CoVest Bancshares, Inc. Reports 9% Increase in Core Net Income for 1st Quarter Of 2001 Over the Same Period in 2000

Apr 24, 2001, 01:00 ET from CoVest Bancshares, Inc.

    DES PLAINES, Ill., April 24 /PRNewswire Interactive News Release/ --
 CoVest Bancshares, Inc.'s (Nasdaq: COVB) core net income (net income, adjusted
 for the after tax effect of the gain on sale of loans) was $1,196,000 for the
 first quarter of 2001, up 9% over $1,097,000 for the same period last year.
 Basic earnings per share on core earnings were $0.31, a 15% increase compared
 to $0.27 per share for the first quarter of 2000.  Diluted earnings per share
 on core earnings were $0.30, a 15% increase compared to $0.26 per share for
 first quarter 2000.  Excluded from first quarter 2001 core net income is a
 $407,000 pretax gain on sale of single family first mortgages.  Net income
 with the gain was $1,435,000, up 31% over $1,097,000 for the same period last
 year.  Basic earnings and diluted earnings per share with the gain were $0.37
 and $0.37 respectively.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19991105/CHBHLOGO )
     Return on average equity and return on average assets during the first
 quarter, exclusive of the gain on sale of loans, were 9.91% and 0.81%
 respectively during 2001 compared to 9.51% and 0.78% in 2000.  Return on
 average equity and return on average assets with the gain on sale of single
 family first mortgages, were 11.89% and 0.98% respectively.
     The Company's efficiency ratio improved to 56.75% compared to 59.44% in
 the first quarter of 2000.  The Company's 2001 goal is to maintain an
 efficiency ratio in the 60% range.
     Cash earnings (net income, exclusive of the gain on sale of loans,
 adjusted for the after tax impact of amortization of goodwill) for the first
 quarter of 2001 were approximately $1,228,000, or $0.32 (basic) and $0.31
 (diluted) earnings per share, compared to $1,123,000 or $0.27 (basic) and
 $0.26 (diluted) earnings per share for the same period in 2000.  Cash earnings
 (net income including gain on sale of mortgage loans, adjusted for the after
 tax impact of amortization of goodwill) for the first quarter of 2001 were
 approximately $1,467,000, or $0.38 (basic) and $0.37 (diluted) earnings per
 share.
     Net interest income increased by $530,000, or 13%, for the first quarter
 of 2001 compared to the first quarter of 2000.  A $24.0 million increase in
 average earning assets for the first quarter of 2001 versus the first quarter
 of 2000 accounted for this increase.  The net interest rate spread averaged
 2.70% for the first quarter of 2001, a 17 basis point increase from 2.53%
 during the first quarter of 2000.  The yield on average earning assets
 increased by 30 basis points while the cost of interest-bearing liabilities
 increased by 13 basis points.  The Company's net interest margin averaged
 3.34% for the first quarter of 2001, a 24 basis point increase from 3.10% in
 the first quarter of 2000.  An increase of 24% or $4.7 million in average
 non-interest bearing deposits outstanding helped increase the net interest
 margin.  The Federal Reserve's rate reductions caused a decrease in the
 Company's prime rate which resulted in a decrease in interest received on
 loans and rates paid on deposits.  The fast decline in the 91 day Treasury
 Bill rate, on which the High Yield Money Market account is indexed, and a
 slower decline in prime rate enhanced the Company's net interest margin.
 During March 2001, the Company sold over $54 million of single family first
 mortgages.  The proceeds from the sale were used to pay off maturing FHLB term
 advances and Purchased CDs, and fund higher yielding loans.  The added
 liquidity also enabled the Company to moderately drop deposit yields.
     The provision for possible loan losses was $250,000 for the first quarter
 of 2001 versus $260,000 for the like period in 2000.
     Non-interest income, excluding gain on sale of loans, increased $38,000,
 or 6%, to $712,000 from the comparable quarter last year.  Loan related fees
 decreased $4,000.  Deposit related charges and fees increased by $33,000
 during the first quarter of 2001 as compared to the first quarter of 2000.
 Loss on sale of securities decreased $57,000 to $31,000 for the first quarter
 of 2001, as compared to an $88,000 loss during the first quarter last year.
     In March 2001, the Company sold single family first mortgage loans for a
 gain of $407,000.  The loans to single product users were sold on a "servicing
 released" basis, which means that the collection of principal and interest
 will be handled by a different servicer going forward.  The remainder of the
 loans will continue to be serviced by the Company.  Associated with the gain
 is $196,000 of capitalized "Mortgage Servicing Rights" (MSR's) on service
 retained mortgages.  These MSR's will be amortized based upon the remaining
 life of the loans.  Including the gain on sale of single family first mortgage
 loans, non-interest income increased $445,000, or 66%, to $1,118,000 from the
 comparable quarter last year.
     Non-interest expense increased $424,000, or 15% for the first quarter of
 2001 from the comparable quarter in 2000.  Total compensation and benefit
 costs increased $301,000 for the quarter ended March 31, 2001 versus
 March 31, 2000.  Advertising expense increased by $55,000 due to the High
 Yield Money Market campaign.  Other expenses increased by $70,000 due to
 increased legal expense and additional contribution expenses.  The Company's
 goal is to maintain an efficiency ratio in the 60% range.
     The Company's assets remained stable to $585 million as of March 31, 2001,
 as compared to $586 million at December 31, 2000.  Net loans receivable
 decreased $37.3 million to $463.1 million as of March 31, 2001 versus
 $500.4 million outstanding, as of December 31, 2000.  Single family mortgage
 loans in the amount of $54 million were sold in March 2001.  The sale of the
 loans  plus regular payoffs caused the decrease in the mortgage loan portfolio
 by $61 million.  The decrease was offset by an increase in multi-family loans
 by $20.7 million and commercial loans by $2.6 million.  The timing and rates
 earned on the redeployment of the remaining funds from the sale of the
 mortgage loans may have an impact on the results in the second and third
 quarters of 2001.  Total securities have decreased by $4.5 million as a result
 of sales, maturities and security paydowns.  These funds were used to fund
 loan growth and repay FHLB advances.  Deposits increased 2% to $460.9 million
 as of March 31, 2001 compared to $451.7 million as of December 31, 2000.  In
 March 2000, the Bank introduced a High Yield Account.  The Company is focused
 on growing High Yield Account balances and attracting new commercial deposit
 accounts.  At March 31, 2001, the account had a $121.5 million balance, a
 $1.7 million increase from year-end 2000.  The Company believes that the slow
 growth in the High Yield Money Market Account in 2001 was due to the rapid
 decline in the 91 day Treasury Bill rate to which the account is indexed.
 Deposit growth was centered in certificates of deposit that grew by
 $6.0 million.
     Stockholders' equity totaled $48.9 million at March 31, 2001.  The number
 of common shares outstanding was 3,850,241 and the book value per common share
 outstanding was $12.70.  The Company announced its 21st stock repurchase
 program on January 30, 2001, enabling the Company to repurchase 100,000 shares
 of its outstanding stock.  As of April 24, 2001, 24,821 shares had been
 repurchased at an average price of $12.69.
     At March 31, 2001, the Allowance for Possible Loan Losses was $5.5 million
 as compared to $5.7 million at December 31, 2000.  The Company recognized net
 charge-offs of $360,000 during the first quarter of 2001 versus $2,000 during
 the first quarter of 2000.
     At March 31, 2001, total non-performing assets amounted to $3,975,000, or
 0.68% of total assets compared to $5,499,000, or 0.94% of total assets at
 December 31, 2000.  As of March 31, 2001, the Company had $1,600,000 of
 impaired loans.  The property is in the process of foreclosure and the Company
 has recorded a write down of $225,000.
     CoVest Bancshares, Inc. is a bank holding company for CoVest Banc, a
 national bank servicing customers with three full-service offices located in
 the northwest suburbs of the greater Chicago area.  The Bank offers a wide
 range of retail and commercial banking services to the communities it serves.
 In addition, the bank provides other financial investments through its
 subsidiary, CoVest Investments, Inc.
 
