Provident Financial Services, Inc. Announces Quarterly Earnings
and Declares Quarterly Cash Dividend
JERSEY CITY, NJ, October 25, 2004 - Provident Financial Services, Inc.
(NYSE:PFS) (the "Company") reported net income of $13.3 million for the three
months ended September 30, 2004 and $32.2 million for the nine months ended
September 30, 2004, compared to $8.1 million and $10.5 million, respectively,
for the same periods in 2003. Basic and diluted earnings per share were $0.19
for the quarter and $0.54 for the nine months ended September 30, 2004, compared
to basic and diluted earnings per share of $0.14 and $0.16 for third quarter
2003 and for the period from January 15, 2003, the date of the Company's stock
conversion, through September 30, 2003, respectively. Earnings and per share
data for 2004 reflected the impact of the Company's acquisition of First
Sentinel Bancorp, Inc. ("First Sentinel") from July 14, 2004, the date the
acquisition was completed. Third quarter 2004 earnings were impacted by one-time
expenses related to the merger and integration of First Sentinel's operations of
approximately $870 thousand, net of tax. Net income for the nine months ended
September 30, 2003 reflected the one-time expense associated with the $15.6
million net of tax contribution to The Provident Bank Foundation.
Paul M. Pantozzi, Chairman and Chief Executive Officer, commented, "Third
quarter results confirm that our acquisition of First Sentinel has significantly
enhanced the performance capabilities of the Company's franchise. Through the
efforts of many dedicated employees, including the newest members of our team,
the process of integrating operations and systems has proceeded according to
expectations and is now substantially complete. The addition of a loyal customer
base in one of New Jersey's best markets allows us to more effectively execute
our proven business model of building relationships with our retail and
commercial clients. We continue to drive toward our strategic objectives of
improving operating efficiency, maximizing core deposits and building our
commercial loan portfolios. "
Declaration of Quarterly Dividend
On October 21, 2004, the Company's Board of Directors declared a quarterly cash
dividend of $0.06 per common share. The dividend is payable on November 30, 2004
to stockholders of record as of the close of business on November 12, 2004.
Balance Sheet Summary
Total assets grew to $6.54 billion at September 30, 2004, compared to $4.28
billion at December 31, 2003, with the increase primarily due to the First
Sentinel acquisition and internal growth in the Company's loan portfolio. The
fair value of assets acquired in the First Sentinel transaction totaled $2.57
billion at July 14, 2004, while deposits and borrowings assumed totaled $1.36
billion and $566.5 million, respectively.
The Company's net loans increased $308.8 million, or 13.9%, during the nine
months ended September 30, 2004, excluding $1.18 billion in loans added through
the First Sentinel acquisition. Internal loan growth highlights for the nine
month period ended September 30, 2004 included an $86.2 million, or 34.4%,
increase in commercial and industrial loans, an $85.8 million, or 28.7%,
increase in consumer loans, and a $124.0 million, or 7.9%, increase in loans
secured by real estate. The increase in consumer loans was largely attributable
to an increase in indirect auto loans, as well as fixed-rate home equity loans
and home equity lines of credit.
Excluding $744.5 million of investments acquired through the First Sentinel
acquisition, total investments decreased $469.9 million, or 28.1%, during the
nine months ended September 30, 2004. Proceeds from investment sales, maturities
and scheduled cash flows were used to fund loan growth and the cash portion of
the acquisition consideration.
Core deposits increased $52.9 million, or 3.0%, for the nine months ended
September 30, 2004, excluding $858.9 million in core deposits acquired through
the First Sentinel acquisition. Total deposits were $4.09 billion at September
30, 2004, with core deposits representing 65.4% of total deposits. The Company's
continued emphasis on core account generation has contributed to an 18 basis
point reduction in the cost of interest-bearing deposits to 1.29% for third
quarter 2004 compared to 1.47% for third quarter 2003. Compared to the trailing
quarter, the cost of deposits decreased six basis points from 1.35% for the
second quarter.
