Sky Financial Group Reports First Quarter Earnings

Apr 17, 2001, 01:00 ET from Sky Financial Group, Inc.

   BOWLING GREEN, Ohio, April 17 /PRNewswire/ -- Sky Financial Group, Inc.
 (Nasdaq: SKYF) today reported first quarter operating earnings of
 $28.4 million, or $.34 per diluted share, compared to $27.7 million, or $.33
 per diluted share, last quarter and $31.1 million, or $.36 per diluted share,
 for the same period last year.  Compared to the prior year, the first quarter
 results were reduced $2.3 million, or $.03 per diluted share, by Sky's new
 program to retain in its loan portfolio the commercial financing loans to
 health care professionals originated through its subsidiary, Sky Financial
 Solutions (SFS).  The new program, initiated in the third quarter of last
 year, eliminated gain on sale accounting treatment for these loans.  On an
 operating basis, return on average assets and return on average equity also
 impacted by the new program, were 1.38% and 18.79%, respectively, for the
 first quarter of 2001, versus 1.33% and 18.99%, respectively, last quarter,
 and 1.57% and 21.85%, respectively, for the first quarter of 2000.
     On a reported basis, first quarter net income was $28.8 million, or $.35
 per diluted share.  In March, Sky completed the sale of its independent
 broker/dealer business realizing an after-tax non-recurring gain of
 $0.4 million.
     "We are very pleased to begin 2001 with strong financial performance in
 the first quarter," stated Marty E. Adams, President and Chief Executive
 Officer.  "Our community-based sales and service strategy continued to produce
 excellent results growing deposits over $150 million in the first quarter,
 after generating over $100 million in growth in the fourth quarter last year.
 Our non-interest revenues also continued to grow in the first quarter, with
 mortgage banking particularly strong in the current low interest rate
 environment, and our credit quality remains among the best in our industry."
     Net interest income for the first quarter was $76.8 million, up from
 $76.5 million in the fourth quarter, and up from $76.3 million in the first
 quarter last year.  Average earning assets increased 5.8% from the first
 quarter last year, with continued strong growth in average loans, increasing
 7.9% from last year.  Average deposits, up 3.5% from the same quarter last
 year grew at an annualized rate of 6% in the first quarter.  The net interest
 margin for the first quarter was 4.03%, an increase of 3 basis points from
 last quarter, but down 23 basis points from the first quarter a year ago.  The
 net interest margin improvement from last quarter resulted primarily from loan
 and deposit growth, improving both the earning asset and funding mix.
     Non-interest revenues, excluding non-recurring gains and the impact of
 eliminating gains on the sales of loans at SFS, were $31.5 million for the
 first quarter, up from $29.7 million last quarter, and increasing 15.7% from
 $27.3 million in the same period last year. Mortgage banking revenues were
 $4.7 million for the quarter, up $1.9 million, or 71.7% from the first quarter
 last year as origination volumes have increased significantly in the more
 favorable interest rate environment compared to the prior year.  Brokerage and
 insurance commissions were $8.8 million for the quarter, up $2.3 million, or
 34.8%, from the prior year, primarily due to the acquisition of the Meyer &
 Eckenrode Insurance Group in July of 2000.
     Non-interest expenses for the first quarter were $59.2 million compared to
 $57.6 million last quarter, excluding non-recurring charges, and $57.4 million
 in the first quarter last year. The efficiency ratio, on an operating basis,
 was 54.24% for the quarter, compared to 53.70% last quarter and 52.68% for the
 same quarter last year.
     Credit quality in the first quarter remained strong.  At March 31, 2001,
 non-performing loans to total loans was .46% and the allowance for credit
 losses to non-performing loans was 344%, compared to .42% and 374%,
 respectively, for the prior year's quarter end.  For the first quarter, net
 credit losses to average loans were .29% compared to .24% for the same quarter
 last year.
     During the first quarter, Sky Financial Solutions added $41.1 million in
 new loans to Sky's loan portfolio.  In the first quarter last year, SFS
 originated and sold $36.7 million in new loans realizing gains of
 $3.4 million.  As a result of no longer realizing gains on the sales of loans,
 SFS reported a net loss of $2.1 million for the first quarter this year,
 versus net income of $0.2 million in the first quarter last year.  Sky expects
 SFS to continue operating at a net loss over the next few years, until the
 retained portfolio grows sufficiently in size for net interest income to
 exceed provisions for credit losses and operating expenses.
     The information in this press release contains forward-looking statements
 regarding the expected future financial performance which are not historical
 facts and which involve risks and uncertainties.  Actual results and
 performance could differ materially from those contemplated by these forward-
 looking statements.
     Today, April 17, 2001 at 2 p.m., a simultaneous webcast of a conference
 call with Marty E. Adams, Chairman and CEO and Kevin T. Thompson, Chief
 Financial Officer of Sky Financial Group, will be available online at the
 company's website www.skyfi.com .  Mr. Adams and Mr. Thompson will provide an
 overview of first quarter performance and business outlook to financial
 analysts.  The webcast is open to the public with both media and individual
 investors invited to listen in via the Internet.  A replay of the call will
 also be available on Sky Financial's website for 10 business days following
 the event.
     Sky Financial Group, Inc. is a $8.5 billion diversified financial holding
 company headquartered in Bowling Green, Ohio. Sky operates 205 banking offices
 serving communities in Ohio, Pennsylvania, Michigan, Indiana and West
 Virginia.  The company's financial service affiliates include Sky Trust, Sky
 Financial Solutions, Sky Access, Picton Cavanaugh, and Meyer & Eckenrode
 Insurance Group.
 
