Exhibit 99.1
L. G. ZANGANI, LLC (908) 788-9660 Fax: (908) 788-4024 Nine Main Street, Flemington, NJ 08822 E-mail: office@zangani.com Web site: http://www.zangani.com |
For Release:IMMEDIATELY
Contact: | Stephen F. Carman, VP/Treasurer (609) 631-6222 For further information see Investor Relations on YNB’s website: www.ynb.com Kevin Nally, LG Zangani LLC (908) 788-9660 |
YARDVILLE NATIONAL BANCORP REPORTS SECOND QUARTER EARNINGS
Hamilton, N.J.- July 21, 2003- Yardville National Bancorp (NASDAQ: YANB)today announced that for the quarter ended June 30, 2003, YNB’s net income increased to $3.6 million, up 1.7 percent from the $3.5 million earned in the same period a year ago. Earnings per share on a diluted basis decreased 20.9 percent to $0.34 compared to $0.43 earned in the same period in 2002.
For the six months ended June 30, 2003, YNB’s net income decreased 1.1 percent to $6.9 million from the $7.0 million earned in the same period a year ago. Earnings per share on a diluted basis for the first half of 2003 decreased 23.3 percent to $0.66 from the $0.86 per diluted share reported in the prior year’s first half. The decrease in earnings per share on a quarterly and year-to-date basis is primarily the result of higher average shares outstanding due to the issuance of 2.3 million shares in a public common stock offering completed in December 2002.
Despite some adverse economic conditions, YNB has maintained its steady growth in net interest income. Led by commercial loans, net interest income increased 13.2 percent in the first six months of 2003 compared to the same period in 2002. This growth in net interest income was offset by an increase in non-interest expenses and also by a decrease in net securities gains, resulting in lower net income for the first six months of 2003 compared to the same time period in 2002.
“We experienced modest improvement in our net interest margin in the second quarter of 2003 compared to the first quarter of this year,” explained YNB President and CEO Patrick M. Ryan. “Should the historically low interest rate environment continue, however, we would expect limited opportunities to expand our margin. In addition, anticipated increases in operating expenses to support expansion in our new and existing markets could continue to limit income growth,” he said.
At June 30, 2003, total loan outstandings, led by commercial loans, increased 24.1 percent over the same date a year ago, reaching $1.33 billion compared with a total of $1.07 billion twelve months ago. Credit quality has remained strong during this period of robust loan growth. Nonperforming assets increased $1.6 million in the second quarter of 2003 to $9.0 million compared to $7.4 million in the second quarter of 2002. Nonperforming assets as a percent of total assets increased to 0.38 percent at June 30, 2003 compared to 0.35 percent at June 30, 2002. The allowance for loan losses at June 30, 2003 totaled $17.5 million, or 1.31 percent of total loans, covering 238.6 percent of total nonperforming loans.
Total deposits increased 15.8 percent to $1.41 billion at June 30, 2003 from $1.22 billion in total deposits at June 30, 2002, funding YNB’s expanding commercial loan portfolio. Continuing its northward expansion, YNB opened another new branch – its first in Somerset County – in the second quarter of 2003. Earlier in the year, YNB introduced “Simply Better Checking” in Bucks County, Pennsylvania and the northern region, which includes Hunterdon, Middlesex and Somerset Counties in New Jersey. This relationship-oriented promotion has resulted in approximately $50 million in new deposits.
“We continue to explore new opportunities for growth, both in Mercer and in our northern region, as well as other target markets,” explained YNB Chairman Jay G. Destribats. “This way, we serve our communities by bringing our unique brand of customer service to new neighborhoods, and strengthen the bank at the same time.”
“By opening new branches and reinforcing our brand image, we expect to gain and retain profitable individual banking business,” added Mr. Ryan. “We believe that increasing our retail presence will reduce our cost of funds, improve our net interest margin, and increase the value of our franchise,” he concluded.
At June 30, 2003, the capital ratios for YNB continued to exceed those required by regulatory authorities to be considered a well-capitalized institution. In the first two quarters of 2003, YNB paid total cash dividends of $0.23 per share, an increase of 4.5 percent compared to the same period in 2002.
YNB had $2.35 billion in assets as of June 30, 2003, with twenty branches serving individuals and businesses in Mercer, Hunterdon, Burlington, Middlesex and Somerset counties in New Jersey and Bucks County in Pennsylvania. Located in the corridor between New York City and Philadelphia, YNB offers a broad range of lending, deposit and other financial products and services with an emphasis on commercial real estate and commercial and industrial lending.
