Nittany Financial Corp. Subject: 4th Qtr 2004 Earnings
Contact: Samuel J. Malizia, Chairman of the Board
David Z. Richards, Jr., President & CEO
(814) 238-5724
Date: February 8, 2005
FOR IMMEDIATE RELEASE
NITTANY FINANCIAL CORP. REPORTS 71% INCREASE IN EARNINGS AND APPROACHES
$300 MILLION IN ASSETS
State College, PA....Nittany Financial Corp., (the "Company") (OTC Bulletin
Board: NTNY) the holding company for Nittany Bank, Vantage Investment Advisors,
LLC and Nittany Asset Management Inc., today announced year ended December 31,
2004 results which included a total assets balance of $299 million, approaching
a milestone for the six year old institution.
Fully diluted earnings for the year ending December 31, 2004 were $2,783,000 or
$1.34 per share, compared to $1,625,000 or $.84 per share for the year ending
December 31, 2003, a 71% increase in earnings. Net interest income for the year
was $8,626,000, compared to $6,366,000 for the previous year, a 35% increase.
The increases resulted from a substantial growth in the loan portfolio and an
increase in the net interest margin. The margin increased to approximately 3.28%
from 3.00% in the fourth quarter of 2003. Non-interest income grew to $3,227,000
for the year, from $1,800,000 for the previous year, due to the growth in asset
management income at Vantage Investment Advisors and service fees. Vantage, the
investment advisory subsidiary of Nittany Financial Corp., now has over $290
million under management, an increase of approximately $50 million for the year.
"The year ended on a positive note for Nittany Bank as we continued our steady
growth in loans and deposits and finalized plans for our fifth office in
Bellefonte, which is expected to open later this month," commented Samuel J.
Malizia, Chairman of the Board for Nittany Financial Corp. In 1998, we started
Nittany Bank to be the State College area hometown bank by offering superior
service, local decision making, and competitive products and rates. We continue
to be the only FDIC-insured institution headquartered and operated only in the
State College area. Our name says it all; whenever anyone throughout the state
or country hears the name `Nittany Bank' they recognize it as the bank that
serves the Penn State/State College area."
The balance sheet for the Company also showed growth in year 2004 and the credit
quality remained high. Total assets for the consolidated entity were
$299,182,000 on December 31, 2004, compared to $248,587,000 at December 31,
2003, a 20% increase. Total deposits grew by $37,378,000 or 17% for the year,
with the Company's core Nittany Savings account providing the majority of the
increase with growth of 15%. Net loans grew by 29% to $235,429,000 for the year
ending December 31, 2004 from the previous year, and non-performing loans over
90 days delinquent were only $42,700, which is less than 0.02% of the total loan
portfolio at December 31, 2004.
President and CEO David Richards added, "We are very pleased to have achieved
both significant growth and expansion of our interest margin for the year in the
face of intense local competition and an increasingly difficult interest rate
environment. A flattening yield curve will provide ongoing challenges for the
entire industry. Our interest rate risk profile as a result of the current mix
of deposit and loan products should keep us well positioned through the coming
months. A growing non-interest revenue stream and continued excellent credit
quality will also play important roles in 2005."
Nittany Financial Corp. (OTC Ticker Symbol "NTNY") is the parent company for
Nittany Bank, a federally chartered financial institution headquartered and
operated in State College, Pennsylvania. Nittany Bank began operations in
October 1998 and currently operates four offices with 59 full-time equivalent
employees. Nittany Bank offers a full range of financial services through its
four offices, five ATM's, telephone banking (814-231-1800) and transactional
internet banking at its www.NittanyBank.com website.
The parent company, Nittany Financial Corp., also owns two investment
subsidiaries. Nittany Asset Management Inc. offers retail investment products
through the Bank's four offices. Vantage Investment Advisors, LLC is a
Registered Investment Advisory firm providing fee-based investment management
services. Vantage currently manages over $290 million in investments for small
business retirement plans as well as individual portfolio management for
consumers.
The foregoing material contains forward-looking statements concerning the
financial condition, results of operations and business of the CompanFy. We
caution that such statements are subject to a number of uncertainties and actual
results could differ materially and, therefore, readers should not place undue
reliance on any forward-looking statements. The Company does not undertake, and
specifically disclaims, any obligation to publicly release the results of any
revisions that may be made to any forward-looking statements to reflect the
occurrence of anticipated or unanticipated events or circumstances after the
date of such statements.
NITTANY FINANCIAL CORP.
