Area Bancshares Corporation Reports Increased First Quarter Core Operating Earnings

Apr 23, 2001, 01:00 ET from Area Bancshares Corporation

    OWENSBORO, Ky., April 23 /PRNewswire Interactive News Release/ --
     AREA Bancshares Corporation (Nasdaq:   AREA) (www.areabancshares.com),
 Kentucky's largest bank holding company, today reported first quarter core
 operating earnings of $7.48 million, or $0.31 per diluted share, increases of
 $467 thousand, or 6.7 percent and $0.03 or 10.7 percent, respectively, over
 the same period of 2000.  Core operating earnings represent net income less
 non-core items (securities gains and nonrecurring items).
     "The increase for the current quarter compared to the first quarter of
 2000 in core operating earnings was due mainly to the increase in net interest
 income which reflects an increase in loans," said John Ray, AREA executive
 vice president and chief operating officer. "We think this reflects the
 success of our efforts to service the lending needs of the markets in which we
 operate."
     AREA operates throughout Kentucky in 39 cities with 72 banking centers and
 96 automatic teller machines. Through its subsidiaries, AREA offers a broad
 range of bank-related services, including trust and brokerage services.
 Ray said, "We are pleased with our core operating return on average assets and
 our core operating return on average equity for the quarter.  Also our cash-
 based core operating return on average assets (core operating return on
 average assets adjusted for amortization of intangibles) increased to 1.35%
 (annualized) during the current quarter compared to 1.31% (annualized) for the
 first quarter of 2000, while our cash-based return on average equity rose to
 15.91% (annualized) from 15.47% (annualized)."
     Ray also noted that in spite of the volatile interest rates over the past
 year, AREA's first quarter net interest margin increased to 4.58% compared to
 4.46% during the first quarter of 2000. He said this increase was the result
 of a positive change in the mix of earning assets and control over interest
 expense.
     "With respect to our consolidation of charters," Ray said, "we continue to
 realize the benefits and anticipate full implementation in the third quarter
 of this year.  We have received many very positive comments on our AREA Bank
 brand awareness process from our customers and others."
 The increases for the current quarter compared to the first quarter of 2000 in
 core operating earnings were due mainly to the growth in taxable equivalent
 net interest income of $2.54 million, or 9.8%, and growth in non-interest
 income (excluding security gains) which totaled $400 thousand or 5.7%. These
 increases were partially off-set by an increase in non-interest expenses.
 During the current period the loan loss provision was higher due to continued
 loan growth and an increase in loan charge-offs.
     Net income for the first quarter of 2001 was $7.49 million compared to
 $11.60 million earned during the first quarter of 2000. The prior year quarter
 includes security gains, net of taxes, of $4.74 million or $0.19 per diluted
 share as compared to only a negligible amount of security gains in the current
 quarter.  Net income per diluted share totaled $0.31 versus $0.47 in the same
 period of 2000. The current quarter includes the cumulative effect of a change
 in accounting principle, net of taxes, of $230 thousand or $0.01 per diluted
 share related to the Company's adoption of SFAS No. 133 on January 1, 2001.
     Cash-based core operating earnings, which are core operating earnings
 adjusted for the amortization of goodwill and other intangibles, were $8.90
 million, or $0.37 per diluted share for the first quarter of 2001, compared to
 $8.07 million, or $0.32 per diluted share.  The increases were $835 thousand,
 or 10.3% and $0.05, or 15.6% per diluted share, respectively.
     The following statistical summary is provided as supplemental information:
 
     (Amounts in thousands except
      per share date and percentages                Quarter Ended
      per share data and percentages)    March 31    December 31   September 30
     (Unaudited)                           2001          2000          2000
 
         HIGHLIGHTS
     Income Statements
     Income before cumulative effect
      of change in acounting principle $7,256          $7,754        $6,673
     Cumulative effect of change
      in accounting principle,
      net of taxes                        230              --            --
                                           --             230            --
     Reported net income                7,486           7,754         6,673
      Non-core items, net of taxes
      (details below)                      (3)            193         1,491
     Core operating income              7,483           7,947         8,164
      Intangible amortization,
       net of taxes                     1,421           1,365         1,223
     Cash-based core operating income   8,904           9,312         9,387
 
