Nittany Financial Corp. Subject: 3rd Qtr 2005 Earnings
Contact: Samuel J. Malizia, Chairman of the Board
David Z. Richards, Jr., President & CEO
(814) 238-5724
Date: November 14, 2005
FOR IMMEDIATE RELEASE
NITTANY FINANCIAL CORP. ANNOUNCES INCREASED
3RD QUARTER EARNINGS
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 third quarter
earnings.
Fully diluted net earnings for the quarter ending September 30, 2005 were
$1,056,800 or $0.45 per share, compared to $797,800 or $0.38 per share for the
quarter ending September 30, 2004, a 32% increase in net earnings. Net interest
income for the quarter was $2,612,200, compared to $2,298,900 for the same
period in the previous year, a 14% increase. The increases resulted primarily
from substantial growth in the loan portfolio during the year. Non-interest
income grew to $1,044,900 for the quarter from $851,500 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
$325 million in assets under management, an increase of nearly $75 million from
September 30, 2004.
"We are pleased with our continued strong loan growth and record earnings in the
face of rising interest rates on deposits and a significant increase in the
number of competitors in our primary market. We believe that maintaining our
original plan of aggressively priced core deposit accounts and superior service
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 $340,821,000 at September 30,
2005, compared to $299,235,700 at December 31, 2004. Total deposits decreased
from $258,270,900 at December 31, 2004 to $239,080,400 at September 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 15% to
$270,523,600 for the nine months ending September 30, 2005 and non-performing
loans over 90 days delinquent were $591,300, which is less than 0.22% of the
total loan portfolio at September 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 that have existed in the entire
banking industry this year appear to be diminishing. We are encouraged on all
fronts with our loan demand, increasing assets under management at Vantage and a
strong core deposit base."
On September 7, 2005, National Penn Bancshares, Inc. of Boyertown, PA and
Nittany Financial Corporation, announced that they had signed a definitive
merger agreement under which National Penn Bancshares would combine with Nittany
Financial in a transaction valued at approximately $96.5 million. It is
anticipated that the merger, which will take place in the first quarter of 2006,
will be transparent to the customers of Nittany Financial, except that Nittany
Bank will be permitted to make larger loans, and that no employees will be
displaced. 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 and Bellefonte, Pennsylvania.
Nittany Bank began operations in October 1998 and currently operates five
offices with 61 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.
The parent company, Nittany Financial Corp., also owns two investment
subsidiaries. Nittany Asset Management Inc. offers retail investment products
through the Bank's five offices. Vantage Investment Advisors, LLC is a
Registered Investment Advisory firm providing fee-based investment management
services. Vantage currently manages approximately $325 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.
National Penn Bancshares, Inc. filed a registration statement on Form S-4 in
connection with the merger, and Nittany Financial intends to mail a proxy
statement/prospectus to its shareholders in connection with the transaction.
Investors and security holders of Nittany Financial are urged to read the proxy
statement/prospectus when it becomes available, because it will contain
important information about National Penn Bancshares, Nittany Financial, and the
transaction. Investors and security holders may obtain a free copy of the proxy
statement/prospectus (when it is available) at the SEC's web site at
www.sec.gov. A free copy of the proxy statement/prospectus may also be obtained
from National Penn Bancshares or Nittany Financial. You may direct such a
request to either of the following persons:
Sandra L. Spayd David Z. Richards Jr.
Corporate Secretary President and CEO
National Penn Bancshares, Inc. Nittany Financial Corporation
Philadelphia and Reading Avenues 116 East College Ave
Boyertown, PA 19512 State College, PA 16801
(610) 369-6202 (814) 238-5724
National Penn Bancshares, Nittany Financial and their respective executive
officers and directors may be deemed to be participants in the solicitation of
proxies from the shareholders of Nittany Financial in favor of the transaction.
Information regarding the interests of these officers and directors in the
transaction will be included in the proxy statement/prospectus.
In addition to the registration statement on Form S-4 filed by National Penn
Bancshares in connection with the transaction, and the proxy
statement/prospectus mailed to the shareholders of Nittany Financial in
connection with the transaction, each of National Penn Bancshares and Nittany
Financial file annual, quarterly and current reports, proxy and information
statements and other information with the SEC. Investors may read and copy any
of these reports, statements and other information at the SEC's public reference
rooms located at 100 F Street, N.E., Washington, D.C., 20549, or any of the
SEC's other public reference rooms located in New York and Chicago. Investors
should call the SEC at 1-800-SEC-0330 for further information on these public
reference rooms. The reports, statements and other information filed by National
Penn Bancshares and Nittany Financial with the SEC are also available for free
at the SEC's Web site at www.sec.gov. A free copy of these reports, statements
and other information may also be obtained from National Penn Bancshares or
Nittany Financial.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
NITTANY FINANCIAL CORP.