     SAFE HARBOR STATEMENT
     This report contains certain forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
 the Securities Exchange Act of 1934, as amended.  The Company intends such
 forward-looking statements to be covered by the safe harbor provisions for
 forward-looking statements contained in the Private Securities Reform Act of
 1995, and is including this statement for purposes of these safe harbor
 provisions.  Forward-looking statements, which are based on certain
 assumptions and describe future plans, strategies and expectations of the
 Company, are generally identifiable by use of the words "believe," "expect,"
 "intend," "anticipate," "estimate," "project" or similar expressions.  The
 Company's ability to predict results or the actual effect of future plans or
 strategies is inherently uncertain.  Factors which could have a material
 adverse affect on the operations and future prospects of the Company and the
 subsidiary include, but are not limited to, changes in: interest rates,
 general economic conditions, legislative/regulatory changes, monetary and
 fiscal policies of the U.S. Government, including policies of the U.S.
 Treasury and the Federal Reserve Board, the quality or composition of the loan
 or securities portfolios, demand for loan products, deposit flows,
 competition, demand for financial services in the Company's market area, the
 Company's implementation of new technologies, the Company's ability to develop
 and maintain secure and reliable electronic systems and accounting principles,
 policies and guidelines.  These risks and uncertainties should be considered
 in evaluating forward-looking statements and undue reliance should not be
 placed on such statements.  Further information concerning the Company and its
 business, including additional factors that could materially affect the
 Company's financial results, is included in the Company's filings with the
 Securities and Exchange Commission.
 
                             COVEST BANCSHARES INC.
                              FINANCIAL HIGHLIGHTS
                                  (Unaudited)
 
                                     THREE MONTHS ENDED
 
                                  MARCH 31,       MARCH 31,
                                    2001             2000            % CHANGE
 
     Earnings:
 
     Net Interest Income (FTE)    $4,730,000      $4,204,000           12%
 
     Net Core Income              $1,196,000      $1,097,000            9%
 
     Net Income                   $1,435,000      $1,097,000           31%
 
     Per Share
 
       Basic                           $0.37           $0.27           37%
 
       Basic (core)                    $0.31           $0.27           15%
 
       Diluted                         $0.37           $0.26           42%
 
       Diluted (core)                  $0.30           $0.26           15%
 
     Key Ratios:
 
       Return on Average Assets        0.98%           0.78%           26%
 
       Return on Average Assets
        (core)                         0.81%           0.78%            4%
 
       Return on Average Equity       11.89%           9.51%           25%
 
       Return on Average Equity
        (core)                         9.91%           9.51%            4%
 
       Net Interest Margin             3.34%           3.10%            8%
 
       Average Stockholders'
        Equity to Average Assets       8.25%           8.23%            0%
 
     Risk-Based Capital Ratios:
 
       Tier I
 
        Company                        11.7%           12.1%           -3%
 
        Bank                           11.2%           11.2%            0%
 
       Total
 
        Company                        13.0%           13.3%           -2%
 
        Bank                           12.4%           12.5%            0%
 
     Common Stock Data:
 
       Cash Dividends Declared per
        Share                          $0.08           $0.08            0%
 
       Book Value per Share           $12.70          $11.36           12%
 
       Price/Earnings Ratio           11.90x           8.89x           34%
 
 
     * Core income adjusted for the after-tax effect of the gain on sale of
       mortgage loans.
 
