Nittany Financial Corp. Subject: 1st Qtr 2005 Earnings
Contact: Samuel J. Malizia, Chairman of the Board
David Z. Richards, Jr., President & CEO
(814) 238-5724
Date: May 10, 2005
FOR IMMEDIATE RELEASE
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NITTANY FINANCIAL CORPORATION ANNOUNCES RECORD EARNINGS
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 first quarter 2005
results which were highlighted by record earnings.
Fully diluted earnings for the quarter ending March 31, 2005 were $909,000 or $
0.42 per share, compared to $496,000 or $ 0.24 per share for the quarter ending
March 31, 2004, a 83% increase in earnings. Net interest income for the quarter
was $2,502,000, compared to $1,861,000 for the same period in the previous year,
a 34% increase. The increases resulted primarily from a substantial growth in
the loan portfolio during the year and an increase in the net interest margin
for the year. The margin increased to approximately 3.36% from 3.03% in the
first quarter of 2004. Non-interest income grew to $926,000 for the quarter from
$723,000 for the previous year, due to the growth in asset management income at
Vantage Investment Advisors and service fees on deposit accounts at Nittany
Bank. Vantage, the investment advisory subsidiary of Nittany Financial Corp.,
now has approximately $300 million in assets under management, an increase of
nearly $60 million from March 31, 2004.
"Nittany Bank continued our steady loan growth and also opened our fifth office
during the first quarter," commented Samuel J. Malizia, Chairman of the Board
for Nittany Financial Corp. "As the only FDIC-insured bank headquartered and
operated solely in the State College area, we continue to be THE State College
area community bank. As noted in our recent marketing campaign, in addition to
our highly competitive rates and products, the Nittany Bank difference includes:
(1) a live voice, instead of a machine on the phone, (2) free internet banking
and online bill pay, (3) five offices and six ATMs located throughout the area,
(4) personal bankers meeting with customers at a desk instead of traditional
teller lines, (5) prompt processing of loans by local decision makers and (6)
superior customer service."
Total assets for the consolidated entity were $306,908,000 on March 31, 2005,
compared to $299,236,000 at December 31, 2004. Total deposits decreased from
$258,271,000 at December 31, 2004 to $252,743,000 at March 31, 2005, due in part
to rising interest rates, increased competition from the stock market and other
financial institutions and a few large withdrawals from large savings accounts
for business and tax reasons. Net loans grew by 2.9% to $242,152,000 for the
quarter ending March 31, 2005 compared to December 31, 2004, and non-performing
loans over 90 days delinquent were $301,000, which is less than 0.12% of the
total loan portfolio at March 31, 2005.
President and CEO David Richards added, "We are very pleased to have achieved
significant loan growth and expansion of our interest margin for the year in the
face of intense local competition and an increasingly difficult interest rate
environment. Income was also helped by a growing non-interest revenue stream and
continued high credit quality, which will continue to play important roles
throughout 2005. Recent rate increases will provide ongoing challenges for the
entire industry in gathering deposits, but we believe that our interest rate
risk profile, as a result of the current mix of deposit and loan products,
should keep us well positioned through the year. During the quarter, we made a
conscious effort to not retain some higher cost deposits that didn't make sense
to our overall funding strategy."
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 five offices with 59 full-time equivalent
employees. Nittany Bank offers a full range of financial services through its
five offices, six ATMs, telephone banking (814-231-1800) and transactional
internet banking at its www.NittanyBank.com website.
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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 approximately $300 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 Company. 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
March 31, December 31,
2005 2004
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(unaudited)
ASSETS
Cash and due from banks $ 915,958 $ 1,094,763
Interest-bearing deposits with other banks 8,814,297 14,487,813
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Cash and cash equivalents 9,730,255 15,582,576
Investment securities available for sale 1,956,868 2,084,223
Investment securities held to maturity (estimated
market value of $42,377,341 and $37,502,230) 42,817,595 37,491,341
Loans receivable 244,412,102 237,626,883
Less allowance for loan losses 2,260,408 2,198,315
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Net loans 242,151,694 235,428,568
Premises and equipment 3,587,308 2,609,528
FHLB Stock 2,212,900 2,066,100
Goodwill 1,763,231 1,763,231
Accrued interest and other assets 2,687,858 2,210,133
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TOTAL ASSETS $ 306,907,709 $ 299,235,700
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LIABILITIES
Deposits:
Noninterest-bearing demand $ 11,956,709 $ 10,668,777
Interest-bearing demand 26,051,710 25,614,681
Money market 34,254,744 43,191,121
Savings 148,020,380 157,200,274
Time 32,459,625 21,596,027
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Total deposits 252,743,168 258,270,880
Short-term borrowings 22,277,783 14,838,231
Other borrowings 7,122,345 7,180,612
Accrued interest payable and other liabilities 1,653,000 1,279,653
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TOTAL LIABILITIES 283,796,296 281,569,376
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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, 2,110,794 and 1,930,794 issued and outstanding 211,079 193,079
Additional paid-in capital 18,863,413 14,339,979
Retained earnings 4,047,959 3,139,165
Accumulated other comprehensive loss (11,038) (5,899)
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TOTAL STOCKHOLDERS' EQUITY 23,111,413 17,666,324
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 306,907,709 $ 299,235,700
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NITTANY FINANCIAL CORP.
CONSOLIDATED STATEMENT OF INCOME
Three-months Ended March 31,
2005 2004
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(unaudited)
INTEREST AND DIVIDEND INCOME
Loans, including fees $3,527,905 $2,757,840
Interest-bearing deposits with other banks 80,161 15,366
Investment securities 382,210 391,059
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Total interest and dividend income 3,990,276 3,164,265
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INTEREST EXPENSE
Deposits 1,256,943 1,159,700
Short-term borrowings 95,870 5,981
Other borrowings 135,818 137,692
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Total interest expense 1,488,631 1,303,373
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NET INTEREST INCOME 2,501,645 1,860,892
Provision for loan losses 62,000 110,000
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NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 2,439,645 1,750,892
NONINTEREST INCOME
Service fees on deposit accounts 164,567 146,061
Asset management fees and commissions 697,770 566,745
Other 64,053 10,130
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Total noninterest income 926,390 722,936
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NONINTEREST EXPENSE
Compensation and employee benefits 780,841 692,765
Occupancy and equipment 176,874 176,336
Professional fees 63,021 43,449
Data processing fees 131,562 119,007
Supplies, printing, and postage 50,301 32,993
Advertising 62,582 40,405
ATM processing fees 36,452 34,871
Commission expense 429,573 377,506
Other 237,036 165,445
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Total noninterest expense 1,968,242 1,682,777
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Income before income taxes 1,397,793 791,051
Income taxes 489,000 295,000
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NET INCOME $ 908,793 $ 496,051
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EARNINGS PER SHARE
Basic $ 0.45 $ 0.26
Diluted 0.42 0.24
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 1,997,751 1,924,621
Diluted 2,154,724 2,074,229