EXHIBIT 99.1
[LOGO]
FOR FURTHER INFORMATION:
Dennis Klaeser, CFO
PrivateBancorp, Inc.
312-683-7100
FOR IMMEDIATE RELEASE
PRIVATEBANCORP REPORTS RECORD EARNINGS PER SHARE OF $0.38
Earnings per share up 23 percent over second quarter 2004
Chicago, IL, July 18, 2005--- PrivateBancorp, Inc. (NASDAQ: PVTB) today
reported earnings of $0.38 per diluted share for the second quarter 2005
compared to second quarter 2004 earnings per diluted share of $0.31, reflecting
an increase of 23 percent. Net income for the second quarter 2005 was $7.9
million compared to second quarter 2004 net income of $6.5 million. Net income
for the six months ended June 30, 2005 was $15.7 million, or $0.75 per diluted
share, compared to net income of $12.4 million, or $0.60 per diluted share for
the six months ended June 30, 2004, reflecting a 25 percent increase in diluted
earnings per share between periods. Financial results for the three-month and
six-month period ended June 30, 2005 include the financial results of The
PrivateBank - Michigan since it was acquired on June 20, 2005.
"PrivateBancorp experienced a solid second quarter in terms of growth
and profitability. We announced and completed our entry into the Detroit market
through the The PrivateBank - Michigan acquisition. Our new Milwaukee office,
which is in temporary space, and our Gold Coast office completed their first
full quarter of operations and are winning new clients and exhibiting strong
momentum. Geographic expansion, coupled with ongoing investments in highly
experienced managing directors, are key factors driving the Company's growth,"
said Ralph B. Mandell, Chairman, President and CEO.
"While investing for tomorrow, we remain focused on executing our
business strategy. Our unique approach to private banking continues to drive
balance sheet growth and strong financial performance. Excluding the acquisition
of The PrivateBank - Michigan, loans outstanding increased by 8 percent during
the quarter and core deposits increased by 6 percent. Credit quality remains
strong and the underlying trends continue to be positive," Mandell said.
On June 20, 2005 PrivateBancorp, Inc. announced completion of its
acquisition of Bloomfield Hills Bancorp. Inc., the holding company of a single
bank subsidiary now referred to as The PrivateBank - Michigan with assets of
$342.8 million at closing. The PrivateBank - Michigan has three banking offices
located in the affluent Detroit area communities of Bloomfield Hills, Grosse
Pointe and Rochester as well as a trust and wealth management unit and a
mortgage-banking subsidiary. The $64.0 million cash acquisition is expected to
be accretive to the Company's 2005 diluted earnings per share. The transaction
was primarily funded with the issuance of $50.0 million in fixed and floating
rate trust preferred securities through PrivateBancorp Statutory Trust II, a
newly created business trust subsidiary. The Company recorded $42.4 million in
goodwill and $3.7 million in client intangibles in connection with the closing.
For the second quarter 2005, net interest income of the Company totaled
$21.8 million compared to second quarter 2004 net interest income of $17.3
million, primarily due to growth in earning assets compared to the year earlier
period. Net interest margin (on a tax equivalent basis) was 3.53 percent in the
second quarter 2005, up slightly from 3.51 percent in the prior year second
quarter and down from 3.57 percent in the first quarter 2005. During the second
quarter 2005, total cost of funds increased by 31 basis points from first
quarter 2005, as a result of increases in money market deposit rates, the
repricing of wholesale funding and to a lesser extent, the impact of the
issuance of $50.0 million of trust preferred securities on June 20, 2005 in
connection with The PrivateBank - Michigan acquisition. Yield on average
interest earning assets increased by 23 basis points during the quarter due
primarily to increases in the prime rate. Approximately 70
2
percent of the loan portfolio is indexed to the prime rate of interest or
otherwise adjusts with other short-term interest rates.
Investment securities were $769.2 million at June 30, 2005, relatively
unchanged from March 31, 2005 levels and up 6 percent from $722.6 million at
June 30, 2004. Investment securities of The PrivateBank - Michigan were $5.1
million at June 30, 2005. During the second quarter 2005, the annualized yield
on the Federal Home Loan Bank of Chicago ("FHLB Chicago") stock dividend was
unchanged at 5.5 percent. On July 15, 2005, the Company redeemed $10.0 million
of its FHLB Chicago stock, reducing this investment to $157.0 million.
