Nittany Financial Corp. Subject: 2nd Qtr 2005 Earnings
Contact: Samuel J. Malizia, Chairman of the Board
David Z. Richards, Jr., President & CEO
(814) 238-5724
Date: July 20, 2005
FOR IMMEDIATE RELEASE
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NITTANY FINANCIAL CORP. EARNINGS
TOP $1 MILLION FOR QUARTER
State College, PA....Nittany Financial Corp., (the "Company") (OTC Bulletin
Board: NTNY) the holding company for Nittany Bank, Vantage Investment Advisors,
LLC ("Vantage") and Nittany Asset Management Inc., today announced that second
quarter earnings surpassed the $1,000,000 mark for the first time in the Bank's
history.
Fully diluted earnings for the quarter ending June 30, 2005 were $1,018,300 or
$0.45 per share, compared to $637,900 or $0.31 per share for the quarter ending
June 30, 2004, a 60% increase in earnings. Net interest income for the quarter
was $2,629,900, compared to $2,085,800 for the same period in the previous year,
a 26% increase. The increases resulted primarily from substantial growth in the
loan portfolio and an increase in the net interest margin. Non-interest income
grew to $1,014,500 for the quarter from $811,300 for the previous year, due
primarily to the growth in asset management income at Vantage and increased fees
from secondary market mortgage operations at Nittany Bank. Vantage, the
investment advisory subsidiary of Nittany Financial Corp., now has approximately
$310 million in assets under management, an increase of nearly $65 million from
June 30, 2004.
"We are pleased with our continued strong loan growth and record earnings in the
face of a significant increase in the number of competitors in our primary
market. We believe that a return to our original plan of aggressively priced
core deposit accounts will provide a renewed ability to attract core funding."
commented Samuel J. Malizia, Chairman of the Board for Nittany Financial Corp.
Total assets for the consolidated entity were $326,516,800 at June 30, 2005,
compared to $299,236,000 at December 31, 2004. Total deposits decreased from
$258,270,900 at December 31, 2004 to $242,079,800 at June 30, 2005. During the
period, several large deposit withdrawals, coupled with the current interest
rate environment, accounted for the reduction. New account openings for the
quarter were on par with previous quarters. Net loans grew by 10.5% to
$260,249,400 for the six months ending June 30, 2005 and non-performing loans
over 90 days delinquent were $149,900, which is less than 0.05% of the total
loan portfolio at June 30, 2005.
President and CEO David Richards added, "We were pleased to be able to pay our
first semi-annual cash dividend of $0.25 per share on June 30th. Earnings
continue to be bolstered by an increasing non-interest revenue stream and strong
loan demand. The deposit gathering challenges so far this year were present
despite strong new deposit account activity and a significant increase in the
net number of deposit accounts. The average balances of our existing deposit
accounts, however, are lower across the board due to competitive and economic
pressures."
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 $310 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
June 30, December 31,
2005 2004
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(unaudited)
ASSETS
Cash and due from banks $ 1,128,445 $ 1,094,763
Interest-bearing deposits with other banks 10,328,376 14,487,813
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Cash and cash equivalents 11,456,821 15,582,576
Investment securities available for sale 1,836,667 2,084,223
Investment securities held to maturity (estimated
market value of $41,256,706 and $37,502,230) 41,317,729 37,491,341
Loans receivable (net of allowance for loan losses
of $2,377,483 and $2,198,235) 260,249,369 235,428,568
Premises and equipment 3,935,558 2,609,528
Federal Home Loan Bank stock 3,652,600 2,066,100
Intangible assets 1,763,231 1,763,231
Accrued interest and other assets 2,304,863 2,210,133
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TOTAL ASSETS $ 326,516,838 $ 299,235,700
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LIABILITIES
Deposits:
Noninterest-bearing demand $ 12,377,899 $ 10,668,777
Interest-bearing demand 28,776,001 25,614,681
Money market 25,267,055 43,191,121
Savings 138,851,337 157,200,274
Time 36,807,492 21,596,027
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Total deposits 242,079,784 258,270,880
Short-term borrowings 54,437,108 14,838,231
Other borrowings 5,063,168 7,180,612
Accrued interest payable and other liabilities 1,331,451 1,279,653
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TOTAL LIABILITIES 302,911,511 281,569,376
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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, 2,113,738 and 1,930,794 issued and outstanding 211,374 193,079
Additional paid-in capital 18,873,040 14,339,979
Retained earnings 4,537,865 3,139,165
Accumulated other comprehensive loss (16,952) (5,899)
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TOTAL STOCKHOLDERS' EQUITY 23,605,327 17,666,324
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 326,516,838 $ 299,235,700
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NITTANY FINANCIAL CORP.
