NEWS RELEASE
CONTACT: Kenneth Wagner, SVP Investor Relations
Provident Financial Services, Inc.
(201) 915-5344
FOR RELEASE 5:00 P.M. Eastern Time: January 26, 2005
Provident Financial Services, Inc. Announces Increases in Quarterly and
Annual Earnings, Increase in Quarterly Dividend and Second Stock
Repurchase Program
JERSEY CITY, N.J., Jan 26 /PRNewswire-First Call/ -- Provident Financial
Services, Inc. (NYSE:PFS) (the "Company") reported net income of $17.1 million
for the three months ended December 31, 2004 and $49.3 million for the year
ended December 31, 2004, compared to $8.2 million and $18.7 million,
respectively, for the same periods in 2003. Basic and diluted earnings per share
were $0.25 and $0.24, respectively, for the quarter ended December 31, 2004,
compared to basic and diluted earnings per share of $0.15 for the quarter ended
December 31, 2003. Basic and diluted earnings per share were $0.80 for the year
ended December 31, 2004, compared to basic and diluted earnings per share of
$0.31 for the period from January 15, 2003, the date of the Company's stock
conversion, through December 31, 2003. 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. Fourth quarter and full year 2004 earnings were impacted by one-time
expenses related to the merger and integration of First Sentinel's operations of
approximately $291 thousand and $1.2 million, respectively, net of tax. Net
income for the year ended December 31, 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, "Our positive
fourth quarter results are indicative of our continued progress toward attaining
our strategic objectives of improving operating efficiency, maximizing core
deposits and building our commercial loan portfolios. We are pleased to share
our success with our shareholders and report that the Company's Board of
Directors has today approved an increase in our quarterly cash dividend and has
authorized a second stock repurchase program."
Declaration of Quarterly Dividend
On January 26, 2005, the Company's Board of Directors declared a quarterly cash
dividend of $0.07 per common share, an increase of 16.7% from the prior
quarter's cash dividend of $0.06 per share. The dividend is payable on February
28, 2005 to stockholders of record as of the close of business on February 11,
2005.
Authorization of Stock Repurchase Program
On January 26, 2005, the Company's Board of Directors authorized a new stock
repurchase program. The Company had completed all repurchases authorized under
the previous plan. Under this new authorization, the Company may repurchase
approximately 3.7 million shares, or five percent of the Company's outstanding
shares of common stock. Repurchases will be made from time to time and will be
effectuated through open market purchases, unsolicited negotiated transactions,
or in such other manner deemed appropriate by management. Completion of the
repurchase program will not be limited to a specific time period. The Company's
repurchase activities will take into account SEC safe harbor rules and guidance
for issuer repurchases.
Balance Sheet Summary
Total assets grew to $6.43 billion at December 31, 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.
Intangible assets grew $419.2 million to $443.1 million at December 31, 2004,
from $23.9 million at December 31, 2003, as a result of the goodwill and core
deposit intangibles recorded in connection with the First Sentinel acquisition.
At December 31, 2004, the goodwill and the core deposit intangibles related to
the First Sentinel acquisition totaled $390.2 million and $29.8 million,
respectively. The core deposit intangible is being amortized on an accelerated
basis over 8.8 years. The Company performs periodic impairment testing of
intangible assets. There was no impairment recognized in 2004.
The Company's net loans increased $272.2 million, or 12.3%, during the year
ended December 31, 2004, excluding $1.18 billion in net loans added through the
First Sentinel acquisition. Internal loan growth highlights for the year ended
December 31, 2004 included a $96.6 million, or 38.5%, increase in commercial and
industrial loans, a $98.2 million, or 32.8%, increase in consumer loans, and a
$108.1 million, or 6.9%, increase in loans secured by real estate. Prudent
growth in commercial and commercial real estate lending remains a focus of the
Company. The increase in consumer loans was largely attributable to an increase
in indirect auto loans, as well as in fixed-rate home equity loans and home
equity lines of credit.
