Exhibit 99.1
For Release: | IMMEDIATELY |
For further information, contact: | Stephen F. Carman, EVP & CFO (609) 631-6222 or consult “Investor Relations” on YNB’s website: www.ynb.com |
YNB REPORTS FIRST QUARTER EARNINGS
Hamilton, NJ ... April 20, 2004... Yardville National Bancorp (NASDAQ:YANB) today announced a 15.6 percent increase in its first quarter 2004 net income over the same period in 2003. For the quarter ended March 31, 2004, YNB’s net income was $3.9 million compared with $3.4 million earned in the first quarter of last year. Earnings per share also increased to $0.36 per diluted share, up 12.5 percent over the $0.32 per diluted share reported in the first quarter of 2003.
Increased interest income and a lower cost of funds resulted in the notable improvement in YNB’s net interest margin, on a tax equivalent basis, to 2.69 percent at the end of the first quarter of 2004, compared to 2.31 percent for the same period in 2003. Excluding securities gains, non-interest income increased 25.8 percent from the comparable quarter in 2003. Improvements in the net interest margin and non-interest income, however, were partially offset by increases in the provision for loan losses and non-interest expenses. YNB’s ongoing expansion entailed significant upfront investments in branches, facilities, personnel, and marketing which contributed to the rise in non-interest expenses. While the full benefit of these expenses is yet to be realized, management believes they are necessary to position YNB for the future.
YNB continued to accumulate significant loan and deposit relationships in the first quarter of 2004. Strong growth in commercial loans resulted in a 27.2 percent rise in total loans to $1.58 billion from $1.25 billion at March 31, 2003 and overall loan quality remains relatively strong. Nonperforming assets increased to $13.3 million from $10.6 million at December 31, 2003, while nonperforming assets as a percent of total assets increased to 0.52 percent at March 31, 2004, compared to 0.44 percent at December 31, 2003. In the three month period ended March 31, 2004, YNB management provided $2.5 million for possible loan losses, primarily due to the strong commercial loan growth experienced in the quarter and a charge off associated with one commercial loan relationship, compared with $600,000 for the same period in 2003. The allowance was 1.15 percent of total loans, covering 136.6 percent of total nonperforming loans at March 31, 2004.
“We have been working hard to increase net interest income and move our net interest margin higher, as reflected in our first quarter results,” said YNB Chief Executive Officer and President Patrick M. Ryan. “Commercial loan growth in the first quarter was significant,” he added, “and our larger core deposit base enabled us to support this additional commercial lending growth at a lower cost. We expect this will further improve our net interest margin, an essential element of YNB’s future success,” Mr. Ryan concluded.
YNB experienced solid deposit growth, as deposits rose 20.6 percent to $1.61 billion at March 31, 2004 from $1.34 billion at the same date a year ago. In growing deposits, YNB experienced ongoing success in bidding for and acquiring surrogates’ deposits. In addition, the Simply Better CheckingSM product that YNB introduced in its northern region last year was rolled out in the Mercer County market for the first time this quarter, and has shown great promise for future deposit growth. Looking ahead, YNB also plans to add several more branches in 2005 which should further accelerate deposit growth.
“We continue to look for opportunities to expand our geographic footprint,” Mr. Ryan noted. “By following our retail strategy and bringing our products and services to a larger audience, we can further enhance shareholder value,” he said.
YNB’s Chief Financial Officer amplified the importance of the margin growth. “We are encouraged by the improvement in our net interest margin in the first quarter,” Stephen F. Carman said, “and we remain optimistic that our net interest margin on a tax-equivalent basis will reach 3.00 percent before the year is out. The commercial loan growth we experienced, a lower cost of funds, and an improving investment portfolio yield have all contributed to our improved financial performance this quarter. With our efficiency ratio now below 60 percent and anticipation of a return to our historically strong credit quality for 2004, we believe we are on the right path for continued net income growth,” he concluded.
YNB’s capital structure to support future growth remains solid. At March 31, 2004, YNB’s Tier 1 and risk-based capital ratios exceeded those required by regulatory guidelines to be considered well-capitalized. Shareholders also continue to be well-rewarded, as February 2004 marked the 41st consecutive quarter that YNB paid a cash dividend.
As of March 31, 2004, YNB had $2.57 billion in assets, with twenty-two branches serving individuals and businesses in Mercer, Hunterdon, Somerset, Burlington and Middlesex Counties in New Jersey, and Bucks County, 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.