CONSOLIDATED STATEMENT OF INCOME
Three-months Ended June 30, Six-months Ended June 30,
2005 2004 2005 2004
---------------- ---------------- ---------------- ----------------
(unaudited) (unaudited)
INTEREST AND DIVIDEND INCOME
Loans, including fees $ 3,792,599 $ 3,009,369 $ 7,320,504 $ 5,767,209
Interest-bearing deposits with other banks 22,945 9,840 103,106 25,206
Investment securities 454,892 351,957 837,102 743,016
---------------- ---------------- ---------------- ----------------
Total interest and dividend income 4,270,436 3,371,166 8,260,712 6,535,431
---------------- ---------------- ---------------- ----------------
INTEREST EXPENSE
Deposits 1,254,228 1,146,837 2,511,171 2,306,537
Short-term borrowings 331,406 37,939 427,276 63,105
Other borrowings 54,905 100,598 190,723 219,105
---------------- ---------------- ---------------- ----------------
Total interest expense 1,640,539 1,285,374 3,129,170 2,588,747
---------------- ---------------- ---------------- ----------------
NET INTEREST INCOME 2,629,897 2,085,792 5,131,542 3,946,684
Provision for loan losses 168,000 194,000 230,000 304,000
---------------- ---------------- ---------------- ----------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 2,461,897 1,891,792 4,901,542 3,642,684
---------------- ---------------- ---------------- ----------------
NONINTEREST INCOME
Service fees on deposit accounts 176,679 174,307 341,246 320,368
Asset management fees and commissions 725,882 592,471 1,423,652 1,159,216
Secondary market fees 75,675 39,119 118,918 47,387
Other 36,273 5,417 57,083 7,279
---------------- ---------------- ---------------- ----------------
Total noninterest income 1,014,509 811,314 1,940,899 1,534,250
---------------- ---------------- ---------------- ----------------
NONINTEREST EXPENSE
Compensation and employee benefits 674,347 745,230 1,455,188 1,437,995
Occupancy and equipment 199,562 177,793 376,436 354,129
Professional fees 63,743 51,349 126,764 94,798
Data processing fees 141,881 111,164 273,443 230,171
Supplies, printing, and postage 33,681 31,938 83,982 64,931
Advertising 51,771 37,723 114,353 78,128
ATM processing fees 36,906 34,982 73,358 69,853
Solicitor fees 443,584 361,331 873,157 738,837
Other 253,560 174,724 490,596 340,169
---------------- ---------------- ---------------- ----------------
Total noninterest expense 1,899,035 1,726,234 3,867,277 3,409,011
---------------- ---------------- ---------------- ----------------
Income before income taxes 1,577,371 976,872 2,975,164 1,767,923
Income taxes 559,030 339,000 1,048,030 634,000
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NET INCOME $ 1,018,341 $ 637,872 $ 1,927,134 $ 1,133,923
================ ================ ================ ================
DIVIDENDS PER SHARE $ 0.25 N/A $ 0.25 N/A
EARNINGS PER SHARE
Basic $ 0.48 $ 0.33 $ 0.94 $ 0.59
Diluted 0.45 0.31 0.87 0.55
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 2,111,729 1,924,621 2,055,054 1,924,621
Diluted 2,267,408 2,080,803 2,211,381 2,077,516