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: | Patrick M. Ryan, President & CEO | (609) 631-6177 | |||
Stephen F. Carman, VP/Treasurer | (609) 631-6222 | ||||
Carl Moebis, LG Zangani LLC | (908) 788-9660 |
YARDVILLE NATIONAL BANCORP REPORTS THIRD QUARTER EARNINGS
Hamilton, N.J. — October 20, 2003 — Yardville National Bancorp (NASDAQ: YANB) today announced that a lower yield on the investment portfolio and an ongoing need to invest in infrastructure for future growth resulted in reduced earnings for the quarter ended September 30, 2003, when compared to the same period a year ago. YNB’s net income decreased 14.4 percent to $3.2 million from the $3.7 million earned in the same period in 2002. Earnings per share on a diluted basis decreased 31.8 percent to $0.30 compared to $0.44 earned for the first nine months last year.
For the year to date ended September 30, 2003, YNB’s net income decreased 5.7 percent to $10.1 million from the $10.7 million earned in the same period in 2002. Earnings per share on a diluted basis for the first three quarters of 2003 decreased 26.9 percent to $0.95 from the $1.30 per diluted share reported in the same nine months of the prior year. The diluted earnings per share decreases, both for the quarter and year-to-date, are attributable to the greater number of common shares outstanding resulting from last year’s stock offering and the lower net income recorded.
Net interest income growth of 11.7 percent for the first nine months of 2003 was offset by a 19.5 percent increase in non-interest expenses and a 49.9 percent decrease in net securities gains. These resulted in lower net income for the current year-to-date when compared to the same period in the prior year.
“It’s important to understand that the increase in non-interest expenses is essential to build market share in the communities we serve,” explained YNB President and CEO Patrick M. Ryan. “The hiring of skilled bankers as well as investments in our infrastructure will help YNB provide the sophisticated products and services that our customers expect and deserve, and positions us for growth in the future.
“On the other side of the equation,” he continued, “We remain committed to improving our net interest margin, but the third quarter 2003 net interest margin remained unchanged from the second quarter. While the company benefited from ongoing growth in the commercial loan portfolio and a lower cost of funds, those benefits were offset by a lower yield on the investment portfolio in the third quarter. We have taken steps intended to improve the investment portfolio yield, and we believe these will have a positive effect on the net interest margin,” Mr. Ryan concluded.
Two factors that are expected to limit net interest margin growth in the near term are the ongoing low interest rate environment and the recent announcement by the Federal Home Loan Bank of New York that it would eliminate its fourth quarter dividend paid to member banks.
There were several bright spots in this quarter’s performance, however, as YNB experienced significant growth in both loans and deposits. At September 30, 2003, total loans outstanding, led by commercial loans, increased 21.7 percent over the same date a year ago, reaching $1.39 billion compared with $1.14 billion in 2002. Credit quality continues to remain strong, with nonperforming assets as a percentage of total assets increasing to 0.46 percent at September 30, 2003 from 0.36 percent at the same date in 2002. The allowance for loan losses at September 30, 2003 totaled $18.0 million, or 1.30 percent of total loans, covering 178.1 percent of total nonperforming loans.
As YNB continues to build its customer base in both new and traditional markets, deposits increased 16.7 percent to $1.47 billion at September 30, 2003 compared to the same time period in 2002. These deposits help fund YNB’s commercial loan growth. Solidifying its coverage of existing markets, YNB previously announced the purchase of a branch in Lawrence Township, Mercer County that is expected to close before year end.
“Our growth is tied to our ongoing commitment to community banking,” explained YNB Chairman Jay G. Destribats. “This is the base on which YNB was built, and we continue to believe it is our path to success in the future,” he concluded.
At September 30, 2003, the capital ratios for YNB once again exceeded those required by regulatory authorities to be considered well-capitalized. Adding further to that capital strength, YNB recently concluded the private sale of $10 million in floating rate trust preferred securities. In the first three quarters of 2003, YNB paid total cash dividends of $0.345 per share, an increase of 4.5 percent compared to the same period in 2002.