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
Yardville National Bancorp
Summary of Financial Information
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
(in thousands, except per share amounts) | 2004 | 2003 | ||||||
Stock Information: | ||||||||
Weighted average shares outstanding: | ||||||||
Basic | 10,427 | 10,397 | ||||||
Diluted | 10,800 | 10,565 | ||||||
Shares outstanding end of period | 10,452 | 10,399 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.37 | $ | 0.32 | ||||
Diluted | 0.36 | 0.32 | ||||||
Dividends paid per share | 0.115 | 0.115 | ||||||
Book value per share | 14.57 | 14.09 | ||||||
Tangible book value per share | 14.39 | 14.09 | ||||||
Closing price per share | 24.70 | 17.01 | ||||||
Closing price to tangible book value | 171.65 | % | 120.72 | % | ||||
Key Ratios: | ||||||||
Return on average assets | 0.62 | % | 0.59 | % | ||||
Return on average stockholders’ equity | 10.48 | 9.18 | ||||||
Net interest margin (tax equivalent) | 2.69 | 2.31 | ||||||
Equity-to-assets at period end | 5.91 | 6.40 | ||||||
Tier 1 leverage ratio (1) | 7.69 | 7.77 | ||||||
Asset Quality Data: | ||||||||
Net loan charge-offs | $ | 1,583 | $ | 860 | ||||
Nonperforming assets as a percentage of total assets | 0.52 | % | 0.32 | % | ||||
Allowance for loan losses at period end as a percent of: | ||||||||
Total loans | 1.15 | 1.33 | ||||||
Nonperforming loans | 136.64 | 297.11 | ||||||
Nonperforming assets at period end: | ||||||||
Nonperforming loans | $ | 13,292 | $ | 5,574 | ||||
Other real estate | — | 1,848 | ||||||
Total nonperforming assets | $ | 13,292 | $ | 7,422 | ||||
(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 | ||||||||
March 31, | ||||||||
(in thousands, except per share amounts) | 2004 | 2003 | ||||||
INTEREST INCOME: | ||||||||
Interest and fees on loans | $ | 23,099 | $ | 20,054 | ||||
Interest on deposits with banks | 51 | 7 | ||||||
Interest on securities available for sale | 8,165 | 8,833 | ||||||
Interest on investment securities: | ||||||||
Taxable | 43 | 58 | ||||||
Exempt from Federal income tax | 778 | 631 | ||||||
Interest on Federal funds sold | 82 | 211 | ||||||
Total Interest Income | 32,218 | 29,794 | ||||||
INTEREST EXPENSE: | ||||||||
Interest on savings account deposits | 2,568 | 2,640 | ||||||
Interest on certificates of deposit of $100,000 or more | 974 | 1,058 | ||||||
Interest on other time deposits | 3,246 | 3,853 | ||||||
Interest on borrowed funds | 8,874 | 9,034 | ||||||
Interest on subordinated debentures | 810 | 880 | ||||||
Total Interest Expense | 16,472 | 17,465 | ||||||
Net Interest Income | 15,746 | 12,329 | ||||||
Less provision for loan losses | 2,450 | 600 | ||||||
Net Interest Income After Provision for Loan Losses | 13,296 | 11,729 | ||||||
NON-INTEREST INCOME: | ||||||||
Service charges on deposit accounts | 863 | 547 | ||||||
Securities gains, net | 586 | 151 | ||||||
Income on bank owned life insurance | 486 | 509 | ||||||
Other non-interest income | 439 | 365 | ||||||
Total Non-Interest Income | 2,374 | 1,572 | ||||||
NON-INTEREST EXPENSE: | ||||||||
Salaries and employee benefits | 5,832 | 5,017 | ||||||
Occupancy expense, net | 1,090 | 1,026 | ||||||
Equipment expense | 794 | 690 | ||||||
Other non-interest expense | 2,571 | 1,914 | ||||||
Total Non-Interest Expense | 10,287 | 8,647 | ||||||
Income before income tax expense | 5,383 | 4,654 | ||||||
Income tax expense | 1,505 | 1,298 | ||||||
Net Income | $ | 3,878 | $ | 3,356 | ||||
EARNINGS PER SHARE: | ||||||||
Basic | $ | 0.37 | $ | 0.32 | ||||
Diluted | 0.36 | 0.32 | ||||||
Weighted average shares outstanding: | ||||||||
Basic | 10,427 | 10,397 | ||||||
Diluted | 10,800 | 10,565 | ||||||
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
March 31, | Dec. 31, | |||||||||||
(in thousands) | 2004 | 2003 | 2003 | |||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 25,498 | $ | 31,592 | $ | 25,785 | ||||||
Federal funds sold | 66,920 | 74,060 | 7,370 | |||||||||
Cash and Cash Equivalents | 92,418 | 105,652 | 33,155 | |||||||||
Interest bearing deposits with banks | 27,161 | 872 | 20,552 | |||||||||
Securities available for sale | 733,517 | 814,893 | 798,007 | |||||||||
Investment securities | 70,784 | 60,551 | 68,686 | |||||||||
Loans | 1,584,939 | 1,245,661 | 1,443,355 | |||||||||
Less: Allowance for loan losses | (18,162 | ) | (16,561 | ) | (17,295 | ) | ||||||
Loans, net | 1,566,777 | 1,229,100 | 1,426,060 | |||||||||
Bank premises and equipment, net | 11,438 | 12,118 | 12,307 | |||||||||