 
                            COVEST BANCSHARES, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (Unaudited)
 
                         (Dollars in thousands, except
                                per share data)
 
                                                   MAR 31, 2001   DEC 31, 2000
     ASSETS
 
     CASH ON HAND AND IN BANKS                         $7,715        $10,501
 
     INTEREST BEARING DEPOSITS                         44,225             21
 
       Cash and Cash Equivalents                       51,940         10,522
 
     SECURITIES:
       Securities Available-for-Sale                   38,534         41,237
       Mortgage-Backed and Related Securities
        Available-for-Sale                              7,055          9,081
       Federal Home Loan Bank and Federal
        Reserve Bank Stock                              7,126          6,866
 
     TOTAL SECURITIES                                  52,715         57,184
 
     LOANS RECEIVABLE:
       Commercial Loans                                39,153         36,630
       Multi-Family Loans                             183,989        163,292
       Commercial Real Estate Loans                    79,000         79,281
       Construction Loans                              51,021         48,127
       Commercial/Municipal Leases                      4,066          5,936
       Mortgage Loans                                  60,010        120,567
       Consumer Loans                                  50,312         51,870
       Mortgage Loans Held for Sale                     1,085            383
 
          TOTAL LOANS RECEIVABLE                      468,636        506,086
       Allowance for Possible Loan Losses              (5,545)        (5,655)
 
     LOANS RECEIVABLE, NET                            463,091        500,431
 
     ACCRUED INTEREST RECEIVABLE                        3,310          4,014
     PREMISES AND EQUIPMENT                             9,849          9,976
     OTHER REAL ESTATE OWNED                              336              0
     GOODWILL                                           1,492          1,544
     MORTGAGE SERVICING RIGHTS                            313            124
     OTHER ASSETS                                       2,077          1,997
 
     TOTAL ASSETS                                    $585,123       $585,792
 
 
                            COVEST BANCSHARES, INC.
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)
                                  (Unaudited)
 
                 (Dollars in thousands, except per share data)
 
                                                  MAR 31, 2001    DEC 31, 2000
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     LIABILITIES:
       Deposits:
        Non-Interest Bearing                          $27,733        $27,197
        Interest Bearing Checking                      22,801         23,656
        Savings Accounts                               42,610         42,906
        Money Market Accounts                         121,484        119,767
        Certificates of Deposit                       168,943        162,870
        Jumbo CDs                                       9,694          8,958
        Purchased CDs                                  67,593         66,371
 
                                                      460,858        451,725
       Short-Term Borrowings and Securities
        Sold U/A to Repurchase                         40,194         45,479
       Long-Term Advances from Federal
        Home Loan Bank                                 24,000         29,000
       Advances from Borrowers for Taxes
        Insurance                                       3,530          5,166
       Accrued Expenses and Other Liabilities           7,632          6,388
 
     TOTAL LIABILITIES                                536,214        537,758
 
     STOCKHOLDERS' EQUITY:
       Common Stock, par value $.01 per share;
        7,500,000 authorized shares; 4,403,803
        shares issued at 3/31/01 and 12/31/00
        respectively                                       44             44
       Additional Paid-in Capital                      17,501         17,501
       Retained Earnings                               37,910         36,783
       Treasury Stock, 553,562 shares and
        494,162 shares, held at cost 3/31/01
        and 12/31/00 respectively                      (6,981)        (6,244)
       Accumulated Other Comprehensive Income/(Loss)      435            (50)
 
     TOTAL STOCKHOLDERS' EQUITY                        48,909         48,034
 
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $585,123       $585,792
 
 
                            COVEST BANCSHARES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                 (Dollars in thousands, except per share data)
 
                                                        THREE MONTHS ENDED
                                                      MAR 31,        MAR 31,
                                                       2001           2000
     INTEREST INCOME
       Loans and Leases Receivable                    $10,496         $9,247
       Interest Bearing Deposits at Banks                  63            117
       Mortgage-Backed and Related Securities             130            318
       Taxable Securities                                 412            538
       Tax Exempt Securities                               92            101
       Other Interest and Dividend Income                 125            117
 
       Total Interest Income                           11,318         10,438
 
     INTEREST EXPENSE
       Deposits                                         5,584          4,826
       Advances from Federal Home Loan Bank               871          1,341
       Other Borrowed Funds                               181            119
 
       Total Interest Expense                           6,636          6,286
 
     NET INTEREST INCOME                                4,682          4,152
 
       Provision for Possible Loan Losses                 250            260
 
     NET INTEREST INCOME AFTER PROVISION FOR
       POSSIBLE LOAN LOSSES                             4,432          3,892
 
     NON-INTEREST INCOME
       Loan Related Fees                                  406            410
       Deposit Related Charges and Fees                   258            225
       Gain/(Loss) on Sale of Securities/Loans            376            (88)
       Insurance and Annuity Commissions                   15             60
       Other                                               63             66
 