The provision for loan losses was $1.9 million in the second quarter
2005, compared to $0.7 million in the prior year second quarter and $0.9 million
in the first quarter 2005. The increase in the provision for loan losses
reflects the impact of continued strong loan growth and an increase in net
charge-offs during the quarter. Net charge-offs totaled $310,000 in the second
quarter 2005 versus net recoveries of $51,000 in the prior year quarter and net
recoveries of $60,000 in the first quarter 2005. The allowance for loan losses
as a percentage of total loans was 1.15 percent as of June 30, 2005, unchanged
from March 31, 2005 and down from 1.23 percent at June 30, 2004. At June 30,
2005, nonperforming loans as a percentage of total loans were 0.17 percent, up
from 0.16 percent at March 31, 2005 and up from 0.06 percent at June 30, 2004.
The growth in non-interest income during the second quarter 2005 as
compared to the prior year second quarter was primarily driven by growth in
wealth management income, mortgage banking income and bank-owned life insurance
("BOLI") income. Wealth management fee income increased to $2.5 million for the
second quarter 2005, up from $2.1 million in the second quarter 2004 and up from
$2.3 million in the first quarter 2005. Wealth management assets under
management increased 25 percent to $2.0 billion at June 30, 2005 compared to
$1.6 billion at June 30, 2004 and $1.7 billion at March 31, 2005, reflecting the
addition of $210.0 million of assets under management as a result of The
PrivateBank - Michigan acquisition. Excluding the acquisition, wealth management
3
assets under management at June 30, 2005 were even with first quarter 2005
levels. Mortgage banking income grew 38 percent to $1.1 million for the second
quarter 2005 compared to $0.8 million for the second quarter 2004 and $0.7
million during the first quarter 2005. Income from BOLI increased to $317,000
from $125,000 in the second quarter 2004 and was down from $326,000 in the first
quarter 2005. The increase in BOLI revenue as compared to the prior year quarter
results from an additional $22.0 million BOLI investment made in the third
quarter 2004.
For the second quarter 2005, a $972,000 loss from an interest rate swap
combined with security gains of $1.045 million, resulted in a $73,000 net gain,
compared to a net gain of $159,000 in the second quarter 2004 and $374,000 in
the first quarter 2005.
Non-interest expense increased to $12.9 million in the second quarter
2005 from $11.2 million in the prior year quarter and $12.6 million in first
quarter 2005. The 15 percent increase in non-interest expense as compared to the
second quarter 2004 is primarily attributable to increases in personnel,
occupancy and data processing costs. The increase in non-interest expense on a
quarter-linked basis of $316,000 is due primarily to the addition of The
PrivateBank - Michigan since closing of the acquisition. The Company continues
to add experienced managing directors to support growth. Full-time equivalent
employees at quarter's end increased to 362 from 252 at June 30, 2004 and from
278 at March 31, 2005. The acquisition of The PrivateBank - Michigan added 73
full-time equivalent employees, including 18 managing directors. At June 30,
2005, the Company had 105 managing directors compared to 71 at June 30, 2004 and
84 managing directors at March 31, 2005. However, as a result of the growth
achieved, the efficiency ratio was 47 percent in the second quarter 2005
compared to 51 percent in the prior year quarter and 48 percent in the first
quarter 2005.
Total assets were $3.2 billion at June 30, 2005 compared to $2.2
billion at June 30, 2004, an increase of 46 percent. Excluding The PrivateBank -
Michigan total assets of $418.6 million, the Company had assets of $2.8 billion
at June 30, 2005 compared to $2.6 billion in assets at March 31, 2005, an
increase of 7 percent. At June 30, 2005, total
4
loans were $2.2 billion, versus $1.4 billion at June 30, 2004 and $1.7 billion
at March 31, 2005. The PrivateBank - Michigan had $315.8 million in total loans
at June 30, 2005.
Total deposits were $2.4 billion at June 30, 2005, up from $1.7 billion
at June 30, 2004 and up from $2.0 billion at March 31, 2005. Excluding the
$301.3 million in deposits acquired in The PrivateBank - Michigan acquisition,
deposits increased by 5 percent to $2.1 billion during the second quarter 2005
as compared to total deposits of $2.0 billion at March 31, 2005. Core deposits,
defined as total deposits less brokered deposits, increased 61 percent to $2.0
billion compared to $1.3 billion at June 30, 2004, and increased 25 percent from
$1.6 billion at March 31, 2005. Brokered deposits were $385.7 million at June
30, 2005, a decrease of 7 percent, or $28.1 million, from $413.8 million at June
30, 2004, and relatively unchanged from $387.4 million at March 31, 2005. The
PrivateBank - Michigan did not have any brokered deposits at June 30, 2005.