Common stock repurchases for the three and nine months ended September 30, 2004
totaled 2.9 million shares at an average cost of $17.58 per share and 3.2
million shares at an average cost of $17.76 per share, respectively. An
additional 738 thousand shares remain eligible for repurchase under the current
common stock repurchase authorization. At September 30, 2004, book value per
share and tangible book value per share totaled $15.00 and $9.32, respectively.
<page>
Results of Operations
Net Interest Margin
The net interest margin increased 29 basis points to 3.43% for the quarter ended
September 30, 2004 compared with 3.14% for the same period in 2003. This
represented an increase of 15 basis points versus the trailing quarter net
interest margin of 3.28%. Purchase accounting adjustments contributed
approximately 14 basis points to the net interest margin for the quarter ended
September 30, 2004. The weighted average rate for interest-earning assets was
4.89% for the three months ended September 30, 2004 compared with 4.48% for the
three months ended September 30, 2003 and 4.58% for the trailing quarter. The
weighted average rate for interest-bearing liabilities was 1.70% for the quarter
ended September 30, 2004, compared with 1.75% for the third quarter of 2003 and
1.69% for the quarter ended June 30, 2004.
The net interest margin increased six basis points to 3.41% for the nine months
ended September 30, 2004 compared with 3.35% for the same period in 2003. The
weighted average rate for interest-earning assets was 4.77% for the nine months
ended September 30, 2004 compared with 4.82% for the nine months ended September
30, 2003. The weighted average rate for interest-bearing liabilities was 1.69%
for the nine months ended September 30, 2004, compared with 1.95% for the same
period in 2003.
Non-Interest Income
Non-interest income totaled $8.2 million for the quarter and $22.6 million for
the nine months ended September 30, 2004, representing increases of $1.4
million, or 21.5%, and $5.2 million, or 30.0%, respectively, compared to the
same periods in 2003. Fee income from retail deposits increased $1.4 million, or
32.9%, to $5.8 million for the three months ended September 30, 2004, compared
to $4.3 million for the three months ended September 30, 2003. For the nine
months ended September 30, 2004, fee income from retail deposits increased $3.2
million, or 26.2%, to $15.2 million compared to $12.0 million for the same
period in 2003. The increase in deposit fees was largely attributable to the
implementation of an overdraft privilege product in late 2003.
Non-Interest Expense
For the three months ended September 30, 2004, non-interest expense increased
$8.6 million or 33.5% to $34.3 million compared to $25.7 million for the three
months ended September 30, 2003. For the three months ended September 30, 2004,
compensation and benefits expense increased $3.7 million compared with the same
period in 2003, primarily as a result of the addition of some staff from First
Sentinel, increases in stock-based compensation and executive severance.
Amortization of intangibles increased $1.1 million for the quarter ended
September 30, 2004 compared with the same period in 2003, primarily as a result
of amortization of the core deposit intangible recorded in connection with the
First Sentinel acquisition. Additional increases in occupancy expense of $1.1
million, advertising expense of $791 thousand and data processing expense of
$490 thousand for the quarter ended September 30, 2004, compared with the same
period in 2003, are also due primarily to the acquisition and integration of the
First Sentinel operations.
For the nine months ended September 30, 2004, non-interest expense decreased
$10.9 million or 11.1% to $87.1 million compared to $98.0 million for the nine
months ended September 30, 2003. A $24.0 million decrease in charitable
contributions associated with the formation of The Provident Bank Foundation in
early 2003 was partially offset by increases in compensation expense of $7.6
million, including stock-based compensation and executive severance. Advertising
expense increased $2.3 million for the nine months ended September 30, 2004,
compared with the same period in 2003, as a result of increased marketing
efforts in support of the Company's focus on core deposit and loan generation,
as well as the cost of customer communications associated with the integration
of the First Sentinel business. Occupancy expense increased $1.8 million for the
nine months ended September 30, 2004 compared with the same period in 2003,
primarily as a result of the additional 22 branch locations obtained through the
First Sentinel acquisition.