     Per Common Share Data
     Diluted-income before cumulative
      effect of change in
      accounting principle               0.30            0.32          0.27
      -cumulative effect of change in
      accounting principle, net of taxes 0.01              --            --
     Diluted-core                        0.31            0.33         0.033
     Diluted-cash-based core             0.37            0.38          0.38
 
     Cash dividends                     0.045           0.045          0.04
     Book value                         12.17           11.79         11.39
     Stock price at period-end          15.94           16.50         14.79
 
     Balance Sheet at Period-end
     Loans                          1,915,343       1,935,946     1,929,777
     Total assets                   2,734,585       2,768,470     2,746,701
     Deposits                       2,169,637       2,149,349     2,076,351
     Equity                           295,842         286,639       277,705
 
     Financial Ratios (A)
     Return on average assets:
      Reported income                    1.11%           1.13%         0.97%
      Core operating income              1.11%           1.16%         1.19%
      Cash-based core operating income   1.35%           1.39%         1.41%
     Return on average equity:
      Reported income                   10.47%          11.06%         9.71%
      Core operating income             10.47%          11.34%        11.87%
      Cash-based core operating income  15.91%          17.33%        18.07%
     Net interest margin                 4.58%           4.55%         4.56%
     Annualized net charge-offs/
      average loans                      0.29%           0.28%         0.07%
 
     (A) Annualized percentages
 
 
     (Amounts in thousands except      Quarter Ended         Year-to-date
     per share data and percentages) June 30   March 31    March 31  March 31
     (Unaudited)                       2000      2000        2001     2000
     HIGHLIGHTS
     Income Statements
     Income before cumulative
      effect of change in accounting
      principle                     $11,703     $11,603     $7,256    $11,603
     Cumulative effect of change
      in accounting principle,
      net of taxes                       --          --        230         --
     Reported net income             11,703      11,603      7,486     11,603
      Non-core items, net of
       taxes (details below)         (4,234)     (4,587)        (3)    (4,587)
     Core operating income            7,469       7,016      7,483      7,016
      Intangible amortization,
      net of taxes                    1,773       1,053      1,421      1,053
     Cash-based core operating income 9,242       8,069      8,904      8,069
 
     Per Common Share Data
     Diluted-income before
      cumulative effect of
      change in accounting
      principle                        0.47        0.47       0.30       0.47
     -cumulative effect of
      change in accounting
      principle, net of taxes            --          --       0.01         --
     Diluted-core                      0.30        0.28       0.31       0.28
     Diluted-cash-based core           0.37        0.32       0.37       0.32
 
     Cash dividends                    0.04       0.037      0.045      0.037
     Book value                       11.11       11.00      12.17      11.00
     Stock price at period-end        14.87       13.25      15.94      13.25
 
     Balance Sheet at Period-end
     Loans                        1,924,262   1,883,588  1,915,343  1,883,588
     Total assets                 2,733,361   2,680,617  2,734,585  2,680,617
     Deposits                     2,055,218   2,052,604  2,169,637  2,052,604
     Equity                         270,724     269,914    295,842    269,914
 
     Financial Ratios (A)
     Return on average assets:
      Reported income                  1.73%       1.85%     1.11%       1.85%
      Core operating income            1.10%       1.12%     1.11%       1.12%
      Cash-based core
       operating income                1.39%       1.31%     1.35%       1.31%
     Return on average equity:
      Reported income                 17.22%      18.38%    10.47%      18.38%
      Core operating income           10.99%      11.11%    10.47%      11.11%
      Cash-based core operating
       income                         17.79%      15.47%    15.91%      15.47%
     Net interest margin               4.51%       4.46%     4.58%       4.46%
     Annualized net charge-offs/
      average loans                    0.08%       0.04%     0.29%       0.04%
 
     (A) Annualized percentages
 
 
 
     Amounts in thousands except
     per share data and percentages)
 
                                                   Quarter Ended
 
                                       March 31     December 31  September 30
 
     (Unaudited)                        2001            2000          2000
     FINANCIAL STATISTICAL SUMMARY
     Income Statement
     Interest income                 $52,413         $54,326       $53,263
     Tax equivalent adjustment         1,319           1,203
     Interest expense                 25,255          26,769        25,831
     Net interest income
      (tax equivalent)                28,477          28,760        28,777
 