Note regarding forward-looking statements
This press release and other statements made from time to time by our management contain express and implied statements relating to our future financial condition, results of operations, plans, objectives, performance, and business, which are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements that relate to, among other things, profitability, liquidity, loan loss reserve adequacy, plans for growth, interest rate sensitivity, market risk, regulatory compliance, and financial and other goals. Actual results may differ materially from those expected or implied as a result of certain risks and uncertainties, including, but not limited to, the results of our efforts to implement our retail strategy, adverse changes in our loan portfolio and the resulting credit risk-related losses and expenses, interest rate fluctuations and other economic conditions, our ability to attract core deposits, continued relationships with major customers, competition in product offerings and product pricing, adverse changes in the economy that could increase credit-related losses and expenses, compliance with laws and regulatory requirements of federal and state agencies, other risks and uncertainties detailed from time to time in our filings with the SEC, as well as other risks and uncertainties detailed from time to time in statements made by our management.
L.G. Zangani, LLC provides financial public relations service to the Company. As such, L.G. Zangani, LLC and/or its officers, agents and employees, receives remuneration for public relations and/or other services performed for the Company. This remuneration may take the form of cash, capital stock in the Company, or warrants and/or options to purchase stock in the Company.
Yardville National Bancorp
Summary of Financial Information
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
(in thousands, except per share amounts) | 2003 | 2002 | 2003 | 2002 | |||||||||||||||
Stock Information: | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 10,395 | 8,025 | 10,396 | 8,018 | |||||||||||||||
Diluted | 10,614 | 8,229 | 10,590 | 8,170 | |||||||||||||||
Shares outstanding end of period | 10,416 | 8,045 | |||||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.35 | $ | 0.44 | $ | 0.67 | $ | 0.88 | |||||||||||
Diluted | 0.34 | 0.43 | 0.66 | 0.86 | |||||||||||||||
Dividends paid per share | 0.115 | 0.11 | 0.23 | 0.22 | |||||||||||||||
Book value per share | 14.28 | 12.90 | |||||||||||||||||
Closing price per share | 19.52 | 19.94 | |||||||||||||||||
Closing price to book | 136.69 | % | 154.57 | % | |||||||||||||||
Key Ratios: | |||||||||||||||||||
Return on average assets | 0.62 | % | 0.69 | % | 0.61 | % | 0.70 | % | |||||||||||
Return on average stockholders’ equity | 9.73 | 14.12 | 9.46 | 14.41 | |||||||||||||||
Net interest margin (tax equivalent) | 2.37 | 2.41 | 2.34 | 2.35 | |||||||||||||||
Equity-to-assets at period end | 6.30 | 4.90 | |||||||||||||||||
Tier 1 leverage ratio (1) | 7.75 | 6.52 | |||||||||||||||||
Asset Quality Data: | |||||||||||||||||||
Net loan charge-offs | $ | 303 | $ | 23 | $ | 1,163 | $ | 69 | |||||||||||
Nonperforming assets as a percentage of total assets | 0.38 | % | 0.35 | % | |||||||||||||||
Allowance for loan losses at period end as a percent of: | |||||||||||||||||||
Total loans | 1.31 | 1.41 | |||||||||||||||||
Nonperforming loans | 238.59 | 247.75 | |||||||||||||||||
Nonperforming assets at period end: | |||||||||||||||||||
Nonperforming loans | $ | 7,338 | $ | 6,094 | |||||||||||||||
Other real estate | 1,651 | 1,257 | |||||||||||||||||
Total nonperforming assets | $ | 8,989 | $ | 7,351 | |||||||||||||||
(1) Tier 1 leverage ratio is Tier 1 capital to adjusted average assets
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
(in thousands, except per share amounts) | 2003 | 2002 | 2003 | 2002 | ||||||||||||||
INTEREST INCOME: | ||||||||||||||||||
Interest and fees on loans | $ | 20,910 | $ | 18,342 | $ | 40,964 | $ | 35,911 | ||||||||||
Interest on deposits with banks | 17 | 14 | 24 | 30 | ||||||||||||||