Asset Quality
The Company continues to emphasize asset quality. Total non-performing loans as
of September 30, 2004 were $4.9 million or 0.13% of loans compared to $4.0
million or 0.17% of total loans at June 30, 2004 and $5.8 million or 0.28% of
total loans at September 30, 2003.
About the Company
Provident Financial Services, Inc. is the holding company for The Provident
Bank. Founded in 1839, the Bank currently operates 77 full service branches
throughout northern and central New Jersey.
<page>
Post Earnings Conference Call
Representatives of the Company will hold a conference call for investors at
10:00 a.m. Eastern Time on Monday October 25, 2004 regarding highlights of the
Company's third quarter 2004 financial results. The call can be accessed by
dialing 1-800-237-9752 (Domestic) or 1-617-847-8706 (International) and stating
the pass code number: 94742996. Internet access to the call is also available
(listen only) at www.providentnj.com by going to Investor Relations and clicking
on Webcast.
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may be
identified by reference to a future period or periods, or by the use of
forward-looking terminology, such as "may," "will," "believe," "expect,"
"estimate," "anticipate," "continue," or similar terms or variations on those
terms, or the negative of those terms. Forward-looking statements are subject to
numerous risks and uncertainties, including, but not limited to, those related
to the economic environment, particularly in the market areas in which the
Company operates, competitive products and pricing, fiscal and monetary policies
of the U.S. Government, changes in government regulations affecting financial
institutions, including regulatory fees and capital requirements, changes in
prevailing interest rates, acquisitions and the integration of acquired
businesses, credit risk management, asset-liability management, the financial
and securities markets and the availability of and costs associated with sources
of liquidity.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company
wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements. The Company does not
undertake and specifically declines any obligation to publicly release the
result of any revisions, which may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.
<page>
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Condition
September 30, 2004 (Unaudited) and December 31, 2003
(Dollars in Thousands)
Assets September 30, 2004 December 31, 2003
--------------------------------- ----------------------------
Cash and due from banks $ 134,553 $ 106,228
Federal funds sold 4,000 --
Short-term investments 11,823 69,624
--------------------------------- ----------------------------
Total cash and cash equivalents 150,376 175,852
--------------------------------- ----------------------------
Investment securities (market value of $465,122
(unaudited) and $524,429 at September 30, 2004
and December 31, 2003, respectively) 458,885 517,789
Securities available for sale, at fair value 1,485,283 1,151,829
Federal Home Loan Bank stock 52,464 34,585
Loans 3,743,686 2,237,367
Less allowance for loan losses 33,630 20,631
--------------------------------- ----------------------------
Net loans 3,710,056 2,216,736
--------------------------------- ----------------------------
Other real estate owned, net 32 41
Banking premises and equipment, net 64,758 46,741
Accrued interest receivable 24,343 16,842
Intangible assets 429,570 23,938
Bank owned life insurance 104,648 71,506
Other assets 59,567 29,019
--------------------------------- ----------------------------