     SKY FINANCIAL GROUP, INC.
     STATEMENTS OF INCOME (Unaudited)
                                          Three Months Ended
     (Dollars in thousands,                    March 31,        Percent
       except per share data)             2001          2000     Change
 
     Interest income                   $162,709      $148,737      9.4
     Interest expense                    85,932        72,437     18.6
     Net interest income                 76,777        76,300      0.6
 
     Provision for credit losses          6,656         4,337     53.5
     Net interest income after
       provision for credit losses       70,121        71,963     (2.6)
 
     Other income
     Trust services income                3,706         3,732     (0.7)
     Service charges and fees on
       deposit accounts                   6,909         6,298      9.7
     Mortgage banking income              4,652         2,709     71.7
     Brokerage and insurance
       commissions                        8,774         6,510     34.8
     Collection agency fees                  --           788   (100.0)
     Net securities gains                   925           182    408.2
     Net gains on sales of
       commercial financing loans            --         3,362   (100.0)
     Other income                         7,205         7,036      2.4
     Total other income                  32,171        30,617      5.1
 
     Other expense
     Salaries and employee benefits      31,205        30,090      3.7
     Occupancy and equipment expense      9,217         9,412     (2.1)
     Merger, integration and
       restructuring expense                 --            --       --
     Other operating expenses            18,817        17,904      5.1
     Total other expense                 59,239        57,406      3.2
 
     Income before income taxes          43,053        45,174     (4.7)
     Income taxes                        14,216        14,068      1.1
 
     Net income                        $ 28,837      $ 31,106     (7.3)
 
     SHARE DATA:
     Basic earnings per share          $   0.35          0.36     (2.8)
     Diluted earnings per share            0.35          0.36     (2.8)
     Cash dividend per common share        0.18          0.18       --
     Average shares outstanding
       Basic                         83,144,000    85,382,000       --
       Diluted                       83,565,000    85,785,000       --
 
     PERFORMANCE RATIOS:
     Return on average equity             18.79 %       21.85 %     --
     Return on average assets              1.38          1.57       --
     Net interest margin (FTE)             4.03          4.26       --
     Efficiency Ratio                     54.24         52.68       --
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER STATEMENTS OF INCOME (Unaudited)
     (Dollars in thousands)
 