Excluding $745.2 million of investments acquired through the First Sentinel
acquisition, total investments decreased $562.9 million, or 33.7%, during the
year ended December 31, 2004. Proceeds from investment sales, maturities and
scheduled cash flows were used to fund loan growth and the cash portion of the
First Sentinel acquisition consideration.
Core deposits, consisting of savings and demand deposit accounts, increased
$33.5 million, or 1.9%, for the year ended December 31, 2004, excluding $858.9
million in core deposits acquired through the First Sentinel acquisition. Total
deposits were $4.05 billion at December 31, 2004, with core deposits
representing 65.6% of total deposits.
Common stock repurchases for the three and twelve months ended December 31, 2004
totaled 738 thousand shares at an average cost of $18.41 per share and 4.0
million shares at an average cost of $17.88 per share, respectively. At December
31, 2004, book value per share and tangible book value per share totaled $15.34
and $9.36, respectively.
Results of Operations
Net Interest Margin
The net interest margin decreased three basis points to 3.38% for the quarter
ended December 31, 2004, compared with 3.41% for the same period in 2003. This
represented a decrease of five basis points versus the trailing quarter net
interest margin of 3.43%. The weighted average rate for interest-earning assets
was 4.90% for the three months ended December 31, 2004, compared with 4.67% for
the three months ended December 31, 2003 and 4.89% for the trailing quarter. The
weighted average rate for interest-bearing liabilities was 1.79% for the quarter
ended December 31, 2004, compared with 1.64% for the fourth quarter of 2003 and
1.70% for the quarter ended September 30, 2004. The increases in rates on
interest-bearing liabilities were primarily attributable to higher rates of
interest paid on savings and time deposits as a result of rising market interest
rates.
The net interest margin increased three basis points to 3.40% for the year ended
December 31, 2004, compared with 3.37% for the same period in 2003. The weighted
average rate for interest-earning assets was 4.81% for the year ended December
31, 2004, compared with 4.78% for the year ended December 31, 2003. The weighted
average rate for interest-bearing liabilities was 1.72% for the year ended
December 31, 2004, compared with 1.87% for the same period in 2003.
Non-Interest Income
Non-interest income totaled $6.6 million for the quarter and $29.2 million for
the year ended December 31, 2004, representing increases of $103 thousand, or
1.6%, and $5.3 million, or 22.3%, respectively, compared to the same periods in
2003. Fee income from retail deposits increased $933 thousand, or 21.8%, to $5.2
million for the three months ended December 31, 2004, compared to $4.3 million
for the three months ended December 31, 2003. For the year ended December 31,
2004, fee income from retail deposits increased $4.1 million, or 25.0%, to $20.4
million compared to $16.3 million for the same period in 2003. The increase in
deposit fees was largely attributable to the implementation of overdraft
privilege in late 2003.
Non-Interest Expense
For the three months ended December 31, 2004, non-interest expense increased
$3.4 million, or 11.9%, to $32.3 million compared to $28.8 million for the three
months ended December 31, 2003. Amortization of intangibles increased $1.5
million for the quarter ended December 31, 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 and data processing expense of $735
thousand for the quarter ended December 31, 2004, compared with the same period
in 2003, were also due primarily to the acquisition and integration of First
Sentinel's operations. Partially offsetting these increases, compensation and
employee benefits expense declined $1.1 million for the quarter ended December
31, 2004, compared with the same period in 2003. The decline in compensation and
benefits expense was a result of the capitalization of severance costs
attributable to the First Sentinel acquisition, as well as reductions in pension
expense and employee insurance costs, partially offset by an increase in
employee headcount.
For the year ended December 31, 2004, non-interest expense decreased $7.4
million, or 5.9%, to $119.3 million compared to $126.8 million for the year
ended December 31, 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 and employee benefits expense of
$6.4 million, including stock-based compensation and executive severance.