     Provision for loan losses           900           1,299           588
 
     Non-interest income:
      Commissions & fees-fiduciary
       activities                      1,582           1,524         1,511
      Service charges, commissions
       & fees                          5,277           5,236         5,300
      Securities gains (losses), net       4           (325)            --
     Other non-interest income           563             860           487
 
     Total non-interest income         7,426           7,295         7,298
 
     Non-interest expenses:
      Salaries and employee benefits  10,501           9,843        10,599
      Occupancy and equipment expenses 3,495           3,773         3,405
      Data processing expenses         1,106           1,078         1,890
      Other non-interest expenses      8,173           7,569         8,872
     Total non-interest expenses      23,275          22,263        24,766
 
     Income before income taxes and
      cumulative effect of change
       in accounting principle        11,728          12,493        10,721
     Income tax expense                3,153           3,536         2,703
     Tax equivalent adjustment         1,319           1,203         1,345
     Income before cumulative
      effect of change
     in accounting principle           7,256           7,754         6,673
     Cumulative effect of change
       in accounting principles,
     principle, net of taxes             230              --            --
     Net income                        7,486           7,754         6,673
 
     Net interest margin-tax
      equivalent(A)                     4.58%           4.55%         4.56%
     Efficiency ratio                  64.83%          61.75%        68.46%
 
     Non-core Items Detail
     Effect on net income, add
      (deduct) net of tax:
     Security (gains) losses             (3)             193            --
     Gain on sale of OREO/assets          --              --            --
     Consolidation costs                  --              --         1,491
     Merger/acquisition-related expense   --              --            --
     Total net income effect of
      non-core items                      (3)            193         1,491
 
     (A) Annualized
 
     (Amounts in thousands except
     per share data and percentages)
                                       Quarter Ended            Year-to-date
                                    June 30      March 31   March 31   March 31
     (Unaudited)                     2000          2000        2001       2000
     FINANCIAL STATISTICAL SUMMARY
     Income Statement
     Interest income              $51,807       $46,691      $52,413   $46,691
     Tax equivalent adjustment      1,327         1,251        1,319     1,251
     Interest expense              24,887        22,007       25,255    22,007
     Net interest income
     (tax equivalent)              28,247        25,935       28,477    25,935
 
     Provision for loan losses       314            322          900       322
 
     Non-interest income:
     Commissions & fees-fiduciary
      activities                   1,507          1,356        1,582     1,356
     Service charges,
      commissions & fees           5,405          4,722        5,277     4,722
     Securities gains (losses),
      net                          7,396          8,206            4     8,206
     Other non-interest income       820          1,087          563     1,087
     Total non-interest income    15,128         15,373        7,426    15,373
 
     Non-interest expenses:
     Salaries and employee
      benefits                    10,128          9,899       10,501     9,899
     Occupancy and equipment
      expenses                     3,334          3,018        3,495     3,018
     Data processing expenses      1,449          1,498        1,106     1,498
     Other non-interest expenses   8,621          7,315        8,173     7,315
     Total non-interest expenses  23,532         21,730       23,275    21,730
 
     Income before income taxes
      and cumulative effect of
      change in accounting
       principle                  19,529         19,256       11,728    19,256
     Income tax expense            6,499          6,402        3,153     6,402
     Tax equivalent adjustment     1,327          1,251        1,319     1,251
     Income before cumulative
       effect of change in
        accounting principle      11,703         11,603        7,256    11,603
     Cumulative effect of change
      in accounting principles,
     principle, net of taxes          --             --          230        --
     Net income                   11,703         11,603        7,486    11,603
 
     Net interest margin-tax
      equivalent (A)                4.51%          4.46%        4.58%     4.46%
     Efficiency ratio              54.25%         52.60%       64.83%    52.60%
 
     Non-core Items Detail
     Effect on net income, add
     (deduct) net of tax:
     Security (gains) losses      (4,234)        (4,742)          (3)   (4,742)
     Gain on sale of OREO/assets      --           (93)           --       (93)
     Consolidation costs              --            --            --        --
     Merger/acquisition-related
      expense                         --           248            --       248
     Total net income effect of
      non-core items              (4,234)       (4,587)           (3)   (4,587)
 