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
 
     FTE int income     $163,616  $166,258  $161,045  $154,652  $150,790
 
     Interest income    $162,709  $165,199  $159,567  $152,512  $148,737
     Interest expense     85,932    88,676    84,036    77,070    72,437
     Net interest income  76,777    76,523    75,531    75,442    76,300
 
     Provision for
       credit losses       6,656     7,086     6,094     4,733     4,337
     Net interest income
       after provision
       for credit losses  70,121    69,437    69,437    70,709    71,963
 
     Other income
     Trust income          3,706     3,727     3,952     3,736     3,732
     Service charges and
       fees on deposits    6,909     7,042     6,968     6,695     6,298
     Mortgage banking      4,652     3,491     3,103     2,901     2,709
     Brokerage/insurance
       commissions         8,774     8,004     8,331     6,332     6,510
     Collection agency        --       187       446       491       788
     Net securities
       gains (losses)        925       123    (3,993)      665       182
     Net gains on sales
       of commercial
       financing loans        --        --       361     3,863     3,362
     Other income          7,205     9,734     7,414     7,768     7,036
     Total other income   32,171    32,308    26,582    32,451    30,617
 
     Other expense
     Salaries and
       employee benefits  31,205    29,035    30,656    28,176    30,090
     Occupancy and
       equipment expense   9,217     8,931     9,472     9,189     9,412
     Merger, integration
       and restructuring      --     3,867        --        --        --
     Other expenses       18,817    19,647    19,250    19,778    17,904
     Total other expense  59,239    61,480    59,378    57,143    57,406
 
     Income before
       income taxes       43,053    40,265    36,641    46,017    45,174
     Income taxes         14,216    13,647    11,491    14,518    14,068
 
     Net income         $ 28,837  $ 26,618  $ 25,150  $ 31,499  $ 31,106
 
     Operating earnings $ 28,425  $ 27,725  $ 27,746  $ 31,499  $ 31,106
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER OPERATING PERFORMANCE RATIOS AND SHARE DATA
     (Unaudited)
 
     OPERATING PERFORMANCE RATIOS:
 
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Return on average
       equity             18.79%    18.99%    18.93%    21.97%    21.85%
     Return on average
       assets              1.38      1.33      1.36      1.58      1.57
     Net interest spread   3.43      3.41      3.49      3.64      3.74
     Net interest margin   4.03      4.00      4.05      4.19      4.26
     Efficiency ratio     54.24     53.70     55.19     51.93     52.68
 
 
    SHARE DATA:
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Earnings per share
       Basic             $ 0.35    $ 0.32    $ 0.30    $ 0.37    $ 0.36
       Diluted             0.35      0.32      0.30      0.37      0.36
 
     Operating earnings
       per share
         Basic             0.34      0.33      0.33      0.37      0.36
         Diluted           0.34      0.33      0.33      0.37      0.36
 
     Cash dividend paid
       per common share    0.18      0.18      0.18      0.18      0.18
 
     Book value per share  7.51      7.31      6.96      6.80      6.71
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER AVERAGE BALANCE SHEETS (Unaudited)
     (Dollars in millions)
 
     AVERAGE BALANCE SHEETS:
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Cash and due
       from banks       $   224   $   218   $   219   $   228   $   235
     Interest-earning
       deposits with
       banks                 16        20        20        12        16
     Fed funds sold          31         5         5         7         9
     Loans held
       for sale              31        15        14        10        12
     Securities
       available for
       sale               1,795     1,830     1,851     1,816     1,846
     Total loans          5,945     5,842     5,677     5,596     5,510
     Allowance for
       credit losses        (94)      (93)      (90)      (89)      (88)
     Net loans            5,851     5,749     5,587     5,507     5,422
     Premises and
       equipment            114       118       119       117       117
     Other assets           304       310       317       303       308
     Total Assets       $ 8,366   $ 8,265   $ 8,132   $ 8,000   $ 7,965
 
