Exhibit 99.1
Third Quarter 2004
Earnings Release and
Supplemental Financials
October 21, 2004
FOR IMMEDIATE RELEASE
| | |
CONTACT: | | Kevin T. Thompson |
| | | Executive Vice President |
| | | Chief Financial Officer |
| | | (419) 254-6068 |
Sky Reports Third Quarter Results
October 21, 2004 (Bowling Green, Ohio, NASDAQ: SKYF) Sky Financial Group, Inc. today reported third quarter net income of $46.1 million, or $.43 per diluted share, compared to $41.6 million, or $.46 per diluted share for the third quarter last year. Net income and diluted earnings per share for the third quarter 2004 reflect the completion of Sky’s acquisition of Second Bancorp on July 1, 2004 and include $2.5 million in after-tax merger-related expenses, while last year’s third quarter included $1.1 million of after-tax income from discontinued operations. Based on net income, return on average assets and return on average equity were 1.26% and 13.21%, respectively, for the third quarter of 2004, versus 1.31% and 18.00%, respectively, for the third quarter of 2003.
Core operating earnings, which reflect income from continuing operations adjusted to exclude the merger, integration and restructuring expenses and significant transactions not representative of ongoing operations, were $48.6 million for the third quarter, up 20.3% versus $40.4 million for the third quarter last year. Core operating earnings per diluted share for the third quarter were $.46, up 4.5% from $.44 for the third quarter last year. Based on core operating earnings, return on average assets and return on average equity were 1.33% and 13.92%, respectively, for the third quarter of 2004, versus 1.35% and 17.51%, respectively, for the third quarter of 2003.
Cash operating earnings, which reflect core operating earnings further adjusted to exclude the effects of amortization of intangibles, were $50.9 million, or $.48 per diluted share in the third quarter, compared to $41.7 million and $.46 respectively, for the third quarter last year. On a cash-operating basis, the annualized return on average tangible equity was 22.52% for the third quarter compared with 22.99% in the same period last year.
“We were very pleased with the improvement in our financial results this quarter,” stated Marty E. Adams, chairman and chief executive officer, “Our increase in core operating earnings from last year, despite the
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large decrease in mortgage revenues, reflects contributions from solid organic growth in our targeted loan and deposit portfolios, acceleration in our fee income excluding mortgage banking, consistent discipline in our credit quality and expense controls, and the very successful completion of our Second Bancorp acquisition.”
“We look forward to continued strong performance in the fourth quarter as we plan to complete our merger with Prospect Bank and expand our growing presence in the greater Columbus market,” continued Mr. Adams.
For the nine months ended September 30, 2004, Sky reported net income of $145.0 million, or $1.47 per diluted share, increasing from $115.2 million, or $1.29 per diluted share, reported for the first nine months last year. The current year-to-date net income included $18.7 million from discontinued operations related to Sky’s dental finance unit, which was sold in the first quarter, while in the prior year-to-date discontinued operations contributed $2.1 million to earnings. In addition, net income reflects after-tax merger, integration and restructuring expenses of $2.7 million in the current year and $2.3 million last year. For the nine months ended September 30, 2004, core operating earnings were $129.0 million, or $1.31 per diluted share compared to $115.4 million, or $1.29 per diluted share, for the same period last year.
Third Quarter Results
Net interest income for the third quarter was $122.5 million, up 21.5% from $100.8 million in the third quarter last year. The net interest margin for the third quarter was 3.69%, the same as the previous quarter and an increase of 3 basis points from the third quarter a year ago. The higher net interest margin from the prior year primarily reflects improvements in funding mix and benefits from the recent rise in short-term rates.
Average earning assets increased 20.6% over the third quarter last year from a combination of organic growth and acquisitions. Average loans for the quarter increased 20.6% with organic growth on targeted portfolios contributing approximately 5.8%. Average total deposits grew 17.1% from the third quarter last year almost exclusively due to the acquisitions. Non-interest demand deposits for the third quarter were up 27.8% from the third quarter last year overall, and up 11.3% when acquisitions were excluded.
Non-interest revenues were $52.7 million for the third quarter, up 5.5% from $50.0 million in the third quarter last year, more than offsetting the anticipated substantial reduction in mortgage banking revenues. Excluding mortgage banking and net securities transactions, non-interest revenues were up 34.9% in total and up 15.9% excluding acquisitions with strong results compared to the same quarter last year. Brokerage and insurance commissions were up 46.3%, trust services income was up 41.7% and service charges on deposits increased 39.1%. For the quarter, in a less favorable environment than last year, mortgage originations declined and mortgage banking revenues were down $12.5 million, or 64.6% from the year-ago quarter. Securities transactions included net gains of $1.9 million in the third quarter this year versus net losses of $2.0 million in the third quarter last year.
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Non-interest expenses for the third quarter, which included $3.8 million in merger, integration and restructuring expenses primarily to complete the acquisition of Second Bancorp, were $97.9 million compared to $81.9 million in the third quarter last year. Excluding merger, integration and restructuring expenses, non-interest expenses were $94.1 million compared to $81.9 million in the third quarter last year. Expenses have increased over the prior year’s third quarter mainly due to the acquisitions of Second Bancorp, GLB Bancorp and two insurance agencies over the last year. The efficiency ratio, on a core operating basis excluding the merger, integration and restructuring expenses, was 53.39% for the quarter, compared to 53.95% for the same quarter last year.
Credit Quality
The provision for credit losses for the third quarter was $8.4 million, increasing from $8.3 million in the same quarter last year. The slightly higher provision compared to the third quarter last year was due to growth in the loan portfolio, while net charge-offs declined. Net credit losses to average loans for the quarter were .32%, down from .43% for the third quarter last year. At September 30, 2004, non-performing loans to total loans was 1.19% versus 1.05% a year ago and the allowance for credit losses to non-performing loans was 120% versus 139% last year. Non-performing loans for the third quarter increased as a result of the Second Bancorp acquisition and continue to reflect the non-accrual status of loans with payments guaranteed by surety bonds or insurance policies issued by three insurance companies, which remain in litigation.
Continued Expansion
On September 15, 2004, Sky announced a definitive agreement to acquire Prospect Bancshares, Inc., Worthington, Ohio, and its wholly-owned subsidiary Prospect Bank with $202 million in assets. Prospect operates four full-service banking centers in the greater Columbus, Ohio area. The merger is expected to close in the fourth quarter 2004.
Outlook For 2004
Commenting on 2004, Kevin Thompson, chief financial officer stated, “With third quarter earnings per share consistent with our expectations, we now project 2004 GAAP earnings of $1.93 to $1.95 per diluted share, and core operating earnings of $1.77 to $1.79 per diluted share. The projected GAAP earnings results include the first quarter sale of Sky’s dental finance unit and the contribution to earnings of $.19 per diluted share from discontinued operations, as well as the merger-related charges of $.02 per diluted share in the third quarter results.”
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Conference Call and Supplemental Financial Information
Today, October 21, 2004 at 10:00 a.m., Mr.’s Adams and Thompson will host a conference call to provide an overview of third quarter performance and a business outlook. Participants are encouraged to call in beginning at 9:45 a.m. by dialing (800) 289-0493 (confirmation code: 984442). R.S.V.P. is not required. The webcast can be accessed via the Investor Relations/Webcasts section (http://investor.skyfi.com/medialist.cfm) of the Sky website. A replay of the call will be available from 2:00 p.m., October 21 until midnight, October 26, by calling (888) 203-1112 (confirmation code: 984442). The event will be archived on the Sky website indefinitely. For supplemental financial tables, please refer to the Investor Relations/Press Releases (http://investor.skyfi.com/releases.cfm) section on our web site.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. Sky believes that providing certain non-GAAP financial measures provides investors with information useful in understanding Sky’s financial performance, its performance trends and financial position. Specifically, Sky provides measures based on “core operating earnings,” which excludes discontinued operations and merger, integration and restructuring expenses, as well as significant gains, losses or expenses that are not reflective of on-going operations or not expected to recur. In addition, Sky provides measures based on “cash operating earnings,” which further adjusts core operating earnings to exclude the effect of amortization of intangibles. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables.
Forward-looking Statement
The information in this press release contains forward-looking statements including certain projections, plans and forecasts of expected future performance that are not historical facts and that are subject to a number of risks and uncertainties. Actual results and performance could differ materially from those contemplated or implied by these forward-looking statements. For a summary of important factors that could affect Sky’s forward-looking statements, please refer to Sky’s filings with the Securities and Exchange Commission (SEC) and available at the SEC’s Internet site (http://www.sec.gov). Sky undertakes no obligation to update or revise these statements following the date of this release.