Occupancy expense increased $2.9 million for the year ended December 31, 2004,
compared with the same period in 2003, primarily as a result of the additional
22 branch locations obtained through the First Sentinel acquisition. Advertising
expense increased $2.2 million for the year ended December 31, 2004, compared
with the same period in 2003, as a result of as the cost of customer
communications associated with the integration of First Sentinel, as well as
increased marketing efforts in support of the Company's focus on loan and core
deposit generation. Data processing expense increased $1.6 million for the year
ended December 31, 2004, compared with the same period in 2003, due primarily to
the acquisition and integration of First Sentinel's operations. Furthermore,
amortization of intangibles increased $1.6 million for the year ended December
31, 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.
Income Tax Expense
For the three and twelve months ended December 31, 2004, the Company's effective
tax rates were 22.2% and 28.1%, respectively, compared with 28.3% and 27.3% for
the three and twelve months ended December 31, 2003, respectively. In the fourth
quarter of 2004, the Company reduced a valuation allowance against a deferred
tax asset created in connection with the formation of The Provident Bank
Foundation in early 2003. The reduction in valuation allowance resulted in a
decrease in fourth quarter 2004 income tax expense of $1.9 million. The
reduction in the valuation allowance was attributable to projected improvement
in the Company's ability to generate sufficient future taxable income to realize
the deferred tax asset. This improvement in the Company's future earnings
outlook was largely due to the successful acquisition and integration of First
Sentinel's business.
Asset Quality
The Company continues to emphasize asset quality. Total non-performing loans as
of December 31, 2004 were $6.4 million, or 0.17% of loans, compared to $4.9
million, or 0.13% of total loans at September 30, 2004, and $6.1 million, or
0.27% of total loans at December 31, 2003. At December 31, 2004, the Company's
allowance for loan losses was 0.91% of total loans and 529.5% of non-performing
loans, compared with 0.90% of total loans and 687.9% of non-performing loans at
September 30, 2004, and 0.92% of total loans and 336.7% of non-performing loans
at December 31, 2003. The provision for loan losses for the three months ended
December 31, 2004 totaled $900 thousand, compared with net charge-offs of $764
thousand. For the year ended December 31, 2004, the provision for loan losses
totaled $3.6 million, while net charge-offs were $3.4 million.
About the Company
Provident Financial Services, Inc. is the bank holding company for The Provident
Bank. The Bank currently operates 78 full service branches throughout northern
and central New Jersey.
Post Earnings Conference Call
Representatives of the Company will hold a conference call for investors at
10:00 a.m. Eastern Time on Thursday January 27, 2005 regarding highlights of the
Company's fourth quarter 2004 financial results. The call can be accessed by
dialing 1-866-800-8649 (Domestic) or 1-617-614-2703 (International) and stating
the pass code number: 46590451. 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.