     Non-interest
       bearing deposits $   722   $   737   $   726   $   747   $   738
     Interest-bearing
       deposits           5,205     5,103     5,026     5,011     4,987
     Total deposits       5,927     5,840     5,752     5,758     5,725
     Repurchase
       agreements and fed
       funds purchased      697       697       691       653       627
     Debt and FHLB
       advances             990     1,027       998       906       920
     Other liabilities      139       120       108       106       121
     Shareholders equity    613       581       583       577       572
     Total Liabilities
       and Shareholders
       Equity           $ 8,366   $ 8,265   $ 8,132   $ 8,000   $ 7,965
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER BALANCE SHEETS (Unaudited)
     (Dollars in millions)
 
     BALANCE SHEETS:
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Cash and due
       from banks       $   227   $   266   $   209   $   279   $   279
     Interest-earning
       deposits with
       banks                 18        18        21        15        14
     Fed funds sold         107        --         7        19         8
     Loans held
       for sale              42        14        12        10         6
     Securities
       available for
       sale               1,773     1,847     1,849     1,831     1,810
     Total loans          5,983     5,916     5,817     5,623     5,571
     Allowance for
       credit losses        (96)      (93)      (92)      (88)      (88)
     Net loans            5,887     5,823     5,725     5,535     5,483
     Premises and
       equipment            113       115       119       117       117
     Other assets           302       304       317       305       314
     Total Assets       $ 8,469   $ 8,387   $ 8,259   $ 8,111   $ 8,031
 
     Non-interest
       bearing deposits $   725   $   758   $   726   $   774   $   762
     Interest-bearing
       deposits           5,332     5,134     5,060     5,014     5,037
     Total deposits       6,057     5,892     5,786     5,788     5,799
     Repurchase
       agreements and fed
       funds purchased      716       703       742       666       651
     Debt and FHLB
       advances             934     1,042     1,027       973       882
     Other liabilities      140       140       120       110       128
     Shareholders equity    622       610       584       574       571
     Total Liabilities
       and Shareholders
       Equity           $ 8,469   $ 8,387   $ 8,259   $ 8,111   $ 8,031
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER ASSET QUALITY DATA (Unaudited)
     (Dollars in thousands)
 
     ASSET QUALITY DATA:
                         2001                     2000
                        1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
 
     Non-accrual loans  $26,697   $20,329   $19,161   $16,643   $21,842
     Restructured loans   1,090     1,131     1,185     1,211     1,621
     Total
       non-performing
       loans and leases  27,787    21,460    20,346    17,854    23,463
     Other real estate
       owned              2,164     2,221     2,393     2,450     3,664
     Total
       non-performing
       assets           $29,951   $23,681   $22,739   $20,304   $27,127
     Loans 90 days or
       more past due and
       still accruing   $ 9,011   $10,294   $ 9,186   $ 7,422   $ 7,099
     Net charge-offs      4,259     5,500     2,437     4,545     3,257
     Allowance for
       credit losses     95,658    93,261    91,675    88,018    87,830
 
     ASSET QUALITY RATIOS:
                         2001                     2000
                        1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Non-accrual loans
       to total loans     0.45%     0.34%     0.33%     0.30%     0.39%
     Non-performing
       loans to total
       loans              0.46      0.36      0.35      0.32      0.42
     Non-performing
       assets to total
       loans plus other
       real estate owned  0.50      0.40      0.39      0.36      0.49
     Loans 90 days or
       more past due and
       still accruing to
       total loans        0.15      0.17      0.16      0.13      0.13
     Net charge-offs to
       average loans      0.29      0.38      0.17      0.32      0.24
     Allowance for
       credit losses to
       non-performing
       loans            344.25    434.58    450.58    492.99    374.33
     Allowance for
       credit losses to
       non-performing
       assets           319.38    393.82    403.16    433.50    323.77
     Allowance for
       credit losses to
       total loans        1.60      1.58      1.58      1.57      1.58
 
 