About Sky Financial Group, Inc.
Sky Financial Group is a $14.6 billion diversified financial holding company with its headquarters located in Bowling Green, Ohio. Sky’s asset size places it among the 50 largest publicly-held bank holding companies in the nation. The company operates 286 financial centers and over 300 ATMs serving communities in Ohio, Pennsylvania, Michigan, Indiana and West Virginia. Sky’s financial service affiliates include: Sky Bank, commercial and retail banking; Sky Trust, an asset management organization; and Sky Insurance and Stouffer-Herzog Insurance Agency, retail and commercial insurance agency services. Sky is located on the web atwww.skyfi.com.
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Summary Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
STATEMENTS OF INCOME (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | | | | Nine months ended September 30,
| | | | |
(Dollars in thousands, except per share data)
| | 2004
| | 2003
| | | Percent Change
| | | 2004
| | 2003
| | | Percent Change
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Interest income | | $ | 178,772 | | $ | 151,707 | | | 17.8 | % | | $ | 475,820 | | $ | 443,655 | | | 7.3 | % |
Interest expense | | | 56,256 | | | 50,904 | | | 10.5 | | | | 148,814 | | | 155,462 | | | (4.3 | ) |
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Net interest income | | | 122,516 | | | 100,803 | | | 21.5 | | | | 327,006 | | | 288,193 | | | 13.5 | |
Provision for credit losses | | | 8,360 | | | 8,325 | | | 0.4 | | | | 26,045 | | | 24,150 | | | 7.8 | |
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Net interest income after provision for credit losses | | | 114,156 | | | 92,478 | | | 23.4 | | | | 300,961 | | | 264,043 | | | 14.0 | |
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Non-interest income | | | | | | | | | | | | | | | | | | | | |
Trust services income | | | 5,079 | | | 3,585 | | | 41.7 | | | | 13,285 | | | 10,576 | | | 25.6 | |
Service charges and fees on deposit accounts | | | 13,820 | | | 9,932 | | | 39.1 | | | | 34,569 | | | 28,026 | | | 23.3 | |
Mortgage banking income | | | 6,845 | | | 19,359 | | | (64.6 | ) | | | 19,169 | | | 42,602 | | | (55.0 | ) |
Brokerage and insurance commissions | | | 14,703 | | | 10,047 | | | 46.3 | | | | 42,462 | | | 31,453 | | | 35.0 | |
Net securities gains (losses) | | | 1,854 | | | (2,034 | ) | | (191.2 | ) | | | 6,259 | | | (1,474 | ) | | (524.6 | ) |
Other income | | | 10,446 | | | 9,090 | | | 14.9 | | | | 30,021 | | | 25,666 | | | 17.0 | |
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Total non-interest income | | | 52,747 | | | 49,979 | | | 5.5 | | | | 145,765 | | | 136,849 | | | 6.5 | |
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Non-interest expenses | | | | �� | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 51,133 | | | 45,261 | | | 13.0 | | | | 139,071 | | | 124,733 | | | 11.5 | |
Occupancy and equipment expense | | | 15,962 | | | 12,987 | | | 22.9 | | | | 42,272 | | | 36,713 | | | 15.1 | |
Merger, integration and restructuring expense | | | 3,831 | | | — | | | 100.0 | | | | 4,177 | | | 3,486 | | | 19.8 | |
Other operating expenses | | | 26,966 | | | 23,604 | | | 14.2 | | | | 73,173 | | | 65,612 | | | 100.0 | |
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Total non-interest expense | | | 97,892 | | | 81,852 | | | 19.6 | | | | 258,693 | | | 230,544 | | | 12.2 | |
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Income from continuing operations before income taxes | | | 69,011 | | | 60,605 | | | 13.9 | | | | 188,033 | | | 170,348 | | | 10.4 | |
Income taxes from continuing operations | | | 22,863 | | | 20,166 | | | 13.4 | | | | 61,732 | | | 57,254 | | | 7.8 | |
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Income from continuing operations | | | 46,148 | | | 40,439 | | | 14.1 | | | | 126,301 | | | 113,094 | | | 11.7 | |
Income from discontinued operations, net of tax | | | — | | | 1,129 | | | (100.0 | ) | | | 18,725 | | | 2,056 | | | 810.7 | |
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Net income | | $ | 46,148 | | $ | 41,568 | | | 11.0 | | | $ | 145,026 | | $ | 115,150 | | | 25.9 | |
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SHARE DATA: | | | | | | | | | | | | | | | | | | | | |
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Earnings per share from continuing operations | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.44 | | $ | 0.45 | | | (2.2 | ) | | $ | 1.30 | | $ | 1.27 | | | 2.4 | |
Diluted | | | 0.43 | | | 0.44 | | | (2.3 | ) | | | 1.28 | | | 1.26 | | | 1.6 | |
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Earnings per share from discontinued operations | | | | | | | | | | | | | | | | | | | | |
Basic | | | 0.00 | | | 0.01 | | | (100.0 | ) | | | 0.19 | | | 0.02 | | | 850.0 | |
Diluted | | | 0.00 | | | 0.01 | | | (100.0 | ) | | | 0.19 | | | 0.02 | | | 850.0 | |
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Earnings per share | | | | | | | | | | | | | | | | | | | | |
Basic | | | 0.44 | | | 0.46 | | | (4.4 | ) | | | 1.49 | | | 1.31 | | | 13.7 | |
Diluted | | | 0.43 | | | 0.46 | | | (6.5 | ) | | | 1.47 | | | 1.29 | | | 14.0 | |
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Core operating earnings per share* | | | | | | | | | | | | | | | | | | | | |
Basic | | | 0.46 | | | 0.45 | | | 2.2 | | | | 1.33 | | | 1.30 | | | 2.3 | |
Diluted | | | 0.46 | | | 0.44 | | | 4.6 | | | | 1.31 | | | 1.29 | | | 1.6 | |
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Cash operating earnings per share* | | | | | | | | | | | | | | | | | | | | |
Basic | | | 0.48 | | | 0.46 | | | 4.4 | | | | 1.38 | | | 1.35 | | | 2.2 | |
Diluted | | | 0.48 | | | 0.46 | | | 4.4 | | | | 1.36 | | | 1.33 | | | 2.3 | |
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Cash dividend declared per common share | | | 0.21 | | | 0.20 | | | — | | | | 0.63 | | | 0.60 | | | — | |
Average shares outstanding | | | | | | | | | | | | | | | | | | | | |
Basic | | | 105,479,000 | | | 90,287,000 | | | — | | | | 97,298,000 | | | 88,813,010 | | | — | |
Diluted | | | 106,408,000 | | | 91,188,000 | | | — | | | | 98,360,000 | | | 89,485,000 | | | — | |
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Summary Financial Information - Third Quarter 2004
PERFORMANCE RATIOS:
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| | | Three months ended
September 30,
| | | Nine months ended
September 30,
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| | | 2004
| | | 2003
| | | 2004
| | | 2003
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ACTUAL | | | | | | | | | | | | | | | | |
Return on average equity | | | 13.21 | % | | | 18.00 | % | | | 16.67 | % | | | 17.39 | % |
Return on average assets | | | 1.26 | | | | 1.31 | | | | 1.47 | | | | 1.29 | |
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CONTINUING OPERATIONS | | | | | | | | | | | | | | | | |
Return on average equity | | | 13.21 | % | | | 17.51 | % | | | 14.52 | % | | | 17.08 | % |
Return on average assets | | | 1.26 | | | | 1.35 | | | | 1.31 | | | | 1.34 | |
Efficiency ratio | | | 55.57 | | | | 53.95 | | | | 54.42 | | | | 53.93 | |
Net interest margin (FTE) | | | 3.69 | | | | 3.66 | | | | 3.69 | | | | 3.70 | |
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CORE OPERATING * | | | | | | | | | | | | | | | | |
Core operating earnings | | $ | 48,638 | | | $ | 40,439 | | | $ | 129,016 | | | $ | 115,360 | |
Return on average equity | | | 13.92 | % | | | 17.51 | % | | | 14.83 | % | | | 17.42 | % |
Return on average assets | | | 1.33 | | | | 1.35 | | | | 1.34 | | | | 1.37 | |
Efficiency ratio | | | 53.39 | | | | 53.95 | | | | 53.54 | | | | 53.10 | |
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CASH OPERATING* | | | | | | | | | | | | | | | | |
Return on average tangible equity | | | 22.52 | % | | | 22.99 | % | | | 26.52 | % | | | 23.06 | % |
Return on average tangible assets | | | 1.44 | | | | 1.33 | | | | 1.44 | | | | 1.44 | |
