LARL Laurel Capital

ALLISON PARK, Pa., Aug. 30 /PRNewswire-FirstCall/ -- Laurel Capital Group, Inc. (NASDAQ:LARL) today reported net income for the fiscal year ended June 30, 2005 of $2.0 million or $1.03 per diluted share compared to net income of $1.7 million or $.85 per diluted share for the year ended June 30, 2004. The $362,000 or 21.5% increase in net income for the year reflects the effect of an increase in net interest income combined with a slight decrease in operating expenses, partially offset by a decrease in non-interest income and an increase in income tax expense. For fiscal 2005, the Company's return on average assets (ROA) was .67% and its return on average stockholders' equity was 7.45% compared to .55% and 6.19%, respectively, for fiscal 2004. Laurel Capital Group, Inc. also reported net income for the quarter ended June 30, 2005 of $578,000 or $.29 per diluted share compared to $431,000 or $.22 per diluted share for the quarter ended June 30, 2004. The 34.1% increase in net income for the fourth quarter of fiscal 2005 was primarily attributable to an increase in net interest income and a decrease in income tax expense partially offset by a slight decrease in non-interest income and an increase in operating expenses. Non-performing assets, which consist of loans delinquent 90 days and over, other real estate owned and other repossessed assets, decreased $1.1 million or 53.3% to $1.0 million or .33% of total assets at June 30, 2005 compared to $2.2 million or .72% of total assets at June 30, 2004. The allowance for loan losses at June 30, 2005 was $2.0 million or .95% of total loans as compared to $2.0 million or 1.17% at June 30, 2004. In commenting on the Company's performance, Edwin R. Maus, President and Chief Executive Officer, stated that "Although we are pleased with the significant improvement in earnings, the Company has been and will continue to be challenged by the current interest rate and economic environment. These conditions continue to make it difficult for the Company's operations to generate significant earnings growth. However, we are pleased with the reduction in the level of non-performing assets and believe it reflects our conservative lending practices." At June 30, 2005, Laurel Capital Group, Inc. had total assets of $309.8 million, loans receivable, net of $209.7 million and total deposits of $254.9 million. Additionally, stockholders' equity amounted to $27.8 million or $14.31 per share compared to $27.1 million or $14.06 per share at June 30, 2004. Laurel Capital Group, Inc., headquartered in Allison Park, Pennsylvania, is the holding company for Laurel Savings Bank, a 118-year-old, Pennsylvania- chartered, FDIC-insured savings bank with 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 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 June 30, 2005 Year-To-Date (Dollars in thousands, except per share data) At or For the Year Ended: (Unaudited) June 30, June 30, 2005 2004 Earnings Interest Income $13,762 $13,066 Interest Expense 6,294 6,130 Net Interest Income Before Provision for Loan Losses 7,468 6,936 Provision for Loan Losses 9 12 Net Interest Income after Provision for Loan Losses 7,459 6,924 Net Gain on Sale of Investment and Mortgage-Backed Securities 15 35 Gain on Sale of Loans Held for Sale 9 14 Other Income (Excluding Gains on Sale) 1,417 1,460 Operating Expenses 6,114 6,150 Income before Income Taxes 2,786 2,283 Provision for Income Taxes 737 596 Net Income $2,049 $1,687 Profitability Ratios (annualized where applicable) Return on Average Assets 0.67% 0.55% Return