Interest on securities available for sale | 8,196 | 10,362 | 17,003 | 20,522 | ||||||||||||||
Interest on investment securities: | ||||||||||||||||||
Taxable | 39 | 248 | 97 | 511 | ||||||||||||||
Exempt from Federal income tax | 698 | 579 | 1,329 | 1,161 | ||||||||||||||
Interest on Federal funds sold | 165 | 353 | 376 | 655 | ||||||||||||||
Total Interest Income | 30,025 | 29,898 | 59,793 | 58,790 | ||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||
Interest on savings account deposits | 2,829 | 2,943 | 5,469 | 5,727 | ||||||||||||||
Interest on certificates of deposit of $100,000 or more | 1,039 | 1,325 | 2,097 | 2,710 | ||||||||||||||
Interest on other time deposits | 3,738 | 4,298 | 7,591 | 8,931 | ||||||||||||||
Interest on borrowed funds | 8,897 | 8,969 | 17,931 | 17,636 | ||||||||||||||
Interest on trust preferred securities | 690 | 775 | 1,544 | 1,550 | ||||||||||||||
Total Interest Expense | 17,193 | 18,310 | 34,632 | 36,554 | ||||||||||||||
Net Interest Income | 12,832 | 11,588 | 25,161 | 22,236 | ||||||||||||||
Less provision for loan losses | 1,250 | 1,075 | 1,850 | 1,625 | ||||||||||||||
Net Interest Income After Provision for Loan Losses | 11,582 | 10,513 | 23,311 | 20,611 | ||||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||||
Service charges on deposit accounts | 572 | 552 | 1,119 | 1,068 | ||||||||||||||
Securities gains, net | 539 | 983 | 690 | 1,626 | ||||||||||||||
Bank owned life insurance | 522 | 432 | 1,031 | 843 | ||||||||||||||
Other non-interest income | 905 | 351 | 1,270 | 683 | ||||||||||||||
Total Non-Interest Income | 2,538 | 2,318 | 4,110 | 4,220 | ||||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||||
Salaries and employee benefits | 5,227 | 4,346 | 10,244 | 8,588 | ||||||||||||||
Occupancy expense, net | 935 | 863 | 1,961 | 1,680 | ||||||||||||||
Equipment expense | 737 | 601 | 1,427 | 1,145 | ||||||||||||||
Other non-interest expense | 2,267 | 2,116 | 4,181 | 3,712 | ||||||||||||||
Total Non-Interest Expense | 9,166 | 7,926 | 17,813 | 15,125 | ||||||||||||||
Income before income tax expense | 4,954 | 4,905 | 9,608 | 9,706 | ||||||||||||||
Income tax expense | 1,362 | 1,373 | 2,660 | 2,679 | ||||||||||||||
Net Income | $ | 3,592 | $ | 3,532 | $ | 6,948 | $ | 7,027 | ||||||||||
EARNINGS PER SHARE: | ||||||||||||||||||
Basic | $ | 0.35 | $ | 0.44 | $ | 0.67 | $ | 0.88 | ||||||||||
Diluted | 0.34 | 0.43 | 0.66 | 0.86 | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 10,395 | 8,025 | 10,396 | 8,018 | ||||||||||||||
Diluted | 10,614 | 8,229 | 10,590 | 8,170 | ||||||||||||||
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
June 30, | Dec. 31, | |||||||||||||
(in thousands) | 2003 | 2002 | 2002 | |||||||||||
Assets: | ||||||||||||||
Cash and due from banks | $ | 30,781 | $ | 28,158 | $ | 28,608 | ||||||||
Federal funds sold | 31,125 | 109,035 | 72,485 | |||||||||||
Cash and Cash Equivalents | 61,906 | 137,193 | 101,093 | |||||||||||
Interest bearing deposits with banks | 25,782 | 4,129 | 2,501 | |||||||||||
Securities available for sale | 806,574 | 795,148 | 820,665 | |||||||||||
Investment securities | 63,796 | 62,904 | 54,690 | |||||||||||
Loans | 1,332,007 | 1,073,070 | 1,195,143 | |||||||||||
Less: Allowance for loan losses | (17,508 | ) | (15,098 | ) | (16,821 | ) | ||||||||
Loans, net | 1,314,499 | 1,057,972 | 1,178,322 | |||||||||||
Bank premises and equipment, net | 11,961 | 11,341 | 12,208 | |||||||||||
Other real estate | 1,651 | 1,257 | 1,048 | |||||||||||
Bank owned life insurance | 41,843 | 32,561 | 40,850 | |||||||||||
Other assets | 24,951 | 17,290 | 20,081 | |||||||||||
Total Assets | $ | 2,352,963 | $ | 2,119,795 | $ | 2,231,458 | ||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||
Deposits | ||||||||||||||
Non-interest bearing | $ | 144,251 | $ | 124,360 | $ | 126,183 | ||||||||
Interest bearing | 1,268,001 | 1,095,169 | 1,146,103 | |||||||||||
Total Deposits | 1,412,252 | 1,219,529 | 1,272,286 | |||||||||||
Borrowed funds | ||||||||||||||
Securities sold under agreements to repurchase | 10,000 | 10,000 | 10,000 | |||||||||||