Other real estate | — | 1,848 | — | |||||||||
Bank owned life insurance | 43,289 | 41,340 | 42,816 | |||||||||
Other assets | 27,112 | 23,373 | 29,610 | |||||||||
Total Assets | $ | 2,572,496 | $ | 2,289,747 | $ | 2,431,193 | ||||||
Liabilities and Stockholders’ Equity: | ||||||||||||
Deposits | ||||||||||||
Non-interest bearing | $ | 179,697 | $ | 137,836 | $ | 163,812 | ||||||
Interest bearing | 1,435,151 | 1,201,266 | 1,319,997 | |||||||||
Total Deposits | 1,614,848 | 1,339,102 | 1,483,809 | |||||||||
Borrowed funds | ||||||||||||
Securities sold under agreements to repurchase | 10,000 | 10,000 | 10,000 | |||||||||
Federal Home Loan Bank advances | 726,000 | 736,000 | 726,000 | |||||||||
Obligation for Employee Stock Ownership Plan (ESOP) | 660 | 300 | 755 | |||||||||
Other | 472 | 660 | 1,325 | |||||||||
Total Borrowed Funds | 737,132 | 746,960 | 738,080 | |||||||||
Subordinated debentures | 47,428 | 37,118 | 47,428 | |||||||||
Other liabilities | 21,043 | 20,081 | 18,319 | |||||||||
Total Liabilities | $ | 2,420,451 | $ | 2,143,261 | $ | 2,287,636 | ||||||
Stockholders’ equity: | ||||||||||||
Common stock: no par value | 90,335 | 89,377 | 90,079 | |||||||||
Surplus | 2,205 | 2,205 | 2,205 | |||||||||
Undivided profits | 58,829 | 52,793 | 56,152 | |||||||||
Treasury stock, at cost | (3,160 | ) | (3,154 | ) | (3,160 | ) | ||||||
Unallocated ESOP shares | (660 | ) | (300 | ) | (755 | ) | ||||||
Accumulated other comprehensive income (loss) | 4,496 | 5,565 | (964 | ) | ||||||||
Total Stockholders’ Equity | 152,045 | 146,486 | 143,557 | |||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,572,496 | $ | 2,289,747 | $ | 2,431,193 | ||||||
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
March 31, 2004 | March 31, 2003 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||
Interest bearing deposits with banks | $ | 20,314 | $ | 51 | 1.00 | % | $ | 1,395 | $ | 7 | 2.01 | % | ||||||||||||
Federal funds sold | 33,481 | 82 | 0.98 | 74,602 | 211 | 1.13 | ||||||||||||||||||
Securities | 847,661 | 8,986 | 4.24 | 901,938 | 9,522 | 4.22 | ||||||||||||||||||
Loans (1) | 1,502,125 | 23,099 | 6.15 | 1,216,904 | 20,054 | 6.59 | ||||||||||||||||||
Total interest earning assets | $ | 2,403,581 | $ | 32,218 | 5.36 | % | $ | 2,194,839 | $ | 29,794 | 5.43 | % | ||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||
Cash and due from banks | $ | 26,317 | $ | 23,590 | ||||||||||||||||||||
Allowance for loan losses | (17,656 | ) | (16,480 | ) | ||||||||||||||||||||
Premises and equipment, net | 12,250 | 12,153 | ||||||||||||||||||||||
Other assets | 68,309 | 62,077 | ||||||||||||||||||||||
Total non-interest earning assets | 89,220 | 81,340 | ||||||||||||||||||||||
Total assets | $ | 2,492,801 | $ | 2,276,179 | ||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Savings, money markets, and interest bearing demand | $ | 772,195 | $ | 2,568 | 1.33 | % | $ | 571,627 | $ | 2,640 | 1.85 | % | ||||||||||||
Certificates of deposit of $100,000 or more | 151,340 | 974 | 2.57 | 137,659 | 1,058 | 3.07 | ||||||||||||||||||
Other time deposits | 454,724 | 3,246 | 2.86 | 465,956 | 3,853 | 3.31 | ||||||||||||||||||
Total interest bearing deposits | 1,378,259 | 6,788 | 1.97 | 1,175,242 | 7,551 | 2.57 | ||||||||||||||||||
Borrowed funds | 737,624 | 8,874 | 4.81 | 757,238 | 9,034 | 4.77 | ||||||||||||||||||
Subordinated debentures | 47,428 | 810 | 6.83 | 39,457 | 880 | 8.92 | ||||||||||||||||||
Total interest bearing liabilities | $ | 2,163,311 | $ | 16,472 | 3.05 | % | $ | 1,971,937 | $ | 17,465 | 3.54 | % | ||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||
Demand deposits | $ | 163,066 | $ | 120,343 | ||||||||||||||||||||
Other liabilities | 18,395 | 37,640 | ||||||||||||||||||||||
Stockholders’ equity | 148,029 | 146,259 | ||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 329,490 | $ | 304,242 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,492,801 | $ | 2,276,179 | ||||||||||||||||||||
Interest rate spread (2) | 2.31 | % | 1.89 | % | ||||||||||||||||||||
Net interest income and margin (3) | $ | 15,746 | 2.62 | % | $ | 12,329 | 2.25 | % | ||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 16,156 | 2.69 | % | $ | 12,665 | 2.31 | % | ||||||||||||||||
(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 35% in 2004 and 34% in 2003 and has the the effect of increasing interest income by $410,000 and $336,000 for the three month periods ended March 31, 2004 and 2003, respectively. |