ACTUAL BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| | | | | | | | | | | |
| | | September 30,
| | | Percent Change
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| | | 2004
| | | 2003
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Cash and due from banks | | $ | 238,820 | | | $ | 184,782 | | | 29.2 | % |
Interest-earning deposits with banks | | | 30,118 | | | | 39,564 | | | (23.9 | ) |
Loans held for sale | | | 31,107 | | | | 46,332 | | | (32.9 | ) |
Securities available for sale | | | 3,118,884 | | | | 2,573,009 | | | 21.2 | |
Total loans | | | 10,262,393 | | | | 8,406,735 | | | 22.1 | |
Allowance for credit losses | | | (147,479 | ) | | | (122,617 | ) | | 20.3 | |
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Net loans | | | 10,114,914 | | | | 8,284,118 | | | 22.1 | |
Premises and equipment | | | 154,252 | | | | 152,219 | | | 1.3 | |
Goodwill and other intangibles | | | 520,221 | | | | 216,554 | | | 140.2 | |
Assets of discontinued operations | | | — | | | | 802,702 | | | (100.0 | ) |
Other assets | | | 434,816 | | | | 363,342 | | | 19.7 | |
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Total Assets | | $ | 14,643,132 | | | $ | 12,662,622 | | | 15.6 | |
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Total interest-earning assets | | $ | 13,442,502 | | | $ | 11,065,640 | | | 21.5 | |
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Non-interest-bearing deposits | | $ | 1,477,061 | | | $ | 1,158,281 | | | 27.5 | |
Interest-bearing deposits | | | 8,677,287 | | | | 7,453,863 | | | 16.4 | |
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Total deposits | | | 10,154,348 | | | | 8,612,144 | | | 17.9 | |
Repos and federal funds purchased | | | 921,175 | | | | 780,608 | | | 18.0 | |
Debt and FHLB advances | | | 1,989,806 | | | | 1,447,478 | | | 37.5 | |
Liabilities of discontinued operations | | | — | | | | 755,365 | | | (100.0 | ) |
Other liabilities | | | 161,388 | | | | 135,083 | | | 19.5 | |
Shareholders’ equity | | | 1,416,415 | | | | 931,944 | | | 52.0 | |
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Total Liabilities and Shareholders’ Equity | | $ | 14,643,132 | | | $ | 12,662,622 | | | 15.6 | |
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Summary Financial Information - Third Quarter 2004
AVERAGE BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended September 30,
| | | Percent
Change
| | | Nine months ended September 30,
| | | Percent
Change
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| | | 2004
| | | 2003
| | | | 2004
| | | 2003
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Cash and due from banks | | $ | 252,731 | | | $ | 202,099 | | | 25.1 | % | | $ | 222,960 | | | $ | 187,663 | | | 18.8 | |
Interest-earning deposits with banks | | | 42,017 | | | | 35,814 | | | 17.3 | | | | 37,418 | | | | 31,612 | | | 18.4 | |
Federal funds sold | | | 2,065 | | | | 1,337 | | | 54.5 | | | | 2,703 | | | | 1,415 | | | 91.0 | |
Loans held for sale | | | 30,139 | | | | 81,493 | | | (63.0 | ) | | | 31,238 | | | | 85,899 | | | (63.6 | ) |
Securities available for sale | | | 3,078,861 | | | | 2,499,421 | | | 23.2 | | | | 2,701,042 | | | | 2,418,163 | | | 11.7 | |
Total loans | | | 10,139,800 | | | | 8,406,189 | | | 20.6 | | | | 9,147,722 | | | | 7,954,462 | | | 15.0 | |
Allowance for credit losses | | | (147,145 | ) | | | (123,766 | ) | | 18.9 | | | | (132,271 | ) | | | (116,340 | ) | | 13.7 | |
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Net loans | | | 9,992,655 | | | | 8,282,423 | | | 20.6 | | | | 9,015,451 | | | | 7,838,122 | | | 15.0 | |
Premises and equipment | | | 159,328 | | | | 152,393 | | | 4.6 | | | | 153,203 | | | | 143,779 | | | 6.6 | |
Goodwill and other intangibles | | | 516,673 | | | | 216,194 | | | 139.0 | | | | 336,718 | | | | 187,268 | | | 79.8 | |
Assets of discontinued operations | | | — | | | | 760,808 | | | (100.0 | ) | | | 287,208 | | | | 703,741 | | | (59.2 | ) |
Other assets | | | 448,680 | | | | 394,100 | | | 13.8 | | | | 392,740 | | | | 352,902 | | | 11.3 | |
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Total Assets | | $ | 14,523,149 | | | $ | 12,626,082 | | | 15.0 | | | $ | 13,180,681 | | | $ | 11,950,564 | | | 10.3 | |
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Total interest-earning assets | | $ | 13,292,882 | | | $ | 11,024,254 | | | 20.6 | | | $ | 11,920,123 | | | $ | 10,491,551 | | | 13.6 | |
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Non-interest-bearing deposits | | $ | 1,508,074 | | | $ | 1,180,214 | | | 27.8 | | | $ | 1,345,420 | | | $ | 1,071,922 | | | 25.5 | |
Interest-bearing deposits | | | 8,704,452 | | | | 7,541,423 | | | 15.4 | | | | 7,893,126 | | | | 7,247,362 | | | 8.9 | |
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Total deposits | | | 10,212,526 | | | | 8,721,637 | | | 17.1 | | | | 9,238,546 | | | | 8,319,284 | | | 11.0 | |
Repos and federal funds purchased | | | 867,547 | | | | 824,163 | | | 5.3 | | | | 881,539 | | | | 826,439 | | | 6.7 | |
Debt and FHLB advances | | | 1,916,452 | | | | 1,318,043 | | | 45.4 | | | | 1,492,717 | | | | 1,134,684 | | | 31.6 | |
Liabilities of discontinued operations | | | — | | | | 716,249 | | | (100.0 | ) | | | 269,614 | | | | 662,535 | | | (59.3 | ) |
Other liabilities | | | 136,611 | | | | 129,681 | | | 5.3 | | | | 136,054 | | | | 122,260 | | | 11.3 | |
Shareholders’ equity | | | 1,390,013 | | | | 916,309 | | | 51.7 | | | | 1,162,211 | | | | 885,362 | | | 31.3 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
| |
|
|
Total Liabilities and Shareholders’ Equity | | $ | 14,523,149 | | | $ | 12,626,082 | | | 15.0 | | | $ | 13,180,681 | | | $ | 11,950,564 | | | 10.3 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
| |
|
|
ASSET QUALITY DATA:
| | | | | | | | |
| | | September 30,
| |
| | | 2004
| | | 2003
| |
Non-accrual loans | | $ | 122,050 | | | $ | 87,188 | |
Restructured loans | | | 556 | | | | 1,245 | |
| | |
|
|
| |
|
|
|
Total non-performing loans | | | 122,606 | | | | 88,433 | |
Investment securities | | | 11,705 | | | | | |
Other real estate owned | | | 11,924 | | | | 7,583 | |
| | |
|
|
| |
|
|
|
Total non-performing assets | | $ | 146,235 | | | $ | 96,016 | |
| | |
|
|
| |
|
|
|
Loans 90 days or more past due & still accruing | | $ | 17,183 | | | $ | 11,906 | |
Allowance for credit losses | | | 147,479 | | | | 122,617 | |
| | |
ASSET QUALITY RATIOS: | | | | | | | | |
| | |
Non-accrual loans to total loans | | | 1.19 | % | | | 1.04 | % |
Non-performing loans to total loans | | | 1.19 | | | | 1.05 | |
Non-performing assets to total assets | | | 1.00 | | | | 0.76 | |
Loans 90 days or more past due and still accruing to total loans | | | 0.17 | | | | 0.14 | |
Allowance for credit losses to non-performing loans | | | 120.29 | | | | 138.66 | |
Allowance for credit losses to non-performing assets | | | 100.85 | | | | 127.70 | |
Allowance for credit losses to total loans | | | 1.44 | | | | 1.46 | |
NET CHARGE-OFFS
| | | | | | |
| | | Three months ended
September 30,
|
| | | 2004
| | 2003
|
Net charge-offs | | $ | 8,106 | | $ | 9,086 |
Net charge-offs to average loans | | | 0.32 | | | 0.43 |
| |
| | | Nine months ended
September 30,
|
| | | 2004
| | 2003
|
Net charge-offs | | $ | 25,074 | | $ | 23,413 |
Net charge-offs to average loans | | | 0.37 | | | 0.39 |
7
Summary Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
*NON-GAAP DISCLOSURE RECONCILIATIONS
(Dollars in thousands)
Core operating earnings are net income adjusted to exclude discontinued operations, merger, integration and restructuring expenses and the results of certain significant transactions or events not representative of ongoing operations (“non-operating items”). Cash operating earnings are core operating earnings adjusted to exclude the after-tax effect of amortizing core deposits and other intangibles. Management believes that both core operating earnings and cash operating earnings assist the investor in understanding the impact of non-operating items and amortization of intangibles on reported results.