Brokered deposits as a percentage of total deposits declined to 16 percent as of
June 30, 2005 compared to 25 percent at June 30, 2004 and 19 percent at March
31, 2005. Funds borrowed, which include Federal Home Loan Bank advances,
increased 52 percent to $464.8 million at June 30, 2005 from $306.4 million at
June 30, 2004, and increased 36 percent from $340.7 million at March 31, 2005.
The PrivateBank - Michigan had $39.9 million of funds borrowed at June 30, 2005.
During the quarter, prior to the closing of the acquisition of The
PrivateBank - Michigan, the Company completed a private placement of $7.6
million of its common stock to investors in that bank's market area, including
certain members of the management team, who purchased $2.9 million of stock.
PrivateBancorp, Inc. was organized in 1989 to provide highly
personalized financial services primarily to affluent individuals,
professionals, owners of closely-held businesses and commercial real estate
investors. The Company uses a European tradition of "private banking" as a model
to develop lifetime relationships with its clients. Utilizing a team of highly
qualified managing directors, The PrivateBank tailors products and services to
meet each client's needs in personal and commercial banking services and
5
wealth management services. The Company, which has assets of $3.2 billion as of
June 30, 2005, currently has banking offices in downtown Chicago, Chicago's Gold
Coast, Wilmette, Oak Brook, St. Charles, Lake Forest, Winnetka, and Geneva,
Illinois; in Bloomfield Hills, Rochester and Grosse Pointe, Michigan; in St.
Louis, Missouri; and in Milwaukee, Wisconsin.
Additional information can be found in the Investor Relations section
of PrivateBancorp, Inc.'s website at http://www.pvtb.com.
Forward-Looking Statements: Statements contained in this news release that are
not historical facts may constitute forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors which could have a material adverse
effect on the operations and future prospects of the Company include, but are
not limited to, fluctuations in market rates of interest and loan and deposit
pricing, greater than anticipated deterioration in asset quality due to a
prolonged economic downturn in the greater Chicago, Detroit and St. Louis
metropolitan areas, legislative or regulatory changes, adverse developments in
the Company's loan or investment portfolios, changes in the current redemption
practices of the FHLBC relating to its stock, slower than anticipated growth of
its business or unanticipated business declines, unforeseen difficulties in
integrating the acquisition of The PrivateBank - Michigan or higher than
expected operational costs, unexpected difficulties in the continued integration
of or in operating our mortgage banking business, unanticipated construction or
other delays relating to our new office to be located in Milwaukee, Wisconsin,
competition and the possible dilutive effect of potential acquisitions,
expansion or future capital raises. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. The Company assumes no obligation to update
publicly any of these statements in light of future events.
Editor's Note: Financial highlights attached.
# # #
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CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
INTEREST INCOME
Interest and fees on loans........... $ 29,198 $ 18,702 $ 54,789 $ 36,382
Interest on investment securities.... 9,428 7,820 18,641 15,749
Interest on short-term investments... 93 4 127 10
----------- ----------- ----------- -----------
TOTAL INTEREST INCOME................ 38,719 26,526 73,557 52,141
----------- ----------- ----------- -----------
INTEREST EXPENSE
Interest on deposits................. 13,586 7,155 24,838 13,248
Interest on borrowings............... 2,750 1,552 5,224 3,038
Interest on long-term debt -
trust preferred securities......... 591 485 1,076 970
----------- ----------- ----------- -----------
TOTAL INTEREST EXPENSE............... 16,927 9,192 31,138 17,256
----------- ----------- ----------- -----------
NET INTEREST INCOME.................. 21,792 17,334 42,419 34,885
Provision for loan losses............ 1,900 724 2,802 2,050
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION.. 19,892 16,610 39,617 32,835
----------- ----------- ----------- -----------
NON INTEREST INCOME
Wealth management income............. 2,468 2,129 4,783 4,087
Mortgage banking income.............. 1,076 782 1,818 1,246
Other income......................... 885 561 1,751 1,119
Net securities (losses) gains........ 1,045 (1,166) 940 (168)
Gains (losses) on interest rate swap. (972) 1,325 (493) 259
----------- ----------- ----------- -----------
TOTAL NON INTEREST INCOME............ 4,502 3,631 8,799 6,543
----------- ----------- ----------- -----------
NON INTEREST EXPENSE
Salaries and benefits................ 7,158 6,057 14,176 12,092
Occupancy expense.................... 1,804 1,350 3,542 2,710
Professional fees.................... 1,343 1,451 2,676 2,565
Marketing............................ 645 703 1,259 1,198
Data processing...................... 627 513 1,209 960
Amortization of intangibles.......... 57 42 99 84
Insurance............................ 270 207 533 422
Other operating expenses............. 995 897 1,988 1,728
----------- ----------- ----------- -----------
TOTAL NON INTEREST EXPENSE........... 12,899 11,220 25,482 21,759
----------- ----------- ----------- -----------
Minority interest expense............ 73 65 149 132
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES........... 11,422 8,956 22,785 17,487
----------- ----------- ----------- -----------
Income tax expense................... 3,523 2,500 7,080 5,081
----------- ----------- ----------- -----------
NET INCOME........................... $ 7,899 $ 6,456 $ 15,705 $ 12,406
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING.. 20,065,931 19,706,993 19,985,936 19,541,468
DILUTED AVERAGE SHARES OUTSTANDING... 20,971,907 20,708,906 20,884,463 20,506,098
EARNINGS PER SHARE
Basic................................ $ 0.39 $ 0.33 $ 0.79 $ 0.63
Diluted.............................. $ 0.38 $ 0.31 $ 0.75 $ 0.60
NOTE 1: Certain reclassifications have been made to prior period statements to
place them on a basis comparable with the current period financial statements.