SOURCE Sky Financial Group, Inc.
   BOWLING GREEN, Ohio, April 17 /PRNewswire/ -- Sky Financial Group, Inc.
 (Nasdaq: SKYF) today reported first quarter operating earnings of
 $28.4 million, or $.34 per diluted share, compared to $27.7 million, or $.33
 per diluted share, last quarter and $31.1 million, or $.36 per diluted share,
 for the same period last year.  Compared to the prior year, the first quarter
 results were reduced $2.3 million, or $.03 per diluted share, by Sky's new
 program to retain in its loan portfolio the commercial financing loans to
 health care professionals originated through its subsidiary, Sky Financial
 Solutions (SFS).  The new program, initiated in the third quarter of last
 year, eliminated gain on sale accounting treatment for these loans.  On an
 operating basis, return on average assets and return on average equity also
 impacted by the new program, were 1.38% and 18.79%, respectively, for the
 first quarter of 2001, versus 1.33% and 18.99%, respectively, last quarter,
 and 1.57% and 21.85%, respectively, for the first quarter of 2000.
     On a reported basis, first quarter net income was $28.8 million, or $.35
 per diluted share.  In March, Sky completed the sale of its independent
 broker/dealer business realizing an after-tax non-recurring gain of
 $0.4 million.
     "We are very pleased to begin 2001 with strong financial performance in
 the first quarter," stated Marty E. Adams, President and Chief Executive
 Officer.  "Our community-based sales and service strategy continued to produce
 excellent results growing deposits over $150 million in the first quarter,
 after generating over $100 million in growth in the fourth quarter last year.
 Our non-interest revenues also continued to grow in the first quarter, with
 mortgage banking particularly strong in the current low interest rate
 environment, and our credit quality remains among the best in our industry."
     Net interest income for the first quarter was $76.8 million, up from
 $76.5 million in the fourth quarter, and up from $76.3 million in the first
 quarter last year.  Average earning assets increased 5.8% from the first
 quarter last year, with continued strong growth in average loans, increasing
 7.9% from last year.  Average deposits, up 3.5% from the same quarter last
 year grew at an annualized rate of 6% in the first quarter.  The net interest
 margin for the first quarter was 4.03%, an increase of 3 basis points from
 last quarter, but down 23 basis points from the first quarter a year ago.  The
 net interest margin improvement from last quarter resulted primarily from loan
 and deposit growth, improving both the earning asset and funding mix.
     Non-interest revenues, excluding non-recurring gains and the impact of
 eliminating gains on the sales of loans at SFS, were $31.5 million for the
 first quarter, up from $29.7 million last quarter, and increasing 15.7% from
 $27.3 million in the same period last year. Mortgage banking revenues were
 $4.7 million for the quarter, up $1.9 million, or 71.7% from the first quarter
 last year as origination volumes have increased significantly in the more
 favorable interest rate environment compared to the prior year.  Brokerage and
 insurance commissions were $8.8 million for the quarter, up $2.3 million, or
 34.8%, from the prior year, primarily due to the acquisition of the Meyer &
 Eckenrode Insurance Group in July of 2000.
     Non-interest expenses for the first quarter were $59.2 million compared to
 $57.6 million last quarter, excluding non-recurring charges, and $57.4 million
 in the first quarter last year. The efficiency ratio, on an operating basis,
 was 54.24% for the quarter, compared to 53.70% last quarter and 52.68% for the
 same quarter last year.
     Credit quality in the first quarter remained strong.  At March 31, 2001,
 non-performing loans to total loans was .46% and the allowance for credit
 losses to non-performing loans was 344%, compared to .42% and 374%,
 respectively, for the prior year's quarter end.  For the first quarter, net
 credit losses to average loans were .29% compared to .24% for the same quarter
 last year.
     During the first quarter, Sky Financial Solutions added $41.1 million in
 new loans to Sky's loan portfolio.  In the first quarter last year, SFS
 originated and sold $36.7 million in new loans realizing gains of
 $3.4 million.  As a result of no longer realizing gains on the sales of loans,
 SFS reported a net loss of $2.1 million for the first quarter this year,
 versus net income of $0.2 million in the first quarter last year.  Sky expects
 SFS to continue operating at a net loss over the next few years, until the
 retained portfolio grows sufficiently in size for net interest income to
 exceed provisions for credit losses and operating expenses.
     The information in this press release contains forward-looking statements
 regarding the expected future financial performance which are not historical
 facts and which involve risks and uncertainties.  Actual results and
 performance could differ materially from those contemplated by these forward-
 looking statements.
     Today, April 17, 2001 at 2 p.m., a simultaneous webcast of a conference
 call with Marty E. Adams, Chairman and CEO and Kevin T. Thompson, Chief
 Financial Officer of Sky Financial Group, will be available online at the
 company's website www.skyfi.com .  Mr. Adams and Mr. Thompson will provide an
 overview of first quarter performance and business outlook to financial
 analysts.  The webcast is open to the public with both media and individual
 investors invited to listen in via the Internet.  A replay of the call will
 also be available on Sky Financial's website for 10 business days following
 the event.
     Sky Financial Group, Inc. is a $8.5 billion diversified financial holding
 company headquartered in Bowling Green, Ohio. Sky operates 205 banking offices
 serving communities in Ohio, Pennsylvania, Michigan, Indiana and West
 Virginia.  The company's financial service affiliates include Sky Trust, Sky
 Financial Solutions, Sky Access, Picton Cavanaugh, and Meyer & Eckenrode
 Insurance Group.
 