YNB had $2.42 billion in assets as of September 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 | Nine Months Ended | ||||||||||||||||||
September, 30 | September 30, | ||||||||||||||||||
(in thousands, except per share amounts) | 2003 | 2002 | 2003 | 2002 | |||||||||||||||
Stock Information: | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 10,379 | 8,047 | 10,390 | 8,028 | |||||||||||||||
Diluted | 10,653 | 8,325 | 10,611 | 8,218 | |||||||||||||||
Shares outstanding end of period | 10,428 | 8,053 | |||||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.30 | $ | 0.46 | $ | 0.97 | $ | 1.34 | |||||||||||
Diluted | 0.30 | 0.44 | 0.95 | 1.30 | |||||||||||||||
Dividends paid per share | 0.115 | 0.11 | 0.345 | 0.33 | |||||||||||||||
Book value per share | 14.05 | 13.68 | |||||||||||||||||
Closing price per share | 20.95 | 16.99 | |||||||||||||||||
Closing price to book | 149.11 | % | 124.20 | % | |||||||||||||||
Key Ratios: | |||||||||||||||||||
Return on average assets | 0.53 | % | 0.69 | % | 0.58 | % | 0.69 | % | |||||||||||
Return on average stockholders’ equity | 8.90 | 13.77 | 9.27 | 14.19 | |||||||||||||||
Net interest margin (tax equivalent) | 2.37 | 2.39 | 2.35 | 2.37 | |||||||||||||||
Equity-to-assets at period end | 6.03 | 5.04 | |||||||||||||||||
Tier 1 leverage ratio (1) | 8.23 | 6.53 | |||||||||||||||||
Asset Quality Data: | |||||||||||||||||||
Net loan charge-offs | $ | 848 | $ | 233 | $ | 2,011 | $ | 302 | |||||||||||
Nonperforming assets as a percentage of total assets | 0.46 | % | 0.36 | % | |||||||||||||||
Allowance for loan losses at period end as a percent of: | |||||||||||||||||||
Total loans | 1.30 | 1.41 | |||||||||||||||||
Nonperforming loans | 178.12 | 244.26 | |||||||||||||||||
Nonperforming assets at period end: | |||||||||||||||||||
Nonperforming loans | $ | 10,125 | $ | 6,618 | |||||||||||||||
Other real estate | 917 | 1,248 | |||||||||||||||||
Total nonperforming assets | $ | 11,042 | $ | 7,866 | |||||||||||||||
(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 | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
(in thousands, except per share amounts) | 2003 | 2002 | 2003 | 2002 | ||||||||||||||
INTEREST INCOME: | ||||||||||||||||||
Interest and fees on loans | $ | 21,942 | $ | 19,294 | $ | 62,906 | $ | 55,205 | ||||||||||
Interest on deposits with banks | 65 | 14 | 89 | 44 | ||||||||||||||
Interest on securities available for sale | 7,254 | 10,521 | 24,257 | 31,043 | ||||||||||||||
Interest on investment securities: | ||||||||||||||||||
Taxable | 53 | 120 | 150 | 631 | ||||||||||||||
Exempt from Federal income tax | 719 | 590 | 2,048 | 1,751 | ||||||||||||||
Interest on Federal funds sold | 88 | 296 | 464 | 951 | ||||||||||||||
Total Interest Income | 30,121 | 30,835 | 89,914 | 89,625 | ||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||
Interest on savings account deposits | 2,776 | 2,759 | 8,245 | 8,486 | ||||||||||||||
Interest on certificates of deposit of $100,000 or more | 993 | 1,233 | 3,090 | 3,943 | ||||||||||||||
Interest on other time deposits | 3,525 | 4,538 | 11,116 | 13,469 | ||||||||||||||
Interest on borrowed funds | 8,924 | 9,414 | 26,855 | 27,050 | ||||||||||||||
Interest on trust preferred securities | 693 | 775 | 2,237 | 2,325 | ||||||||||||||