7
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CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
06/30/05 12/31/04 06/30/04
---------- ---------- ----------
UNAUDITED AUDITED UNAUDITED
ASSETS
Cash and due from banks......... $ 33,359 $ 49,534 $ 22,414
Short-term investments.......... 74,873 1,120 1,779
Investment securities:
available-for-sale............ 769,218 763,985 722,582
Loans held for sale............. 12,532 7,200 6,419
Loans........................... 2,192,542 1,653,363 1,407,586
Allowance for loan losses....... (25,152) (18,986) (17,304)
---------- ---------- ----------
Net loans....................... 2,167,390 1,634,377 1,390,282
Premises and equipment, net..... 8,580 6,486 5,711
Goodwill........................ 62,981 20,547 20,547
Other assets.................... 73,139 52,568 29,436
---------- ---------- ----------
TOTAL ASSETS.................... $3,202,072 $2,535,817 $2,199,170
========== ========== ==========
LIABILITIES
Non-interest bearing deposits... $ 245,019 $ 165,170 $ 163,543
Interest bearing deposits....... 2,162,322 1,707,465 1,509,861
---------- ---------- ----------
Total deposits.................. 2,407,341 1,872,635 1,673,404
---------- ---------- ----------
Funds borrowed.................. 464,799 414,519 306,447
Long-term debt - trust
preferred securities.......... 78,000 20,000 20,000
Other liabilities............... 32,026 34,590 25,650
---------- ---------- ----------
TOTAL LIABILITIES............... 2,982,166 2,341,744 2,025,501
---------- ---------- ----------
STOCKHOLDERS' EQUITY
Common stock and additional
paid-in-capital............... 133,346 120,491 119,499
Treasury stock.................. (2,635) (2,207) (1,662)
Retained earnings............... 88,659 73,789 57,682
Accumulated other
comprehensive income.......... 9,179 7,056 3,052
Deferred compensation........... (8,643) (5,056) (4,902)
---------- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY...... 219,906 194,073 173,669
---------- ---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY............ $3,202,072 $2,535,817 $2,199,170
========== ========== ==========
BOOK VALUE PER SHARE............ $ 10.51 $ 9.51 $ 8.54
Note 1: Certain reclassifications have been made to prior period statements to
place them on a basis comparable with the current period financial statements.