     (A) Annualized
 
 
     (Amounts in thousands except
      per share data and percentages)
                                             Quarter Ended
                    March 31   December 31  September 30   June 30    March 31
     (Unaudited)      2001         2000         2000        2000         2000
 
     Balance Sheet at Period-end
     Securities   $541,106      $549,845     $546,845     $551,161    $563,797
     Allowance for
      loan losses   27,165        27,630       27,706       27,456      27,540
     Intangibles    62,170        63,945       65,700       66,882      63,885
 
     Non-interest-
      bearing
      deposits     299,929       332,588      308,537      310,635     303,142
     Interest-
      bearing
      deposits   1,869,708     1,816,761    1,767,814    1,744,583   1,749,462
     Borrowings    242,431       301,579      367,358      383,970     328,910
 
     Equity-to-
      assets         10.82%        10.35%       10.11%       9.90%       10.07%
     Shares
      outstanding   24,319        24,318       24,481       24,476      24,533
 
     Average Balance Sheet
     Gross loans 1,915,337     1,936,330    1,927,869    1,909,330   1,764,978
     Earning
      assets     2,519,787     2,516,824    2,510,651    2,517,111   2,339,522
     Total
      assets     2,731,059     2,735,846    2,723,738    2,719,521   2,523,234
     Non-interest-
      bearing
      deposits     291,643       299,227      297,600      302,545     285,392
 
     Interest-bearing
      deposits   1,862,237     1,801,949    1,769,718    1,752,519   1,607,518
     Borrowings    258,503       329,499      355,245      364,197     366,787
     Equity        289,973       278,827      273,503      273,400     253,943
     Diluted shares
      outstanding   24,383        24,385       24,606       24,799      24,899
 
     Asset Quality
      At period-end:
     Non-accrual
      loans          1,902         4,036        2,452        3,171       3,406
     Past due 90 days
      and still
      accruing       4,772         1,755        3,047        3,773       3,412
     OREO              816         1,966          797          678         661
     Total non-
      performing
      assets (NPA)   7,490         7,757        6,296        7,622       7,479
     Nonperforming
      assets/assets   0.27%         0.28%        0.23%        0.28%       0.28%
 
     Allowance coverage
      of NPA         362.7%        356.2%       440.1%       360.2%      368.2%
     Allowance for loan
      losses/loans    1.42%         1.43%        1.44%        1.43%       1.46%
 
      For the period:
     Gross
      charge-offs    1,715         1,807          696          651         476
     Recoveries        350           432          358          253         316
     Net charge-offs 1,365         1,375          338          398         160
     Net charge-offs/
      average
      loans (A)       0.29%         0.28%        0.07%        0.08%       0.04%
 
     (A) Annualized
 
 
     (Amounts in thousands except                          Year-to-date
      per share data and percentages)                 March 31       March 31
     (Unaudited)                                        2001          2000
 
     Balance Sheet at Period-end
 
     Securities                                      $541,106       $563,797
     Allowance for loan losses                         27,165         27,540
     Intangibles                                       62,170         63,885
 
     Non-interest-bearing deposits                    299,929        303,142
     Interest-bearing deposits                      1,869,708      1,749,462
     Borrowings                                       242,431        328,910
 
     Equity-to-assets                                  10.82%         10.07%
     Shares outstanding                                24,319         24,533
 
     Average Balance Sheet
     Gross loans                                    1,915,337      1,764,978
     Earning assets                                 2,519,787      2,339,522
     Total assets                                   2,731,059      2,523,234
     Non-interest-bearing deposits                    291,643        285,392
     Interest-bearing deposits                      1,862,237      1,607,518
     Borrowings                                       258,503        366,787
     Equity                                           289,973        253,943
 
     Diluted shares outstanding                        24,383         24,899
 
     Asset Quality
      At period-end:
     Non-accrual loans                                  1,902          3,406
     Past due 90 days and still accruing                4,772          3,412
     OREO                                                 816            661
     Total non-performing assets (NPA)                  7,490          7,479
     Nonperforming assets/assets                        0.27%          0.28%
 
     Allowance coverage of NPA                         362.7%         368.2%
     Allowance for loan losses/loans                    1.42%          1.46%
 
      For the period:
     Gross charge-offs                                  1,715            476
     Recoveries                                           350            316
     Net charge-offs                                    1,365            160
     Net charge-offs/average loans (A)                  0.29%          0.04%
 