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
Consolidated Statements of Condition
December 31, 2004 (Unaudited) and December 31, 2003
(Dollars in Thousands)
Assets December 31, 2004 December 31, 2003
--------------------------------- ----------------------------
Cash and due from banks $ 121,187 $ 106,228
Federal funds sold 16,000 --
Short-term investments 26,507 69,624
--------------------------------- ----------------------------
Total cash and cash equivalents 163,694 175,852
--------------------------------- ----------------------------
Investment securities (market value of $450,071
(unaudited) and $524,429 at December 31, 2004
and 2003, respectively) 445,633 517,789
Securities available for sale, at fair value 1,406,340 1,151,829
Federal Home Loan Bank stock 48,283 34,585
Loans 3,707,211 2,237,367
Less allowance for loan losses 33,766 20,631
--------------------------------- ----------------------------
Net loans 3,673,445 2,216,736
--------------------------------- ----------------------------
Other real estate owned, net 140 41
Banking premises and equipment, net 64,605 46,741
Accrued interest receivable 23,865 16,842
Intangible assets 443,148 23,938
Bank-owned life insurance 105,932 71,506
Other assets 58,237 29,019
--------------------------------- ----------------------------
Total assets $ 6,433,322 $ 4,284,878
================================= ============================
Liabilities and Stockholders' Equity
Deposits:
Demand deposits $ 1,116,812 $ 774,988
Savings deposits 1,538,466 987,877
Certificates of deposit of $100,000 or more 253,024 148,306
Other time deposits 1,142,171 784,805
--------------------------------- ----------------------------
Total deposits 4,050,473 2,695,976
Mortgage escrow deposits 15,389 11,061
Borrowed funds 1,166,064 736,328
Subordinated debentures 27,113 --
Other liabilities 37,507 24,394
--------------------------------- ----------------------------
Total liabilities 5,296,546 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 74,078,784 shares outstanding at
December 31, 2004 and 61,538,300 shares issued and
60,600,100 shares outstanding at December 31, 2003,
respectively 799 615
Additional paid-in capital 960,792 606,541
Retained earnings 358,678 324,250
Accumulated other comprehensive income 3,767 6,416
Treasury stock at cost (3,961,278 shares at December 31, 2004) (70,810) --
Unallocated common stock held by Employee Stock
Ownership Plan (76,101) (78,816)
Common Stock acquired by the Stock Award Plan (40,349) (41,887)
Common Stock acquired by the Directors' Deferred Fee Plan
(765,318 shares at December 31, 2004) (13,379) --
Deferred compensation - Directors' Deferred Fee Plan 13,379 --
-------------------------------- ----------------------------
Total stockholders' equity 1,136,776 817,119
-------------------------------- ----------------------------
Total liabilities and stockholders'
equity $ 6,433,322 $ 4,284,878
================================ ============================
PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDAIRY
Consolidated Statements of Income
Three Months and Year Ended December 31, 2004 and 2003
(Dollars in Thousands)
Three Months Ended Year Ended
December 31 December 31
----------------------------- ----------------------------
2004 2003 2004 2003
------------- --------------- ------------- --------------
(Unaudited) (Unaudited)
Interest income:
Real estate secured loans $ 39,313 $ 21,744 $ 121,291 $ 84,307
Commercial loans 5,025 4,045 18,309 20,711
Consumer loans 7,136 4,573 23,084 18,432
Investment securities 4,661 4,984 19,183 17,708
Securities available for sale 14,072 10,785 46,675 41,639
Other short-term investments 72 93 480 463
Federal funds 52 206 521 1,246
------------- --------------- ------------- --------------
Total interest income 70,331 46,430 229,543 184,506
------------- --------------- ------------- --------------
Interest expense:
Deposits 12,383 8,209 39,506 39,171
Borrowed funds 9,099 4,325 27,107 15,462
Subordinated debentures 319 -- 572 --
------------- --------------- ------------- --------------
Total interest expense 21,801 12,534 67,185 54,633