Core operating earnings
The following reconciles GAAP income from continuing operations to core operating earnings for the nine and three: months ended September 30, 2004 and 2003:
| | | | | | | | | | | | | | | |
| | | Three months ended
September 30,
| | Nine months ended
September 30,
| |
| | | 2004
| | | 2003
| | 2004
| | | 2003
| |
Income from continuing operations | | $ | 46,148 | | | $ | 40,439 | | $ | 126,301 | | | $ | 113,094 | |
| | |
|
|
| |
|
| |
|
|
| |
|
|
|
Merger, integration and restructuring expense | | | 3,831 | | | | — | | | 4,177 | | | | 3,486 | |
Tax effect | | | (1,341 | ) | | | — | | | (1,462 | ) | | | (1,220 | ) |
| | |
|
|
| |
|
| |
|
|
| |
|
|
|
After-tax non-operating items | | | 2,490 | | | | — | | | 2,715 | | | | 2,266 | |
| | |
|
|
| |
|
| |
|
|
| |
|
|
|
Core operating earnings | | $ | 48,638 | | | $ | 40,439 | | $ | 129,016 | | | $ | 115,360 | |
| | |
|
|
| |
|
| |
|
|
| |
|
|
|
Merger, integration and restructuring expense in 2004 reflect charges associated with the acquisition of Second Bancorp, Inc. and the sale of Sky Financial Solutions, Inc. in the third and first quarters, respectively.
Core operating earnings is used as the numerator to calculate core operating return on average assets, core operating return on average equity and core operating earnings per share. Additionally, non-operating items are deducted from non-interest expense in the numerator and non-interest income in the denominator of the core operating efficiency ratio disclosed in the tables. The comparable information on a GAAP basis is also provided in the tables.
Cash operating earnings
The following table reconciles core operating earnings to cash operating earnings for the nine and three months ended September 30, 2004 and 2003:
| | | | | | | | | | | | | | | | |
| | | Three months ended
September 30,
| | | Nine months ended
September 30,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Core operating earnings | | $ | 48,638 | | | $ | 40,439 | | | $ | 129,016 | | | $ | 115,360 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Amortization of core deposits and other intangible assets | | | 3,553 | | | | 1,869 | | | | 7,403 | | | | 4,993 | |
Tax effect | | | (1,244 | ) | | | (654 | ) | | | (2,591 | ) | | | (1,748 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
After-tax non-operating items | | | 2,309 | | | | 1,215 | | | | 4,812 | | | | 3,245 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash operating earnings | | $ | 50,947 | | | $ | 41,654 | | | $ | 133,828 | | | $ | 118,605 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash operating earnings is used as the numerator to calculate the cash operating return on average tangible equity and the cash operating return on average tangible assets. The denominator of each ratio is adjusted to deduct the average balance of intangible assets during the period. The comparable GAAP information is also included in the tables.
8
Summary Financial Information - Third Quarter 2004
The following table reconciles average GAAP equity to average tangible equity for the three and nine months ended
September 30, 2004 and 2003.
| | | | | | | | | | | | | | | | |
| | | Three months ended
September 30,
| | | Nine months ended
September 30,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Average GAAP equity | | $ | 1,390,013 | | | $ | 916,309 | | | $ | 1,162,211 | | | $ | 885,362 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Goodwill | | | 436,148 | | | | 162,568 | | | | 439,409 | | | | 162,222 | |
Core deposits and other intangibles | | | 75,939 | | | | 53,626 | | | | 74,976 | | | | 54,619 | |
Deferred taxes | | | (26,579 | ) | | | (18,769 | ) | | | (26,242 | ) | | | (19,117 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | 485,508 | | | | 197,425 | | | | 488,143 | | | | 197,724 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Average tangible equity | | $ | 904,505 | | | $ | 718,884 | | | $ | 674,068 | | | $ | 687,638 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
The following table reconciles average GAAP assets to average tangible assets for the three and nine months ended September 30,
2004 and 2003:
| | | | | | | | | | | | | | | | |
| | | Three months ended September 30,
| | | Nine months ended September 30,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Average GAAP assets | | $ | 14,523,149 | | | $ | 12,626,082 | | | $ | 13,180,681 | | | $ | 11,950,564 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Goodwill | | | 436,148 | | | | 162,568 | | | | 439,409 | | | | 162,222 | |
Core deposits and other intangibles | | | 75,939 | | | | 53,626 | | | | 74,976 | | | | 54,619 | |
Deferred taxes | | | (26,579 | ) | | | (18,769 | ) | | | (26,242 | ) | | | (19,117 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | 485,508 | | | | 197,425 | | | | 488,143 | | | | 197,724 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Average tangible assets | | $ | 14,037,641 | | | $ | 12,428,657 | | | $ | 12,692,538 | | | $ | 11,752,840 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
The following table reconciles GAAP earnings per share to operating earnings per share, core operating earnings per
share and cash operating earnings per share:
| | | | | | | | | | | | | | | |
| | | Three months ended September 30,
| | | Nine months ended September 30,
| |
Basic EPS
| | 2004
| | 2003
| | | 2004
| | | 2003
| |
Net income | | $ | 0.44 | | $ | 0.46 | | | $ | 1.49 | | | $ | 1.30 | |
After-tax earnings from discontinued operations | | | — | | | (0.01 | ) | | | (0.19 | ) | | | (0.02 | ) |
After-tax merger, integration and restructuring | | | 0.02 | | | 0.00 | | | | 0.03 | | | | 0.03 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
|
Core operating earnings | | | 0.46 | | | 0.45 | | | | 1.33 | | | | 1.31 | |
After-tax amortization of core deposits and other intangible assets | | | 0.02 | | | 0.01 | | | | 0.05 | | | | 0.04 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
|
Cash operating earnings | | $ | 0.48 | | $ | 0.46 | | | $ | 1.38 | | | $ | 1.35 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
|
| | |
| | | Three months ended September 30,
| | | Nine months ended September 30,
| |
Diluted EPS
| | 2004
| | 2003
| | | 2004
| | | 2003
| |
Net income | | $ | 0.43 | | $ | 0.46 | | | $ | 1.47 | | | $ | 1.29 | |
After-tax earnings from discontinued operations | | | — | | | (0.01 | ) | | | (0.19 | ) | | | (0.02 | ) |
After-tax merger, integration and restructuring | | | 0.03 | | | 0.00 | | | | 0.03 | | | | 0.03 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
|
Core operating earnings | | | 0.46 | | | 0.45 | | | | 1.31 | | | | 1.29 | |
After-tax amortization of core deposits and other intangible assets | | | 0.02 | | | 0.01 | | | | 0.05 | | | | 0.04 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
|
Cash operating earnings | | $ | 0.48 | | $ | 0.46 | | | $ | 1.36 | | | $ | 1.33 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
|
— end —
9
Third Quarter 2004
Supplemental Financial Information
October 21, 2004
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTERS STATEMENTS OF INCOME (unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | | | |
| | | 2004
| | 2003
| |
| | | 3rd qtr
| | 2nd qtr
| | 1st qtr
| | 4th qtr
| | 3rd qtr
| |
Fully taxable equivalent interest income | | $ | 179,675 | | $ | 148,839 | | $ | 149,872 | | $ | 151,054 | | $ | 152,635 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Interest income | | $ | 178,772 | | $ | 148,027 | | $ | 149,021 | | $ | 150,407 | | $ | 151,707 | |
