE Interest Expense | Average Rate Earned/Paid | ||||||||||||
Federal funds sold and interest-bearing deposits in banks | $ | 24,022 | $ | 151 | 2.55 | % | $ | 6,399 | $ | 13 | 0.82 | % | ||||||
Investment securities | 613,074 | 8,354 | 5.53 | % | 671,746 | 8,699 | 5.21 | % | ||||||||||
Loans - commercial | 419,713 | 6,476 | 6.26 | % | 393,786 | 5,581 | 5.70 | % | ||||||||||
- commercial real estate | 362,149 | 5,593 | 6.26 | % | 283,302 | 4,209 | 5.98 | % | ||||||||||
- residential real estate | 91,326 | 1,501 | 6.67 | % | 96,119 | 1,675 | 7.01 | % | ||||||||||
- consumer | 359,770 | 5,797 | 6.53 | % | 332,001 | 5,426 | 6.57 | % | ||||||||||
Total earning assets | $ | 1,870,054 | $ | 27,872 | 6.04 | % | $ | 1,783,353 | $ | 25,603 | 5.77 | % | ||||||
Deposits - savings and NOW accounts | $ | 501,945 | $ | 1,313 | 1.06 | % | $ | 457,269 | 889 | 0.78 | % | |||||||
- time | 641,767 | 4,747 | 3.00 | % | 621,030 | 4,569 | 2.96 | % | ||||||||||
Short-term borrowings | 31,106 | 157 | 2.05 | % | 52,020 | 124 | 0.96 | % | ||||||||||
Long-term debt | 425,318 | 4,817 | 4.59 | % | 410,148 | 4,581 | 4.49 | % | ||||||||||
Subordinated debt | 30,928 | 459 | 6.02 | % | 30,928 | 378 | 4.92 | % | ||||||||||
Total interest-bearing liabilities | $ | 1,631,064 | 11,493 | 2.86 | % | $ | 1,571,395 | 10,541 | 2.70 | % | ||||||||
Interest income to earning assets | 6.04 | % | 5.77 | % | ||||||||||||||
Interest expense to paying liabilities | 2.86 | % | 2.70 | % | ||||||||||||||
Interest spread | 3.18 | % | 3.07 | % | ||||||||||||||
Impact of noninterest funds | 0.37 | % | 0.33 | % | ||||||||||||||
Net interest margin | $ | 16,379 | 3.55 | % | $ | 15,062 | 3.40 | % | ||||||||||
14
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
NET INTEREST MARGIN - QUARTER-TO-DATE
| March 31, 2005 | December 31, 2004 | |||||||||||||||||
(dollars in thousands) | Average Balance | FTE Interest Expense | Average Rate Earned/Paid | Average Balance | FTE Interest Expense | Average Rate Earned/Paid | ||||||||||||
Federal funds sold and interest-bearing deposits in banks | $ | 24,022 | $ | 151 | 2.55 | % | $ | 16,133 | $ | 76 | 1.87 | % | ||||||
Investment securities | 613,074 | 8,354 | 5.53 | % | 625,998 | 8,658 | 5.50 | % | ||||||||||
Loans - commercial | 419,713 | 6,476 | 6.26 | % | 402,008 | 6,046 | 5.98 | % | ||||||||||
- commercial real estate | 362,149 | 5,593 | 6.26 | % | 348,740 | 5,293 | 6.04 | % | ||||||||||
- residential real estate | 91,326 | 1,501 | 6.67 | % | 93,701 | 1,512 | 6.42 | % | ||||||||||
- consumer | 359,770 | 5,797 | 6.53 | % | 358,095 | 5,789 | 6.43 | % | ||||||||||
Total earning assets | $ | 1,870,054 | $ | 27,872 | 6.04 | % | $ | 1,844,675 | $ | 27,374 | 5.90 | % | ||||||
Deposits - savings and NOW accounts | $ | 501,945 | $ | 1,313 | 1.06 | % | $ | 494,275 | $ | 1,119 | 0.90 | % | ||||||
- time | 641,767 | 4,747 | 3.00 | % | 621,810 | 4,602 | 2.94 | % | ||||||||||
Short-term borrowings | 31,106 | 157 | 2.05 | % | 48,926 | 215 | 1.75 | % | ||||||||||
Long-term debt | 425,318 | 4,817 | 4.59 | % | 405,615 | 4,718 | 4.63 | % | ||||||||||
Subordinated debt | 30,928 | 459 | 6.02 | % | 30,928 | 435 | 5.60 | % | ||||||||||
Total interest-bearing liabilities | $ | 1,631,064 | 11,493 | 2.86 | % | $ | 1,601,554 | 11,089 | 2.75 | % | ||||||||
Interest income to earning assets | 6.04 | % | 5.90 | % | ||||||||||||||
Interest expense to paying liabilities | 2.86 | % | 2.75 | % | ||||||||||||||
Interest spread | 3.18 | % | 3.15 | % | ||||||||||||||
Impact of noninterest funds | 0.37 | % | 0.36 | % | ||||||||||||||
Net interest margin | $ | 16,379 | 3.55 | % | $ | 16,285 | 3.51 | % | ||||||||||
15
COMMUNITY BANKS, INC. & SUBSIDIARIES
Fiscal Insight - MARCH 31, 2005
PERIOD-END LOAN PORTFOLIO ANALYSIS
| 2005 | 2004 | ||||||||||||||
(dollars in thousands) | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | ||||||||||
Commercial: | |||||||||||||||
Commercial | $ | 378,986 | $ | 359,112 | $ | 384,464 | $ | 378,588 | $ | 356,862 | |||||
Obligations of political subdivisions | 54,327 | 49,993 | 40,226 | 37,801 | 37,142 | ||||||||||
Total commercial | 433,313 | 409,105 | 424,690 | 416,389 | 394,004 | ||||||||||
Commercial real estate: | |||||||||||||||
Commercial mortgages | $ | 363,246 | $ | 356,871 | $ | 312,327 | $ | 303,031 | $ | 287,964 | |||||
Residential real estate: | |||||||||||||||
Residential mortgages | $ | 84,469 | $ | 83,979 | $ | 82,546 | $ | 84,260 | $ | 87,280 | |||||
Construction | 6,190 | 8,703 | 13,378 | 10,929 | 8,505 | ||||||||||
Total residential real estate | 90,659 | 92,682 | 95,924 | 95,189 | 95,785 | ||||||||||
Consumer: | |||||||||||||||
Home equity loans | $ | 224,608 | $ | 224,494 | $ | 225,319 | $ | 216,384 | $ | 209,868 | |||||
Home equity lines of credit | 54,309 | 53,921 | 49,380 | 45,324 | 40,535 | ||||||||||
Indirect consumer loans | 53,847 | 52,808 | 55,207 | 55,252 | 54,628 | ||||||||||
Other consumer loans | 25,922 | 26,070 | 25,433 | 29,799 | 29,773 | ||||||||||
Total consumer | 358,686 | 357,293 | 355,339 | 346,759 | 334,804 | ||||||||||
Total loans | $ | 1,245,904 | $ | 1,215,951 | $ | 1,188,280 | $ | 1,161,368 | $ | 1,112,557 | |||||
16