8
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KEY FINANCIAL DATA
UNAUDITED
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
2Q05 1Q05 4Q04 3Q04 2Q04
---------- ---------- ---------- ---------- ----------
KEY STATISTICS
Net income................ $ 7,899 $ 7,806 $ 7,526 $ 7,063 $ 6,456
Basic earnings per share.. $ 0.39 $ 0.39 $ 0.38 $ 0.35 $ 0.33
Diluted earnings per
share................... $ 0.38 $ 0.37 $ 0.36 $ 0.34 $ 0.31
Return on average total
assets.................. 1.18% 1.24% 1.24% 1.23% 1.20%
Return on average total
equity.................. 15.45% 15.81% 15.65% 15.29% 14.86%
Dividend payout ratio..... 11.73% 11.77% 8.11% 8.63% 9.42%
Fee revenue as a
percent of total
revenue(1).............. 16.89% 15.98% 16.03% 17.41% 16.69%
Wealth management
assets under management. 1,984,371 1,735,292 1,727,479 1,620,487 1,590,119
Non-interest income to
average assets.......... 0.67% 0.68% 0.61% 0.71% 0.67%
Non-interest expense to
average assets.......... 1.92% 2.01% 1.98% 2.08% 2.08%
Net overhead ratio(2)..... 1.25% 1.32% 1.37% 1.37% 1.41%
Efficiency ratio(3)....... 47.0% 48.3% 48.3% 50.0% 50.8%
Net interest margin(4).... 3.53% 3.57% 3.63% 3.58% 3.51%
Yield on average
earning assets.......... 6.16% 5.93% 5.70% 5.46% 5.27%
Cost of average
interest-bearing
liabilities............. 2.99% 2.68% 2.36% 2.14% 2.03%
Net interest spread(5).... 3.17% 3.25% 3.34% 3.32% 3.24%
Tax equivalent
adjustment to net
interest income(6)...... $ 1,125 $ 1,107 $ 1,040 $ 1,224 $ 1,100
<FN>
(1) Represents wealth management, mortgage banking and other income as a
percentage of the sum of net interest income and wealth management,
mortgage banking and other income.
(2) Non-interest expense less non-interest income divided by average total
assets.
(3) Non-interest expense divided by the sum of net interest income, on a
tax equivalent basis, plus non-interest income.
(4) Net interest income, on a tax equivalent basis, divided by average
interest-earning assets.
(5) Yield on average interest-earning assets less rate on average
interest-bearing liabilities.
(6) The company adjusts GAAP reported net interest income by the tax
equivalent adjustment amount to account for the tax attributes on
federally tax exempt municipal securities. For GAAP purposes, tax
benefits associated with federally tax exempt municipal securities are
recorded as a benefit in income tax expense. The following table
reconciles reported net interest income to net interest income on a tax
equivalent basis for the periods presented:
</FN>
RECONCILIATION OF NET INTEREST INCOME TO NET
INTEREST INCOME ON A TAX EQUIVALENT BASIS
2Q05 1Q05 4Q04 3Q04 2Q04
------- ------- ------- ------- -------
Net interest income......... $21,792 $20,627 $20,172 $18,485 $17,334
Tax equivalent adjustment
to net interest income.... 1,125 1,107 1,040 1,224 1,100
------- ------- ------- ------- -------
Net interest income, tax
equivalent basis.......... $22,917 $21,734 $21,212 $19,709 $18,434
------- ------- ------- ------- -------
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KEY FINANCIAL DATA
UNAUDITED
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
2Q05 1Q05 4Q04 3Q04 2Q04
----------- ----------- ----------- ----------- -----------
BALANCE SHEET RATIOS
Loans to Deposits
(period end)................ 91.08% 86.35% 88.29% 81.34% 84.12%
Average interest-earning
assets to average
interest-bearing
liabilities................. 113.6 113.5 114.1 114.0 114.9
PER SHARE DATA
Dividends..................... $ 0.045 $ 0.045 $ 0.030 $ 0.030 $ 0.030
Book value
(period end)................ $ 10.51 $ 9.79 $ 9.51 $ 9.19 $ 8.54
Tangible book
value (period end)(1)....... $ 7.22 $ 8.68 $ 8.40 $ 8.07 $ 7.41
SHARE PRICE DATA (PERIOD END)
Closing Price................. $ 35.38 $ 31.41 $ 32.23 $ 26.96 $ 27.48
Diluted earnings
multiple (2)................ 23.21 x 20.93 x 22.57 x 19.99 x 22.10 x
Book value multiple........... 3.37 x 3.21 x 3.39 x 2.93 x 3.22 x
Common Stock Information
Outstanding shares at end
of period................... 20,928,869 20,467,143 20,400,103 20,346,303 20,344,073
Number of shares used to compute:
Basic earnings
per share................... 20,065,931 19,973,853 19,911,662 19,921,465 19,706,993
Diluted earnings
per share................... 20,971,907 20,998,095 20,992,893 20,947,078 20,708,906
Capital Ratios (period end)(3):
Total equity to
total assets................ 6.87% 7.70% 7.65% 7.95% 7.90%
Total risk-based
capital ratio............... 10.92% 11.07% 11.29% 11.80% 12.14%
Tier-1 risk-based
capital ratio............... 9.49% 10.03% 10.24% 10.71% 11.00%
Leverage ratio................ 8.22% 7.61% 7.71% 7.74% 7.83%
<FN>
(1) Tangible book value is total capital less goodwill and other
intangibles divided by outstanding shares at end of period.
(2) Period end closing stock price divided by annualized quarterly earnings
for the quarter then ended.