     SKY FINANCIAL GROUP, INC.
     STATEMENTS OF INCOME (Unaudited)
                                          Three Months Ended
     (Dollars in thousands,                    March 31,        Percent
       except per share data)             2001          2000     Change
 
     Interest income                   $162,709      $148,737      9.4
     Interest expense                    85,932        72,437     18.6
     Net interest income                 76,777        76,300      0.6
 
     Provision for credit losses          6,656         4,337     53.5
     Net interest income after
       provision for credit losses       70,121        71,963     (2.6)
 
     Other income
     Trust services income                3,706         3,732     (0.7)
     Service charges and fees on
       deposit accounts                   6,909         6,298      9.7
     Mortgage banking income              4,652         2,709     71.7
     Brokerage and insurance
       commissions                        8,774         6,510     34.8
     Collection agency fees                  --           788   (100.0)
     Net securities gains                   925           182    408.2
     Net gains on sales of
       commercial financing loans            --         3,362   (100.0)
     Other income                         7,205         7,036      2.4
     Total other income                  32,171        30,617      5.1
 
     Other expense
     Salaries and employee benefits      31,205        30,090      3.7
     Occupancy and equipment expense      9,217         9,412     (2.1)
     Merger, integration and
       restructuring expense                 --            --       --
     Other operating expenses            18,817        17,904      5.1
     Total other expense                 59,239        57,406      3.2
 
     Income before income taxes          43,053        45,174     (4.7)
     Income taxes                        14,216        14,068      1.1
 
     Net income                        $ 28,837      $ 31,106     (7.3)
 
     SHARE DATA:
     Basic earnings per share          $   0.35          0.36     (2.8)
     Diluted earnings per share            0.35          0.36     (2.8)
     Cash dividend per common share        0.18          0.18       --
     Average shares outstanding
       Basic                         83,144,000    85,382,000       --
       Diluted                       83,565,000    85,785,000       --
 
     PERFORMANCE RATIOS:
     Return on average equity             18.79 %       21.85 %     --
     Return on average assets              1.38          1.57       --
     Net interest margin (FTE)             4.03          4.26       --
     Efficiency Ratio                     54.24         52.68       --
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER STATEMENTS OF INCOME (Unaudited)
     (Dollars in thousands)
 
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
 
     FTE int income     $163,616  $166,258  $161,045  $154,652  $150,790
 
     Interest income    $162,709  $165,199  $159,567  $152,512  $148,737
     Interest expense     85,932    88,676    84,036    77,070    72,437
     Net interest income  76,777    76,523    75,531    75,442    76,300
 