 (A) Annualized
 
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SOURCE Area Bancshares Corporation
    OWENSBORO, Ky., April 23 /PRNewswire Interactive News Release/ --
     AREA Bancshares Corporation (Nasdaq:   AREA) (www.areabancshares.com),
 Kentucky's largest bank holding company, today reported first quarter core
 operating earnings of $7.48 million, or $0.31 per diluted share, increases of
 $467 thousand, or 6.7 percent and $0.03 or 10.7 percent, respectively, over
 the same period of 2000.  Core operating earnings represent net income less
 non-core items (securities gains and nonrecurring items).
     "The increase for the current quarter compared to the first quarter of
 2000 in core operating earnings was due mainly to the increase in net interest
 income which reflects an increase in loans," said John Ray, AREA executive
 vice president and chief operating officer. "We think this reflects the
 success of our efforts to service the lending needs of the markets in which we
 operate."
     AREA operates throughout Kentucky in 39 cities with 72 banking centers and
 96 automatic teller machines. Through its subsidiaries, AREA offers a broad
 range of bank-related services, including trust and brokerage services.
 Ray said, "We are pleased with our core operating return on average assets and
 our core operating return on average equity for the quarter.  Also our cash-
 based core operating return on average assets (core operating return on
 average assets adjusted for amortization of intangibles) increased to 1.35%
 (annualized) during the current quarter compared to 1.31% (annualized) for the
 first quarter of 2000, while our cash-based return on average equity rose to
 15.91% (annualized) from 15.47% (annualized)."
     Ray also noted that in spite of the volatile interest rates over the past
 year, AREA's first quarter net interest margin increased to 4.58% compared to
 4.46% during the first quarter of 2000. He said this increase was the result
 of a positive change in the mix of earning assets and control over interest
 expense.
     "With respect to our consolidation of charters," Ray said, "we continue to
 realize the benefits and anticipate full implementation in the third quarter
 of this year.  We have received many very positive comments on our AREA Bank
 brand awareness process from our customers and others."
 The increases for the current quarter compared to the first quarter of 2000 in
 core operating earnings were due mainly to the growth in taxable equivalent
 net interest income of $2.54 million, or 9.8%, and growth in non-interest
 income (excluding security gains) which totaled $400 thousand or 5.7%. These
 increases were partially off-set by an increase in non-interest expenses.
 During the current period the loan loss provision was higher due to continued
 loan growth and an increase in loan charge-offs.
     Net income for the first quarter of 2001 was $7.49 million compared to
 $11.60 million earned during the first quarter of 2000. The prior year quarter
 includes security gains, net of taxes, of $4.74 million or $0.19 per diluted
 share as compared to only a negligible amount of security gains in the current
 quarter.  Net income per diluted share totaled $0.31 versus $0.47 in the same
 period of 2000. The current quarter includes the cumulative effect of a change
 in accounting principle, net of taxes, of $230 thousand or $0.01 per diluted
 share related to the Company's adoption of SFAS No. 133 on January 1, 2001.
     Cash-based core operating earnings, which are core operating earnings
 adjusted for the amortization of goodwill and other intangibles, were $8.90
 million, or $0.37 per diluted share for the first quarter of 2001, compared to
 $8.07 million, or $0.32 per diluted share.  The increases were $835 thousand,
 or 10.3% and $0.05, or 15.6% per diluted share, respectively.
     The following statistical summary is provided as supplemental information:
 
     (Amounts in thousands except
      per share date and percentages                Quarter Ended
      per share data and percentages)    March 31    December 31   September 30
     (Unaudited)                           2001          2000          2000
 
         HIGHLIGHTS
     Income Statements
     Income before cumulative effect
      of change in acounting principle $7,256          $7,754        $6,673
     Cumulative effect of change
      in accounting principle,
      net of taxes                        230              --            --
                                           --             230            --
     Reported net income                7,486           7,754         6,673
      Non-core items, net of taxes
      (details below)                      (3)            193         1,491
     Core operating income              7,483           7,947         8,164
      Intangible amortization,
       net of taxes                     1,421           1,365         1,223
     Cash-based core operating income   8,904           9,312         9,387
 