       Total Non-Interest Income                        1,118            673
 
     NON-INTEREST EXPENSE
       Compensation and Benefits                        1,892          1,591
       Occupancy and Equipment                            489            494
       Federal Deposit Insurance Premium                   23             19
       Data Processing                                    218            218
       Advertising                                        146             91
       Other Real Estate Owned                             (3)             0
       Amortization of Goodwill                            51             51
       Amortization of Mortgage Servicing Rights            7              5
       Other                                              469            399
 
       Total Non-Interest Expense                       3,292          2,868
 
     INCOME BEFORE INCOME TAXES                         2,258          1,697
 
       Income Tax Provision                              (823)          (600)
 
     NET INCOME                                        $1,435         $1,097
 
     Basic Earnings per Share                           $0.37          $0.27
     Diluted Earnings per Share                         $0.37          $0.26
 
 
                             COVEST BANCSHARES INC.
                             AVERAGE BALANCE SHEET
                                  (Unaudited)
                             (Dollars in thousands)
 
     The following table sets forth certain information related to the
     Company's average balance sheet.  It reflects the average yield on assets
     and average cost of liabilities for the periods indicated, on a fully tax
     equivalent basis, as derived by dividing income or expense by the average
     daily balance of assets or liabilities, respectively, for the periods
     indicated.
 
 
                                                THREE MONTHS ENDED
                                                    MAR 31, 2001
 
                                    AVERAGE                          AVERAGE
                                    BALANCE          INTEREST      YIELD/COST
 
     INTEREST EARNING ASSETS:
       Commercial Loans (A)(B)       $37,742            $768         8.14%
       Multi-Family Loans (B)        174,260           3,451          7.92
       Commercial Real Estate Loans
        (A)(B)                        78,967           1,622          8.22
       Construction Loans (A)(B)      48,676           1,232         10.12
       Commercial/Muni Leases (A)(B)   4,808              71          5.91
       Mortgage Loans (A)(B)         114,020           2,189          7.68
       Consumer Loans (A)             51,503           1,163          9.03
       Securities                     44,671             677          6.06
       Mortgage-Backed and
        Related Securities             7,608             130          6.83
       Other Investments               4,971              63          5.07
     Total Interest-Earning
      Assets                        $567,226         $11,366         8.02%
     Non-Interest Earning Assets      17,873
 
        TOTAL ASSETS                $585,099
 
     INTEREST-BEARING LIABILITIES:
       Interest-Bearing Checking     $22,859             $64         1.12%
       Savings                        42,371             261          2.46
       Money Market                  122,045           1,460          4.79
       Certificates of Deposits      165,839           2,543          6.13
       Jumbo CDs                       9,245             145          6.27
       Purchased CDs                  67,323           1,111          6.60
       FHLB Advances                  55,778             871          6.25
       Other Borrowed Funds           13,510             181          5.36
     Total Interest-Bearing
      Liabilities                   $498,970          $6,636         5.32%
 
     Non-Interest Bearing Deposits    24,456
     Other Liabilities                13,403
 
     TOTAL LIABILITIES              $536,829
 
     Stockholders' Equity             48,270
 
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY          $585,099
 
     NET INTEREST INCOME                              $4,730
 
     NET INTEREST RATE SPREAD (C)                                    2.70%
 
     NET INTEREST MARGIN (D)                                         3.34%
 
 
                                               THREE MONTHS ENDED
                                                  MAR 31, 2000
 
                                    AVERAGE                         AVERAGE
                                    BALANCE          INTEREST     YIELD/COST
 
     INTEREST EARNING ASSETS:
       Commercial Loans (A)(B)       $18,205            $334         7.34%
       Multi-Family Loans (B)        123,956           2,446          7.89
       Commercial Real Estate Loans
        (A)(B)                        74,252           1,487          8.01
       Construction Loans (A)(B)      45,201           1,166         10.32
       Commercial/Muni Leases (A)(B)  19,747             308          6.24
       Mortgage Loans (A) (B)        130,011           2,393          7.36
       Consumer Loans (A)             51,263           1,113          8.68
       Securities                     53,785             808          6.01
       Mortgage-Backed and
        Related Securities            18,317             318          6.94
       Other Investments               8,466             117          5.53
     Total Interest-Earning
      Assets                        $543,203         $10,490         7.72%
     Non-Interest Earning Assets      17,621
 
        TOTAL ASSETS                $560,824
 
     INTEREST-BEARING LIABILITIES:
       Interest-Bearing Checking     $22,417             $61         1.09%
       Savings                        49,529             308          2.49
       Money Market                   89,484           1,206          5.39
       Certificates of Deposits      165,872           2,321          5.60
       Jumbo CDs                       8,390             118          5.63
       Purchased CDs                  50,311             812          6.46
       FHLB Advances                  89,824           1,341          5.97
       Other Borrowed Funds            8,759             119          5.43
     Total Interest-Bearing
      Liabilities                   $484,586         $ 6,286         5.19%
 
     Non-Interest Bearing Deposits    19,798
     Other Liabilities                10,272
 
     TOTAL LIABILITIES              $514,656
 
     Stockholders' Equity             46,168
 
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY          $560,824
 
     NET INTEREST INCOME                              $4,204
 
     NET INTEREST RATE SPREAD (C)                                    2.53%
 
     NET INTEREST MARGIN (D)                                         3.10%
 
     (A) Includes cash basis loans.
     (B) Includes deferred fees/costs.
     (C) Interest Rate Spread is calculated by subtracting the average cost of
         interest-bearing liabilities from the average rate on interest-earning
         assets.
     (D) Net Interest Margin is calculated by dividing net interest income by
         average interest-earning assets.
 