Total assets $ 6,539,982 $ 4,284,878
================================= ============================
Liabilities and Stockholders' Equity
Deposits:
Demand deposits $ 1,113,028 $ 774,988
Savings deposits 1,561,614 987,877
Certificates of deposit of $100,000 or more 250,233 148,306
Other time deposits 1,167,120 784,805
--------------------------------- ----------------------------
Total deposits 4,091,995 2,695,976
Mortgage escrow deposits 14,876 11,061
Borrowed funds 1,239,239 736,328
Subordinated debentures 27,286 --
Other
liabilities 31,984 24,394
--------------------------------- ----------------------------
Total liabilities 5,405,380 3,467,759
--------------------------------- ----------------------------
Stockholders' Equity:
Preferred stock, $0.01 par value,
50,000,000 shares authorized, none issued -- --
Common stock, $0.01 par value, 200,000,000 shares authorized,
79,879,017 shares issued and 75,616,638 shares outstanding at
September 30, 2004 and 61,538,300 shares issued and
60,600,100 shares outstanding at December 31, 2003,
Respectively 799 615
Additional paid-in capital 959,339 606,541
Retained earnings 345,163 324,250
Accumulated other comprehensive income 4,704 6,416
Treasury stock at cost (3,228,742 shares at September 30, 2004) (57,327) --
Unallocated common stock held by Employee Stock
Ownership Plan (76,477) (78,816)
Common Stock acquired by the Stock Award Plan (41,599) (41,887)
Common Stock acquired by the Directors' Deferred Fee Plan
(700,841 shares at September 30, 2004) (13,379) --
Deferred compensation - Directors' Deferred Fee Plan 13,379 --
-------------------------------- ----------------------------
Total stockholders' equity 1,134,602 817,119
-------------------------------- ----------------------------
Total liabilities and stockholders'
equity $ 6,539,982 $ 4,284,878
================================ ============================
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
Three Months and Nine Months Ended September 30, 2004 and 2003 (Unaudited)
(Dollars in Thousands)
Three Months Ended Nine Months Ended
September 30 September 30
----------------------------- ----------------------------
2004 2003 2004 2003
------------- --------------- ------------- --------------
Interest income:
Real estate secured loans $ 36,978 $ 20,371 $ 84,283 $ 62,563
Commercial loans 3,953 5,608 10,979 16,666
Consumer loans 6,552 4,470 15,948 13,859
Investment securities 4,799 4,194 14,522 12,724
Securities available for sale 14,423 8,738 32,603 30,854
Other short-term investments 108 126 408 370
Federal funds 95 347 469 1,040
------------- --------------- ------------- --------------
Total interest income 66,908 43,854 159,212 138,076
------------- --------------- ------------- --------------
Interest expense:
Deposits 11,321 8,792 27,123 30,962
Borrowed funds 8,404 4,325 18,008 11,137
Subordinated debentures 253 -- 253 --
------------- --------------- ------------- --------------
Total interest expense 19,978 13,117 45,384 42,099
------------- --------------- ------------- --------------
Net interest income 46,930 30,737 113,828 95,977
Provision for loan losses 1,050 160 2,700 1,060
------------- --------------- ------------- --------------
Net interest income after
provision for loan losses 45,880 30,577 111,128 94,917
------------- --------------- ------------- --------------
Non-interest income:
Fees 5,757 4,333 15,194 12,043
Net gain on securities transactions 577 665 1,312 661
Commissions 96 39 342 197
Bank owned life insurance 1,255 1,019 3,193 2,813
Other income 515 695 2,531 1,644
