Exhibit 99.1
For Release: IMMEDIATELY
Contact: | Stephen F. Carman, EVP/CFO | (609) 631-6222 | ||
For further information see Investor Relations on YNB’s website: www.ynb.com |
YARDVILLE NATIONAL BANCORP REPORTS RECORD THIRD QUARTER EARNINGS
Hamilton, N.J.- October 20, 2004- Yardville National Bancorp (NASDAQ: YANB) today announced the continuation of double digit earnings increases for the quarter ended September 30, 2004 compared to the same period a year ago. YNB’s net income was up 72.3 percent to $5.4 million from the $3.2 million earned in the same period in 2003, and earnings per share on a diluted basis increased 66.7 percent to $0.50 compared to $0.30 earned for the third quarter of last year.
For the nine months ended September 30, 2004, YNB’s net income increased 36.4 percent to $13.8 million from the $10.1 million earned in the same period in 2003. Earnings per share on a diluted basis for the first three quarters of 2004 increased 33.7 percent to $1.27 from the $0.95 per diluted share reported in the same nine months of the prior year. The improvement in financial performance for the quarterly and year-to-date comparative periods is reflective of an expanding net interest margin, that has resulted in increasing levels of net interest income, partially offset by higher non-interest expenses and a higher provision for loan losses.
“We’re beginning to see measurable results from our retail banking strategy,” said YNB President and CEO Patrick M. Ryan. “Supporting our marketing efforts with a dynamic advertising campaign and offering competitive retail banking products and services have all contributed,” he noted. “In particular, our ‘Simply Better CheckingSM’ product has been instrumental in attracting core deposits.”
Deposits increased 20.6 percent to $1.78 billion at September 30, 2004 compared to the same period in 2003. These deposits helped to fund YNB’s commercial loan growth while improving the net interest margin.
“A number of proposed new branch offices will also have a role to play in YNB’s future profitability,” added F. Kevin Tylus, YNB’s recently-named Senior Executive Vice President and Chief Administrative Officer. “Approval has already been received for an additional YNB branch at Pennington Pointe West in Hopewell Township, and that branch is expected to open in the first quarter of 2005,” he noted. “In the second and third quarters of 2005, YNB is developing plans to open branch offices in West Windsor, Mercer County, and in Readington, Hunterdon County — both high-growth communities where YNB already has a significant retail and business customer base. We remain on the lookout for additional opportunities to expand our branch network in our targeted markets,” he concluded.
The supercommunity bank’s growth in contiguous markets will also continue in Pennsylvania, with plans to open a branch in Morrisville, Bucks County, directly across the Delaware River from YNB’s existing Mercer County hub, in the second quarter of 2005. The bank already has an office in Bucks County, in Newtown, Pa. YNB will continue its branch expansion with its
first office in Washington Township, which adjoins YNB’s Hamilton Township home base. The branch, in the newly-developed Washington Town Center, is scheduled to open at the end of 2005 or beginning of 2006.
YNB also experienced significant growth in its loan portfolio again this quarter. At September 30, 2004, total loans outstanding, led by commercial loans, increased 22.3 percent over the same date a year ago, reaching $1.70 billion compared with $1.39 billion at the same date in 2003. Credit quality continues to remain strong, with nonperforming assets as a percentage of total assets decreasing to 0.34 percent at September 30, 2004 from 0.46 percent at the same date in 2003. The allowance for loan losses at September 30, 2004 totaled $19.6 million, or 1.15 percent of total loans, covering 208.8 percent of total nonperforming loans. Through the first nine months of 2004, YNB provided $6.8 million for possible loan losses, primarily due to an increased level of net loan charge offs and the strong commercial loan growth experienced.
YNB’s Executive Vice President and Chief Financial Officer Stephen F. Carman noted a 33.5 percent increase in net interest income for 2004. “We are confident we will achieve our net income goal for 2004,” he commented. “Our net interest margin, on a tax equivalent basis, increased to 2.89 percent in the third quarter and we expect to close in on our 3.00 percent net interest margin goal by the end of the year,” he added. “As we look forward, we are also expecting credit quality trends to show continued improvement, and we believe we are well positioned to benefit from the current or a gradually increasing interest rate environment,” Mr. Carman concluded.