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SOURCE CoVest Bancshares, Inc.
    DES PLAINES, Ill., April 24 /PRNewswire Interactive News Release/ --
 CoVest Bancshares, Inc.'s (Nasdaq: COVB) core net income (net income, adjusted
 for the after tax effect of the gain on sale of loans) was $1,196,000 for the
 first quarter of 2001, up 9% over $1,097,000 for the same period last year.
 Basic earnings per share on core earnings were $0.31, a 15% increase compared
 to $0.27 per share for the first quarter of 2000.  Diluted earnings per share
 on core earnings were $0.30, a 15% increase compared to $0.26 per share for
 first quarter 2000.  Excluded from first quarter 2001 core net income is a
 $407,000 pretax gain on sale of single family first mortgages.  Net income
 with the gain was $1,435,000, up 31% over $1,097,000 for the same period last
 year.  Basic earnings and diluted earnings per share with the gain were $0.37
 and $0.37 respectively.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19991105/CHBHLOGO )
     Return on average equity and return on average assets during the first
 quarter, exclusive of the gain on sale of loans, were 9.91% and 0.81%
 respectively during 2001 compared to 9.51% and 0.78% in 2000.  Return on
 average equity and return on average assets with the gain on sale of single
 family first mortgages, were 11.89% and 0.98% respectively.
     The Company's efficiency ratio improved to 56.75% compared to 59.44% in
 the first quarter of 2000.  The Company's 2001 goal is to maintain an
 efficiency ratio in the 60% range.
     Cash earnings (net income, exclusive of the gain on sale of loans,
 adjusted for the after tax impact of amortization of goodwill) for the first
 quarter of 2001 were approximately $1,228,000, or $0.32 (basic) and $0.31
 (diluted) earnings per share, compared to $1,123,000 or $0.27 (basic) and
 $0.26 (diluted) earnings per share for the same period in 2000.  Cash earnings
 (net income including gain on sale of mortgage loans, adjusted for the after
 tax impact of amortization of goodwill) for the first quarter of 2001 were
 approximately $1,467,000, or $0.38 (basic) and $0.37 (diluted) earnings per
 share.
     Net interest income increased by $530,000, or 13%, for the first quarter
 of 2001 compared to the first quarter of 2000.  A $24.0 million increase in
 average earning assets for the first quarter of 2001 versus the first quarter
 of 2000 accounted for this increase.  The net interest rate spread averaged
 2.70% for the first quarter of 2001, a 17 basis point increase from 2.53%
 during the first quarter of 2000.  The yield on average earning assets
 increased by 30 basis points while the cost of interest-bearing liabilities
 increased by 13 basis points.  The Company's net interest margin averaged
 3.34% for the first quarter of 2001, a 24 basis point increase from 3.10% in
 the first quarter of 2000.  An increase of 24% or $4.7 million in average
 non-interest bearing deposits outstanding helped increase the net interest
 margin.  The Federal Reserve's rate reductions caused a decrease in the
 Company's prime rate which resulted in a decrease in interest received on
 loans and rates paid on deposits.  The fast decline in the 91 day Treasury
 Bill rate, on which the High Yield Money Market account is indexed, and a
 slower decline in prime rate enhanced the Company's net interest margin.
 During March 2001, the Company sold over $54 million of single family first
 mortgages.  The proceeds from the sale were used to pay off maturing FHLB term
 advances and Purchased CDs, and fund higher yielding loans.  The added
 liquidity also enabled the Company to moderately drop deposit yields.
     The provision for possible loan losses was $250,000 for the first quarter
 of 2001 versus $260,000 for the like period in 2000.
     Non-interest income, excluding gain on sale of loans, increased $38,000,
 or 6%, to $712,000 from the comparable quarter last year.  Loan related fees
 decreased $4,000.  Deposit related charges and fees increased by $33,000
 during the first quarter of 2001 as compared to the first quarter of 2000.
 Loss on sale of securities decreased $57,000 to $31,000 for the first quarter
 of 2001, as compared to an $88,000 loss during the first quarter last year.
     In March 2001, the Company sold single family first mortgage loans for a
 gain of $407,000.  The loans to single product users were sold on a "servicing
 released" basis, which means that the collection of principal and interest
 will be handled by a different servicer going forward.  The remainder of the
 loans will continue to be serviced by the Company.  Associated with the gain
 is $196,000 of capitalized "Mortgage Servicing Rights" (MSR's) on service
 retained mortgages.  These MSR's will be amortized based upon the remaining
 life of the loans.  Including the gain on sale of single family first mortgage
 loans, non-interest income increased $445,000, or 66%, to $1,118,000 from the
 comparable quarter last year.
     Non-interest expense increased $424,000, or 15% for the first quarter of
 2001 from the comparable quarter in 2000.  Total compensation and benefit
 costs increased $301,000 for the quarter ended March 31, 2001 versus
 March 31, 2000.  Advertising expense increased by $55,000 due to the High
 Yield Money Market campaign.  Other expenses increased by $70,000 due to
 increased legal expense and additional contribution expenses.  The Company's
 goal is to maintain an efficiency ratio in the 60% range.
     The Company's assets remained stable to $585 million as of March 31, 2001,
 as compared to $586 million at December 31, 2000.  Net loans receivable
 decreased $37.3 million to $463.1 million as of March 31, 2001 versus
 $500.4 million outstanding, as of December 31, 2000.  Single family mortgage
 loans in the amount of $54 million were sold in March 2001.  The sale of the
 loans  plus regular payoffs caused the decrease in the mortgage loan portfolio
 by $61 million.  The decrease was offset by an increase in multi-family loans
 by $20.7 million and commercial loans by $2.6 million.  The timing and rates
 earned on the redeployment of the remaining funds from the sale of the
 mortgage loans may have an impact on the results in the second and third
 quarters of 2001.  Total securities have decreased by $4.5 million as a result
 of sales, maturities and security paydowns.  These funds were used to fund
 loan growth and repay FHLB advances.  Deposits increased 2% to $460.9 million
 as of March 31, 2001 compared to $451.7 million as of December 31, 2000.  In
 March 2000, the Bank introduced a High Yield Account.  The Company is focused
 on growing High Yield Account balances and attracting new commercial deposit
 accounts.  At March 31, 2001, the account had a $121.5 million balance, a
 $1.7 million increase from year-end 2000.  The Company believes that the slow
 growth in the High Yield Money Market Account in 2001 was due to the rapid
 decline in the 91 day Treasury Bill rate to which the account is indexed.
 Deposit growth was centered in certificates of deposit that grew by
 $6.0 million.
     Stockholders' equity totaled $48.9 million at March 31, 2001.  The number
 of common shares outstanding was 3,850,241 and the book value per common share
 outstanding was $12.70.  The Company announced its 21st stock repurchase
 program on January 30, 2001, enabling the Company to repurchase 100,000 shares
 of its outstanding stock.  As of April 24, 2001, 24,821 shares had been
 repurchased at an average price of $12.69.
     At March 31, 2001, the Allowance for Possible Loan Losses was $5.5 million
 as compared to $5.7 million at December 31, 2000.  The Company recognized net
 charge-offs of $360,000 during the first quarter of 2001 versus $2,000 during
 the first quarter of 2000.
     At March 31, 2001, total non-performing assets amounted to $3,975,000, or
 0.68% of total assets compared to $5,499,000, or 0.94% of total assets at
 December 31, 2000.  As of March 31, 2001, the Company had $1,600,000 of
 impaired loans.  The property is in the process of foreclosure and the Company
 has recorded a write down of $225,000.
     CoVest Bancshares, Inc. is a bank holding company for CoVest Banc, a
 national bank servicing customers with three full-service offices located in
 the northwest suburbs of the greater Chicago area.  The Bank offers a wide
 range of retail and commercial banking services to the communities it serves.
 In addition, the bank provides other financial investments through its
 subsidiary, CoVest Investments, Inc.
 