------------- --------------- ------------- --------------
Net interest income 48,530 33,896 162,358 129,873
Provision for loan losses 900 100 3,600 1,160
------------- --------------- ------------- --------------
Net interest income after
provision for loan losses 47,630 33,796 158,758 128,713
------------- --------------- ------------- --------------
Non-interest income:
Fees 5,215 4,282 20,409 16,325
Net (loss) gain on securities transactions (2) 455 1,310 1,116
Bank-owned life insurance 1,284 1,034 4,477 3,847
Other income 82 705 2,955 2,546
------------- --------------- ------------- --------------
Total non-interest income 6,579 6,476 29,151 23,834
------------- --------------- ------------- --------------
Non-interest expense:
Compensation and employee benefits 14,747 15,886 61,098 54,683
Net occupancy expense 4,653 3,595 17,008 14,157
Federal deposit insurance 156 101 503 440
Data processing expense 2,414 1,679 8,234 6,618
Advertising and promotion expense 1,072 1,216 5,969 3,770
Amortization of intangibles 2,218 702 5,266 3,699
Other operating expenses 6,991 5,646 21,256 19,412
Contribution to The Provident Bank Foundation -- -- -- 24,000
------------- --------------- ------------- --------------
Total non-interest expense 32,251 28,825 119,334 126,779
------------- --------------- ------------- --------------
Income before income tax expense 21,958 11,447 68,575 25,768
Income tax expense 4,875 3,236 19,274 7,024
------------- --------------- ------------- --------------
Net income $ 17,083 $ 8,211 $ 49,301 $ 18,744
============= =============== ============= ==============
Basic earnings per share $0.25 $0.15 $0.80 $0.31
Average basic shares outstanding 69,031,409 55,395,928 61,576,544 57,835,726
Diluted earnings per share $0.24 $0.15 $0.80 $0.31
Average diluted shares outstanding 69,766,411 55,299,358 61,932,173 57,965,640
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 Year Ended
December 31 December 31
----------- -----------
2004 2003 2004 2003
---- ---- ---- ----
INCOME STATEMENT:
Net interest income $48,530 $33,896 $162,358 $129,873
Provision for loan losses 900 100 3,600 1,160
Non-interest income 6,579 6,476 29,151 23,834
Non-interest expense 32,251 28,825 119,334 126,779
Income before income tax expense 21,958 11,447 68,575 25,768
Net income 17,083 8,211 49,301 18,744
Basic earnings per share (1) $0.25 $0.15 $0.80 $0.31
Diluted earnings per share (1) $0.24 $0.15 $0.80 $0.31
Interest rate spread 3.11% 3.03% 3.09% 2.91%
Net interest margin 3.38% 3.41% 3.40% 3.37%
PROFITABILITY:
Annualized return on average assets 1.05% 0.78% 0.93% 0.46%
Annualized return on average equity 6.06% 4.00% 5.06% 2.31%
Annualized operating expense to
average assets 1.99% 2.74% 2.25% 3.08%
Efficiency ratio (net of Foundation expense) (2) 58.52% 71.40% 62.31% 66.87%
ASSET QUALITY:
Non-performing loans 6,378 6,128
Other real estate owned 140 41
Non-performing loans to
total loans 0.17% 0.27%
Non-performing assets to
total assets 0.10% 0.14%
Allowance for loan losses 33,766 20,631
Allowance for loan losses to
non-performing loans 529.45% 336.67%
Allowance for loan losses to
total loans 0.91% 0.92%
AVERAGE BALANCE SHEET DATA:
Assets $6,485,607 $4,209,811 $5,315,860 $4,117,127
Loans, net 3,711,983 2,114,565 2,906,982 2,014,861
Earning assets 5,705,720 3,945,029 4,774,031 3,856,922
Core deposits 2,654,426 1,751,646 2,178,806 1,694,160
Borrowings 1,246,652 658,533 956,922 567,732
Interest-bearing liabilities 4,835,099 3,031,235 3,909,188 2,922,879
Stockholders' equity 1,128,147 821,146 974,963 812,452
Average yield on interest-
earning assets 4.90% 4.67% 4.81% 4.78%
Average cost of interest-
bearing liabilities 1.79% 1.64% 1.72% 1.87%
CAPITAL:
Leverage capital 12.31% 13.27% 12.31% 13.27%
Total risk-based capital 20.42% 22.36% 20.42% 22.36%
Average equity to
average assets 17.39% 19.51% 18.34% 19.73%
Notes
(1) Basic and Diluted Earnings Per Share for the year ended December 31, 2003,
include the results of operations from January 15, 2003, the date the
Company completed its Plan of Conversion, in the amount of $17,755,000.