Total Interest Expense | 16,911 | 18,719 | 51,543 | 55,273 | ||||||||||||||
Net Interest Income | 13,210 | 12,116 | 38,371 | 34,352 | ||||||||||||||
Less provision for loan losses | 1,375 | 1,300 | 3,225 | 2,925 | ||||||||||||||
Net Interest Income After Provision for Loan Losses | 11,835 | 10,816 | 35,146 | 31,427 | ||||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||||
Service charges on deposit accounts | 592 | 573 | 1,711 | 1,641 | ||||||||||||||
Securities gains, net | 574 | 896 | 1,264 | 2,522 | ||||||||||||||
Income on bank owned life insurance | 523 | 417 | 1,554 | 1,260 | ||||||||||||||
Other non-interest income | 415 | 326 | 1,685 | 1,009 | ||||||||||||||
Total Non-Interest Income | 2,104 | 2,212 | 6,214 | 6,432 | ||||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||||
Salaries and employee benefits | 5,579 | 4,529 | 15,823 | 13,117 | ||||||||||||||
Occupancy expense, net | 969 | 888 | 2,930 | 2,568 | ||||||||||||||
Equipment expense | 721 | 590 | 2,148 | 1,735 | ||||||||||||||
Other non-interest expense | 2,379 | 1,854 | 6,560 | 5,566 | ||||||||||||||
Total Non-Interest Expense | 9,648 | 7,861 | 27,461 | 22,986 | ||||||||||||||
Income before income tax expense | 4,291 | 5,167 | 13,899 | 14,873 | ||||||||||||||
Income tax expense | 1,129 | 1,473 | 3,789 | 4,152 | ||||||||||||||
Net Income | $ | 3,162 | $ | 3,694 | $ | 10,110 | $ | 10,721 | ||||||||||
EARNINGS PER SHARE: | ||||||||||||||||||
Basic | $ | 0.30 | $ | 0.46 | $ | 0.97 | $ | 1.34 | ||||||||||
Diluted | 0.30 | 0.44 | 0.95 | 1.30 | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 10,379 | 8,047 | 10,390 | 8,028 | ||||||||||||||
Diluted | 10,653 | 8,325 | 10,611 | 8,218 | ||||||||||||||
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
September 30, | Dec. 31, | |||||||||||||
(in thousands) | 2003 | 2002 | 2002 | |||||||||||
Assets: | ||||||||||||||
Cash and due from banks | $ | 33,066 | $ | 28,916 | $ | 28,608 | ||||||||
Federal funds sold | 72,865 | 104,275 | 72,485 | |||||||||||
Cash and Cash Equivalents | 105,931 | 133,191 | 101,093 | |||||||||||
Interest bearing deposits with banks | 15,589 | 1,972 | 2,501 | |||||||||||
Securities available for sale | 777,932 | 802,665 | 820,665 | |||||||||||
Investment securities | 65,728 | 54,174 | 54,690 | |||||||||||
Loans | 1,392,219 | 1,143,921 | 1,195,143 | |||||||||||
Less: Allowance for loan losses | (18,035 | ) | (16,165 | ) | (16,821 | ) | ||||||||
Loans, net | 1,374,184 | 1,127,756 | 1,178,322 | |||||||||||
Bank premises and equipment, net | 11,880 | 11,790 | 12,208 | |||||||||||
Other real estate | 917 | 1,248 | 1,048 | |||||||||||
Bank owned life insurance | 42,346 | 32,955 | 40,850 | |||||||||||
Other assets | 25,798 | 17,544 | 20,081 | |||||||||||
Total Assets | $ | 2,420,305 | $ | 2,183,295 | $ | 2,231,458 | ||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||
Deposits | ||||||||||||||
Non-interest bearing | $ | 159,087 | $ | 122,022 | $ | 126,183 | ||||||||
Interest bearing | 1,313,424 | 1,140,045 | 1,146,103 | |||||||||||
Total Deposits | 1,472,511 | 1,262,067 | 1,272,286 | |||||||||||
Borrowed funds | ||||||||||||||
Securities sold under agreements to repurchase | 10,000 | 10,000 | 10,000 | |||||||||||
Federal Home Loan Bank advances | 726,000 | 746,002 | 746,000 | |||||||||||