At September 30, 2004, the capital ratios for YNB once again exceeded those required by regulatory authorities to be considered well-capitalized. In the first three quarters of 2004, YNB paid total cash dividends of $0.345 per share.
YNB had $2.76 billion in assets as of September 30, 2004, with 22 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) | 2004 | 2003 | 2004 | 2003 | ||||||||||||
Stock Information: | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 10,464 | 10,379 | 10,445 | 10,390 | ||||||||||||
Diluted | 10,842 | 10,653 | 10,847 | 10,611 | ||||||||||||
Shares outstanding end of period | 10,492 | 10,428 | ||||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.52 | $ | 0.30 | $ | 1.32 | $ | 0.97 | ||||||||
Diluted | 0.50 | 0.30 | 1.27 | 0.95 | ||||||||||||
Dividends paid per share | 0.115 | 0.115 | 0.345 | 0.345 | ||||||||||||
Book value per share | 14.84 | 14.05 | ||||||||||||||
Tangible book value per share | 14.66 | 14.05 | ||||||||||||||
Closing price per share | 29.10 | 20.95 | ||||||||||||||
Closing price to tangible book value | 198.50 | % | 149.11 | % | ||||||||||||
Key Ratios: | ||||||||||||||||
Return on average assets | 0.80 | % | 0.53 | % | 0.70 | % | 0.58 | % | ||||||||
Return on average stockholders’ equity | 14.57 | 8.90 | 12.52 | 9.27 | ||||||||||||
Net interest margin (tax equivalent) (1) | 2.89 | 2.37 | 2.78 | 2.35 | ||||||||||||
Equity-to-assets at period end | 5.64 | 6.03 | ||||||||||||||
Tier 1 leverage ratio (2) | 7.90 | 8.23 | ||||||||||||||
Asset Quality Data: | ||||||||||||||||
Net loan charge-offs | $ | 1,363 | $ | 848 | $ | 4,539 | $ | 2,011 | ||||||||
Nonperforming assets as a percentage of total assets | 0.34 | % | 0.46 | % | ||||||||||||
Allowance for loan losses at period end as a percent of: | ||||||||||||||||
Total loans | 1.15 | 1.30 | ||||||||||||||
Nonperforming loans | 208.82 | 178.12 | ||||||||||||||
Nonperforming assets at period end: | ||||||||||||||||
Nonperforming loans | $ | 9,377 | $ | 10,125 | ||||||||||||
Other real estate | — | 917 | ||||||||||||||
Total nonperforming assets | $ | 9,377 | $ | 11,042 | ||||||||||||
(1) | Tax equivalent net interest margin includes an adjustment to present income and yields on tax exempt earning assets on a comparable basis to those of taxable earning assets. |
(2) | 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) | 2004 | 2003 | 2004 | 2003 | ||||||||||||
INTEREST INCOME: | ||||||||||||||||
Interest and fees on loans | $ | 25,754 | $ | 21,942 | $ | 73,002 | $ | 62,906 | ||||||||
Interest on deposits with banks | 95 | 65 | 205 | 89 | ||||||||||||
Interest on securities available for sale | 9,262 | 7,276 | 26,058 | 24,327 | ||||||||||||
Interest on investment securities: | ||||||||||||||||
Taxable | 29 | 53 | 104 | 150 | ||||||||||||
Exempt from Federal income tax | 806 | 719 | 2,370 | 2,048 | ||||||||||||
Interest on Federal funds sold | 102 | 88 | 228 | 464 | ||||||||||||
Total Interest Income | 36,048 | 30,143 | 101,967 | 89,984 | ||||||||||||
INTEREST EXPENSE: | ||||||||||||||||
Interest on savings account deposits | 3,502 | 2,776 | 9,054 | 8,245 | ||||||||||||
Interest on certificates of deposit of $100,000 or more | 1,063 | 993 | 3,020 | 3,090 | ||||||||||||
Interest on other time deposits | 2,879 | 3,525 | 9,172 | 11,116 | ||||||||||||
Interest on borrowed funds | 9,081 | 8,924 | 26,834 | 26,855 | ||||||||||||