(2) Efficiency Ratio Calculation
Three Months Ended
December 31, Year Ended December 31,
------------ -----------------------
2004 2003 2004 2003
---- ---- ---- ----
Net interest income $48,530 $ 33,896 $162,358 $129,873
Non-interest income 6,579 6,476 29,151 23,834
-------- -------- -------- --------
Total income $ 55,109 $ 40,372 $191,509 $153,707
======== ======== ======== ========
Non-interest expense $ 32,251 $ 28,825 $119,334 $126,779
Less: Provident Bank Charitable Foundation Donation - - - (24,000)
-------- -------- -------- --------
Adjusted non-interest expense $ 32,251 $ 28,825 $119,334 $102,779
======== ======== ======== ========
Expense/Income: 58.52% 71.40% 62.31% 66.87%
======== ======== ======== ========
Average Quarterly Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) (Dollars in Thousands)
December 31, 2004 September 30, 2004
----------------- ------------------
Average Average Average Average
Balance Interest Yield Balance Interest Yield
---------------------------------- ----------------------------------
Interest-Earning Assets:
Fed Funds Sold and
Other Short-Term Investments $ 31,015 $ 124 1.59% $ 58,043 $ 203 1.39%
Investment Securities (1) 454,764 4,661 4.08% 474,110 4,799 4.03%
Securities Available for Sale 1,457,204 13,776 3.76% 1,455,892 14,258 3.90%
Federal Home Loan Bank Stock 50,754 296 2.32% 48,730 165 1.35%
Net Loans (2)
Total Mortgage Loans 2,856,170 39,313 5.48% 2,605,044 35,920 5.49%
Total Commercial Loans 343,923 5,025 5.81% 337,961 5,011 5.90%
Total Consumer Loans 511,890 7,136 5.55% 462,854 6,552 5.63%
---------- ------------ ---------- ------------
Total Interest-Earning Assets $5,705,720 70,331 4.90% $5,442,634 66,908 4.89%
---------- ------------ ---------- ------------
Non-Interest Earning Assets:
Cash and Due from Banks 107,695 100,488
Other Assets 672,192 611,289
---------- ----------
Total Assets $6,485,607 $6,154,411
========== ==========
Interest-Bearing Liabilities:
Demand Deposits $ 639,244 1,131 0.70% $ 659,449 1,530 0.92%
Savings Deposits 1,546,669 3,684 0.95% 1,498,412 2,965 0.79%
Time Deposits 1,402,534 7,568 2.15% 1,338,965 6,826 2.03%
---------- ------------ ---------- ------------
Total Deposits 3,588,447 12,383 1.37% 3,496,826 11,321 1.29%
---------- ------------ ---------- ------------
Borrowed Funds 1,246,652 9,418 3.01% 1,173,304 8,657 2.94%
---------- ------------ ---------- ------------
Total Borrowings 1,246,652 9,418 3.01% 1,173,304 8,657 2.94%
---------- ------------ ---------- ------------
Total Interest-Bearing Liabilities $4,835,099 21,801 1.79% $4,670,130 19,978 1.70%
---------- ------------ ---------- ------------
Non-Interest Bearing Liabilities 522,361 450,203
---------- ----------
Total Liabilities 5,357,460 5,120,333
Stockholders' Equity 1,128,147 1,034,078
---------- ----------
Total Liabilities & Stockholders' Equity $6,485,607 $6,154,411
========== ==========
Net interest income $ 48,530 $ 46,930
============ ==========
Net interest rate spread 3.11% 3.19%
==== ====
Net interest-earning assets $ 870,621 $ 772,504
========== ==========
Net interest margin (3) 3.38% 3.43%
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.18x 1.17x
========== ==========
<FN>
- ----------------------------------------------
(1) Average outstanding 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.
</FN>
The following table summarizes the net interest margin for the previous year,
inclusive.