     Per Common Share Data
     Diluted-income before cumulative
      effect of change in
      accounting principle               0.30            0.32          0.27
      -cumulative effect of change in
      accounting principle, net of taxes 0.01              --            --
     Diluted-core                        0.31            0.33         0.033
     Diluted-cash-based core             0.37            0.38          0.38
 
     Cash dividends                     0.045           0.045          0.04
     Book value                         12.17           11.79         11.39
     Stock price at period-end          15.94           16.50         14.79
 
     Balance Sheet at Period-end
     Loans                          1,915,343       1,935,946     1,929,777
     Total assets                   2,734,585       2,768,470     2,746,701
     Deposits                       2,169,637       2,149,349     2,076,351
     Equity                           295,842         286,639       277,705
 
     Financial Ratios (A)
     Return on average assets:
      Reported income                    1.11%           1.13%         0.97%
      Core operating income              1.11%           1.16%         1.19%
      Cash-based core operating income   1.35%           1.39%         1.41%
     Return on average equity:
      Reported income                   10.47%          11.06%         9.71%
      Core operating income             10.47%          11.34%        11.87%
      Cash-based core operating income  15.91%          17.33%        18.07%
     Net interest margin                 4.58%           4.55%         4.56%
     Annualized net charge-offs/
      average loans                      0.29%           0.28%         0.07%
 
     (A) Annualized percentages
 
 
     (Amounts in thousands except      Quarter Ended         Year-to-date
     per share data and percentages) June 30   March 31    March 31  March 31
     (Unaudited)                       2000      2000        2001     2000
     HIGHLIGHTS
     Income Statements
     Income before cumulative
      effect of change in accounting
      principle                     $11,703     $11,603     $7,256    $11,603
     Cumulative effect of change
      in accounting principle,
      net of taxes                       --          --        230         --
     Reported net income             11,703      11,603      7,486     11,603
      Non-core items, net of
       taxes (details below)         (4,234)     (4,587)        (3)    (4,587)
     Core operating income            7,469       7,016      7,483      7,016
      Intangible amortization,
      net of taxes                    1,773       1,053      1,421      1,053
     Cash-based core operating income 9,242       8,069      8,904      8,069
 
     Per Common Share Data
     Diluted-income before
      cumulative effect of
      change in accounting
      principle                        0.47        0.47       0.30       0.47
     -cumulative effect of
      change in accounting
      principle, net of taxes            --          --       0.01         --
     Diluted-core                      0.30        0.28       0.31       0.28
     Diluted-cash-based core           0.37        0.32       0.37       0.32
 
     Cash dividends                    0.04       0.037      0.045      0.037
     Book value                       11.11       11.00      12.17      11.00
     Stock price at period-end        14.87       13.25      15.94      13.25
 
     Balance Sheet at Period-end
     Loans                        1,924,262   1,883,588  1,915,343  1,883,588
     Total assets                 2,733,361   2,680,617  2,734,585  2,680,617
     Deposits                     2,055,218   2,052,604  2,169,637  2,052,604
     Equity                         270,724     269,914    295,842    269,914
 
     Financial Ratios (A)
     Return on average assets:
      Reported income                  1.73%       1.85%     1.11%       1.85%
      Core operating income            1.10%       1.12%     1.11%       1.12%
      Cash-based core
       operating income                1.39%       1.31%     1.35%       1.31%
     Return on average equity:
      Reported income                 17.22%      18.38%    10.47%      18.38%
      Core operating income           10.99%      11.11%    10.47%      11.11%
      Cash-based core operating
       income                         17.79%      15.47%    15.91%      15.47%
     Net interest margin               4.51%       4.46%     4.58%       4.46%
     Annualized net charge-offs/
      average loans                    0.08%       0.04%     0.29%       0.04%
 
     (A) Annualized percentages
 
 
 
     Amounts in thousands except
     per share data and percentages)
 
                                                   Quarter Ended
 
                                       March 31     December 31  September 30
 
     (Unaudited)                        2001            2000          2000
     FINANCIAL STATISTICAL SUMMARY
     Income Statement
     Interest income                 $52,413         $54,326       $53,263
     Tax equivalent adjustment         1,319           1,203
     Interest expense                 25,255          26,769        25,831
     Net interest income
      (tax equivalent)                28,477          28,760        28,777
 