Obligation for Employee Stock Ownership Plan (ESOP) | 855 | 500 | 400 | |||||||||||
Other | 1,058 | 1,261 | 1,311 | |||||||||||
Total Borrowed Funds | 737,913 | 757,763 | 757,711 | |||||||||||
Trust preferred securities | 46,000 | 32,500 | 32,500 | |||||||||||
Other liabilities | 17,974 | 20,839 | 23,022 | |||||||||||
Total Liabilities | $ | 2,274,398 | $ | 2,073,169 | $ | 2,085,519 | ||||||||
Stockholders’ equity: | ||||||||||||||
Common stock: no par value | 89,797 | 54,922 | 89,297 | |||||||||||
Surplus | 2,205 | 2,205 | 2,205 | |||||||||||
Undivided profits | 57,153 | 48,238 | 50,633 | |||||||||||
Treasury stock, at cost | (3,160 | ) | (3,030 | ) | (3,154 | ) | ||||||||
Unallocated ESOP shares | (855 | ) | (500 | ) | (400 | ) | ||||||||
Accumulated other comprehensive income | 767 | 8,291 | 7,358 | |||||||||||
Total Stockholders’ Equity | 145,907 | 110,126 | 145,939 | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,420,305 | $ | 2,183,295 | $ | 2,231,458 | ||||||||
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||
September 30, 2003 | September 30, 2002 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Deposits with other banks | $ | 22,162 | $ | 65 | 1.17 | % | $ | 2,763 | $ | 14 | 2.03 | % | ||||||||||||||
Federal funds sold | 36,419 | 88 | 0.97 | 66,629 | 296 | 1.78 | ||||||||||||||||||||
Securities | 868,268 | 8,026 | 3.70 | 909,095 | 11,231 | 4.94 | ||||||||||||||||||||
Loans (1) | 1,362,588 | 21,942 | 6.44 | 1,102,407 | 19,294 | 7.00 | ||||||||||||||||||||
Total interest earning assets | $ | 2,289,437 | $ | 30,121 | 5.26 | % | $ | 2,080,894 | $ | 30,835 | 5.93 | % | ||||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Cash and due from banks | $ | 26,477 | $ | 22,346 | ||||||||||||||||||||||
Allowance for loan losses | (17,658 | ) | (15,213 | ) | ||||||||||||||||||||||
Premises and equipment, net | 12,032 | 11,310 | ||||||||||||||||||||||||
Other assets | 70,624 | 51,187 | ||||||||||||||||||||||||
Total non-interest earning assets | 91,475 | 69,630 | ||||||||||||||||||||||||
Total assets | $ | 2,380,912 | $ | 2,150,524 | ||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Savings, money markets and interest bearing demand | $ | 705,095 | $ | 2,776 | 1.57 | % | $ | 480,886 | $ | 2,759 | 2.29 | % | ||||||||||||||
Certificates of deposit of $100,000 or more | 140,469 | 993 | 2.83 | 143,696 | 1,233 | 3.43 | ||||||||||||||||||||
Other time deposits | 451,928 | 3,525 | 3.12 | 494,196 | 4,538 | 3.67 | ||||||||||||||||||||
Total interest bearing deposits | 1,297,492 | 7,294 | 2.25 | 1,118,778 | 8,530 | 3.05 | ||||||||||||||||||||
Borrowed funds | 737,685 | 8,924 | 4.84 | 753,875 | 9,414 | 4.99 | ||||||||||||||||||||
Trust preferred securities | 36,344 | 693 | 7.63 | 32,500 | 775 | 9.54 | ||||||||||||||||||||
Total interest bearing liabilities | $ | 2,071,521 | $ | 16,911 | 3.27 | % | $ | 1,905,153 | $ | 18,719 | 3.93 | % | ||||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Demand deposits | $ | 149,821 | $ | 119,167 | ||||||||||||||||||||||
Other liabilities | 17,436 | 18,936 | ||||||||||||||||||||||||
Stockholders’ equity | 142,134 | 107,268 | ||||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 309,391 | $ | 245,371 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,380,912 | $ | 2,150,524 | ||||||||||||||||||||||