CONSOLIDATED BALANCE SHEET
September 30, December 31,
2005 2004
------------- -------------
(unaudited)
ASSETS
Cash and due from banks $ 1,311,483 $ 1,094,763
Interest-bearing deposits with other banks 15,494,167 14,487,813
------------- -------------
Cash and cash equivalents 16,805,650 15,582,576
Investment securities available for sale 1,717,756 2,084,223
Investment securities held to maturity (estimated
market value of $38,569,087 and $37,502,230) 38,873,162 37,491,341
Loans receivable (net of allowance for loan losses
of $2,469,213 and $2,198,235) 270,523,560 235,428,568
Premises and equipment 3,922,400 2,609,528
Federal Home Loan Bank stock 4,309,900 2,066,100
Intangible assets 1,763,231 1,763,231
Accrued interest and other assets 2,905,308 2,210,133
------------- -------------
TOTAL ASSETS $ 340,820,967 $ 299,235,700
============= =============
LIABILITIES
Deposits:
Noninterest-bearing demand $ 12,551,749 $ 10,668,777
Interest-bearing demand 28,387,104 25,614,681
Money market 35,439,254 43,191,121
Savings 122,451,170 157,200,274
Time 40,251,138 21,596,027
------------- -------------
Total deposits 239,080,415 258,270,880
Short-term borrowings 69,232,473 14,838,231
Other borrowings 5,003,068 7,180,612
Accrued interest payable and other liabilities 1,316,354 1,279,653
------------- -------------
TOTAL LIABILITIES 314,632,310 281,569,376
============= =============
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, 2,270,442 and 1,930,794 issued and outstanding 227,044 193,079
Additional paid-in capital 20,378,456 14,339,979
Retained earnings 5,594,647 3,139,165
Accumulated other comprehensive loss (11,490) (5,899)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 26,188,657 17,666,324
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 340,820,967 $ 299,235,700
============= =============
NITTANY FINANCIAL CORP.
CONSOLIDATED STATEMENT OF INCOME
Three months Ended Nine months Ended
September 30, September 30,
2005 2004 2005 2004
----------- ---------- ----------- -----------
(unaudited) (unaudited)
INTEREST AND DIVIDEND INCOME
Loans, including fees $ 4,090,536 $3,266,905 $11,411,040 $ 9,034,114
Interest-bearing deposits with other banks 65,007 24,473 168,113 49,679
Investment securities 414,472 371,767 1,251,574 1,114,783
----------- ---------- ----------- -----------
Total interest and dividend income 4,570,015 3,663,145 12,830,727 10,198,576
----------- ---------- ----------- -----------
INTEREST EXPENSE
Deposits 1,278,195 1,185,689 3,789,366 3,492,226
Short-term borrowings 602,991 1,932 1,030,267 65,037
Other borrowings 76,633 176,615 267,356 395,720
----------- ---------- ----------- -----------
Total interest expense 1,957,819 1,364,236 5,086,989 3,952,983
----------- ---------- ----------- -----------
NET INTEREST INCOME 2,612,196 2,298,909 7,743,738 6,245,593
Provision for loan losses 76,000 138,000 306,000 442,000
----------- ---------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 2,536,196 2,160,909 7,437,738 5,803,593
----------- ---------- ----------- -----------
NONINTEREST INCOME
Service fees on deposit accounts 180,384 177,863 521,630 498,231
Investment security gain -- 32,707 -- 32,707
Asset management fees and commissions 750,322 614,209 2,173,974 1,773,425
Secondary market fees 82,047 17,758 200,965 65,145
Other 32,176 8,951 89,259 16,230
----------- ---------- ----------- -----------
Total noninterest income 1,044,929 851,488 2,985,828 2,385,738
----------- ---------- ----------- -----------
NONINTEREST EXPENSE
Compensation and employee benefits 718,847 730,611 2,174,035 2,168,606
Occupancy and equipment 213,561 186,363 589,997 540,492
Professional fees 50,767 49,290 177,531 144,088
Data processing fees 147,513 121,146 420,956 351,317
Supplies, printing, and postage 42,487 39,084 126,469 104,015
Advertising 36,967 37,721 151,320 115,849
ATM processing fees 41,425 36,191 114,783 106,044
Solicitor fees 463,173 381,639 1,336,330 1,120,476
Other 246,603 205,537 737,199 545,706
----------- ---------- ----------- -----------
Total noninterest expense 1,961,343 1,787,582 5,828,620 5,196,593
----------- ---------- ----------- -----------
Income before income taxes 1,619,782 1,224,815 4,594,946 2,992,738
Income taxes 563,000 427,000 1,611,030 1,061,000
----------- ---------- ----------- -----------
NET INCOME $ 1,056,782 $ 797,815 $ 2,983,916 $ 1,931,738
=========== ========== =========== ===========
DIVIDENDS PER SHARE $ 0.25 N/A $ 0.25 N/A
EARNINGS PER SHARE
Basic $ 0.47 0.41 $ 1.41 1.00
Diluted 0.45 0.38 1.32 0.93
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 2,193,701 1,924,621 2,101,778 1,924,621
Diluted 2,304,330 2,080,438 2,242,872 2,078,490