     SAFE HARBOR STATEMENT
     This report contains certain forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
 the Securities Exchange Act of 1934, as amended.  The Company intends such
 forward-looking statements to be covered by the safe harbor provisions for
 forward-looking statements contained in the Private Securities Reform Act of
 1995, and is including this statement for purposes of these safe harbor
 provisions.  Forward-looking statements, which are based on certain
 assumptions and describe future plans, strategies and expectations of the
 Company, are generally identifiable by use of the words "believe," "expect,"
 "intend," "anticipate," "estimate," "project" or similar expressions.  The
 Company's ability to predict results or the actual effect of future plans or
 strategies is inherently uncertain.  Factors which could have a material
 adverse affect on the operations and future prospects of the Company and the
 subsidiary include, but are not limited to, changes in: interest rates,
 general economic conditions, legislative/regulatory changes, monetary and
 fiscal policies of the U.S. Government, including policies of the U.S.
 Treasury and the Federal Reserve Board, the quality or composition of the loan
 or securities portfolios, demand for loan products, deposit flows,
 competition, demand for financial services in the Company's market area, the
 Company's implementation of new technologies, the Company's ability to develop
 and maintain secure and reliable electronic systems and accounting principles,
 policies and guidelines.  These risks and uncertainties should be considered
 in evaluating forward-looking statements and undue reliance should not be
 placed on such statements.  Further information concerning the Company and its
 business, including additional factors that could materially affect the
 Company's financial results, is included in the Company's filings with the
 Securities and Exchange Commission.
 
                             COVEST BANCSHARES INC.
                              FINANCIAL HIGHLIGHTS
                                  (Unaudited)
 
                                     THREE MONTHS ENDED
 
                                  MARCH 31,       MARCH 31,
                                    2001             2000            % CHANGE
 
     Earnings:
 
     Net Interest Income (FTE)    $4,730,000      $4,204,000           12%
 
     Net Core Income              $1,196,000      $1,097,000            9%
 
     Net Income                   $1,435,000      $1,097,000           31%
 
     Per Share
 
       Basic                           $0.37           $0.27           37%
 
       Basic (core)                    $0.31           $0.27           15%
 
       Diluted                         $0.37           $0.26           42%
 
       Diluted (core)                  $0.30           $0.26           15%
 
     Key Ratios:
 
       Return on Average Assets        0.98%           0.78%           26%
 
       Return on Average Assets
        (core)                         0.81%           0.78%            4%
 
       Return on Average Equity       11.89%           9.51%           25%
 
       Return on Average Equity
        (core)                         9.91%           9.51%            4%
 
       Net Interest Margin             3.34%           3.10%            8%
 
       Average Stockholders'
        Equity to Average Assets       8.25%           8.23%            0%
 
     Risk-Based Capital Ratios:
 
       Tier I
 
        Company                        11.7%           12.1%           -3%
 
        Bank                           11.2%           11.2%            0%
 
       Total
 
        Company                        13.0%           13.3%           -2%
 
        Bank                           12.4%           12.5%            0%
 
     Common Stock Data:
 
       Cash Dividends Declared per
        Share                          $0.08           $0.08            0%
 
       Book Value per Share           $12.70          $11.36           12%
 
       Price/Earnings Ratio           11.90x           8.89x           34%
 
 
     * Core income adjusted for the after-tax effect of the gain on sale of
       mortgage loans.
 