Interest expense | | | 56,256 | | | 45,340 | | | 47,218 | | | 47,358 | | | 50,904 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net interest income | | | 122,516 | | | 102,687 | | | 101,803 | | | 103,049 | | | 100,803 | |
| | | | | |
Provision for credit losses | | | 8,360 | | | 11,020 | | | 6,665 | | | 9,975 | | | 8,325 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net interest income after provision for credit losses | | | 114,156 | | | 91,667 | | | 95,138 | | | 93,074 | | | 92,478 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Non-interest income | | | | | | | | | | | | | | | | |
Trust services income | | | 5,079 | | | 4,101 | | | 4,105 | | | 3,773 | | | 3,585 | |
Service charges and fees on deposit accounts | | | 13,820 | | | 11,107 | | | 9,642 | | | 10,182 | | | 9,932 | |
Mortgage banking income | | | 6,845 | | | 6,879 | | | 5,445 | | | 5,231 | | | 19,359 | |
Brokerage and insurance commissions | | | 14,703 | | | 13,451 | | | 14,308 | | | 11,233 | | | 10,047 | |
Net securities gains (losses) | | | 1,854 | | | 2,877 | | | 1,528 | | | 2,345 | | | (2,034 | ) |
Other income | | | 10,446 | | | 11,194 | | | 8,381 | | | 9,285 | | | 9,090 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Total non-interest income | | | 52,747 | | | 49,609 | | | 43,409 | | | 42,049 | | | 49,979 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Non-interest expenses | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 51,133 | | | 43,740 | | | 44,198 | | | 39,326 | | | 45,261 | |
Occupancy and equipment expense | | | 15,962 | | | 13,436 | | | 12,874 | | | 13,312 | | | 12,987 | |
Merger, integration and restructuring expense | | | 3,831 | | | — | | | 346 | | | 1,091 | | | — | |
Other operating expenses | | | 26,966 | | | 25,122 | | | 21,085 | | | 22,913 | | | 23,604 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Total non-interest expense | | | 97,892 | | | 82,298 | | | 78,503 | | | 76,642 | | | 81,852 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Income from continuing operations before income taxes | | | 69,011 | | | 58,978 | | | 60,044 | | | 58,481 | | | 60,605 | |
Income taxes from continuing operations | | | 22,863 | | | 18,777 | | | 20,092 | | | 18,896 | | | 20,166 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Income from continuing operations | | | 46,148 | | | 40,201 | | | 39,952 | | | 39,585 | | | 40,439 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Income from discontinued operations, net of tax | | | — | | | — | | | 18,725 | | | 1,883 | | | 1,131 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Net income | | $ | 46,148 | | $ | 40,201 | | $ | 58,677 | | $ | 41,468 | | $ | 41,570 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
Core operating earnings | | $ | 48,639 | | $ | 40,201 | | $ | 40,177 | | $ | 39,687 | | $ | 40,439 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
|
1
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTER PERFORMANCE RATIOS AND SHARE DATA
(Unaudited)
PERFORMANCE RATIOS
| | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
| |
ACTUAL
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Return on average equity | | 13.21 | % | | 15.25 | % | | 22.83 | % | | 16.82 | % | | 18.00 | % |
Return on average assets | | 1.26 | | | 1.33 | | | 1.83 | | | 1.28 | | | 1.31 | |
| | |
| | | 2004
| | | 2003
| |
CONTINUING OPERATIONS
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Return on average equity | | 13.21 | % | | 15.25 | % | | 15.55 | % | | 16.05 | % | | 17.51 | % |
Return on average assets | | 1.26 | | | 1.33 | | | 1.34 | | | 1.31 | | | 1.35 | |
Net interest rate spread (FTE) | | 3.43 | | | 3.41 | | | 3.43 | | | 3.45 | | | 3.41 | |
Net interest rate margin (FTE) | | 3.69 | | | 3.69 | | | 3.69 | | | 3.70 | | | 3.66 | |
Efficiency ratio | | 55.57 | | | 53.75 | | | 53.75 | | | 52.59 | | | 53.95 | |
| | |
| | | 2004
| | | 2003
| |
CORE OPERATING *
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Return on average equity | | 13.92 | % | | 15.25 | % | | 15.63 | % | | 16.09 | % | | 17.51 | % |
Return on average assets | | 1.33 | | | 1.33 | | | 1.34 | | | 1.32 | | | 1.35 | |
Efficiency ratio | | 53.39 | | | 53.75 | | | 53.51 | | | 51.84 | | | 53.95 | |
. | | | | | | | | | | | | | | | |
| | |
| | | 2004
| | | 2003
| |
CASH OPERATING*
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Return on average tangible equity | | 22.52 | % | | 20.09 | % | | 20.64 | % | | 21.13 | % | | 22.99 | % |
Return on average assets | | 1.44 | | | 1.40 | | | 1.32 | | | 1.29 | | | 1.33 | |
2
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTER SHARE DATA
(Unaudited)
| | | | | | | | | | | | | | | |
| | | 2004
| | 2003
|
| | | 3rd qtr
| | 2nd qtr
| | 1st qtr
| | 4th qtr
| | 3rd qtr
|
Earnings per share from continuing operations | | | | | | | | | | | | | | | |
Basic | | $ | 0.44 | | $ | 0.43 | | $ | 0.43 | | $ | 0.43 | | $ | 0.45 |
Diluted | | | 0.43 | | | 0.43 | | | 0.42 | | | 0.43 | | | 0.44 |
| | | | | |
Earnings per share from discontinued operations | | | | | | | | | | | | | | | |
Basic | | | — | | | — | | | 0.20 | | | 0.02 | | | 0.01 |
Diluted | | | — | | | — | | | 0.20 | | | 0.02 | | | 0.01 |
| | | | | |
Earnings per share | | | | | | | | | | | | | | | |
Basic | | | 0.44 | | | 0.43 | | | 0.63 | | | 0.45 | | | 0.46 |
Diluted | | | 0.43 | | | 0.43 | | | 0.62 | | | 0.45 | | | 0.46 |
| | | | | |
Core operating earnings per share* | | | | | | | | | | | | | | | |
Basic | | | 0.46 | | | 0.43 | | | 0.43 | | | 0.43 | | | 0.45 |
Diluted | | | 0.46 | | | 0.43 | | | 0.43 | | | 0.43 | | | 0.44 |
| | | | | |
Cash operating earnings per share* | | | | | | | | | | | | | | | |
Basic | | | 0.48 | | | 0.44 | | | 0.44 | | | 0.44 | | | 0.46 |
Diluted | | | 0.48 | | | 0.44 | | | 0.44 | | | 0.44 | | | 0.46 |
| | | | | |
Cash dividend declared per common share | | | 0.21 | | | 0.21 | | | 0.21 | | | 0.20 | | | 0.20 |
| | | | | |
Book value per share | | | 13.43 | | | 11.13 | | | 11.46 | | | 10.80 | | | 10.31 |
| | | | | |
Average shares outstanding | | | | | | | | | | | | | | | |
Basic | | | 105,479,000 | | | 93,322,000 | | | 92,957,000 | | | 92,019,000 | | | 90,303,000 |
Diluted | | | 106,408,000 | | | 94,314,000 | | | 94,226,000 | | | 93,122,000 | | | 91,204,000 |
| | | | | |
Book value calculation shares outstanding | | | 105,441,000 | | | 93,420,000 | | | 93,063,000 | | | 92,459,000 | | | 90,383,000 |
3
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTER AVERAGE BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
| |
| | | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Cash and due from banks | | $ | 252,731 | | | $ | 198,246 | | | $ | 217,575 | | | $ | 202,720 | | | $ | 202,099 | |
Interest-earning deposits with banks | | | 42,017 | | | | 36,385 | | | | 33,800 | | | | 39,238 | | | | 35,814 | |
Federal funds sold | | | 2,065 | | | | 885 | | | | 5,165 | | | | 8,497 | | | | 1,337 | |
Loans held for sale | | | 30,139 | | | | 31,866 | | | | 31,720 | | | | 28,980 | | | | 81,493 | |
Securities available for sale | | | 3,078,861 | | | | 2,570,976 | | | �� | 2,449,138 | | | | 2,508,711 | | | | 2,499,421 | |
Total loans | | | 10,139,800 | | | | 8,631,914 | | | | 8,660,549 | | | | 8,546,675 | | | | 8,406,189 | |
Allowance for credit losses | | | (147,145 | ) | | | (124,752 | ) | | | (124,751 | ) | | | (123,629 | ) | | | (123,766 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net loans | | | 9,992,655 | | | | 8,507,162 | | | | 8,535,798 | | | | 8,423,046 | | | | 8,282,423 | |
Premises and equipment | | | 159,328 | | | | 147,058 | | | | 153,155 | | | | 153,866 | | | | 152,393 | |