on Average Stockholders' Equity 7.45% 6.19% Yield on Interest-Earning Assets 4.71% 4.51% Cost of Interest-Bearing Liabilities 2.44% 2.36% Average Interest Rate Spread 2.27% 2.15% Net Interest Margin 2.56% 2.39% Operating Expenses to Average Assets 1.99% 2.01% Efficiency Ratio (1) 69.17% 73.53% Per Common Share Data Shares Outstanding (at period end) 1,943,000 1,928,604 Average Shares Outstanding - Basic 1,937,086 1,897,091 Average Shares Outstanding - Diluted 1,987,843 1,985,116 Earnings Per Share - Basic $1.06 $0.89 Earnings Per Share - Diluted $1.03 $0.85 Cash Dividends Paid $0.80 $0.80 Book Value (period end) $14.31 $14.06 Tangible Book Value (period end) $12.60 $12.16 Market Value of Outstanding Shares $20.56 $21.15 (period end closing sales price) LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data June 30, 2005 Fiscal 2005 (Dollars in thousands, except per share data) At or For the Three Months Ended: June March December September (Unaudited) 30, 31, 31, 30, 2005 2005 2004 2004 Earnings Interest Income $3,489 $3,525 $3,424 $3,324 Interest Expense 1,637 1,578 1,563 1,516 Net Interest Income Before Provision for Loan Losses 1,852 1,947 1,861 1,808 Provision for Loan Losses 0 3 3 3 Net Interest Income after Provision for Loan Losses 1,852 1,944 1,858 1,805 Net Gain on Sale of Investment and Mortgage-Backed Securities 15 - - - Gain on Sale of Loans Held for Sale 2 1 - 6 Other Income (Excluding Gains on Sale) 343 352 359 363 Operating Expenses 1,560 1,533 1,549 1,472 Income before Income Taxes 652 764 668 702 Provision for Income Taxes 74 242 207 214 Net Income $578 $522 $461 $488 Profitability Ratios (annualized where applicable) Return on Average Assets 0.75% 0.68% 0.60% 0.64% Return on Average Stockholders' Equity 8.40% 7.58% 6.68% 7.14% Yield on Interest-Earning Assets 4.75% 4.81% 4.71% 4.58% Cost of Interest-Bearing Liabilities 2.54% 2.46% 2.41% 2.34% Average Interest Rate Spread 2.21% 2.35% 2.30% 2.24% Net Interest Margin 2.52% 2.65% 2.56% 2.49% Operating Expenses to Average Assets 2.02% 1.98% 2.02% 1.93% Efficiency Ratio (1) 71.90% 67.24% 69.77% 67.80% Per Common Share Data Shares Outstanding (at period end) 1,943,000 1,940,021 1,940,021 1,928,604 Average Shares Outstanding - Basic 1,942,255 1,940,021 1,936,811 1,928,604 Average Shares Outstanding - Diluted 1,989,273 1,998,902 2,000,559 1,988,809 Earnings Per Share - Basic $0.30 $0.27 $0.24 $0.25 Earnings Per Share - Diluted $0.29 $0.26 $0.23 $0.25 Cash Dividends Paid $0.20 $0.20 $0.20 $0.20 Book Value (period end) $14.31 $14.07 $14.28 $14.26 Tangible Book Value (period end) $12.60 $12.31 $12.48 $12.41 Market Value of Outstanding Shares $20.56 $21.88 $21.54 $22.65 (period end closing sales price) LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data June 30, 2005 Fiscal 2004 (Dollars in thousands, except per share data) At or For The Three Months Ended: (Unaudited) June 30, March 31, 2004 2004 Earnings Interest Income $3,115 $3,316 Interest Expense 1,427 1,471 Net Interest Income Before Provision for Loan Losses 1,688 1,845 Provision for Loan Losses 3 3 Net Interest Income after Provision for Loan Losses 1,685 1,842 Net Gain on Sale of Investment and Mortgage-Backed Securities - 22 Gain on Sale of Loans Held for Sale 7 - Other Income (Excluding Gains on Sale) 363 339 Operating Expenses 1,480 1,577 Income before Income Taxes 575 626 Provision for Income Taxes 144 193 Net Income $431 $433 Profitability Ratios (annualized where applicable) Return on Average Assets 0.57% 0.57% Return on Average Stockholders' Equity 6.34% 6.32% Yield on Interest-Earning Assets 