Atlantic Bank of New York Announces 13 Percent Gain in 1st Quarter 2005 Earnings

Business Wire, July 1, 2005

NEW YORK -- Atlantic Bank of New York today announced the results of its operations for the first quarter of 2005. Net income for the quarter ended March 31, 2005 increased 13.1% to $8.3 million compared with $7.3 million for the same quarter last year. Net interest income was $24.6 million for the first quarter, representing an increase of $1.2 million or 5.3% over the comparable prior year period. The net interest margin for the quarter improved to 3.39% from the 3.22% reported for the same quarter last year. The increase in net interest income is primarily attributable to growth in the commercial real estate loan portfolio. For the three months ended March 31, 2005, the Bank had a $1.0 million benefit for loan losses versus a $.3 million provision for the same period last year, reflecting continued improvement in the quality of the Bank's overall credit portfolio.

Non-interest income for the first quarter declined by $1.7 million or 24.0% to $5.2 million compared with the $6.9 million reported for the same period last year. The reduction in non-interest income for the quarter is primarily due to decreases in recognized securities gains compared with the same quarter the prior year.

Non-interest expense for the first quarter was $17.0 million, a decrease of $.8 million or 4.3% compared with the same quarter last year. The reduction in non-interest expense reflects the continued emphasis the Bank has placed on prudently managing its cost structure as it pursues its strategic goals.

Commenting on the Bank's performance, Atlantic Bank's President and CEO, Thomas M. O'Brien, said, "Our emphasis on building our business by concentrating on forging strong relationships in partnership with our clients is reaping dividends across our entire company. We are pleased that we continue to deliver strong, quality earnings as we grow and strategically position the Bank to successfully capitalize on changing market conditions and opportunities."

Total loans, net of unearned income, rose by $38.3 million or 3.0% to $1,304.0 million at March 31, 2005, compared with $1,265.7 million at March 31, 2004. The Bank's loan growth primarily resulted from continued expansion of its commercial real estate and multi-family lending businesses. As of March 31, 2005 total assets were $3.1 billion.

Total deposits grew to $1,914.1 million at March 31, 2005, up $31.0 million or 1.6% from the same quarter last year. The Bank's deposit growth is attributable to its ongoing emphasis on capturing the core deposit relationships of its clients. As of March 31, 2005, core deposits represented 80.4% of the Bank's total deposits, compared with 76.6% for the same period last year.

Atlantic Bank's return on average total assets increased to 1.05% for the first quarter of 2005 compared with .93% for the comparable 2004 period. Return on average tangible equity was 17.28% for the quarter compared with 18.54% for the same period the prior year. The Bank's efficiency ratio for the first quarter of 2005 was 57.04%, reflecting an improvement of 1.73% from the same period last year. The Bank's Tier I leverage ratio was 7.14% at March 31, 2005, which significantly exceeds the current regulatory guidelines for a well-capitalized institution. The allowance for loan losses as a percentage of total loans was .89% as of March 31, 2005 compared with 1.40% for the prior year. The allowance for loan losses represents 387.0% of non-performing assets at March 31, 2005 compared to 190.7% at March 31, 2004. Non-performing assets declined to $3.0 million as of March 31, 2005 from $9.3 million for the first quarter of last year.

Established in 1926, Atlantic Bank of New York is one of the top 20 commercial banks serving the New York area. With over $3.0 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 branch offices in Manhattan, Queens, Brooklyn, Long Island and Westchester, and offers Commercial Insurance Premium Financing on a nationwide basis through its wholly-owned subsidiary, Standard Funding Corp. Atlantic Bank is a member of the NBG Group (NYSE: NBG), which has more than $67 billion in assets and operates in 18 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, 2005 March 31, 2004
                                         -----------------------------
Interest Income                          $     36,813    $    34,025
Interest Expense                               12,178         10,619
                                          ------------   -----------
Net Interest Income                            24,635         23,406
(Benefit) Provision for Loan Losses              (972)           287
                                          ------------   -----------
Net Interest Income after (Benefit)
 Provision for Loan Losses                     25,607         23,119

Non-Interest Income:
--------------------
Customer Related Fees & Service Charges         1,451          1,544
Investment Management and Commissions           3,224          2,884
Trading Income                                  1,036          1,027
Other Operating Income                            564            617
(Loss) / Gain on Sale of Loans                    (55)            85
Net Securities (Losses) / Gains                  (982)           732
                                          ------------   -----------
Total Non-Interest Income                       5,238          6,889
                                          ------------   -----------

Non-Interest Expense                           17,040         17,804

Income Before Taxes                            13,805         12,204
Provision for Income Taxes                      5,523          4,881
                                          ------------   -----------
Net Income                                $     8,282    $     7,323
                                          ============   ===========


Return on Average Total Assets                   1.05%          0.93%
Return on Average Stockholder's Equity          12.88%         12.93%
Return on Average Tangible Equity               17.28%         18.54%
Yield on Interest Earning Assets                 5.06%          4.68%
Cost of Funds                                    2.15%          1.76%
Net Interest Margin                              3.39%          3.22%
Efficiency Ratio                                57.04%         58.77%
Tangible Efficiency Ratio                       54.29%         56.32%
Atlantic Bank of New York
(In thousands, except ratios)

BALANCE SHEET HIGHLIGHTS
                                UNAUDITED                   UNAUDITED
                                March 31,    December 31,   March 31,
                                  2005           2004         2004
                             -----------------------------------------
Total Assets                  $ 3,067,571    $ 3,181,830  $ 3,213,729
Loans, net                      1,304,000      1,342,113    1,265,719
Allowance for Loan Losses          11,628         13,494       17,719
Securities Available-For-Sale   1,520,944      1,597,888    1,709,484
Total Treasury Investments      1,549,565      1,632,566    1,742,036
Total Deposits                  1,914,078      1,938,599    1,883,127
Borrowings                        863,530        954,562    1,066,548
Stockholder's Equity - see
 Note to Financial Summary        249,700        254,410      235,180


SELECTED FINANCIAL HIGHLIGHTS

CAPITAL RATIOS:
---------------
Risk Based Capital:
Tier I                              12.54%         11.61%       10.94%
Total                               13.23%         12.38%       12.03%
Leverage Ratio                       7.14%          6.67%        5.87%


ASSET QUALITY
-------------
Non-Performing Loans          $     3,004    $     5,049  $     9,293
Other                                   -              -            -
                               -----------    -----------  -----------
Total Non-Performing Assets   $     3,004    $     5,049  $     9,293
                               ===========    ===========  ===========


Allowance for Loan Losses to
 Non-Performing Assets             387.02%        267.26%      190.67%

Allowance for Loan Losses to
 Total Loans, Net                    0.89%          1.01%        1.40%

Non-Performing Loans to Total
 Loans, Net                          0.23%          0.38%        0.73%


Note to Financial Summary
-------------------------
Stockholder's equity includes unrealized losses, net of tax effect on
the Available-for-Sale investment portfolio of $22,589 at March 31,
2005, $9,602 at December 31, 2004, and $1,005 at March 31, 2004.