------------- --------------- ------------- --------------
Total non-interest income 8,200 6,751 22,572 17,358
------------- --------------- ------------- --------------
Non-interest expense:
Salaries and employee benefits 17,869 14,151 46,351 38,797
Net occupancy expense 4,837 3,727 12,355 10,562
Federal deposit insurance 141 105 347 339
Data processing expense 2,156 1,666 5,820 4,939
Advertising and promotion expense 1,853 1,062 4,897 2,554
Amortization of intangibles 1,953 863 3,048 2,997
Other operating expenses 5,531 4,154 14,265 13,766
Contribution to The Provident Bank Foundation -- -- -- 24,000
------------- --------------- ------------- --------------
Total non-interest expense 34,340 25,728 87,083 97,954
------------- --------------- ------------- --------------
Income before income tax 19,740 11,600 46,617 14,321
expense
Income tax expense 6,397 3,462 14,399 3,788
------------- --------------- ------------- --------------
Net income $ 13,343 $ 8,138 $ 32,218 $ 10,533
============= =============== ============= =============
Basic earnings per share $0.19 $0.14 $0.54 $0.16
Average basic shares outstanding 69,370,408 56,972,858 59,660,054 58,702,373
Diluted earnings per share $0.19 $0.14 $0.54 $0.16
Average diluted shares outstanding 69,370,675 57,174,970 59,660,492 58,774,166
<Page>
PROVIDENT FINANCIAL SERVICES, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data)(unaudited)
At or for the Three At or for the
Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2004 2003 2004 2003
---- ---- ---- ----
INCOME STATEMENT:
Net interest income $46,930 $30,737 $113,828 $95,977
Provision for loan losses 1,050 160 2,700 1,060
Non-interest income 8,200 6,751 22,572 17,358
Non-interest expense 34,340 25,728 87,083 97,954
Income before income tax expense 19,740 11,600 46,617 14,321
Net income 13,343 8,138 32,218 10,533
Basic earnings per share (1) $0.19 $0.14 $0.54 $0.16
Diluted earnings per share (1) $0.19 $0.14 $0.54 $0.16
Interest rate spread 3.19% 2.76% 3.08% 2.87%
Net interest margin 3.43% 3.17% 3.41% 3.35%
PROFITABILITY:
Annualized return on average assets 0.87% 0.78% 0.88% 0.34%
Annualized return on average equity 5.16% 3.84% 4.84% 1.74%
Annualized operating expense to
average assets 2.21% 2.47% 2.37% 3.21%
Efficiency ratio (net of foundation expense) (2) 62.29% 68.63% 63.84% 65.25%
ASSET QUALITY:
Non-performing loans 4,889 5,848
Other real estate owned 32 41
Non-performing loans to
total loans 0.13% 0.28%
Non-performing assets to
total assets 0.08% 0.14%
Allowance for loan losses 33,630 21,288
Allowance for loan losses to
non-performing loans 687.92% 364.02%
Allowance for loan losses to
total loans 0.90% 1.01%
AVERAGE BALANCE SHEET DATA:
Assets $6,154,411 $4,167,851 $4,886,347 $4,085,849
Loans, net 3,405,859 2,016,717 2,636,690 1,981,261
Earning assets 5,442,634 3,886,874 4,461,198 3,827,232
Core deposits 2,540,794 1,700,013 2,019,111 1,674,773
Borrowings 1,173,304 612,818 854,321 537,132
Interest-bearing liabilities 4,670,130 2,977,902 3,591,234 2,886,430
Stockholders' equity 1,034,078 846,885 889,517 809,046
Average yield on interest-
earning assets 4.89% 4.53% 4.77% 4.82%
Average cost of interest-
bearing liabilities 1.70% 1.77% 1.69% 1.95%
CAPITAL:
Leverage capital 12.73% 19.37% 12.73% 19.37%
Total risk-based capital 19.78% 35.39% 19.78% 35.39%
Average equity to
average assets 16.80% 20.32% 18.20% 19.80%
<page>
Notes
- ------
(1) Basic and Diluted Earnings Per Share for the nine months ended September
30, 2003, includes the results of operations from January 15, 2003, the
date the Company completed its Plan of Conversion, in the amount of
$9,553,000.