 
                            COVEST BANCSHARES, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (Unaudited)
 
                         (Dollars in thousands, except
                                per share data)
 
                                                   MAR 31, 2001   DEC 31, 2000
     ASSETS
 
     CASH ON HAND AND IN BANKS                         $7,715        $10,501
 
     INTEREST BEARING DEPOSITS                         44,225             21
 
       Cash and Cash Equivalents                       51,940         10,522
 
     SECURITIES:
       Securities Available-for-Sale                   38,534         41,237
       Mortgage-Backed and Related Securities
        Available-for-Sale                              7,055          9,081
       Federal Home Loan Bank and Federal
        Reserve Bank Stock                              7,126          6,866
 
     TOTAL SECURITIES                                  52,715         57,184
 
     LOANS RECEIVABLE:
       Commercial Loans                                39,153         36,630
       Multi-Family Loans                             183,989        163,292
       Commercial Real Estate Loans                    79,000         79,281
       Construction Loans                              51,021         48,127
       Commercial/Municipal Leases                      4,066          5,936
       Mortgage Loans                                  60,010        120,567
       Consumer Loans                                  50,312         51,870
       Mortgage Loans Held for Sale                     1,085            383
 
          TOTAL LOANS RECEIVABLE                      468,636        506,086
       Allowance for Possible Loan Losses              (5,545)        (5,655)
 
     LOANS RECEIVABLE, NET                            463,091        500,431
 
     ACCRUED INTEREST RECEIVABLE                        3,310          4,014
     PREMISES AND EQUIPMENT                             9,849          9,976
     OTHER REAL ESTATE OWNED                              336              0
     GOODWILL                                           1,492          1,544
     MORTGAGE SERVICING RIGHTS                            313            124
     OTHER ASSETS                                       2,077          1,997
 
     TOTAL ASSETS                                    $585,123       $585,792
 
 
                            COVEST BANCSHARES, INC.
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Continued)
                                  (Unaudited)
 
                 (Dollars in thousands, except per share data)
 
                                                  MAR 31, 2001    DEC 31, 2000
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     LIABILITIES:
       Deposits:
        Non-Interest Bearing                          $27,733        $27,197
        Interest Bearing Checking                      22,801         23,656
        Savings Accounts                               42,610         42,906
        Money Market Accounts                         121,484        119,767
        Certificates of Deposit                       168,943        162,870
        Jumbo CDs                                       9,694          8,958
        Purchased CDs                                  67,593         66,371
 
                                                      460,858        451,725
       Short-Term Borrowings and Securities
        Sold U/A to Repurchase                         40,194         45,479
       Long-Term Advances from Federal
        Home Loan Bank                                 24,000         29,000
       Advances from Borrowers for Taxes
        Insurance                                       3,530          5,166
       Accrued Expenses and Other Liabilities           7,632          6,388
 
     TOTAL LIABILITIES                                536,214        537,758
 
     STOCKHOLDERS' EQUITY:
       Common Stock, par value $.01 per share;
        7,500,000 authorized shares; 4,403,803
        shares issued at 3/31/01 and 12/31/00
        respectively                                       44             44
       Additional Paid-in Capital                      17,501         17,501
       Retained Earnings                               37,910         36,783
       Treasury Stock, 553,562 shares and
        494,162 shares, held at cost 3/31/01
        and 12/31/00 respectively                      (6,981)        (6,244)
       Accumulated Other Comprehensive Income/(Loss)      435            (50)
 
     TOTAL STOCKHOLDERS' EQUITY                        48,909         48,034
 
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $585,123       $585,792
 
 
                            COVEST BANCSHARES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                 (Dollars in thousands, except per share data)
 
                                                        THREE MONTHS ENDED
                                                      MAR 31,        MAR 31,
                                                       2001           2000
     INTEREST INCOME
       Loans and Leases Receivable                    $10,496         $9,247
       Interest Bearing Deposits at Banks                  63            117
       Mortgage-Backed and Related Securities             130            318
       Taxable Securities                                 412            538
       Tax Exempt Securities                               92            101
       Other Interest and Dividend Income                 125            117
 
       Total Interest Income                           11,318         10,438
 
     INTEREST EXPENSE
       Deposits                                         5,584          4,826
       Advances from Federal Home Loan Bank               871          1,341
       Other Borrowed Funds                               181            119
 
       Total Interest Expense                           6,636          6,286
 
     NET INTEREST INCOME                                4,682          4,152
 
       Provision for Possible Loan Losses                 250            260
 
     NET INTEREST INCOME AFTER PROVISION FOR
       POSSIBLE LOAN LOSSES                             4,432          3,892
 
     NON-INTEREST INCOME
       Loan Related Fees                                  406            410
       Deposit Related Charges and Fees                   258            225
       Gain/(Loss) on Sale of Securities/Loans            376            (88)
       Insurance and Annuity Commissions                   15             60
       Other                                               63             66
 