Federal Home Loan Bank advances | 726,000 | 735,004 | 746,000 | |||||||||||
Obligation for Employee Stock Ownership Plan (ESOP) | 955 | 600 | 400 | |||||||||||
Other | 1,033 | 1,221 | 1,311 | |||||||||||
Total Borrowed Funds | 737,988 | 746,825 | 757,711 | |||||||||||
Trust preferred securities | 36,000 | 32,500 | 32,500 | |||||||||||
Other liabilities | 18,515 | 17,174 | 23,022 | |||||||||||
Total Liabilities | $ | 2,204,755 | $ | 2,016,028 | $ | 2,085,519 | ||||||||
Stockholders’ equity: | ||||||||||||||
Common stock: no par value | 89,550 | 54,760 | 89,297 | |||||||||||
Surplus | 2,205 | 2,205 | 2,205 | |||||||||||
Undivided profits | 55,189 | 45,432 | 50,633 | |||||||||||
Treasury stock, at cost | (3,154 | ) | (3,030 | ) | (3,154 | ) | ||||||||
Unallocated ESOP shares | (955 | ) | (600 | ) | (400 | ) | ||||||||
Accumulated other comprehensive income | 5,373 | 5,000 | 7,358 | |||||||||||
Total Stockholders’ Equity | 148,208 | 103,767 | 145,939 | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,352,963 | $ | 2,119,795 | $ | 2,231,458 | ||||||||
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||
June 30, 2003 | June 30, 2002 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Deposits with other banks | $ | 5,440 | $ | 17 | 1.25 | % | $ | 3,441 | $ | 14 | 1.63 | % | ||||||||||||||
Federal funds sold | 56,975 | 165 | 1.16 | 88,274 | 353 | 1.60 | ||||||||||||||||||||
Securities | 882,475 | 8,933 | 4.05 | 836,157 | 11,189 | 5.35 | ||||||||||||||||||||
Loans (1) | 1,278,949 | 20,910 | 6.54 | 1,049,093 | 18,342 | 6.99 | ||||||||||||||||||||
Total interest earning assets | $ | 2,223,839 | $ | 30,025 | 5.40 | % | $ | 1,976,965 | $ | 29,898 | 6.05 | % | ||||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Cash and due from banks | $ | 24,990 | $ | 23,125 | ||||||||||||||||||||||
Allowance for loan losses | (16,871 | ) | (14,063 | ) | ||||||||||||||||||||||
Premises and equipment, net | 12,189 | 11,241 | ||||||||||||||||||||||||
Other assets | 65,421 | 52,022 | ||||||||||||||||||||||||
Total non-interest earning assets | 85,729 | 72,325 | ||||||||||||||||||||||||
Total assets | $ | 2,309,568 | $ | 2,049,290 | ||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Savings, money markets and interest bearing demand | $ | 635,619 | $ | 2,829 | 1.78 | % | $ | 464,145 | $ | 2,943 | 2.54 | % | ||||||||||||||
Certificates of deposit of $100,000 or more | 139,178 | 1,039 | 2.99 | 150,262 | 1,325 | 3.53 | ||||||||||||||||||||
Other time deposits | 463,099 | 3,738 | 3.23 | 450,143 | 4,298 | 3.82 | ||||||||||||||||||||
Total interest bearing deposits | 1,237,896 | 7,606 | 2.46 | 1,064,550 | 8,566 | 3.22 | ||||||||||||||||||||
Borrowed funds | 739,026 | 8,897 | 4.82 | 720,415 | 8,969 | 4.98 | ||||||||||||||||||||
Trust preferred securities | 36,000 | 690 | 7.67 | 32,500 | 775 | 9.54 | ||||||||||||||||||||
Total interest bearing liabilities | $ | 2,012,922 | $ | 17,193 | 3.42 | % | $ | 1,817,465 | $ | 18,310 | 4.03 | % | ||||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Demand deposits | $ | 131,603 | $ | 116,396 | ||||||||||||||||||||||
Other liabilities | 17,377 | 15,379 | ||||||||||||||||||||||||
Stockholders’ equity | 147,666 | 100,050 | ||||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 296,646 | $ | 231,825 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,309,568 | $ | 2,049,290 | ||||||||||||||||||||||
Interest rate spread (2) | 1.98 | % | 2.02 | % | ||||||||||||||||||||||
Net interest income and margin (3) | $ | 12,832 | 2.31 | % | $ | 11,588 | 2.34 | % | ||||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 13,196 | 2.37 | % | $ | 11,906 | 2.41 | % | ||||||||||||||||||
(1) | Loan origination fees are considered an adjustment to interest income. For the purpose of calculating loan yields, average loan balances include nonaccrual loans with no related interest income. | |
(2) | The interest rate spread is the difference between the average yield on interest earning assets and the average rate paid on interest bearing liabilities. | |
(3) | The net interest margin is equal to net interest income divided by average interest earning assets. | |