Interest rate spread (2) | 1.99 | % | 2.00 | % | ||||||||||||||||||||||
Net interest income and margin (3) | $ | 13,210 | 2.31 | % | $ | 12,116 | 2.33 | % | ||||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 13,586 | 2.37 | % | $ | 12,429 | 2.39 | % | ||||||||||||||||||
(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 $376,000 and $313,000 for the three month periods ended September 30, 2003 and 2002, respectively. |
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, 2003 | September 30, 2002 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Deposits with other banks | $ | 9,666 | $ | 89 | 1.23 | % | $ | 2,947 | $ | 44 | 1.99 | % | ||||||||||||||
Federal funds sold | 55,999 | 464 | 1.10 | 76,279 | 951 | 1.66 | ||||||||||||||||||||
Securities | 883,831 | 26,455 | 3.99 | 851,989 | 33,425 | 5.23 | ||||||||||||||||||||
Loans (1) | 1,286,147 | 62,906 | 6.52 | 1,056,545 | 55,205 | 6.97 | ||||||||||||||||||||
Total interest earning assets | $ | 2,235,643 | $ | 89,914 | 5.36 | % | $ | 1,987,760 | $ | 89,625 | 6.01 | % | ||||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||||
Cash and due from banks | $ | 25,019 | $ | 22,570 | ||||||||||||||||||||||
Allowance for loan losses | (17,003 | ) | (14,270 | ) | ||||||||||||||||||||||
Premises and equipment, net | 12,125 | 11,195 | ||||||||||||||||||||||||
Other assets | 66,041 | 51,298 | ||||||||||||||||||||||||
Total non-interest earning assets | 86,182 | 70,793 | ||||||||||||||||||||||||
Total assets | $ | 2,321,825 | $ | 2,058,553 | ||||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Savings, money markets and interest bearing demand | $ | 637,447 | $ | 8,245 | 1.72 | % | $ | 456,600 | $ | 8,486 | 2.48 | % | ||||||||||||||
Certificates of deposit of $100,000 or more | 139,102 | 3,090 | 2.96 | 147,616 | 3,943 | 3.56 | ||||||||||||||||||||
Other time deposits | 460,328 | 11,116 | 3.22 | 462,405 | 13,469 | 3.88 | ||||||||||||||||||||
Total interest bearing deposits | 1,236,877 | 22,451 | 2.42 | 1,066,621 | 25,898 | 3.24 | ||||||||||||||||||||
Borrowed funds | 744,650 | 26,855 | 4.81 | 727,602 | 27,050 | 4.96 | ||||||||||||||||||||
Trust preferred securities | 36,871 | 2,237 | 8.09 | 32,500 | 2,325 | 9.54 | ||||||||||||||||||||
Total interest bearing liabilities | $ | 2,018,398 | $ | 51,543 | 3.40 | % | $ | 1,826,723 | $ | 55,273 | 4.03 | % | ||||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||||
Demand deposits | $ | 133,923 | $ | 115,046 | ||||||||||||||||||||||
Other liabilities | 24,151 | 16,029 | ||||||||||||||||||||||||
Stockholders’ equity | 145,353 | 100,755 | ||||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 303,427 | $ | 231,830 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,321,825 | $ | 2,058,553 | ||||||||||||||||||||||
Interest rate spread (2) | 1.96 | % | 1.98 | % | ||||||||||||||||||||||
Net interest income and margin (3) | $ | 38,371 | 2.29 | % | $ | 34,352 | 2.30 | % | ||||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 39,447 | 2.35 | % | $ | 35,281 | 2.37 | % | ||||||||||||||||||
(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 $1,076,000 and $929,000 for the nine month periods ended September 30, 2003 and 2002, respectively. |