Atlantic Bank of New York Announces 13% Increase in Earnings for the Second Quarter of 2004

Business Wire, August 2, 2004

NEW YORK -- Atlantic Bank of New York today announced the results of its operations for the second quarter and first six months of 2004. Net income for the quarter was $7.9 million, which was $.9 million or 13.2% greater than the $7.0 million posted for the same period last year. Net income for the year to date increased to $15.2 million reflecting a $.7 million or 5.0% increase over the $14.5 million reported for the comparable period of the prior year.

Net interest income for the quarter ended June 30, 2004 was $24.6 million, a $3.1 million or 14.5% increase compared with the comparable quarter of 2003. For the six months ended June 30, 2004, net interest income was $48.3 million, a $5.6 million or 13.2% increase over the comparable prior year period. The net interest margin for the second quarter and first half of 2004 increased to 3.25% for both reporting periods, reflecting a .20% and a .06% increase respectively compared with the same periods last year. The provision for loan losses for the second quarter, 2004 was $.8 million, a $.2 million decrease from the comparable quarter last year.

Non-interest income for the second quarter decreased by $.4 million or 6.7% to $6.3 million compared with the $6.7 million reported for the same period last year. Non-interest income for the year to date increased to $13.1 million, representing a $.3 million or 2.7% increase compared with $12.8 million posted the first half of 2003.

Non-interest expense for the second quarter was $16.9 million, an increase of $1.3 million over the comparable quarter last year. For the six months of 2003, non-interest expense was $35.0 million, an increase of $3.8 million compared with the same period last year. The increases in non-interest expense are primarily attributable to increased operating expenses associated with the acquisition of the Allied Irish Bank, plc (AIB) Park Avenue branch, inclusive of amortization of related intangible assets of $.6 million and $1.2 million for the quarter and year to date, respectively, and the two additional Manhattan branch openings completed in the fourth quarter of last year.

Total loans, net of unearned income, were $1,283.7 million at June 30, 2004, compared with $1,265.7 million at March 31, 2004 and $1,216.6 million at June 30, 2003. The increase in loans during the second quarter and over the same period last year, is attributable to growth in the Bank's revitalized Corporate Lending area, Commercial Real Estate portfolio and its wholly-owned subsidiary, Standard Funding Corp., partially offset by strategic management of runoff in fixed rate Residential Mortgage loans.

As of June 30, 2004, total assets stood at $3.4 billion, reflecting an increase of $179.5 million or 5.6% over the prior quarter and $322.4 million or 10.5% increase compared with the prior year. Total deposits grew to $1,957.3 million at June 30, 2004, an increase of $74.2 million or 3.9% over the prior quarter and an increase of $304.1 million or 18.4% over the prior year. These increases are due to the Bank's Manhattan branch openings, including the AIB Park Avenue branch acquisition, together with successful attraction of lower cost core deposits through a continued emphasis on relationship banking across all business lines.

Atlantic Bank's return on average total assets for the second quarter and first half of 2004 remained fairly stable compared with the same periods last year. Return on average stockholder's equity increased to 14.70% for the quarter and declined to 13.51% for the six months ended June 30, 2004. The Bank's efficiency ratio improved for both the second quarter and the year to date to 52.45% and 54.57% respectively compared with the prior year periods. The Bank's Tier I leverage ratio was 5.92% and 5.80% at June 30, 2004 and 2003, respectively. This ratio is well in excess of the current regulatory guidelines for a well-capitalized institution. The allowance for loan losses decreased in the quarter to $17.3 million, representing 206.73% of non-performing loans and 1.35% of total loans, net, at June 30, 2004 compared with 1.40% reported the previous quarter. Non-performing loans declined from $10.1 million or .83% of total loans, net, as of June 30, 2003 to $8.4 million or .65% of total loans, net, as of the current quarter. The Bank's return on average tangible equity increased to 19.66% for the quarter and 17.84% for the six months ended June 30, 2004.

Commenting on Atlantic Bank's financial performance, Thomas M. O'Brien, President and CEO stated, "We are very pleased with the continued expansion of our business and the quality of all our lending portfolios. We believe our positive growth trends over the past few years validate the viability of both our business model and strategic plan, and that we are well poised to capitalize on the improving economic climate for sustainable growth and increased profitability."

Established in 1926, Atlantic Bank of New York is one of the top 20 commercial banks serving the New York area. With $3.4 billion in assets, Atlantic Bank is a full-service commercial bank providing a comprehensive range of financial services to small and mid-sized businesses, commercial real estate investors and consumers. The Bank operates 22 branch offices in Manhattan, Queens, Brooklyn, Long Island, Westchester, Dutchess and Boston, and offers Commercial Insurance Premium Financing on a nationwide basis through its wholly-owned subsidiary, Standard Funding Corporation. Atlantic Bank is a member of the NBG Group (NYSE: NBG), which has more than $69 billion in assets and operates in 17 countries. Additional information is available on the Bank's website at www.abny.com. The financial summary follows.