12/31/04 09/30/04 6/30/04 3/31/04 12/31/03
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
-------- -------- -------- -------- --------
Interest-Earning Assets:
Securities 3.76% 3.79% 3.16% 3.53% 3.48%
Net Loans 5.52% 5.55% 5.62% 5.78% 5.70%
Total Interest-Earning Assets 4.90% 4.89% 4.58% 4.79% 4.67%
Interest-Bearing Liabilities:
Total Deposits 1.37% 1.29% 1.35% 1.35% 1.37%
Total Borrowings 3.01% 2.94% 2.83% 2.76% 2.61%
Total Interest-Bearing Liabilities 1.79% 1.70% 1.69% 1.67% 1.64%
Interest Rate Spread 3.11% 3.19% 2.89% 3.12% 3.03%
Net Interest Margin 3.38% 3.43% 3.28% 3.50% 3.41%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.18x 1.17x 1.30x 1.30x 1.30x
Average YTD Balance
NET INTEREST MARGIN ANALYSIS
(Unaudited) (Dollars in Thousands)
December 31, 2004 September 30, 2004
----------------- ------------------
Average Average Average Average
Balance Interest Yield Balance Interest Yield
---------------------------------- ----------------------------------
Interest-Earning Assets:
Fed Funds Sold and
Other Short-Term Investments $ 87,635 $ 1,001 1.14% $ 157,854 $ 1,709 1.08%
Investment Securities (1) 484,583 19,183 3.96% 461,742 17,708 3.84%
Securities Available for Sale 1,253,570 45,968 3.67% 1,196,435 40,880 3.42%
Federal Home Loan Bank Stock 41,261 707 1.71% 26,030 759 2.92%
Net Loans (2)
Total Mortgage Loans 2,183,550 121,291 5.55% 1,348,872 84,307 6.25%
Total Commercial Loans 320,669 18,309 5.71% 393,853 20,711 5.26%
Total Consumer Loans 402,763 23,084 5.73% 272,136 18,432 6.77%
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Total Interest-Earning Assets $4,774,031 229,543 4.81% $3,856,922 184,506 4.78%
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Non-Interest Earning Assets:
Cash and Due from Banks 93,511 83,981
Other Assets 448,318 176,224
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Total Assets $5,315,860 $4,117,127
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Interest-Bearing Liabilities:
Demand Deposits $ 541,120 4,274 0.79% $ 413,582 3,590 0.87%
Savings Deposits 1,254,758 11,011 0.88% 952,776 11,839 1.24%
Time Deposits 1,156,388 24,221 2.09% 988,789 23,742 2.40%
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Total Deposits 2,952,266 39,506 1.34% 2,355,147 39,171 1.66%
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Borrowed Funds 956,922 27,679 2.89% 567,732 15,462 2.72%
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Total Borrowings 956,922 27,679 2.89% 567,732 15,462 2.72%
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Total Interest-Bearing Liabilities $3,909,188 67,185 1.72% $2,922,879 54,633 1.87%
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Non-Interest-Bearing Liabilities 431,709 381,796
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Total Liabilities 4,340,897 3,304,675
Stockholders' Equity 974,963 812,452
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Total Liabilities & Stockholders' Equity $5,315,860 $4,117,127
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Net interest income $ 162,358 $ 129,873
============ ============
Net interest rate spread 3.09% 2.91%
==== ====
Net interest-earning assets $ 864,843 $ 934,043
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Net interest margin (3) 3.40% 3.37%
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.22x 1.32x
========== ==========
<FN>
- --------------------------------------------
(1) Average outstanding 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.
</FN>
The following table summarizes the net interest margin for the three previous
years, inclusive.
Year Ended
---------------------------------
12/31/04 12/31/03 12/31/02
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Interest-Earning Assets:
Securities 3.58% 3.31% 4.67%
Net Loans 5.60% 6.13% 6.87%
Total Interest-Earning Assets 4.81% 4.78% 6.16%
Interest-Bearing Liabilities:
Total Deposits 1.34% 1.66% 2.44%
Total Borrowings 2.89% 2.72% 4.10%
Total Interest-Bearing Liabilities 1.72% 1.87% 2.57%
Interest Rate Spread 3.09% 2.91% 3.59%
Net Interest Margin 3.40% 3.37% 3.96%
Ratio of interest-earning assets to
interest-bearing liabilities 1.22x 1.32x 1.17x