       Total Non-Interest Income                        1,118            673
 
     NON-INTEREST EXPENSE
       Compensation and Benefits                        1,892          1,591
       Occupancy and Equipment                            489            494
       Federal Deposit Insurance Premium                   23             19
       Data Processing                                    218            218
       Advertising                                        146             91
       Other Real Estate Owned                             (3)             0
       Amortization of Goodwill                            51             51
       Amortization of Mortgage Servicing Rights            7              5
       Other                                              469            399
 
       Total Non-Interest Expense                       3,292          2,868
 
     INCOME BEFORE INCOME TAXES                         2,258          1,697
 
       Income Tax Provision                              (823)          (600)
 
     NET INCOME                                        $1,435         $1,097
 
     Basic Earnings per Share                           $0.37          $0.27
     Diluted Earnings per Share                         $0.37          $0.26
 
 
                             COVEST BANCSHARES INC.
                             AVERAGE BALANCE SHEET
                                  (Unaudited)
                             (Dollars in thousands)
 
     The following table sets forth certain information related to the
     Company's average balance sheet.  It reflects the average yield on assets
     and average cost of liabilities for the periods indicated, on a fully tax
     equivalent basis, as derived by dividing income or expense by the average
     daily balance of assets or liabilities, respectively, for the periods
     indicated.
 
 
                                                THREE MONTHS ENDED
                                                    MAR 31, 2001
 
                                    AVERAGE                          AVERAGE
                                    BALANCE          INTEREST      YIELD/COST
 
     INTEREST EARNING ASSETS:
       Commercial Loans (A)(B)       $37,742            $768         8.14%
       Multi-Family Loans (B)        174,260           3,451          7.92
       Commercial Real Estate Loans
        (A)(B)                        78,967           1,622          8.22
       Construction Loans (A)(B)      48,676           1,232         10.12
       Commercial/Muni Leases (A)(B)   4,808              71          5.91
       Mortgage Loans (A)(B)         114,020           2,189          7.68
       Consumer Loans (A)             51,503           1,163          9.03
       Securities                     44,671             677          6.06
       Mortgage-Backed and
        Related Securities             7,608             130          6.83
       Other Investments               4,971              63          5.07
     Total Interest-Earning
      Assets                        $567,226         $11,366         8.02%
     Non-Interest Earning Assets      17,873
 
        TOTAL ASSETS                $585,099
 
     INTEREST-BEARING LIABILITIES:
       Interest-Bearing Checking     $22,859             $64         1.12%
       Savings                        42,371             261          2.46
       Money Market                  122,045           1,460          4.79
       Certificates of Deposits      165,839           2,543          6.13
       Jumbo CDs                       9,245             145          6.27
       Purchased CDs                  67,323           1,111          6.60
       FHLB Advances                  55,778             871          6.25
       Other Borrowed Funds           13,510             181          5.36
     Total Interest-Bearing
      Liabilities                   $498,970          $6,636         5.32%
 
     Non-Interest Bearing Deposits    24,456
     Other Liabilities                13,403
 
     TOTAL LIABILITIES              $536,829
 
     Stockholders' Equity             48,270
 
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY          $585,099
 
     NET INTEREST INCOME                              $4,730
 
     NET INTEREST RATE SPREAD (C)                                    2.70%
 
     NET INTEREST MARGIN (D)                                         3.34%
 
 
                                               THREE MONTHS ENDED
                                                  MAR 31, 2000
 
                                    AVERAGE                         AVERAGE
                                    BALANCE          INTEREST     YIELD/COST
 
     INTEREST EARNING ASSETS:
       Commercial Loans (A)(B)       $18,205            $334         7.34%
       Multi-Family Loans (B)        123,956           2,446          7.89
       Commercial Real Estate Loans
        (A)(B)                        74,252           1,487          8.01
       Construction Loans (A)(B)      45,201           1,166         10.32
       Commercial/Muni Leases (A)(B)  19,747             308          6.24
       Mortgage Loans (A) (B)        130,011           2,393          7.36
       Consumer Loans (A)             51,263           1,113          8.68
       Securities                     53,785             808          6.01
       Mortgage-Backed and
        Related Securities            18,317             318          6.94
       Other Investments               8,466             117          5.53
     Total Interest-Earning
      Assets                        $543,203         $10,490         7.72%
     Non-Interest Earning Assets      17,621
 
        TOTAL ASSETS                $560,824
 
     INTEREST-BEARING LIABILITIES:
       Interest-Bearing Checking     $22,417             $61         1.09%
       Savings                        49,529             308          2.49
       Money Market                   89,484           1,206          5.39
       Certificates of Deposits      165,872           2,321          5.60
       Jumbo CDs                       8,390             118          5.63
       Purchased CDs                  50,311             812          6.46
       FHLB Advances                  89,824           1,341          5.97
       Other Borrowed Funds            8,759             119          5.43
     Total Interest-Bearing
      Liabilities                   $484,586         $ 6,286         5.19%
 
     Non-Interest Bearing Deposits    19,798
     Other Liabilities                10,272
 
     TOTAL LIABILITIES              $514,656
 
     Stockholders' Equity             46,168
 
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY          $560,824
 
     NET INTEREST INCOME                              $4,204
 
     NET INTEREST RATE SPREAD (C)                                    2.53%
 
     NET INTEREST MARGIN (D)                                         3.10%
 
     (A) Includes cash basis loans.
     (B) Includes deferred fees/costs.
     (C) Interest Rate Spread is calculated by subtracting the average cost of
         interest-bearing liabilities from the average rate on interest-earning
         assets.
     (D) Net Interest Margin is calculated by dividing net interest income by
         average interest-earning assets.
 
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 SOURCE  CoVest Bancshares, Inc.