     Provision for loan losses           900           1,299           588
 
     Non-interest income:
      Commissions & fees-fiduciary
       activities                      1,582           1,524         1,511
      Service charges, commissions
       & fees                          5,277           5,236         5,300
      Securities gains (losses), net       4           (325)            --
     Other non-interest income           563             860           487
 
     Total non-interest income         7,426           7,295         7,298
 
     Non-interest expenses:
      Salaries and employee benefits  10,501           9,843        10,599
      Occupancy and equipment expenses 3,495           3,773         3,405
      Data processing expenses         1,106           1,078         1,890
      Other non-interest expenses      8,173           7,569         8,872
     Total non-interest expenses      23,275          22,263        24,766
 
     Income before income taxes and
      cumulative effect of change
       in accounting principle        11,728          12,493        10,721
     Income tax expense                3,153           3,536         2,703
     Tax equivalent adjustment         1,319           1,203         1,345
     Income before cumulative
      effect of change
     in accounting principle           7,256           7,754         6,673
     Cumulative effect of change
       in accounting principles,
     principle, net of taxes             230              --            --
     Net income                        7,486           7,754         6,673
 
     Net interest margin-tax
      equivalent(A)                     4.58%           4.55%         4.56%
     Efficiency ratio                  64.83%          61.75%        68.46%
 
     Non-core Items Detail
     Effect on net income, add
      (deduct) net of tax:
     Security (gains) losses             (3)             193            --
     Gain on sale of OREO/assets          --              --            --
     Consolidation costs                  --              --         1,491
     Merger/acquisition-related expense   --              --            --
     Total net income effect of
      non-core items                      (3)            193         1,491
 
     (A) Annualized
 
     (Amounts in thousands except
     per share data and percentages)
                                       Quarter Ended            Year-to-date
                                    June 30      March 31   March 31   March 31
     (Unaudited)                     2000          2000        2001       2000
     FINANCIAL STATISTICAL SUMMARY
     Income Statement
     Interest income              $51,807       $46,691      $52,413   $46,691
     Tax equivalent adjustment      1,327         1,251        1,319     1,251
     Interest expense              24,887        22,007       25,255    22,007
     Net interest income
     (tax equivalent)              28,247        25,935       28,477    25,935
 
     Provision for loan losses       314            322          900       322
 
     Non-interest income:
     Commissions & fees-fiduciary
      activities                   1,507          1,356        1,582     1,356
     Service charges,
      commissions & fees           5,405          4,722        5,277     4,722
     Securities gains (losses),
      net                          7,396          8,206            4     8,206
     Other non-interest income       820          1,087          563     1,087
     Total non-interest income    15,128         15,373        7,426    15,373
 
     Non-interest expenses:
     Salaries and employee
      benefits                    10,128          9,899       10,501     9,899
     Occupancy and equipment
      expenses                     3,334          3,018        3,495     3,018
     Data processing expenses      1,449          1,498        1,106     1,498
     Other non-interest expenses   8,621          7,315        8,173     7,315
     Total non-interest expenses  23,532         21,730       23,275    21,730
 
     Income before income taxes
      and cumulative effect of
      change in accounting
       principle                  19,529         19,256       11,728    19,256
     Income tax expense            6,499          6,402        3,153     6,402
     Tax equivalent adjustment     1,327          1,251        1,319     1,251
     Income before cumulative
       effect of change in
        accounting principle      11,703         11,603        7,256    11,603
     Cumulative effect of change
      in accounting principles,
     principle, net of taxes          --             --          230        --
     Net income                   11,703         11,603        7,486    11,603
 
     Net interest margin-tax
      equivalent (A)                4.51%          4.46%        4.58%     4.46%
     Efficiency ratio              54.25%         52.60%       64.83%    52.60%
 
     Non-core Items Detail
     Effect on net income, add
     (deduct) net of tax:
     Security (gains) losses      (4,234)        (4,742)          (3)   (4,742)
     Gain on sale of OREO/assets      --           (93)           --       (93)
     Consolidation costs              --            --            --        --
     Merger/acquisition-related
      expense                         --           248            --       248
     Total net income effect of
      non-core items              (4,234)       (4,587)           (3)   (4,587)
 
     (A) Annualized
 
 
     (Amounts in thousands except
      per share data and percentages)
                                             Quarter Ended
                    March 31   December 31  September 30   June 30    March 31
     (Unaudited)      2001         2000         2000        2000         2000
 