(2) Efficiency Ratio Calculation
Three Months Ended Nine Months Ended
September 30, September 30,
------------ -------------
2004 2003 2004 2003
---- ---- ---- ----
Net interest income $46,930 $ 30,737 $ 113,828 $ 95,977
Non-interest income 8,200 6,751 22,572 17,358
-------- -------- --------- --------
Total income $ 55,130 $ 37,488 $136,400 $113,335
======== ======== ========= ========
Non-interest expense $ 34,340 $ 25,728 $ 87,083 $ 97,954
LESS: Provident Bank Charitable Foundation Donation - - - (24,000)
-------- -------- --------- --------
Adjusted non-interest expense $ 34,340 $ 25,728 $ 87,083 $ 73,954
======== ======== ========= ========
Expense/Income: 62.29% 68.63% 63.84% 65.25%
====== ====== ====== ======
Average Quarterly Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) September 30, 2004 June 30, 2004
------------------ -------------
(Dollars in Thousands) Average Average Average Average
Balance Interest Yield Balance Interest Yield
--------------------------------------- ---------------------------------
Interest-Earning Assets:
Fed Funds Sold and
Other Short-Term Investments $ 58,043 $ 203 1.39% $ 147,058 $ 364 1.00%
Investment Securities (1) 474,110 4,799 4.03% 494,080 4,581 3.73%
Securities Available for Sale 1,455,892 14,258 3.90% 1,017,331 8,213 3.25%
Federal Home Loan Bank Stock 48,730 165 1.35% 32,090 131 1.64%
Net Loans (2)
Total Mortgage Loans 2,599,509 36,978 5.66% 1,625,142 23,539 5.83%
Total Commercial Loans 348,116 3,953 4.52% 342,126 3,728 4.38%
Total Consumer Loans 458,234 6,552 5.69% 323,698 4,761 5.92%
-------------- ------------ ----------- ----------
Total Interest-Earning Assets $ 5,442,634 66,908 4.89% $ 3,981,525 45,317 4.58%
-------------- ------------ ----------- ----------
Non-Interest Earning Assets:
Cash and Due from Banks 100,488 81,782
Other Assets 611,289 189,420
-------------- -----------
TOTAL ASSETS $ 6,154,411 $ 4,252,727
============== ===========
Interest-Bearing Liabilities:
Demand Deposits $ 659,449 1,530 0.92% $ 436,910 821 0.76%
Savings Deposits 1,498,412 2,965 0.79% 990,032 2,200 0.89%
Time Deposits 1,338,965 6,826 2.03% 937,851 4,915 2.11%
-------------- ------------ ----------- ----------
TOTAL DEPOSITS 3,496,826 11,321 1.29% 2,364,793 7,936 1.35%
-------------- ------------ ----------- ----------
Borrowed Funds 1,173,304 8,657 2.94% 693,534 4,885 2.83%
-------------- ------------ ----------- ----------
TOTAL BORROWINGS 1,173,304 8,657 2.94% 693,534 4,885 2.83%
-------------- ------------ ----------- ----------
Total Interest-Bearing Liabilities $ 4,670,130 19,978 1.70% $ 3,058,327 12,821 1.69%
-------------- ------------ ----------- ----------
Non-Interest Bearing Liabilities 450,203 379,555
-------------- -----------
TOTAL LIABILITIES 5,120,333 3,437,882
Equity 1,034,078 814,845
-------------- -----------
TOTAL LIAB & EQUITY $ 6,154,411 $ 4,252,727
============== ===========
Net interest income $ 46,930 $ 32,496
============ ==========
Net interest rate spread 3.19% 2.89%
==== ====
Net interest-earning assets $ 772,504 $ 923,198
============== ===========
Net interest margin (3) 3.43% 3.28%
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.17x 1.30x
============== ===========
- ----------------------------------------------
(1) Average oustanding balance amounts shown are amortized cost.
(2) Average outstanding balances shown net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Net interest income divided by average interest-earning assets.
<page>
The following table summarizes the net interest margin for the previous year,
inclusive.
