Alabama National BanCorporation Announces Second Quarter 2005 Earnings

Business Wire, July 19, 2005

BIRMINGHAM, Ala. -- Alabama National BanCorporation ("ANB") (NASDAQ/NM:ALAB) today announced record earnings for the quarter ended June 30, 2005.

For the 2005 second quarter, ANB reported earnings of $16.2 million, up 22.3% from the 2004 second quarter. Diluted earnings per share of $0.93 were up 11.1% from the year ago quarter. Diluted cash earnings per share were $0.96, up 10.0% from the 2004 second quarter. Total revenue grew to $67.3 million in the 2005 second quarter, up 14.2% from $58.9 million in the year ago second quarter. Noninterest income represented 27.1% of second quarter 2005 total revenue, down from 32.7% in the 2004 second quarter. ANB's taxable equivalent net interest margin was 3.93% for the 2005 second quarter, up 28 basis points from the 2004 second quarter and down 1 basis point from the first quarter of 2005.

Year-to-date earnings were $31.7 million, an increase of 29.0% over the $24.6 million in earnings reported for the same period in 2004. Diluted earnings per share for the first six months of 2005 were $1.82, up 11.2% from the $1.64 earned in the first half of 2004. Six months 2005 cash earnings per diluted share of $1.88 were up 11.0% over 2004 levels.

"I am proud of our employees and their consistent performance. We are encouraged by the continuation of loan growth and earnings per share growth while maintaining strong asset quality," said John H. Holcomb, III, Chairman and CEO. "Our markets present us with a number of opportunities, making our job one of execution. Our employees continue to perform well in executing our business plan on behalf of our shareowners."

Total assets at June 30, 2005 were $5.7 billion. Loan growth (excluding loans held for sale) was 25.0% on an annualized basis during the 2005 second quarter, while securities purchases continued to be moderate, with ending balances down $24 million from March 31, 2005 levels. Year-to-date annualized loan growth was 21.2%. Deposits grew at an 11.1% annualized rate from March 31, 2005 and at a 13.1% annualized rate from December 31, 2004, ending the June 30, 2005 period at $4.2 billion. Quarter-end shareowners' equity was $549 million, or $32.26 per share, and tangible book value per share was $23.20.

During the 2005 second quarter, ANB recognized $180 thousand in net charge-offs, or an annualized rate of 0.02% of average loans. Combined with first quarter net charge-offs, ANB's year-to-date loss of $482 thousand represents a rate of 0.03% in net losses to average loans and leases. Quarter-end nonperforming assets were 0.19% of period end loans and other real estate. The allowance for loan losses covered nonperforming loans 714%.

ANB is a bank holding company operating 85 banking locations through ten bank subsidiaries in Alabama, Florida and Georgia. Alabama subsidiaries include: First American Bank in north central Alabama; Bank of Dadeville; and Alabama Exchange Bank in Tuskegee. Florida subsidiaries are: First Gulf Bank, N.A., in Escambia County, Florida and Baldwin County, AL; Community Bank of Naples, N.A.; Millennium Bank in Gainesville; Public Bank in metropolitan Orlando; CypressCoquina Bank in Ormond Beach; and Indian River National Bank in Vero Beach. ANB has one subsidiary in Georgia, Georgia State Bank in metropolitan Atlanta. ANB provides full banking services to individuals and businesses. Brokerage services are provided to customers through First American Bank's wholly owned subsidiary, NBC Securities, Inc. Investments are not bank guaranteed, not FDIC insured and may lose value. Insurance services are provided through ANB Insurance Services, Inc., a wholly owned subsidiary of First American Bank.

Alabama National BanCorporation common stock is traded on the NASDAQ National Market System under the symbol "ALAB."

Conference Call Instructions:

Alabama National will discuss financial results for the second quarter completed June 30, 2005 as well as its goals and general outlook for the remainder of 2005 in a conference call to be held Wednesday, July 20, 2005 at 9:00 a.m. Central Time. A listen-only simulcast and replay of Alabama National's conference call will be available on-line at the following Internet links: www.alabamanational.com, under "In The News," or www.viavid.net, on July 20, beginning at 9:00 a.m. Central Time. The on-line replay will follow immediately and continue for 30 days.

For live interactive access to the teleconference, please dial 1-800-938-1464 at 9:00 a.m. Central Time on July 20. For those without Internet access, a telephonic replay will be available through August 20 by dialing 1-800-648-1687 and entering Conference ID number 7250201.

Many of the comparisons of financial data from period to period presented in the narrative of this release have been rounded from actual values reported in the attached selected unaudited financial tables. The percentage changes presented above are based on a comparison of the actual values recorded in the attached tables, not the rounded values.

This press release, including the attached selected unaudited financial tables which are a part of this release, contains financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). These "non-GAAP" financial measures are "cash earnings" (cash earnings per share), "tangible book value" (tangible book value per share), "return on average tangible equity" and "return on average tangible assets." ANB's management uses these non-GAAP measures in its analysis of ANB's performance. Cash earnings is defined as net income plus amortization expense (net of tax) applicable to intangible assets that do not qualify as regulatory capital. Cash earnings per basic and diluted share is defined as cash earnings divided by basic and diluted common shares outstanding. ANB's management includes cash earnings measures to compare the company's earnings exclusive of non-cash amortization expense and because it is a measure used by many investors as part of their analysis of ANB's performance. Tangible book value is defined as total equity reduced by recorded intangible assets. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace that are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Alabama National that have engaged in multiple business combinations, purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Return on average tangible equity is defined as earnings for the period (annualized for the quarterly period) divided by average equity reduced by average goodwill and other intangible assets. Return on average tangible assets is defined as earnings for the period (annualized for the quarterly period) divided by average assets reduced by average goodwill and other intangible assets. ANB's management includes these measures because it believes that they are important when measuring the company's performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and these measures are used by many investors as part of their analysis of ANB. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the "Reconciliation Table" in the attached schedules for a more detailed analysis of these non-GAAP performance measures and the most directly comparable GAAP measures.