     Balance Sheet at Period-end
     Securities   $541,106      $549,845     $546,845     $551,161    $563,797
     Allowance for
      loan losses   27,165        27,630       27,706       27,456      27,540
     Intangibles    62,170        63,945       65,700       66,882      63,885
 
     Non-interest-
      bearing
      deposits     299,929       332,588      308,537      310,635     303,142
     Interest-
      bearing
      deposits   1,869,708     1,816,761    1,767,814    1,744,583   1,749,462
     Borrowings    242,431       301,579      367,358      383,970     328,910
 
     Equity-to-
      assets         10.82%        10.35%       10.11%       9.90%       10.07%
     Shares
      outstanding   24,319        24,318       24,481       24,476      24,533
 
     Average Balance Sheet
     Gross loans 1,915,337     1,936,330    1,927,869    1,909,330   1,764,978
     Earning
      assets     2,519,787     2,516,824    2,510,651    2,517,111   2,339,522
     Total
      assets     2,731,059     2,735,846    2,723,738    2,719,521   2,523,234
     Non-interest-
      bearing
      deposits     291,643       299,227      297,600      302,545     285,392
 
     Interest-bearing
      deposits   1,862,237     1,801,949    1,769,718    1,752,519   1,607,518
     Borrowings    258,503       329,499      355,245      364,197     366,787
     Equity        289,973       278,827      273,503      273,400     253,943
     Diluted shares
      outstanding   24,383        24,385       24,606       24,799      24,899
 
     Asset Quality
      At period-end:
     Non-accrual
      loans          1,902         4,036        2,452        3,171       3,406
     Past due 90 days
      and still
      accruing       4,772         1,755        3,047        3,773       3,412
     OREO              816         1,966          797          678         661
     Total non-
      performing
      assets (NPA)   7,490         7,757        6,296        7,622       7,479
     Nonperforming
      assets/assets   0.27%         0.28%        0.23%        0.28%       0.28%
 
     Allowance coverage
      of NPA         362.7%        356.2%       440.1%       360.2%      368.2%
     Allowance for loan
      losses/loans    1.42%         1.43%        1.44%        1.43%       1.46%
 
      For the period:
     Gross
      charge-offs    1,715         1,807          696          651         476
     Recoveries        350           432          358          253         316
     Net charge-offs 1,365         1,375          338          398         160
     Net charge-offs/
      average
      loans (A)       0.29%         0.28%        0.07%        0.08%       0.04%
 
     (A) Annualized
 
 
     (Amounts in thousands except                          Year-to-date
      per share data and percentages)                 March 31       March 31
     (Unaudited)                                        2001          2000
 
     Balance Sheet at Period-end
 
     Securities                                      $541,106       $563,797
     Allowance for loan losses                         27,165         27,540
     Intangibles                                       62,170         63,885
 
     Non-interest-bearing deposits                    299,929        303,142
     Interest-bearing deposits                      1,869,708      1,749,462
     Borrowings                                       242,431        328,910
 
     Equity-to-assets                                  10.82%         10.07%
     Shares outstanding                                24,319         24,533
 
     Average Balance Sheet
     Gross loans                                    1,915,337      1,764,978
     Earning assets                                 2,519,787      2,339,522
     Total assets                                   2,731,059      2,523,234
     Non-interest-bearing deposits                    291,643        285,392
     Interest-bearing deposits                      1,862,237      1,607,518
     Borrowings                                       258,503        366,787
     Equity                                           289,973        253,943
 
     Diluted shares outstanding                        24,383         24,899
 
     Asset Quality
      At period-end:
     Non-accrual loans                                  1,902          3,406
     Past due 90 days and still accruing                4,772          3,412
     OREO                                                 816            661
     Total non-performing assets (NPA)                  7,490          7,479
     Nonperforming assets/assets                        0.27%          0.28%
 
     Allowance coverage of NPA                         362.7%         368.2%
     Allowance for loan losses/loans                    1.42%          1.46%
 
      For the period:
     Gross charge-offs                                  1,715            476
     Recoveries                                           350            316
     Net charge-offs                                    1,365            160
     Net charge-offs/average loans (A)                  0.29%          0.04%
 
 (A) Annualized
 
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 SOURCE  Area Bancshares Corporation