LARL Laurel Capital

Laurel Capital Group Announces Earnings for the Second Quarter of Fiscal 2005 ALLISON PARK, Pa., Feb. 1 /PRNewswire-FirstCall/ -- Laurel Capital Group, Inc. (NASDAQ:LARL) today announced consolidated net income for the second quarter ended December 31, 2004 of $461,000 or $.23 per diluted share, an increase of 30.6% compared to net income of $353,000 or $.18 per diluted share in the prior year quarter. For the six month period ended December 31, 2004, the Company recorded consolidated net income of $949,000 or $.48 per diluted share, an increase of 15.3% compared to consolidated net income of $823,000 or $.42 per diluted share for the six months ended December 31, 2003. The Company's net interest income after provision for loan losses increased $225,000 or 13.8% to $1.9 million for the quarter ended December 31, 2004, compared to $1.6 million in the prior year period. Other income increased slightly to $359,000 compared to $358,000 for the same period in the prior year period. However, included in the quarter ended December 31, 2003 was $14,000 in gains on sale of loans and securities. Excluding gains on sale, other income increased 4.4%. The increase primarily relates to an increase in service charge income partially offset by a slight decrease in income from bank owned life insurance. Operating expenses decreased 2.1% to $1.5 million compared to $1.6 million in the prior year period. The operating expense decrease primarily resulted from a decrease in compensation and related fringe benefit costs and other operating expenses partially offset by an increase in professional fee expenses. Provision for income taxes was $207,000 for the quarter ended December 31, 2004 compared to $55,000 in the prior year. The increase was related to higher pre-tax taxable income for the quarter ended December 31, 2004. The increase in earnings for the six month period was primarily the result of a 7.8% increase in net interest income, after provision for loan losses, to $3.7 million for the six months ended December 31, 2004 compared to $3.4 million for the same period in the prior year. Results were further impacted by a decrease of 2.3% in operating expenses from $3.1 million for the six months ended December 31, 2003 to $3.0 million for the six months ended December 31, 2004. Partially offsetting such beneficial shifts were a slight decrease in other income and an increase in provision for income taxes. Non-performing assets, which consist of loans delinquent 90 days and over and other real estate owned, decreased $601,000 or 27.9% to $1.6 million or .50% of total assets at December 31, 2004 compared to $2.2 million or .72% of total assets at June 30, 2004. At December 31, 2004, Laurel Capital Group, Inc., had total assets of $308.5 million, an increase of $9.1 million or 3.0% compared to $299.4 million at June 30, 2004. Net loans receivable increased $24.6 million or 14.2% to $197.9 million at December 31, 2004 as compared to $173.3 million at June 30, 2004, primarily due to an increase in the single-family loan portfolio. Savings deposits increased $8.5 million or 3.4% to $254.7 million at December 31, 2004 compared to $246.2 million at June 30, 2004, primarily due to an increase in certificate of deposit accounts. Stockholders' equity was $27.7 million or $14.28 per share at December 31, 2004 an increase of 2.1% compared to $27.1 million or $14.06 per share at June 30, 2004. Laurel Capital Group, Inc., headquartered in Allison Park, PA, is the holding company for Laurel Savings Bank, a 117-year-old, Pennsylvania- chartered, FDIC-insured savings bank operating eight full-service offices located in Allegheny and Butler counties offering a wide variety of financial services and products to customers throughout the Pittsburgh metropolitan area. The Company's filings with the Securities and Exchange Commission are available electronically on the Internet and can be found at http://www.sec.gov/edgar/searchedgar/webusers.htm . This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non- GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of significant gains or losses that are unusual in nature. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ materially from those currently anticipated due to a number of factors. Such factors include, but are not limited to, changes in interest rates which could affect net interest margins and net interest income, the possibility that increased demand or prices for the Company's financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data December 31, 2004 Year-To-Date Fiscal 2005 (Dollars in thousands, At or For the At or For the except per share data) Six Months Ended: Three Months Ended: (Unaudited) Dec. 31, Dec. 31, Dec. 31, Sept. 30, 2004 2003 2004 2004 Earnings Interest Income $6,748 $6,635 $3,424 $3,324 Interest Expense 3,079 3,232 1,563 1,516 Net Interest Income Before Provision for Loan Losses 3,669 3,403 1,861 1,808 Provision for Loan Losses 6 6 3 3 Net Interest Income after Provision for Loan Losses 3,663 3,397 1,858 1,805 Net Gain on Sale of Investment and Mortgage-Backed Securities 0 13 0 0 Gain on Sale of Loans Held for Sale 6 7 0 6 Other Income (excluding gains) 722 758 359 363 Operating Expenses 3,021 3,093 1,549 1,472 Income before Income Taxes 1,370 1,082 668 702 Provision for Income Taxes 421 259 207 214 Net Income $949 $823 $461 $488 Profitability Ratios (annualized where applicable) Return on Average Assets 0.62% 0.53% 0.60% 0.64% Return on Average Stockholders' Equity 6.91% 6.04% 6.68% 7.14% Yield on Interest-Earning Assets 4.65% 4.61% 4.71% 4.58% Cost of Interest-Bearing Liabilities 2.38% 2.42% 2.41% 2.34% Average Interest Rate Spread 2.27% 2.19% 2.30% 2.24% Net Interest Margin 2.53% 2.36% 2.56% 2.49% Operating Expenses to Average Assets 1.98% 1.99% 2.02% 1.93% Efficiency Ratio (1) 68.80% 74.29% 69.77% 67.80% Per Common Share Data Shares Outstanding (at period end) 1,940,021 1,879,354 1,940,021 1,928,604 Average Shares Outstanding- Basic 1,933,293 1,881,017 1,936,811 1,928,604 Average Shares Outstanding- Diluted 1,994,352 1,981,734 2,000,559 1,988,809 Earnings Per Share -Basic $0.49 $0.44 $0.24 $0.25 Earnings Per Share -Diluted $0.48 $0.42 $0.23 $0.25 Cash Dividends Paid $0.20 $0.40 $0.20 $0.20 Book Value (period end) $14.28 $14.44 $14.28 $14.26 Tangible Book Value (period end) $12.48 $12.33 $12.48 $12.41 Market Value (period end closing sales price) $21.540 $24.750 $21.540 $22.650 (1) Total operating expenses (excluding net income or (loss) on other real estate owned) divided by total operating income (excluding gains on sale of assets available for sale). Gains and losses on the sales of loans and securities available for sale are excluded since they are generally considered by the Company's management to be non-recurring in nature. Similarly, net income or loss on other real estate owned is excluded since it is generally considered by the Company's management to be non-recurring in nature. The efficiency ratio is not a financial measurement required by Generally Accepted Accounting Principles (GAAP) used in the United States of America. However, the Company believes such information is useful to investors in evaluating the Company's operations. As a result of rounding, the sum of quarterly amounts may not equal the year-to-date amounts. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data December 31, 2004 (Dollars in thousands, Fiscal 2004 except per share data) At or For The Three Months Ended: (Unaudited) June 30, March 31, Dec. 31, Sept. 30, 2004 2004 2003 2003 Earnings Interest Income $3,115 $3,316 $3,168 $3,467 Interest Expense 1,427 1,471 1,532 1,700 Net Interest Income Before Provision for Loan Losses 1,688 1,845 1,636 1,767 Provision for Loan Losses 3 3 3 3 Net Interest Income after Provision for Loan Losses 1,685 1,842 1,633 1,764 Net Gain on Sale of Investment and Mortgage-Backed Securities 0 22 13 0 Gain on Sale of Loans Held for Sale 7 0 1 6 Other Income (excluding gains) 363 339 344 414 Operating Expenses 1,480 1,577 1,583 1,510 Income before Income Taxes 575 626 408 674 Provision for Income Taxes 144 193 55 204 Net Income $431 $433 $353 $470 Profitability Ratios (annualized where applicable) Return on Average Assets 0.57% 0.57% 0.46% 0.60% Return on Average Stockholders' Equity 6.34% 6.32% 5.20% 6.85% Yield on Interest-Earning Assets 4.37% 4.65% 4.40% 4.64% Cost of Interest-Bearing Liabilities 2.28% 2.32% 2.37% 2.48% Average Interest Rate Spread 2.09% 2.33% 2.03% 2.16% Net Interest Margin 2.36% 2.59% 2.27% 2.36% Operating Expenses to Average Assets 1.96% 2.09% 2.08% 2.53% Efficiency Ratio (1) 72.94% 72.59% 79.86% 69.23% Per Common Share Data Shares Outstanding (at period end) 1,928,604 1,925,228 1,879,354 1,885,410 Average Shares Outstanding- Basic 1,922,740 1,904,878 1,879,262 1,883,871 Average Shares Outstanding- Diluted 1,985,426 1,992,913 1,974,863 1,985,873 Earnings Per Share -Basic $0.22 $0.23 $0.19 $0.25 Earnings Per Share -Diluted $0.22 $0.22 $0.18 $0.24 Cash Dividends Paid $0.20 $0.20 $0.20 $0.20 Book Value (period end) $14.06 $14.29 $14.44 $14.59 Tangible Book Value (period end) $12.16 $12.28 $12.33 $12.43 Market Value (period end closing sales price) $21.150 $23.740 $24.750 $20.690 (1) Total operating expenses (excluding net income or (loss) on other real estate owned) divided by total operating income (excluding gains on sale of assets available for sale). Gains and losses on the sales of loans and securities available for sale are excluded since they are generally considered by the Company's management to be non-recurring in nature. Similarly, net income or loss on other real estate owned is excluded since it is generally considered by the Company's management to be non-recurring in nature. The efficiency ratio is not a financial measurement required by Generally Accepted Accounting Principles (GAAP) used in the United States of America. However, the Company believes such information is useful to investors in evaluating the Company's operations. As a result of rounding, the sum of quarterly amounts may not equal the year-to-date amounts. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data December 31, 2004 (Dollars in thousands) Fiscal 2005 (Unaudited) Dec. 31, Sept. 30, 2004 2004 Balance Sheet Data (As Of) Total Assets $308,499 $306,633 Mortgage Loans 159,464 147,361 Commercial and Other Loans 1,174 1,095 Consumer Loans 37,289 37,643 Total Loans Receivable, Net 197,927 186,099 Cash and Investment Securities 76,032 84,305 Mortgage-Backed Securities 17,068 19,231 Savings Deposits 254,652 251,553 FHLB Advances 21,605 21,607 Stockholders' Equity 27,702 27,505 Asset Quality (As Of) Non-Performing Loans $1,205 $1,985 Non-Performing Assets 1,555 2,025 Allowance for Loan Losses 1,988 1,992 Net Loan Charge-Offs (Recoveries) 50 43 Non-Performing Loans to Total Loans, Net 0.61% 1.07% Non-Performing Assets to Total Assets 0.50% 0.66% Allowance for Loan Losses/ Total Loans 1.00% 1.07% Allowance for Loan Losses/ Non-Performing Loans 164.98% 100.35% Net Loan Charge-Offs (Recoveries)/Avg Loans 0.0264% 0.0233% Ratios (As Of) Dividend Payout Ratio 83.33% 80.00% Average Equity to Average Assets 8.99% 8.96% Core Capital - Tier I 7.71% 7.70% Risk-Based Capital -Tier I 14.98% 15.21% Risk-Based Capital -Tier II 16.24% 16.46% Leverage Multiple (2) 11.14x 11.15x Other Data (As Of) Shareholders of Record 376 381 Number of Full-Service Banking Offices 8 8 (2) Assets divided by stockholder equity. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data December 31, 2004 (Dollars in thousands) Fiscal 2004 (Unaudited) June 30, March 31, Dec. 31, Sept. 30, 2004 2004 2003 2003 Balance Sheet Data (As Of) Total Assets $299,375 $301,251 $302,725 $307,278 Mortgage Loans 133,920 127,900 118,205 114,799 Commercial and Other Loans 1,475 2,269 2,254 3,012 Consumer Loans 37,896 38,247 39,551 40,172 Total Loans Receivable, Net 173,291 168,416 160,010 157,983 Cash and Investment Securities 87,554 99,038 113,575 120,175 Mortgage-Backed Securities 21,024 15,452 10,640 10,397 Savings Deposits 246,179 247,677 248,803 251,236 FHLB Advances 21,609 21,610 21,612 24,632 Stockholders' Equity 27,125 27,519 27,145 27,509 Asset Quality (As Of) Non-Performing Loans $2,156 $1,741 $1,595 $1,142 Non-Performing Assets 2,156 1,753 1,608 1,157 Allowance for Loan Losses 2,032 2,017 1,984 2,005 Net Loan Charge-Offs (Recoveries) (14) (5) 28 4 Non-Performing Loans to Total Loans, Net 1.24% 1.03% 1.00% 0.72% Non-Performing Assets to Total Assets 0.72% 0.58% 0.53% 0.38% Allowance for Loan Losses/ Total Loans 1.17% 1.20% 1.24% 1.27% Allowance for Loan Losses/ Non-Performing Loans 94.25% 115.85% 124.39% 175.57% Net Loan Charge-Offs (Recoveries)/Avg Loans -0.0084% -0.0030% 0.0170% 0.0023% Ratios (As Of) Dividend Payout Ratio 94.13% 95.24% 95.24% 83.33% Average Equity to Average Assets 8.89% 8.87% 8.77% 8.68% Core Capital - Tier I 7.76% 7.70% 7.63% 7.22% Risk-Based Capital -Tier I 15.65% 15.30% 15.39% 14.82% Risk-Based Capital -Tier II 16.90% 16.60% 16.69% 16.08% Leverage Multiple (2) 11.04x 10.95x 11.15x 11.17x Other Data (As Of) Shareholders of Record 383 387 393 395 Number of Full-Service Banking Offices 8 8 8 8 (2) Assets divided by stockholder equity. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data December 31, 2004 (Dollars in thousands) Fiscal 2003 (Unaudited) June 30, March 31, 2003 2003 Balance Sheet Data (As Of) Total Assets $322,783 $316,755 Mortgage Loans 133,518 143,151 Commercial and Other Loans 3,012 1,052 Consumer Loans 44,672 42,968 Total Loans Receivable, Net 181,202 187,171 Cash and Investment Securities 109,168 99,668 Mortgage-Backed Securities 13,505 16,031 Savings Deposits 265,580 259,388 FHLB Advances 24,672 24,713 Stockholders' Equity 27,684 27,385 Asset Quality (As Of) Non-Performing Loans $956 $953 Non-Performing Assets 956 1,083 Allowance for Loan Losses 2,006 2,014 Net Loan Charge-Offs (Recoveries) 18 8 Non-Performing Loans to Total Loans, Net 0.53% 0.51% Non-Performing Assets to Total Assets 0.30% 0.34% Allowance for Loan Losses/ Total Loans 1.11% 1.08% Allowance for Loan Losses/ Non-Performing Loans 209.83% 211.33% Net Loan Charge-Offs (Recoveries)/Avg Loans 0.0103% 0.0062% Ratios (As Of) Dividend Payout Ratio 59.38% 57.00% Average Equity to Average Assets 9.52% 9.82% Core Capital - Tier I 7.51% 8.45% Risk-Based Capital -Tier I 13.82% 11.65% Risk-Based Capital -Tier II 15.04% 12.69% Leverage Multiple (2) 11.66x 11.57x Other Data (As Of) Shareholders of Record 401 402 Number of Full-Service Banking Offices 8 8 (2) Assets divided by stockholder equity. DATASOURCE: Laurel Capital Group, Inc. CONTACT: Edwin R. Maus, President-CEO, ext. 303, or , or John A. Howard, Jr., Sr. Vice-President-CFO, ext. 311, or , both of Laurel Capital Group, Inc., +1-412-487-7404

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