4.37% 4.65% Cost of Interest-Bearing Liabilities 2.28% 2.32% Average Interest Rate Spread 2.09% 2.33% Net Interest Margin 2.36% 2.59% Operating Expenses to Average Assets 1.96% 2.09% Efficiency Ratio (1) 72.94% 72.59% Per Common Share Data Shares Outstanding (at period end) 1,928,604 1,925,228 Average Shares Outstanding - Basic 1,922,740 1,904,878 Average Shares Outstanding - Diluted 1,985,426 1,992,913 Earnings Per Share - Basic $0.22 $0.23 Earnings Per Share - Diluted $0.22 $0.22 Cash Dividends Paid $0.20 $0.20 Book Value (period end) $14.06 $14.29 Tangible Book Value (period end) $12.16 $12.28 Market Value of Outstanding Shares $21.15 $23.74 (period end closing sales price) (1) Equals 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 also 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 June 30, 2005 (Dollars in thousands) Fiscal 2005 June March December September (Unaudited) 30, 31, 31, 30, 2005 2005 2004 2004 Balance Sheet Data (As Of) Total Assets $309,801 $307,742 $308,499 $306,633 Mortgage Loans 172,854 165,008 159,464 147,361 Commercial and Other Loans 665 731 1,174 1,095 Consumer Loans 36,230 36,748 37,289 37,643 Total Loans Receivable, Net 209,749 202,487 197,927 186,099 Cash and Investment Securities 69,428 72,697 76,032 84,305 Mortgage-Backed Securities 13,002 15,002 17,068 19,231 Savings Deposits 254,891 253,282 254,652 251,553 FHLB Advances 21,602 21,604 21,605 21,607 Stockholders' Equity 27,804 27,293 27,702 27,505 Asset Quality (As Of Or For The FYTD Period (2)) Non-Performing Loans $970 $833 $1,205 $1,985 Non-Performing Assets 1,007 961 1,555 2,025 Allowance for Loan Losses 1,989 1,998 1,988 1,992 Net Loan Charge-Offs (Recoveries) 52 43 50 43 Non-Performing Loans to Total Loans, Net 0.46% 0.41% 0.61% 1.07% Non-Performing Assets to Total Assets 0.33% 0.31% 0.50% 0.66% Allowance for Loan Losses/ Total Loans 0.95% 0.99% 1.00% 1.07% Allowance for Loan Losses/ Non-Performing Loans 205.05% 239.86% 164.98% 100.35% Net Loan Charge-Offs (Recoveries)/Avg Loans 0.0263% 0.0222% 0.0264% 0.0233% Ratios (As Of Or For The FYTD Period (2)) Dividend Payout Ratio 77.59% 81.40% 83.33% 80.00% Average Equity to Average Assets 8.96% 8.97% 8.99% 8.96% Core Capital - Tier I (3) 7.91% 7.64% 7.71% 7.70% Risk-Based Capital - Tier I (3) 15.33% 14.83% 14.98% 15.21% Risk-Based Capital - Tier II (3) 16.59% 16.08% 16.24% 16.46% Leverage Multiple (4) 11.14x 11.28x 11.14x 11.15x Other Data (As Of) Stockholders of Record 372 374 376 381 Number of Full-Service Banking Offices 8 8 8 8 LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data June 30, 2005 (Dollars in thousands) Fiscal 2004 June March December September (Unaudited) 30, 31, 31, 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 Or For The FYTD Period (2)) 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 Or For The FYTD Period (2)) 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 (3) 7.76% 7.70% 7.63% 7.22% Risk-Based Capital - Tier I (3) 15.65% 15.30% 15.39% 14.82% Risk-Based Capital - Tier II (3) 16.90% 16.60% 16.69% 16.08% Leverage Multiple (4) 11.04x 10.95x 11.15x 11.17x Other Data (As Of) Stockholders of Record 383 387 393 395 Number of Full-Service Banking Offices 8 8 8 8 (2) Fiscal Year To Date. (3) Ratios for Laurel Savings Bank. (4) Total assets divided by stockholders' equity. DATASOURCE: Laurel Capital Group, Inc. CONTACT: Edwin R. Maus, President-CEO, +1-412-487-7404, ext. 303, or ; or John A. Howard, Jr., Sr. Vice-President-CFO, +1-412-487-7404, ext. 311, or , both of Laurel Capital Group, Inc.

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