(3) Capital ratios for the most recent period presented in the press
release are based on preliminary data.
</FN>
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KEY FINANCIAL DATA
UNAUDITED
(DOLLARS IN THOUSANDS)
2Q05 1Q05 4Q04 3Q04 2Q04
------- ------- ------- ------- -------
SUMMARY INCOME STATEMENT
INTEREST INCOME
Interest and fees on loans........... $29,198 $25,591 $22,802 $20,315 $18,702
Interest on investment
securities......................... 9,428 9,213 9,386 8,436 7,820
Interest on short-term
investments........................ 93 34 12 18 4
------- ------- ------- ------- -------
TOTAL INTEREST INCOME.................. 38,719 34,838 32,200 28,769 26,526
INTEREST EXPENSE....................... 16,927 14,211 12,028 10,284 9,192
------- ------- ------- ------- -------
NET INTEREST INCOME.................... 21,792 20,627 20,172 18,485 17,334
Provision for loan losses............ 1,900 902 1,498 851 724
------- ------- ------- ------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES............ 19,892 19,725 18,674 17,634 16,610
------- ------- ------- ------- -------
NON INTEREST INCOME
Wealth management income............. 2,468 2,316 2,113 2,117 2,129
Mortgage banking income.............. 1,076 742 834 776 782
Other income......................... 885 865 903 1,006 561
Net securities (losses) gains........ 1,045 (105) (123) 1,259 (1,166)
Gains (losses) on interest rate swap. (972) 479 (11) (1,118) 1,325
------- ------- ------- ------- -------
TOTAL NON INTEREST INCOME.............. 4,502 4,297 3,716 4,040 3,631
------- ------- ------- ------- -------
NON INTEREST EXPENSE
Salaries and benefits................ 7,158 7,018 7,124 6,811 6,057
Occupancy expense.................... 1,804 1,738 1,567 1,394 1,350
Professional fees.................... 1,343 1,333 1,082 1,407 1,451
Marketing............................ 645 614 695 628 703
Data processing...................... 627 582 529 520 513
Insurance............................ 270 263 276 221 207
Amortization of intangibles.......... 57 42 42 42 42
Other operating expenses............. 995 993 717 860 897
------- ------- ------- ------- -------
TOTAL NON INTEREST EXPENSE............. 12,899 12,583 12,032 11,883 11,220
------- ------- ------- ------- -------
Minority interest expense............ 73 76 64 74 65
------- ------- ------- ------- -------
INCOME BEFORE INCOME TAXES............. 11,422 11,363 10,294 9,717 8,956
Income tax expense................... 3,523 3,557 2,768 2,654 2,500
------- ------- ------- ------- -------
NET INCOME............................. $ 7,899 $ 7,806 $ 7,526 $ 7,063 $ 6,456
======= ======= ======= ======= =======
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KEY FINANCIAL DATA
UNAUDITED
(DOLLARS IN THOUSANDS)
2Q05 1Q05 4Q04 3Q04 2Q04
------- ------- ------- ------- -------
CREDIT QUALITY
KEY RATIOS
Net charge-offs
(recoveries) to average loans......... 0.07% -0.01% 0.07% 0.11% -0.01%
Total non-performing loans
to total loans........................ 0.17% 0.16% 0.15% 0.17% 0.06%
Total non-performing
assets to total assets................ 0.11% 0.11% 0.10% 0.10% 0.04%
Nonaccrual loans to:
total loans........................... 0.06% 0.08% 0.07% 0.05% 0.01%
total assets.......................... 0.04% 0.06% 0.04% 0.03% 0.01%
Allowance for loan losses to:
total loans........................... 1.15% 1.15% 1.15% 1.21% 1.23%
non-performing loans.................. 689% 717% 751% 729% 2175%
nonaccrual loans...................... 2076% 1377% 1742% 2228% 11422%
NON-PERFORMING ASSETS:
Loans delinquent over 90 days......... $ 2,026 $ 1,335 $ 1,438 $ 1,638 $ 644
Nonaccrual loans...................... 1,212 1,448 1,090 797 151
OREO.................................. 413 - - - -
------- ------- ------- ------- -------
Total non-performing assets............. $ 3,651 $ 2,783 $ 2,528 $ 2,435 $ 795
======= ======= ======= ======= =======
NET LOAN CHARGE-OFFS (RECOVERIES):
Loans charged off....................... $ 328 $ 3 $ 330 $ 831 $ 0
(Recoveries)............................ (18) (63) (67) (427) (51)
------- ------- ------- ------- -------
Net charge-offs (recoveries)............ $ 310 ($ 60) $ 263 $ 404 ($ 51)
