Atlantic Bank of New York Announces 1st Quarter 2004 Earnings

Business Wire, May 7, 2004

Business Editors

NEW YORK--(BUSINESS WIRE)--May 7, 2004

Atlantic Bank of New York today announced the results of its operations for the first quarter of 2004. These results are inclusive of Atlantic Bank's acquisition and integration of the Park Avenue branch of Allied Irish Banks, plc (AIB), which was completed in December 2003.

Net income for the quarter ended March 31, 2004 was $7.3 million compared with $7.5 million for the same quarter last year. Net interest income was $23.4 million for the first quarter, representing an increase of $1.4 million or 6.2% over the comparable prior year period. The net interest margin for the quarter declined to 3.26% from the 3.35% reported for the same quarter last year. The increase in net interest income is primarily attributable to an increase in the Bank's available for sale securities portfolio. The provision for loan losses was $.3 million for the quarter compared with a $.9 million credit in the loan loss provision last year. The 2003 credit to the loan loss provision reflects the Bank's implementation of FAS 114 for the determination of the allowance for loan losses. The Bank experienced significant improvement in the credit quality of its loan portfolios, as reflected in the 73.0% reduction in non-performing loans to $9.3 million at March 31, 2004 from the $34.4 million reported at March 31, 2003.

Non-interest income for the first quarter increased by $.8 million or 13.1% to $6.9 million compared with the $6.1 million reported for the same period last year. The improvement in non-interest income for the quarter is primarily due to increases in loan and other fees associated with growth in commercial loans and gains on trading activity during the period.

Non-interest expense for the first quarter was $18.1 million, an increase of $2.5 million or 15.8% compared with the same quarter last year. The increased non-interest expense over the prior year is primarily due to costs associated with the Bank's branch expansion efforts, including the two new Manhattan branch openings and the AIB Park Avenue branch acquisition during the fourth quarter of last year.

Commenting on the Bank's performance, Atlantic Bank's President and CEO, Thomas M. O'Brien, said, "We continue to be pleased with the progress we are making toward expanding our service delivery channels and building a strong customer-focused organization. The Bank's financial performance for the first quarter of 2004 is evidence that our core business growth strategies are taking hold across the company and positioning us to successfully capitalize on future expansion opportunities."

Total loans, net of unearned income, rose by $61.9 million or 5.1% to $1,265.7 million at March 31, 2004, compared with $1,203.8 million at March 31, 2003. The Bank's loan growth resulted from continued expansion of its commercial real estate and multi-family lending businesses, including the loan portfolio acquired through the AIB Park Avenue branch acquisition, and increased production by the Bank's commercial insurance premium financing subsidiary, Standard Funding Corp. As of March 31, 2004 total assets stood at $3.2 billion, reflecting an increase of 7.3% over the prior year. This increase is primarily due to the continued growth within the Bank's principal business lines and the acquisition of the AIB branch.

Total deposits stood at $1,883.1 million at March 31, 2004, up $313.9 million or 20.0% from the same quarter last year. The Bank's deposit growth is attributable to both the AIB acquisition and the Bank's increased emphasis on sales and business development activities across its business lines.

Atlantic Bank's return on average total assets was .93% for the first quarter compared to 1.09% for the comparable 2003 period. The loan loss reserve coverage ratio increased to 190.67% at March 31, 2004 compared to 40.79% at March 31, 2003. The Bank's efficiency ratio for the first quarter improved to 56.70%. The Bank's Tier I leverage ratio was 5.87% at March 31, 2004, which significantly exceeds the current regulatory guidelines for a well-capitalized institution.

Established in 1926, Atlantic Bank of New York is one of the top 20 commercial banks serving the New York area. With over $3.2 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.

Atlantic Bank of New York
(In thousands, except ratios)

INCOME STATEMENT HIGHLIGHTS


                                                   Three Months Ended
                                                   UNAUDITED UNAUDITED
                                                   March 31, March 31,
                                                      2004      2003
                                                   --------- ---------
Interest Income                                     $34,325   $32,711
Interest Expense                                     10,619    11,542
                                                   --------- ---------
Net Interest Income                                  23,706    21,169
  Provision for Loan  Losses                            287      (893)
                                                   --------- ---------


Net Interest Income after
Provision for Loan Losses                            23,419    22,062

Non-Interest Income:
----------------------
Customer Related Fees & Service Charges               1,544     1,553
Investment Management and Commissions                 2,884     2,728
Trading Income                                        1,027       508
Other Operating Income                                  617       619
Gain / (Loss) on Sale of Loans                           85      (610)
Net Securities Gains                                    732     1,293
                                                   --------- ---------
Total Non-Interest Income                             6,889     6,091
                                                   --------- ---------

Non-Interest Expense                                 18,104    15,630

Income Before Taxes                                  12,204    12,523
Provision for Income Taxes                            4,881     5,012
                                                   --------- ---------
Net Income                                           $7,323    $7,511
                                                   ========= =========


Return on Average Total Assets                         0.93%     1.09%
Return on Average Stockholder's Equity                12.93%    14.59%
Yield on Interest Earning Assets                       4.72%     5.18%
Cost of Funds                                          1.76%     2.16%
Net Interest Margin                                    3.26%     3.35%
Efficiency Ratio                                      56.70%    57.34%

Atlantic Bank of New York
(In thousands, except ratios)

BALANCE SHEET HIGHLIGHTS
                                   UNAUDITED              UNAUDITED
                                  March 31,  December 31, March 31,
                                      2004      2003         2003
                                  ----------- ----------- -----------
Total Assets                      $3,213,729  $3,097,899  $2,994,320
Loans, net                         1,265,719   1,226,087   1,203,829
Allowance for Loan Losses             17,719      17,147      14,135
Securities Available-For-Sale      1,709,484   1,569,549   1,465,689
Total Treasury Investments         1,742,036   1,608,875   1,583,768
Total Deposits                     1,883,127   1,830,427   1,569,256
Borrowings                         1,066,548   1,014,164   1,184,700
Stockholder's Equity - see Note to
 Financial Summary                   235,180     220,446     206,013


SELECTED FINANCIAL HIGHLIGHTS

CAPITAL RATIOS:
--------------------------------
Risk Based Capital:
Tier I                                 10.94%      10.75%      10.98%
Total                                  12.03%      11.86%      11.91%
   Leverage Ratio                       5.87%       5.93%       6.14%


ASSET QUALITY
--------------------------------
Non-Performing Loans                  $9,293      $8,736     $34,407
Other                                      -           -         245
                                  ----------- ----------- -----------
   Total Non-Performing Assets        $9,293      $8,736     $34,652
                                  =========== =========== ===========


Allowance for Loan Losses to Non-
 Performing Assets                    190.67%     196.28%      40.79%

Allowance for Loan Losses to Total
 Loans, Net                             1.40%       1.39%       1.17%

Non-Performing Loans to Total
 Loans, Net                             0.73%       0.71%       2.86%


Note to Financial Summary
---------------------------------
Stockholder's equity includes unrealized gains (losses) on the
Available-for-Sale portfolio in accordance with FAS-115 as follows:
March 31, 2004, ($1,005); December 31, 2003, ($8,444); and March 31,
2003, ($2,829).