(4) | In order to present pre-tax income and resultant yields on tax exempt investments and loans on a basis comparable to those on taxable investments and loans, a tax equivalent adjustment is made to interest income. The tax equivalent adjustment has been computed using a Federal income tax rate of 34 % and has the effect of increasing interest income by $364,000 and $318,000 for the three month periods ended June 30, 2003 and 2002, respectively. |
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Six Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, 2003 | June 30, 2002 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Deposits with other banks | $ | 3,417 | $ | 24 | 1.40 | % | $ | 3,039 | $ | 30 | 1.97 | % | ||||||||||||||
Federal funds sold | 65,788 | 376 | 1.14 | 81,104 | 655 | 1.62 | ||||||||||||||||||||
Securities | 891,612 | 18,429 | 4.13 | 823,437 | 22,194 | 5.39 | ||||||||||||||||||||
Loans (1) | 1,247,927 | 40,964 | 6.57 | 1,033,614 | 35,911 | 6.95 | ||||||||||||||||||||
Total interest earning assets | $ | 2,208,744 | $ | 59,793 | 5.41 | % | $ | 1,941,194 | $ | 58,790 | 6.06 | % | ||||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Cash and due from banks | $ | 24,290 | $ | 22,682 | ||||||||||||||||||||||
Allowance for loan losses | (16,676 | ) | (13,799 | ) | ||||||||||||||||||||||
Premises and equipment, net | 12,171 | 11,137 | ||||||||||||||||||||||||
Other assets | 63,751 | 51,354 | ||||||||||||||||||||||||
Total non-interest earning assets | 83,536 | 71,374 | ||||||||||||||||||||||||
Total assets | $ | 2,292,280 | $ | 2,012,568 | ||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Savings, money markets and interest bearing demand | $ | 603,623 | $ | 5,469 | 1.81 | % | $ | 444,458 | $ | 5,727 | 2.58 | % | ||||||||||||||
Certificates of deposit of $100,000 or more | 138,418 | 2,097 | 3.03 | 149,576 | 2,710 | 3.62 | ||||||||||||||||||||
Other time deposits | 464,527 | 7,591 | 3.27 | 446,510 | 8,931 | 4.00 | ||||||||||||||||||||
Total interest bearing deposits | 1,206,568 | 15,157 | 2.51 | 1,040,544 | 17,368 | 3.34 | ||||||||||||||||||||
Borrowed funds | 748,132 | 17,931 | 4.79 | 714,465 | 17,636 | 4.94 | ||||||||||||||||||||
Trust preferred securities | 37,135 | 1,544 | 8.32 | 32,500 | 1,550 | 9.54 | ||||||||||||||||||||
Total interest bearing liabilities | $ | 1,991,835 | $ | 34,632 | 3.48 | % | $ | 1,787,509 | $ | 36,554 | 4.09 | % | ||||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Demand deposits | $ | 125,973 | $ | 112,985 | ||||||||||||||||||||||
Other liabilities | 27,509 | 14,575 | ||||||||||||||||||||||||
Stockholders’ equity | 146,963 | 97,499 | ||||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 300,445 | $ | 225,059 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,292,280 | $ | 2,012,568 | ||||||||||||||||||||||
Interest rate spread (2) | 1.93 | % | 1.97 | % | ||||||||||||||||||||||
Net interest income and margin (3) | $ | 25,161 | 2.28 | % | $ | 22,236 | 2.29 | % | ||||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 25,861 | 2.34 | % | $ | 22,852 | 2.35 | % | ||||||||||||||||||
(1) | Loan origination fees are considered an adjustment to interest income. For the purpose of calculating loan yields, average loan balances include nonaccrual loans with no related interest income. | |
(2) | The interest rate spread is the difference between the average yield on interest earning assets and the average rate paid on interest bearing liabilities. | |
(3) | The net interest margin is equal to net interest income divided by average interest earning assets. | |
(4) | In order to present pre-tax income and resultant yields on tax exempt investments and loans on a basis comparable to those on taxable investments and loans, a tax equivalent adjustment is made to interest income. The tax equivalent adjustment has been computed using a Federal income tax rate of 34 % and has the effect of increasing interest income by $700,000 and $616,000 for the six month periods ended June 30, 2003 and 2002, respectively. |