======= ======= ======= ======= =======
PROVISION FOR LOAN LOSSES................. $ 1,900 $ 902 $ 1,498 $ 851 $ 724
======= ======= ======= ======= =======
ALLOWANCE FOR LOAN LOSSES SUMMARY
Balance at beginning of period.......... $19,948 $18,986 $17,751 $17,304 $16,529
Provision............................... 1,900 902 1,498 851 724
Net charge-offs (recoveries)............ 310 (60) 263 404 (51)
------- ------- ------- ------- -------
Balance at end of period................ $21,538 $19,948 $18,986 $17,751 $17,304
======= ======= ======= ======= =======
NET LOAN CHARGE-OFFS (RECOVERIES):
Commercial real estate.................. - - - - -
Residential real estate................. - - - - -
Commercial.............................. $ 270 ($ 60) $ 184 ($ 314) ($ 49)
Personal................................ $ 40 - 79 718 (2)
Home equity............................. - - - - -
Construction............................ - - - - -
------- ------- ------- ------- -------
Total net loan charge-offs (recoveries). $ 310 ($ 60) $ 263 $ 404 ($ 51)
======= ======= ======= ======= =======
12
[LOGO]
BALANCE SHEETS
(DOLLARS IN THOUSANDS)
unaudited unaudited audited unaudited unaudited
06/30/05 03/31/05 12/31/04 09/30/04 06/30/04
---------- ---------- ---------- ---------- ----------
ASSETS
- ------
Cash and due from banks......... $ 33,359 $ 29,943 $ 49,534 $ 44,814 $ 22,414
Short-term investments.......... 74,873 5,047 1,120 11,004 1,779
Investment securities:
available-for-sale............ 769,218 764,917 763,985 759,328 722,582
Loans held for sale............. 12,532 8,678 7,200 8,014 6,419
Loans........................... 2,192,542 1,729,882 1,653,363 1,471,083 1,407,586
Less: Allowance for
loan losses................. (25,152) (19,948) (18,986) (17,751) (17,304)
---------- ---------- ---------- ---------- ----------
Net loans..................... 2,167,390 1,709,934 1,634,377 1,453,332 1,390,282
---------- ---------- ---------- ---------- ----------
Premises and
equipment, net................ 8,580 6,990 6,486 6,013 5,711
Goodwill........................ 62,981 20,547 20,547 20,547 20,547
Other assets.................... 73,139 55,634 52,568 49,314 29,436
---------- ---------- ---------- ---------- ----------
Total Assets................ $3,202,072 $2,601,690 $2,535,817 $2,352,366 $2,199,170
========== ========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
------
Non-interest bearing
deposits...................... $ 245,019 $ 173,558 $ 165,170 $ 170,315 $ 163,543
Interest bearing
demand deposits............... 118,089 100,598 106,846 89,538 89,810
Savings and money
market deposits............... 1,153,918 1,016,876 854,163 864,794 683,205
Time deposits................... 890,315 712,207 746,456 683,885 736,846
---------- ---------- ---------- ---------- ----------
Total deposits................ 2,407,341 2,003,239 1,872,635 1,808,532 1,673,404
Funds borrowed.................. 464,799 340,737 414,519 301,558 306,447
Long-term debt - Trust
Preferred Securities.......... 78,000 20,000 20,000 20,000 20,000
Other liabilities............... 32,026 37,342 34,590 35,241 25,650
---------- ---------- ---------- ---------- ----------
Total liabilities............. 2,982,166 2,401,318 2,341,744 2,165,331 2,025,501
Stockholders' equity............ 219,906 200,372 194,073 187,035 173,669
---------- ---------- ---------- ---------- ----------
Total Liabilities and
Stockholders' Equity...... $3,202,072 $2,601,690 $2,535,817 $2,352,366 $2,199,170
========== ========== ========== ========== ==========
13
[LOGO]
AVERAGE QUARTERLY BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS)
06/30/05 03/31/05 12/31/04 09/30/04 06/30/04
-------- -------- -------- -------- --------
ASSETS
- ------
Cash and due from banks........... $ 28,483 $ 32,559 $ 27,459 $ 26,706 $ 31,788
Short-term investments............ 12,643 4,245 1,878 3,949 1,944
Investment securities:
available-for-sale.............. 768,523 752,794 775,602 744,446 713,099
Loans held for sale............... 8,517 7,339 6,324 4,704 10,335
Loans............................. 1,803,580 1,686,713 1,535,642 1,432,003 1,370,030
Less:Allowance for loan losses. (20,665) (19,360) (18,167) (17,781) (16,838)