Goodwill and other intangibles | | | 516,673 | | | | 247,469 | | | | 244,035 | | | | 228,836 | | | | 216,194 | |
Assets of discontinued operations | | | — | | | | — | | | | 864,779 | | | | 837,579 | | | | 760,808 | |
Other assets | | | 448,680 | | | | 374,374 | | | | 354,550 | | | | 376,770 | | | | 394,100 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Assets | | $ | 14,523,149 | | | $ | 12,114,421 | | | $ | 12,889,715 | | | $ | 12,808,243 | | | $ | 12,626,082 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total interest-earning assets | | $ | 13,292,882 | | | $ | 11,272,026 | | | $ | 11,180,372 | | | $ | 11,132,101 | | | $ | 11,024,254 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Non-interest-bearing deposits | | $ | 1,508,074 | | | $ | 1,297,932 | | | $ | 1,228,468 | | | $ | 1,214,825 | | | $ | 1,180,214 | |
Interest-bearing deposits | | | 8,704,452 | | | | 7,517,853 | | | | 7,448,158 | | | | 7,427,640 | | | | 7,541,423 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total deposits | | | 10,212,526 | | | | 8,815,785 | | | | 8,676,626 | | | | 8,642,465 | | | | 8,721,637 | |
Repos and federal funds purchased | | | 867,547 | | | | 788,596 | | | | 988,628 | | | | 917,789 | | | | 824,163 | |
Debt and FHLB advances | | | 1,916,452 | | | | 1,309,167 | | | | 1,247,874 | | | | 1,359,818 | | | | 1,318,043 | |
Liabilities of discontinued operations | | | — | | | | — | | | | 811,805 | | | | 787,410 | | | | 716,249 | |
Other liabilities | | | 136,611 | | | | 140,355 | | | | 131,183 | | | | 122,437 | | | | 129,681 | |
Shareholders’ equity | | | 1,390,013 | | | | 1,060,518 | | | | 1,033,599 | | | | 978,324 | | | | 916,309 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Liabilities and Shareholders’ Equity | | $ | 14,523,149 | | | $ | 12,114,421 | | | $ | 12,889,715 | | | $ | 12,808,243 | | | $ | 12,626,082 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
4
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTER ACTUAL BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
| |
| | | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Cash and due from banks | | $ | 238,820 | | | $ | 223,255 | | | $ | 200,783 | | | $ | 251,364 | | | $ | 184,782 | |
Interest-earning deposits with banks | | | 30,118 | | | | 27,100 | | | | 29,051 | | | | 22,808 | | | | 39,564 | |
Loans held for sale | | | 31,107 | | | | 15,834 | | | | 57,650 | | | | 28,062 | | | | 46,332 | |
Securities available for sale | | | 3,118,884 | | | | 2,541,687 | | | | 2,613,816 | | | | 2,511,369 | | | | 2,573,009 | |
Total loans | | | 10,262,393 | | | | 8,794,596 | | | | 8,555,651 | | | | 8,643,862 | | | | 8,406,735 | |
Allowance for credit losses | | | (147,479 | ) | | | (125,661 | ) | | | (125,043 | ) | | | (124,943 | ) | | | (122,617 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net loans | | | 10,114,914 | | | | 8,668,935 | | | | 8,430,608 | | | | 8,518,919 | | | | 8,284,118 | |
Premises and equipment | | | 154,252 | | | | 145,315 | | | | 152,621 | | | | 153,285 | | | | 152,219 | |
Goodwill and other intangibles | | | 520,221 | | | | 246,586 | | | | 243,356 | | | | 237,014 | | | | 216,554 | |
Assets of discontinued operations | | | — | | | | — | | | | — | | | | 874,765 | | | | 802,702 | |
Other assets | | | 434,816 | | | | 373,171 | | | | 365,506 | | | | 348,609 | | | | 363,342 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Assets | | $ | 14,643,132 | | | $ | 12,241,883 | | | $ | 12,093,391 | | | $ | 12,946,195 | | | $ | 12,662,622 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total interest-earning assets | | $ | 13,442,502 | | | $ | 11,379,217 | | | $ | 11,256,168 | | | $ | 11,206,101 | | | $ | 11,065,640 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Non-interest-bearing deposits | | $ | 1,477,061 | | | $ | 1,297,942 | | | $ | 1,229,981 | | | $ | 1,233,272 | | | $ | 1,158,281 | |
Interest-bearing deposits | | | 8,677,287 | | | | 7,484,259 | | | | 7,541,365 | | | | 7,282,261 | | | | 7,453,863 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total deposits | | | 10,154,348 | | | | 8,782,201 | | | | 8,771,346 | | | | 8,515,533 | | | | 8,612,144 | |
Repos and federal funds purchased | | | 921,175 | | | | 844,738 | | | | 931,792 | | | | 994,896 | | | | 780,608 | |
Debt and FHLB advances | | | 1,989,806 | | | | 1,436,707 | | | | 1,156,419 | | | | 1,475,781 | | | | 1,447,478 | |
Liabilities of discontinued operations | | | — | | | | — | | | | — | | | | 822,498 | | | | 755,365 | |
Other liabilities | | | 161,388 | | | | 138,029 | | | | 167,677 | | | | 138,911 | | | | 135,083 | |
Shareholders’ equity | | | 1,416,415 | | | | 1,040,208 | | | | 1,066,157 | | | | 998,576 | | | | 931,944 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Liabilities and Shareholders’ Equity | | $ | 14,643,132 | | | $ | 12,241,883 | | | $ | 12,093,391 | | | $ | 12,946,195 | | | $ | 12,662,622 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
5
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTER LOAN TABLE (Unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
| |
ACTUAL
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Residential Mortgage | | $ | 1,037,229 | | | $ | 905,249 | | | $ | 891,088 | | | $ | 905,007 | | | $ | 783,003 | |
Home Equity | | | 1,658,344 | | | | 1,266,508 | | | | 1,176,581 | | | | 1,140,310 | | | | 1,057,301 | |
Consumer | | | 846,412 | | | | 694,732 | | | | 717,789 | | | | 770,901 | | | | 787,436 | |
Commercial Real Estate | | | 3,939,070 | | | | 3,417,236 | | | | 3,455,525 | | | | 3,387,202 | | | | 3,321,713 | |
Commercial & Industrial | | | 2,781,338 | | | | 2,510,871 | | | | 2,314,668 | | | | 2,440,442 | | | | 2,457,282 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Loans | | $ | 10,262,393 | | | $ | 8,794,596 | | | $ | 8,555,651 | | | $ | 8,643,862 | | | $ | 8,406,735 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Residential Mortgage | | | 10 | % | | | 10 | % | | | 10 | % | | | 10 | % | | | 9 | % |
Home Equity | | | 16 | % | | | 14 | % | | | 13 | % | | | 13 | % | | | 12 | % |
Consumer | | | 8 | % | | | 8 | % | | | 8 | % | | | 9 | % | | | 9 | % |
Commercial Real Estate | | | 38 | % | | | 39 | % | | | 40 | % | | | 39 | % | | | 40 | % |
Commercial & Industrial | | | 27 | % | | | 29 | % | | | 27 | % | | | 28 | % | | | 29 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Loans | | | 100 | % | | | 100 | % | | | 100 | % | | | 100 | % | | | 100 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | |
| | | 2004
| | | 2003
| |
AVERAGES
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Residential Mortgage | | $ | 1,058,878 | | | $ | 896,779 | | | $ | 897,703 | | | $ | 780,998 | | | $ | 794,756 | |
Home Equity | | | 1,630,492 | | | | 1,219,822 | | | | 1,159,333 | | | | 1,163,658 | | | | 1,026,317 | |
Consumer | | | 865,205 | | | | 710,848 | | | | 751,371 | | | | 778,355 | | | | 797,113 | |
Commercial Real Estate | | | 4,071,301 | | | | 3,523,316 | | | | 3,483,465 | | | | 3,440,354 | | | | 3,312,295 | |
Commercial & Industrial | | | 2,513,924 | | | | 2,281,149 | | | | 2,368,677 | | | | 2,383,310 | | | | 2,475,708 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Loans | | $ | 10,139,800 | | | $ | 8,631,914 | | | $ | 8,660,549 | | | $ | 8,546,675 | | | $ | 8,406,189 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Residential Mortgage | | | 10 | % | | | 10 | % | | | 10 | % | | | 9 | % | | | 9 | % |
Home Equity | | | 16 | % | | | 14 | % | | | 13 | % | | | 14 | % | | | 12 | % |
Consumer | | | 9 | % | | | 8 | % | | | 9 | % | | | 9 | % | | | 9 | % |
Commercial Real Estate | | | 40 | % | | | 41 | % | | | 40 | % | | | 40 | % | | | 39 | % |