Interest on subordinated debentures | 1,004 | 715 | 2,654 | 2,307 | ||||||||||||
Total Interest Expense | 17,529 | 16,933 | 50,734 | 51,613 | ||||||||||||
Net Interest Income | 18,519 | 13,210 | 51,233 | 38,371 | ||||||||||||
Less provision for loan losses | 2,400 | 1,375 | 6,825 | 3,225 | ||||||||||||
Net Interest Income After Provision for Loan Losses | 16,119 | 11,835 | 44,408 | 35,146 | ||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||
Service charges on deposit accounts | 750 | 592 | 2,400 | 1,711 | ||||||||||||
Securities gains, net | 618 | 574 | 1,204 | 1,264 | ||||||||||||
Income on bank owned life insurance | 480 | 523 | 1,457 | 1,554 | ||||||||||||
Other non-interest income | 448 | 415 | 1,325 | 1,685 | ||||||||||||
Total Non-Interest Income | 2,296 | 2,104 | 6,386 | 6,214 | ||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||
Salaries and employee benefits | 6,169 | 5,579 | 17,644 | 15,823 | ||||||||||||
Occupancy expense, net | 1,072 | 969 | 3,239 | 2,930 | ||||||||||||
Equipment expense | 749 | 721 | 2,359 | 2,148 | ||||||||||||
Other non-interest expense | 2,632 | 2,379 | 8,250 | 6,560 | ||||||||||||
Total Non-Interest Expense | 10,622 | 9,648 | 31,492 | 27,461 | ||||||||||||
Income before income tax expense | 7,793 | 4,291 | 19,302 | 13,899 | ||||||||||||
Income tax expense | 2,344 | 1,129 | 5,513 | 3,789 | ||||||||||||
Net Income | $ | 5,449 | $ | 3,162 | $ | 13,789 | $ | 10,110 | ||||||||
EARNINGS PER SHARE: | ||||||||||||||||
Basic | $ | 0.52 | $ | 0.30 | $ | 1.32 | $ | 0.97 | ||||||||
Diluted | 0.50 | 0.30 | 1.27 | 0.95 | ||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 10,464 | 10,379 | 10,445 | 10,390 | ||||||||||||
Diluted | 10,842 | 10,653 | 10,847 | 10,611 | ||||||||||||
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
September 30, | Dec. 31, | |||||||||||
(in thousands) | 2004 | 2003 | 2003 | |||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 25,784 | $ | 33,066 | $ | 25,785 | ||||||
Federal funds sold | 11,775 | 72,865 | 7,370 | |||||||||
Cash and Cash Equivalents | 37,559 | 105,931 | 33,155 | |||||||||
Interest bearing deposits with banks | 45,712 | 15,589 | 20,552 | |||||||||
Securities available for sale | 830,430 | 779,360 | 798,007 | |||||||||
Investment securities | 74,684 | 65,728 | 68,686 | |||||||||
Loans | 1,702,610 | 1,392,219 | 1,443,355 | |||||||||
Less: Allowance for loan losses | (19,581 | ) | (18,035 | ) | (17,295 | ) | ||||||
Loans, net | 1,683,029 | 1,374,184 | 1,426,060 | |||||||||
Bank premises and equipment, net | 10,574 | 11,880 | 12,307 | |||||||||
Other real estate | — | 917 | — | |||||||||
Bank owned life insurance | 44,221 | 42,346 | 42,816 | |||||||||
Other assets | 29,401 | 25,798 | 29,610 | |||||||||
Total Assets | $ | 2,755,610 | $ | 2,421,733 | $ | 2,431,193 | ||||||
Liabilities and Stockholders’ Equity: | ||||||||||||
Deposits | ||||||||||||
Non-interest bearing | $ | 202,975 | $ | 159,087 | $ | 163,812 | ||||||
Interest bearing | 1,573,488 | 1,313,424 | 1,319,997 | |||||||||
Total Deposits | 1,776,463 | 1,472,511 | 1,483,809 | |||||||||
Borrowed funds | ||||||||||||
Securities sold under agreements to repurchase | 10,000 | 10,000 | 10,000 | |||||||||
Federal Home Loan Bank advances | 726,000 | 726,000 | 726,000 | |||||||||
Obligation for Employee Stock Ownership Plan (ESOP) | 472 | 855 | 755 | |||||||||
Other | 978 | 1,058 | 1,325 | |||||||||