---------- ---------- ---------- ---------- ----------
Net loans...................... 1,782,915 1,667,353 1,517,475 1,414,222 1,353,192
---------- ---------- ---------- ---------- ----------
Premises and equipment, net....... 7,241 6,966 6,251 5,788 5,854
Goodwill.......................... 25,486 20,547 20,547 20,547 19,242
Other assets...................... 62,007 53,770 52,493 51,115 28,874
---------- ---------- ---------- ---------- ----------
Total Assets.................... $2,695,815 $2,545,573 $2,408,029 $2,271,477 $2,164,328
========== ========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
------
Non-interest bearing deposits..... $ 190,477 $ 171,845 $ 168,942 $ 157,312 $ 152,817
Interest bearing demand deposits.. 110,956 100,843 99,758 89,754 88,982
Savings and money market deposits. 1,038,059 918,113 867,787 780,746 660,324
Time deposits..................... 743,221 748,909 688,156 719,528 724,794
---------- ---------- ---------- ---------- ----------
Total deposits................. 2,082,713 1,939,710 1,824,643 1,747,340 1,626,917
Funds borrowed.................... 348,216 357,712 342,184 293,942 320,766
Long-term debt - Trust Preferred
Securities.................... 27,229 20,000 20,000 20,000 20,000
Other liabilities................. 32,583 28,046 30,412 26,901 22,469
---------- ---------- ---------- ---------- ----------
Total liabilities.............. 2,490,741 2,345,468 2,217,239 2,088,183 1,990,152
Stockholders' equity.............. 205,074 200,105 190,790 183,294 174,176
---------- ---------- ---------- ---------- ----------
Total Liabilities and
Stockholders' Equity......... $2,695,815 $2,545,573 $2,408,029 $2,271,477 $2,164,328
========== ========== ========== ========== ==========
14
[LOGO]
AVERAGE YEAR-TO-DATE BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS)
06/30/05 03/31/05 12/31/04 09/30/04 06/30/04
-------- -------- -------- -------- --------
ASSETS
- ------
Cash and due from banks........... $ 30,370 $ 32,559 $ 30,387 $ 31,557 $ 33,630
Short-term investments............ 8,540 4,245 2,358 2,468 1,797
Investment securities:
available-for-sale............. 760,700 752,794 731,152 727,466 701,963
Loans held for sale............... 8,710 7,339 7,028 5,350 8,842
Loans............................. 1,744,754 1,686,713 1,399,849 1,365,261 1,314,683
Less: Allowance for loan
losses...................... (20,016) (19,360) (17,087) (16,844) (16,191)
---------- ---------- ---------- ---------- ----------
Net loans...................... 1,724,738 1,667,353 1,382,762 1,348,417 1,298,492
---------- ---------- ---------- ---------- ----------
Premises and equipment, net....... 7,104 6,966 6,013 5,895 6,008
Goodwill.......................... 23,116 20,547 20,850 20,917 20,290
Other assets...................... 58,612 53,770 39,735 35,278 25,929
---------- ---------- ---------- ---------- ----------
Total Assets................... $2,621,890 $2,545,573 $2,220,285 $2,177,348 $2,096,951
========== ========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
------
Non-interest bearing deposits..... $ 181,274 $ 171,845 $ 151,588 $ 147,818 $ 140,188
Interest bearing demand deposits.. 105,927 100,843 90,888 87,906 86,978
Savings and money market deposits. 978,402 918,113 722,923 683,121 620,493
Time deposits..................... 746,049 748,909 712,399 734,053 721,038
---------- ---------- ---------- ---------- ----------
Total deposits................. 2,011,652 1,939,710 1,677,798 1,652,898 1,568,697
Funds borrowed.................... 352,931 357,712 315,719 302,291 313,348
Long-term debt - Trust Preferred
Securities..................... 23,615 20,000 20,000 20,000 20,000
Other liabilities................. 30,963 28,046 26,370 24,646 21,459
---------- ---------- ---------- ---------- ----------
Total liabilities.............. 2,419,161 2,345,468 2,039,887 1,999,835 1,923,504
Stockholders' equity.............. 202,729 200,105 180,398 177,513 173,447
---------- ---------- ---------- ---------- ----------
Total Liabilities and
Stockholders' Equity........ $2,621,890 $2,545,573 $2,220,285 $2,177,348 $2,096,951
========== ========== ========== ========== ==========
15