Commercial & Industrial | | | 25 | % | | | 26 | % | | | 27 | % | | | 28 | % | | | 29 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Loans | | | 100 | % | | | 100 | % | | | 100 | % | | | 100 | % | | | 100 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
6
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
FIVE QUARTER FUNDING TABLE (Unaudited)
(Dollars in thousands)
| | | | | | | | | | | | | | | |
| | | 2004
| | 2003
|
ACTUAL
| | 3rd qtr
| | 2nd qtr
| | 1st qtr
| | 4th qtr
| | 3rd qtr
|
Non-interest-bearing demand deposits | | $ | 1,477,061 | | $ | 1,297,942 | | $ | 1,229,981 | | $ | 1,233,272 | | $ | 1,158,281 |
Interest-bearing demand deposits | | | 389,986 | | | 238,646 | | | 257,931 | | | 223,096 | | | 258,845 |
Savings deposits | | | 3,979,107 | | | 3,493,196 | | | 3,610,996 | | | 3,447,033 | | | 3,488,911 |
Time deposits | | | 4,308,194 | | | 3,752,417 | | | 3,672,439 | | | 3,612,132 | | | 3,706,107 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Total deposits | | | 10,154,348 | | | 8,782,201 | | | 8,771,347 | | | 8,515,533 | | | 8,612,144 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Short-term borrowings | | | 921,175 | | | 844,738 | | | 931,792 | | | 994,896 | | | 780,608 |
Trust preferred securities | | | 185,067 | | | 145,583 | | | 169,669 | | | 164,805 | | | 171,176 |
Debt and FHLB advances | | | 1,804,739 | | | 1,291,123 | | | 986,750 | | | 1,310,976 | | | 1,276,302 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Total funding sources | | $ | 13,065,329 | | $ | 11,063,645 | | $ | 10,859,558 | | $ | 10,986,210 | | $ | 10,840,230 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| | |
| | | 2004
| | 2003
|
AVERAGE
| | 3rd qtr
| | 2nd qtr
| | 1st qtr
| | 4th qtr
| | 3rd qtr
|
Non-interest-bearing demand deposits | | $ | 1,508,074 | | $ | 1,297,932 | | $ | 1,228,468 | | $ | 1,214,825 | | $ | 1,180,213 |
Interest-bearing demand deposits | | | 353,368 | | | 239,174 | | | 238,777 | | | 262,812 | | | 252,475 |
Savings deposits | | | 4,014,051 | | | 3,554,212 | | | 3,558,869 | | | 3,517,407 | | | 3,489,416 |
Time deposits | | | 4,337,033 | | | 3,724,467 | | | 3,650,512 | | | 3,647,421 | | | 3,799,532 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Total deposits | | | 10,212,526 | | | 8,815,785 | | | 8,676,626 | | | 8,642,465 | | | 8,721,636 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Short-term borrowings | | | 867,547 | | | 788,596 | | | 988,628 | | | 917,789 | | | 824,163 |
Trust preferred securities | | | 182,288 | | | 163,503 | | | 164,859 | | | 165,800 | | | 164,569 |
Debt and FHLB advances | | | 1,734,164 | | | 1,145,664 | | | 1,083,015 | | | 1,194,018 | | | 1,153,474 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Total funding sources | | $ | 12,996,525 | | $ | 10,913,548 | | $ | 10,913,128 | | $ | 10,920,072 | | $ | 10,863,842 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
7
Supplemental Financial Information - Third Quarter 2004
The following asset quality information does not include Sky Financial Solutions.
| | | | | | | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
| |
ASSET QUALITY DATA:
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Non-accrual loans | | $ | 122,050 | | | $ | 95,674 | | | $ | 90,132 | | | $ | 81,979 | | | $ | 87,188 | |
Restructured loans | | | 556 | | | | 575 | | | | 585 | | | | 599 | | | | 1,245 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total non-performing loans | | | 122,606 | | | | 96,249 | | | | 90,717 | | | | 82,578 | | | | 88,433 | |
Investment securities | | | 11,705 | | | | — | | | | — | | | | — | | | | — | |
Other real estate owned | | | 11,924 | | | | 10,766 | | | | 10,775 | | | | 10,441 | | | | 7,583 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total non-performing assets | | $ | 146,235 | | | $ | 107,015 | | | $ | 101,492 | | | $ | 93,019 | | | $ | 96,016 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loans 90 days or more past due & still accruing | | $ | 17,183 | | | $ | 12,841 | | | $ | 26,039 | | | $ | 13,841 | | | $ | 11,906 | |
Net charge-offs | | | 8,106 | | | | 10,402 | | | | 6,565 | | | | 9,330 | | | | 9,086 | |
Allowance for credit losses | | | 147,479 | | | | 125,661 | | | | 125,043 | | | | 124,943 | | | | 122,617 | |
| | |
| | | 2004
| | | 2003
| |
ASSET QUALITY RATIOS:
| | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
| |
Non-accrual loans to total loans | | | 1.19 | % | | | 1.09 | % | | | 1.05 | % | | | 0.95 | % | | | 1.04 | % |
Non-performing loans to total loans | | | 1.19 | | | | 1.09 | | | | 1.06 | | | | 0.96 | | | | 1.05 | |
Non-performing assets to total assets | | | 1.00 | | | | 0.87 | | | | 0.84 | | | | 0.72 | | | | 0.76 | |
Loans 90 days or more past due and still accruing to total loans | | | 0.17 | | | | 0.15 | | | | 0.30 | | | | 0.16 | | | | 0.14 | |
Net charge-offs to average loans | | | 0.32 | | | | 0.48 | | | | 0.30 | | | | 0.43 | | | | 0.43 | |
Allowance for credit losses to non-performing loans | | | 120.29 | | | | 130.56 | | | | 137.84 | | | | 151.30 | | | | 138.66 | |
Allowance for credit losses to non-performing assets | | | 100.85 | | | | 117.42 | | | | 123.20 | | | | 134.32 | | | | 127.70 | |
Allowance for credit losses to total loans | | | 1.44 | | | | 1.43 | | | | 1.46 | | | | 1.45 | | | | 1.46 | |
8
Supplemental Financial Information - Third Quarter 2004
SKY FINANCIAL GROUP, INC.
*NON-GAAP DISCLOSURE RECONCILIATIONS
(Dollars in thousands)
Core operating earnings are net income adjusted to exclude discontinued operations, merger, integration and restructuring expenses and the results of certain significant transactions or events not representative of ongoing operations (“non-operating items”). Cash operating earnings are core operating earnings adjusted to exclude the after-tax effect of amortizing core deposits and other intangibles. Management believes that both core operating earnings and cash operating earnings assist the investor in understanding the impact of non-operating items and amortization of intangibles on reported results.
Core operating earnings
The following reconciles GAAP income from continuing operations to core operating earnings for each of the five quarters presented in the tables:
| | | | | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
|
| | | 3rd qtr
| | | 2nd qtr
| | 1st qtr
| | | 4th qtr
| | | 3rd qtr
|
Income from continuing operations | | $ | 46,148 | | | $ | 40,201 | | $ | 39,952 | | | $ | 39,585 | | | $ | 40,439 |
| | |
|
|
| |
|
| |
|
|
| |
|
|
| |
|
|
Merger, integration and restructuring expense | | | 3,831 | | | | — | | | 346 | | | | 1,091 | | | | — |
Non-operating gains | | | — | | | | — | | | — | | | | (934 | ) | | | — |
Tax effect | | | (1,341 | ) | | | — | | | (121 | ) | | | (55 | ) | | | — |
| | |
|
|
| |
|
| |
|
|
| |
|
|
| |
|
|
After-tax non-operating items | | | 2,490 | | | | — | | | 225 | | | | 102 | | | | — |
| | |
|
|
| |
|
| |
|
|
| |
|
|
| |
|
|
Core operating earnings | | $ | 48,638 | | | $ | 40,201 | | $ | 40,177 | | | $ | 39,687 | | | $ | 40,439 |
| | |
|
|
| |
|
| |
|
|
| |
|
|
| |
|
|
Merger, integration and restructuring expense in 2004 reflect charges associated with the acquisition of Second Bancorp, Inc. and the sale of Sky Financial Solutions, Inc. in the third and first quarters, respectively.
Merger, integration and restructuring expense in 2003 reflect the impact of charges for the acquisition GLB Bancorp, Inc. in the fourth quarter. The non- operating gain recognized in the fourth quarter of 2003 relates to a gain on the sale of a building.