Total Borrowed Funds | 737,450 | 737,913 | 738,080 | |||||||||
Subordinated debentures | 62,892 | 47,428 | 47,428 | |||||||||
Other liabilities | 23,403 | 17,974 | 18,319 | |||||||||
Total Liabilities | $ | 2,600,208 | $ | 2,275,826 | $ | 2,287,636 | ||||||
Stockholders’ equity: | ||||||||||||
Common stock: no par value | 91,105 | 89,797 | 90,079 | |||||||||
Surplus | 2,205 | 2,205 | 2,205 | |||||||||
Undivided profits | 66,332 | 57,153 | 56,152 | |||||||||
Treasury stock, at cost | (3,160 | ) | (3,160 | ) | (3,160 | ) | ||||||
Unallocated ESOP shares | (472 | ) | (855 | ) | (755 | ) | ||||||
Accumulated other comprehensive (loss) income | (608 | ) | 767 | (964 | ) | |||||||
Total Stockholders’ Equity | 155,402 | 145,907 | 143,557 | |||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,755,610 | $ | 2,421,733 | $ | 2,431,193 | ||||||
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
September 30, 2004 | September 30, 2003 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||
Interest bearing deposits with banks | $ | 25,070 | $ | 95 | 1.52 | % | $ | 22,162 | $ | 65 | 1.17 | % | ||||||||||||
Federal funds sold | 29,295 | 102 | 1.39 | 36,419 | 88 | 0.97 | ||||||||||||||||||
Securities | 899,156 | 10,097 | 4.49 | 869,396 | 8,048 | 3.70 | ||||||||||||||||||
Loans (1) | 1,672,321 | 25,754 | 6.16 | 1,362,588 | 21,942 | 6.44 | ||||||||||||||||||
Total interest earning assets | $ | 2,625,842 | $ | 36,048 | 5.49 | % | $ | 2,290,565 | $ | 30,143 | 5.26 | % | ||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||
Cash and due from banks | $ | 29,277 | $ | 26,477 | ||||||||||||||||||||
Allowance for loan losses | (19,193 | ) | (17,658 | ) | ||||||||||||||||||||
Premises and equipment, net | 10,808 | 12,032 | ||||||||||||||||||||||
Other assets | 72,734 | 70,624 | ||||||||||||||||||||||
Total non-interest earning assets | 93,626 | 91,475 | ||||||||||||||||||||||
Total assets | $ | 2,719,468 | $ | 2,382,040 | ||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Savings, money markets, and interest bearing demand | $ | 927,276 | $ | 3,502 | 1.51 | % | $ | 705,095 | $ | 2,776 | 1.57 | % | ||||||||||||
Certificates of deposit of $100,000 or more | 164,437 | 1,063 | 2.59 | 140,469 | 993 | 2.83 | ||||||||||||||||||
Other time deposits | 460,936 | 2,879 | 2.50 | 451,928 | 3,525 | 3.12 | ||||||||||||||||||
Total interest bearing deposits | 1,552,649 | 7,444 | 1.92 | 1,297,492 | 7,294 | 2.25 | ||||||||||||||||||
Borrowed funds | 740,418 | 9,081 | 4.91 | 737,685 | 8,924 | 4.84 | ||||||||||||||||||
Subordinated debentures | 62,892 | 1,004 | 6.39 | 37,472 | 715 | 7.63 | ||||||||||||||||||
Total interest bearing liabilities | $ | 2,355,959 | $ | 17,529 | 2.98 | % | $ | 2,072,649 | $ | 16,933 | 3.27 | % | ||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||
Demand deposits | $ | 193,957 | $ | 149,821 | ||||||||||||||||||||
Other liabilities | 20,002 | 17,436 | ||||||||||||||||||||||
Stockholders’ equity | 149,550 | 142,134 | ||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 363,509 | $ | 309,391 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,719,468 | $ | 2,382,040 | ||||||||||||||||||||
Interest rate spread (2) | 2.51 | % | 1.99 | % | ||||||||||||||||||||