     Provision for
       credit losses       6,656     7,086     6,094     4,733     4,337
     Net interest income
       after provision
       for credit losses  70,121    69,437    69,437    70,709    71,963
 
     Other income
     Trust income          3,706     3,727     3,952     3,736     3,732
     Service charges and
       fees on deposits    6,909     7,042     6,968     6,695     6,298
     Mortgage banking      4,652     3,491     3,103     2,901     2,709
     Brokerage/insurance
       commissions         8,774     8,004     8,331     6,332     6,510
     Collection agency        --       187       446       491       788
     Net securities
       gains (losses)        925       123    (3,993)      665       182
     Net gains on sales
       of commercial
       financing loans        --        --       361     3,863     3,362
     Other income          7,205     9,734     7,414     7,768     7,036
     Total other income   32,171    32,308    26,582    32,451    30,617
 
     Other expense
     Salaries and
       employee benefits  31,205    29,035    30,656    28,176    30,090
     Occupancy and
       equipment expense   9,217     8,931     9,472     9,189     9,412
     Merger, integration
       and restructuring      --     3,867        --        --        --
     Other expenses       18,817    19,647    19,250    19,778    17,904
     Total other expense  59,239    61,480    59,378    57,143    57,406
 
     Income before
       income taxes       43,053    40,265    36,641    46,017    45,174
     Income taxes         14,216    13,647    11,491    14,518    14,068
 
     Net income         $ 28,837  $ 26,618  $ 25,150  $ 31,499  $ 31,106
 
     Operating earnings $ 28,425  $ 27,725  $ 27,746  $ 31,499  $ 31,106
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER OPERATING PERFORMANCE RATIOS AND SHARE DATA
     (Unaudited)
 
     OPERATING PERFORMANCE RATIOS:
 
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Return on average
       equity             18.79%    18.99%    18.93%    21.97%    21.85%
     Return on average
       assets              1.38      1.33      1.36      1.58      1.57
     Net interest spread   3.43      3.41      3.49      3.64      3.74
     Net interest margin   4.03      4.00      4.05      4.19      4.26
     Efficiency ratio     54.24     53.70     55.19     51.93     52.68
 
 
    SHARE DATA:
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Earnings per share
       Basic             $ 0.35    $ 0.32    $ 0.30    $ 0.37    $ 0.36
       Diluted             0.35      0.32      0.30      0.37      0.36
 
     Operating earnings
       per share
         Basic             0.34      0.33      0.33      0.37      0.36
         Diluted           0.34      0.33      0.33      0.37      0.36
 
     Cash dividend paid
       per common share    0.18      0.18      0.18      0.18      0.18
 
     Book value per share  7.51      7.31      6.96      6.80      6.71
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER AVERAGE BALANCE SHEETS (Unaudited)
     (Dollars in millions)
 
     AVERAGE BALANCE SHEETS:
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Cash and due
       from banks       $   224   $   218   $   219   $   228   $   235
     Interest-earning
       deposits with
       banks                 16        20        20        12        16
     Fed funds sold          31         5         5         7         9
     Loans held
       for sale              31        15        14        10        12
     Securities
       available for
       sale               1,795     1,830     1,851     1,816     1,846
     Total loans          5,945     5,842     5,677     5,596     5,510
     Allowance for
       credit losses        (94)      (93)      (90)      (89)      (88)
     Net loans            5,851     5,749     5,587     5,507     5,422
     Premises and
       equipment            114       118       119       117       117
     Other assets           304       310       317       303       308
     Total Assets       $ 8,366   $ 8,265   $ 8,132   $ 8,000   $ 7,965
 