Core operating earnings is used as the numerator to calculate core operating return on average assets, core operating return on average equity and core operating earnings per share. Additionally, non-operating items are deducted from non-interest expense in the numerator and non-interest income in the denominator of the core operating efficiency ratio efficiency ratio disclosed in the tables. The comparable information on a GAAP basis is also provided in the tables.
9
Supplemental Financial Information - Third Quarter 2004
Cash operating earnings
The following reconciles core operating earnings to cash operating earnings for each of the five quarters presented in these tables:
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| | | 2004
| | | 2003
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| | | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
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Core operating earnings | | $ | 48,638 | | | $ | 40,201 | | | $ | 40,177 | | | $ | 39,687 | | | $ | 40,439 | |
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Amortization of core deposits and other intangible assets | | | 3,553 | | | | 1,943 | | | | 1,907 | | | | 1,903 | | | | 1,869 | |
Tax effect | | | (1,244 | ) | | | (680 | ) | | | (667 | ) | | | (666 | ) | | | (654 | ) |
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After-tax non-operating items | | | 2,309 | | | | 1,263 | | | | 1,240 | | | | 1,237 | | | | 1,215 | |
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Cash operating earnings | | $ | 50,947 | | | $ | 41,464 | | | $ | 41,417 | | | $ | 40,924 | | | $ | 41,654 | |
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Cash operating earnings is used as the numerator to calculate the cash operating return on average tangible equity and the cash operating return on average tangible assets. The denominator of each ratio is adjusted to deduct the average balance of intangible assets during the period. The comparable GAAP information is also included in the tables.
10
Supplemental Financial Information - Third Quarter 2004
The following table reconciles average GAAP equity to average tangible equity for the nine months ended September 30, 2004 and 2003, as well as for each of the period ends presented in the tables.
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| | | September 30,
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| | | 2004
| | | 2003
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Average GAAP equity | | $ | 1,162,211 | | | $ | 885,362 | |
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Goodwill | | | 439,409 | | | | 162,222 | |
Core deposits and other intangibles | | | 74,976 | | | | 54,619 | |
Deferred taxes | | | (26,242 | ) | | | (19,117 | ) |
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| | | | 488,143 | | | | 197,724 | |
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Average tangible equity | | $ | 674,068 | | | $ | 687,638 | |
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| | | 2004
| | | 2003
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| | | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
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Average GAAP equity | | $ | 1,390,013 | | | $ | 1,060,518 | | | $ | 1,033,599 | | | $ | 978,324 | | | $ | 916,309 | |
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Goodwill | | | 436,148 | | | | 198,414 | | | | 193,561 | | | | 174,660 | | | | 162,568 | |
Core deposits and other intangibles | | | 75,939 | | | | 49,056 | | | | 50,474 | | | | 54,176 | | | | 53,626 | |
Deferred taxes | | | (26,579 | ) | | | (17,170 | ) | | | (17,666 | ) | | | (18,962 | ) | | | (18,769 | ) |
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| | | | 485,508 | | | | 230,300 | | | | 226,369 | | | | 209,874 | | | | 197,425 | |
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Average tangible equity | | $ | 904,505 | | | $ | 830,218 | | | $ | 807,230 | | | $ | 768,450 | | | $ | 718,884 | |
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The following table reconciles average GAAP assets to average tangible assets for the nine months ended September 30, 2004 and 2003, as well as for each of the period ends presented in the tables.
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| | | September 30,
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| | | 2004
| | | 2003
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Average GAAP assets | | $ | 13,180,681 | | | $ | 11,950,564 | |
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Goodwill | | | 439,409 | | | | 162,222 | |
Core deposits and other intangibles | | | 74,976 | | | | 54,619 | |
Deferred taxes | | | (26,242 | ) | | | (19,117 | ) |
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| | | | 488,143 | | | | 197,724 | |
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Average tangible assets | | $ | 12,692,538 | | | $ | 11,752,840 | |
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| | | 2004
| | | 2003
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| | | 3rd qtr
| | | 2nd qtr
| | | 1st qtr
| | | 4th qtr
| | | 3rd qtr
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Average GAAP assets | | $ | 14,523,149 | | | $ | 12,114,421 | | | $ | 12,889,715 | | | $ | 12,808,243 | | | $ | 12,626,082 | |
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Goodwill | | | 436,148 | | | | 198,414 | | | | 193,561 | | | | 174,660 | | | | 162,568 | |
Core deposits and other intangibles | | | 75,939 | | | | 49,056 | | | | 50,474 | | | | 54,176 | | | | 53,626 | |
Deferred taxes | | | (26,579 | ) | | | (17,170 | ) | | | (17,666 | ) | | | (18,962 | ) | | | (18,769 | ) |
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| | | | 485,508 | | | | 230,300 | | | | 226,369 | | | | 209,874 | | | | 197,425 | |
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Average tangible assets | | $ | 14,037,641 | | | $ | 11,884,121 | | | $ | 12,663,346 | | | $ | 12,598,369 | | | $ | 12,428,657 | |
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11
Supplemental Financial Information - Third Quarter 2004
The following table reconciles GAAP earnings per share to core operating earnings per share and cash operating earnings per share:
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| | | September 30,
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Basic EPS
| | 2004
| | | 2003
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Net income | | $ | 1.49 | | | $ | 1.30 | |
After-tax earnings from discontinued operations | | | (0.19 | ) | | | (0.02 | ) |
After-tax merger, integration and restructuring | | | 0.03 | | | | 0.03 | |
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Core operating earnings | | | 1.33 | | | | 1.31 | |
After-tax amortization of core deposits and other intangible assets | | | 0.05 | | | | 0.04 | |
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Cash operating earnings | | $ | 1.38 | | | $ | 1.35 | |
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| | | 2004
| | | 2003
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| | | 3rd qtr
| | 2nd qtr
| | 1st qtr
| | | 4th qtr
| | | 3rd qtr
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Net income | | $ | 0.44 | | $ | 0.43 | | $ | 0.63 | | | $ | 0.45 | | | $ | 0.46 | |
After-tax earnings from discontinued operations | | | — | | | — | | | (0.20 | ) | | | (0.02 | ) | | | (0.01 | ) |
After-tax merger, integration and restructuring | | | 0.02 | | | — | | | — | | | | — | | | | — | |
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Core operating earnings | | | 0.46 | | | 0.43 | | | 0.43 | | | | 0.43 | | | | 0.45 | |
After-tax amortization of core deposits and other intangible assets | | | 0.02 | | | 0.01 | | | 0.01 | | | | 0.01 | | | | 0.01 | |
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Cash operating earnings | | $ | 0.48 | | $ | 0.44 | | $ | 0.44 | | | $ | 0.44 | | | $ | 0.46 | |
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| | | September 30,
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Diluted EPS
| | 2004
| | | 2003
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Net income | | $ | 1.47 | | | $ | 1.29 | |
After-tax earnings from discontinued operations | | | (0.19 | ) | | | (0.02 | ) |
After-tax merger, integration and restructuring | | | 0.03 | | | | 0.03 | |
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Core operating earnings | | | 1.31 | | | | 1.29 | |
After-tax amortization of core deposits and other intangible assets | | | 0.05 | | | | 0.04 | |
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Cash operating earnings | | $ | 1.36 | | | $ | 1.33 | |
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12
Supplemental Financial Information - Third Quarter 2004
| | | | | | | | | | | | | | | | | | |
| | | 2004
| | | 2003
| |
| | | 3rd qtr
| | 2nd qtr
| | 1st qtr
| | | 4th qtr
| | | 3rd qtr
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Net income | | $ | 0.43 | | $ | 0.43 | | $ | 0.62 | | | $ | 0.45 | | | $ | 0.46 | |
After-tax earnings from discontinued operations | | | — | | | — | | | (0.20 | ) | | | (0.02 | ) | | | (0.01 | ) |
After-tax merger, integration and restructuring | | | 0.03 | | | — | | | 0.01 | | | | — | | | | — | |
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Core operating earnings | | | 0.46 | | | 0.43 | | | 0.43 | | | | 0.43 | | | | 0.45 | |
After-tax amortization of core deposits and other intangible assets | | | 0.02 | | | 0.01 | | | 0.01 | | | | 0.01 | | | | 0.01 | |
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Cash operating earnings | | $ | 0.48 | | $ | 0.44 | | $ | 0.44 | | | $ | 0.44 | | | $ | 0.46 | |
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— end —
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