CONSOLIDATED BALANCE SHEET
December 31,
2004 2003
------------- -------------
ASSETS
Cash and due from banks $ 1,094,763 $ 805,812
Interest-bearing deposits with other banks 14,487,813 14,147,474
------------- -------------
Cash and cash equivalents 15,582,576 14,953,286
Investment securities available for sale 2,084,223 4,074,095
Investment securities held to maturity (estimated
market value of $37,502,629 and $39,168,895) 37,491,341 39,246,289
Loans receivable 237,626,883 184,480,012
Less allowance for loan losses 2,198,315 1,737,475
------------- -------------
Net loans 235,428,568 182,742,537
Premises and equipment 2,609,528 2,570,953
FHLB Stock 2,066,100 1,311,300
Goodwill 1,763,231 1,763,231
Accrued interest and other assets 2,156,227 1,925,622
------------- -------------
TOTAL ASSETS $ 299,181,794 $ 248,587,313
============= =============
LIABILITIES
Deposits:
Noninterest-bearing demand $ 10,668,777 $ 7,880,177
Interest-bearing demand 25,614,681 21,902,355
Money market 43,191,121 34,237,951
Savings 157,200,274 136,273,936
Time 21,596,027 20,598,238
------------- -------------
Total deposits 258,270,880 220,892,657
Short-term borrowings 10,363,231 2,363,887
Other borrowings 11,655,612 9,829,866
Accrued interest payable and other liabilities 1,225,746 673,159
------------- -------------
TOTAL LIABILITIES 281,515,469 233,759,569
------------- -------------
STOCKHOLDERS' EQUITY
Serial preferred stock, no par value; 5,000,000 shares
authorized, none issued -- --
Common stock, $.10 par value; 10,000,000 shares
authorized, 1,930,794 and 1,603,960 issued and outstanding 193,079 160,396
Additional paid-in capital 14,339,979 14,323,021
Retained earnings 3,139,166 356,344
Accumulated other comprehensive loss (5,899) (12,017)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 17,666,325 14,827,744
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 299,181,794 $ 248,587,313
============= =============
NITTANY FINANCIAL CORP.
CONSOLIDATED STATEMENT OF INCOME
Three-Months Ended December 31, Twelve-Months Ended December 31,
2004 2003 2004 2003
----------- ----------- ------------ ------------
INTEREST AND DIVIDEND INCOME
Loans, including fees $ 3,411,732 $ 2,698,627 $ 12,445,846 $ 9,710,520
Interest-bearing deposits with
other banks 37,299 8,501 86,978 57,304
Investment securities 363,073 376,702 1,477,856 1,451,137
----------- ----------- ------------ ------------
Total interest and
dividend income 3,812,104 3,083,830 14,010,680 11,218,961
----------- ----------- ------------ ------------
INTEREST EXPENSE
Deposits 1,239,919 1,123,379 4,732,145 4,294,545
Short-term borrowings 40,046 15,583 105,083 59,594
Other borrowings 151,454 109,152 547,174 498,806
----------- ----------- ------------ ------------
Total interest expense 1,431,419 1,248,114 5,384,402 4,852,945
----------- ----------- ------------ ------------
NET INTEREST INCOME 2,380,685 1,835,716 8,626,278 6,366,016
Provision for loan losses 91,000 85,000 533,000 593,000
----------- ----------- ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,289,685 1,750,716 8,093,278 5,773,016
----------- ----------- ------------ ------------
NONINTEREST INCOME
Service fees on deposit accounts 169,423 127,077 667,654 487,332
Investment securities gains - 23,439 32,707 30,130
Asset management fees/commissions 626,014 434,070 2,399,439 1,223,376
Other 45,709 4,307 127,084 59,505
----------- ----------- ------------ ------------
Total noninterest income 841,146 588,893 3,226,884 1,800,343
----------- ----------- ------------ ------------
NONINTEREST EXPENSE
Compensation and employee benefits 766,592 672,672 2,935,198 2,280,552
Occupancy and equipment 199,465 173,207 739,957 646,825
Professional fees 30,987 62,988 175,075 220,413
Data processing fees 117,151 111,713 468,468 397,312
Supplies, printing, and postage 29,203 36,751 133,218 140,726
Advertising 68,899 36,038 184,748 140,424
ATM processing fees 35,236 35,284 141,280 132,541
Commission expense 385,396 264,690 1,505,872 650,198
Other 192,482 161,030 738,188 511,458
----------- ----------- ------------ ------------
Total noninterest expense 1,825,411 1,554,373 7,022,004 5,120,449
----------- ----------- ------------ ------------
Income before income taxes 1,305,420 785,236 4,298,158 2,452,910
Income taxes 454,337 273,482 1,515,337 827,872
----------- ----------- ------------ ------------
NET INCOME $ 851,083 $ 511,754 $ 2,782,821 $ 1,625,038
=========== =========== ============ ============
EARNINGS PER SHARE
Basic $ 0.44 $ 0.24 $ 1.45 $ 0.91
Diluted 0.41 0.23 1.34 0.84