     Non-interest
       bearing deposits $   722   $   737   $   726   $   747   $   738
     Interest-bearing
       deposits           5,205     5,103     5,026     5,011     4,987
     Total deposits       5,927     5,840     5,752     5,758     5,725
     Repurchase
       agreements and fed
       funds purchased      697       697       691       653       627
     Debt and FHLB
       advances             990     1,027       998       906       920
     Other liabilities      139       120       108       106       121
     Shareholders equity    613       581       583       577       572
     Total Liabilities
       and Shareholders
       Equity           $ 8,366   $ 8,265   $ 8,132   $ 8,000   $ 7,965
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER BALANCE SHEETS (Unaudited)
     (Dollars in millions)
 
     BALANCE SHEETS:
                          2001                     2000
                         1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Cash and due
       from banks       $   227   $   266   $   209   $   279   $   279
     Interest-earning
       deposits with
       banks                 18        18        21        15        14
     Fed funds sold         107        --         7        19         8
     Loans held
       for sale              42        14        12        10         6
     Securities
       available for
       sale               1,773     1,847     1,849     1,831     1,810
     Total loans          5,983     5,916     5,817     5,623     5,571
     Allowance for
       credit losses        (96)      (93)      (92)      (88)      (88)
     Net loans            5,887     5,823     5,725     5,535     5,483
     Premises and
       equipment            113       115       119       117       117
     Other assets           302       304       317       305       314
     Total Assets       $ 8,469   $ 8,387   $ 8,259   $ 8,111   $ 8,031
 
     Non-interest
       bearing deposits $   725   $   758   $   726   $   774   $   762
     Interest-bearing
       deposits           5,332     5,134     5,060     5,014     5,037
     Total deposits       6,057     5,892     5,786     5,788     5,799
     Repurchase
       agreements and fed
       funds purchased      716       703       742       666       651
     Debt and FHLB
       advances             934     1,042     1,027       973       882
     Other liabilities      140       140       120       110       128
     Shareholders equity    622       610       584       574       571
     Total Liabilities
       and Shareholders
       Equity           $ 8,469   $ 8,387   $ 8,259   $ 8,111   $ 8,031
 
 
     SKY FINANCIAL GROUP, INC.
     FIVE QUARTER ASSET QUALITY DATA (Unaudited)
     (Dollars in thousands)
 
     ASSET QUALITY DATA:
                         2001                     2000
                        1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
 
     Non-accrual loans  $26,697   $20,329   $19,161   $16,643   $21,842
     Restructured loans   1,090     1,131     1,185     1,211     1,621
     Total
       non-performing
       loans and leases  27,787    21,460    20,346    17,854    23,463
     Other real estate
       owned              2,164     2,221     2,393     2,450     3,664
     Total
       non-performing
       assets           $29,951   $23,681   $22,739   $20,304   $27,127
     Loans 90 days or
       more past due and
       still accruing   $ 9,011   $10,294   $ 9,186   $ 7,422   $ 7,099
     Net charge-offs      4,259     5,500     2,437     4,545     3,257
     Allowance for
       credit losses     95,658    93,261    91,675    88,018    87,830
 
     ASSET QUALITY RATIOS:
                         2001                     2000
                        1st qtr   4th qtr   3rd qtr   2nd qtr   1st qtr
     Non-accrual loans
       to total loans     0.45%     0.34%     0.33%     0.30%     0.39%
     Non-performing
       loans to total
       loans              0.46      0.36      0.35      0.32      0.42
     Non-performing
       assets to total
       loans plus other
       real estate owned  0.50      0.40      0.39      0.36      0.49
     Loans 90 days or
       more past due and
       still accruing to
       total loans        0.15      0.17      0.16      0.13      0.13
     Net charge-offs to
       average loans      0.29      0.38      0.17      0.32      0.24
     Allowance for
       credit losses to
       non-performing
       loans            344.25    434.58    450.58    492.99    374.33
     Allowance for
       credit losses to
       non-performing
       assets           319.38    393.82    403.16    433.50    323.77
     Allowance for
       credit losses to
       total loans        1.60      1.58      1.58      1.57      1.58
 
 SOURCE  Sky Financial Group, Inc.