Net interest income and margin (3) | $ | 18,519 | 2.82 | % | $ | 13,210 | 2.31 | % | ||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 18,972 | 2.89 | % | $ | 13,586 | 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 35% in 2004 and 34% in 2003 and has the the effect of increasing interest income by $453,000 and $376,000 for the three month periods ended September 30, 2004 and 2003, respectively. |
Financial Summary
Average Balances, Yields and Costs
(Unaudited)
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2004 | September 30, 2003 | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Average | Yield / | Average | Yield / | |||||||||||||||||||||
(in thousands) | Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||||
INTEREST EARNING ASSETS: | ||||||||||||||||||||||||
Interest bearing deposits with banks | $ | 23,538 | $ | 205 | 1.16 | % | $ | 9,666 | $ | 89 | 1.23 | % | ||||||||||||
Federal funds sold | 26,974 | 228 | 1.13 | 55,999 | 464 | 1.10 | ||||||||||||||||||
Securities | 875,480 | 28,532 | 4.35 | 884,978 | 26,525 | 4.00 | ||||||||||||||||||
Loans (1) | 1,589,647 | 73,002 | 6.12 | 1,286,147 | 62,906 | 6.52 | ||||||||||||||||||
Total interest earning assets | $ | 2,515,639 | $ | 101,967 | 5.40 | % | $ | 2,236,790 | $ | 89,984 | 5.36 | % | ||||||||||||
NON-INTEREST EARNING ASSETS: | ||||||||||||||||||||||||
Cash and due from banks | $ | 28,147 | $ | 25,019 | ||||||||||||||||||||
Allowance for loan losses | (18,446 | ) | (17,003 | ) | ||||||||||||||||||||
Premises and equipment, net | 11,434 | 12,125 | ||||||||||||||||||||||
Other assets | 73,038 | 66,041 | ||||||||||||||||||||||
Total non-interest earning assets | 94,173 | 86,182 | ||||||||||||||||||||||
Total assets | $ | 2,609,812 | $ | 2,322,972 | ||||||||||||||||||||
INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Savings, money markets, and interest bearing demand | $ | 856,543 | $ | 9,054 | 1.41 | % | $ | 637,447 | $ | 8,245 | 1.72 | % | ||||||||||||
Certificates of deposit of $100,000 or more | 157,881 | 3,020 | 2.55 | 139,102 | 3,090 | 2.96 | ||||||||||||||||||
Other time deposits | 456,262 | 9,172 | 2.68 | 460,328 | 11,116 | 3.22 | ||||||||||||||||||
Total interest bearing deposits | 1,470,686 | 21,246 | 1.93 | 1,236,877 | 22,451 | 2.42 | ||||||||||||||||||
Borrowed funds | 738,439 | 26,834 | 4.85 | 744,650 | 26,855 | 4.81 | ||||||||||||||||||
Subordinated debentures | 53,327 | 2,654 | 6.64 | 38,018 | 2,307 | 8.09 | ||||||||||||||||||
Total interest bearing liabilities | $ | 2,262,452 | $ | 50,734 | 2.99 | % | $ | 2,019,545 | $ | 51,613 | 3.41 | % | ||||||||||||
NON-INTEREST BEARING LIABILITIES: | ||||||||||||||||||||||||
Demand deposits | $ | 179,887 | $ | 133,923 | ||||||||||||||||||||
Other liabilities | 20,595 | 24,151 | ||||||||||||||||||||||
Stockholders’ equity | 146,878 | 145,353 | ||||||||||||||||||||||
Total non-interest bearing liabilities and stockholders’ equity | $ | 347,360 | $ | 303,427 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,609,812 | $ | 2,322,972 | ||||||||||||||||||||
Interest rate spread (2) | 2.41 | % | 1.95 | % | ||||||||||||||||||||
Net interest income and margin (3) | $ | 51,233 | 2.72 | % | $ | 38,371 | 2.29 | % | ||||||||||||||||
Net interest income and margin (tax equivalent basis)(4) | $ | 52,488 | 2.78 | % | $ | 39,447 | 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 35% in 2004 and 34% in 2003 and has the the effect of increasing interest income by $1,255,000 and $1,076,000 for the nine month periods ended September 30, 2004 and 2003, respectively. |