09/30/04 06/30/04 3/31/04 12/31/03 09/30/03
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
------- -------- -------- -------- --------
Interest-Earning Assets:
Securities 3.79% 3.16% 3.53% 3.48% 2.84%
Net Loans 5.55% 5.62% 5.78% 5.70% 5.99%
Total Interest-Earning Assets 4.89% 4.58% 4.79% 4.67% 4.48%
Interest-Bearing Liabilities:
Total Deposits 1.29% 1.35% 1.35% 1.37% 1.47%
Total Borrowings 2.94% 2.83% 2.76% 2.61% 2.80%
Total Interest-Bearing Liabilities 1.70% 1.69% 1.67% 1.64% 1.75%
Interest Rate Spread 3.19% 2.89% 3.12% 3.03% 2.73%
Net Interest Margin 3.43% 3.28% 3.50% 3.41% 3.14%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.17x 1.30x 1.30x 1.30x 1.31x
Average YTD Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) September 30, 2004 September 30, 2003
------------------ ------------------
(Dollars in Thousands) Average Average Average Average
Balance Interest Yield Balance Interest Yield
-------------------------------------- ----------------------------------
Interest-Earning Assets:
Fed Funds Sold and
Other Short-Term Investments $ 106,645 $ 877 1.10% $ 170,558 $ 1,410 1.11%
Investment Securities (1) 494,534 14,522 3.92% 445,746 12,724 3.82%
Securities Available for Sale 1,185,256 32,192 3.63% 1,205,195 30,109 3.34%
Federal Home Loan Bank Stock 38,073 411 1.44% 24,472 745 4.07%
Net Loans (2)
Total Mortgage Loans 1,960,222 84,283 5.74% 1,287,717 62,563 6.50%
Total Commercial Loans 314,134 10,979 4.67% 425,918 16,666 5.23%
Total Consumer Loans 362,334 15,948 5.88% 267,626 13,859 6.92%
-------------- ------------ ------------ ---------
Total Interest-Earning Assets $ 4,461,198 159,212 4.77% $ 3,827,232 138,076 4.82%
-------------- ------------ ------------ ---------
Non-Interest Earning Assets:
Cash and Due from Banks 88,748 85,589
Other Assets 336,401 173,028
-------------- ------------
TOTAL ASSETS $ 4,886,347 $ 4,085,849
============== ============
Interest-Bearing Liabilities:
Demand Deposits $ 508,172 3,143 0.83% $ 402,695 2,741 0.91%
Savings Deposits 1,155,000 7,327 0.85% 940,605 9,441 1.34%
Time Deposits 1,073,741 16,653 2.07% 1,005,998 18,780 2.50%
-------------- ------------ ------------ ---------
TOTAL DEPOSITS 2,736,913 27,123 1.32% 2,349,298 30,962 1.76%
-------------- ------------ ------------ ---------
Borrowed Funds 854,321 18,261 2.86% 537,132 11,137 2.77%
-------------- ------------ ------------ ---------
TOTAL BORROWINGS 854,321 18,261 2.86% 537,132 11,137 2.77%
-------------- ------------ ------------ ---------
Total Interest-Bearing Liabilities $ 3,591,234 45,384 1.69% $ 2,886,430 42,099 1.95%
-------------- ------------ ------------ ---------
Non-Interest-Bearing Liabilities 405,596 390,373
-------------- ------------
TOTAL LIABILITIES 3,996,830 3,276,803
Equity 889,517 809,046
-------------- ------------
TOTAL LIAB & EQUITY $ 4,886,347 $ 4,085,849
============== ============
Net interest income $ 113,828 $ 95,977
============ =========
Net interest rate spread 3.08% 2.87%
==== ====
Net interest-earning assets $ 869,964 $ 940,802
============== ============
Net interest margin (3) 3.41% 3.35%
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.24x 1.33x
============== ============
- --------------------------------------------
(1) Average oustanding balance amounts shown are amortized cost.
(2) Average outstanding balances shown net of the allowance for loan losses,
deferred loan fees and expenses, loan premiums and discounts and include
non-accrual loans.
(3) Net interest income divided by average interest-earning assets.
<page>
The following table summarizes the net interest margin for the three previous
years, inclusive.
Nine Months Ended
---------------------------------------
09/30/04 09/30/03 09/30/02
Interest-Earning Assets: ---------------------------------------
Securities 3.51% 3.26% 4.84%
Net Loans 5.63% 6.28% 7.03%
Total Interest-Earning Assets 4.77% 4.82% 6.35%
Interest-Bearing Liabilities:
Total Deposits 1.32% 1.76% 2.52%
Total Borrowings 2.86% 2.77% 4.26%
Total Interest-Bearing Liabilities 1.69% 1.95% 2.66%
Interest Rate Spread 3.08% 2.87% 3.69%
Net Interest Margin 3.41% 3.35% 4.06%
Ratio of interest-earning assets to
interest-bearing liabilities 1.24x 1.33x 1.16x