Atlantic Bank of New York Announces 22 Percent Gain in 2nd Quarter 2005 Earnings

Business Wire, Sept 30, 2005

NEW YORK -- Atlantic Bank of New York today announced the results of its operations for the second quarter and first six months of 2005. Net income for the quarter was $9.6 million, which was $1.7 million or 21.70% greater than the $7.9 million posted for the same period last year. Net income for the year to date increased to $17.9 million reflecting a $2.7 million or 17.50% increase over the $15.2 million reported for the comparable prior year period.

Net interest income for the quarter ended June 30, 2005 was $23.8 million, a $.5 million or 2.11% decrease compared with the comparable quarter of 2004. For the six months ended June 30, 2005, net interest income was $48.4 million, a $.7 million or 1.50% increase over the comparable prior year period. The net interest margin was 3.37% for the second quarter and 3.38% for the first half of 2005, reflecting a .16% and a .17% increase respectively compared with the same periods last year. For the three months ended June 30, 2005, the Bank had a $1.4 million benefit for loan losses versus a $.8 million provision for the same period last year, reflecting continued improvement in the quality of the Bank's overall credit portfolio as more fully discussed below.

Non-interest income for the second quarter increased by $1.4 million or 22.70% to $7.6 million compared with the $6.2 million reported for the same period last year. Non-interest income for the year to date decreased to $12.9 million, representing a $.2 million or 1.80% reduction compared with $13.1 million posted the first half of 2004. The quarter and year to date variances in non-interest income were primarily due to gains resulting from the second quarter sale of the Boston branch business and office building, partially offset by a reduction in trading income as well as changes in recognized securities gains or losses reported for the comparable prior year periods.

Non-interest expense for the second quarter was $16.9 million, an increase of $.3 million or 1.80% over the comparable quarter last year. For the six months of 2005, non-interest expense was $33.9 million, a decrease of $.5 million or 1.40% compared with the same period last year.

Total loans, net of unearned income, were $1,324.3 million at June 30, 2005, compared with $1,304.0 million at March 31, 2005 and $1,283.7 million at June 30, 2004. The increase in loans during the second quarter and over the same period last year is primarily attributable to continued expansion in the Bank's Corporate Lending and Commercial Real Estate Lending businesses, partially offset by runoff in fixed rate Residential Mortgage loans.

As of June 30, 2005, total assets were $3.0 billion, reflecting decreases of $68.8 million or 2.20% over the prior quarter and $394.4 million or 11.60% compared with the prior year. Total deposits were $1,826.0 million at June 30, 2005, a decrease of $88.1 million or 4.60% over the prior quarter and a decrease of $131.3 million or 6.70% over the prior year. The reductions in deposits were primarily attributable to the Bank's branch office strategic rationalization program, which included the sale of its Boston branch in June 2005, and the closing of its remaining three in-store branch locations in October 2004.

Atlantic Bank's return on average total assets for the second quarter and first half of 2005 increased to 1.26% and 1.15% respectively. Return on average stockholder's equity was 14.40% for the quarter and 13.76% for the six months ended June 30, 2005. The Bank's efficiency ratio improved for both the second quarter and the year to date to 53.77% and 55.36% respectively. The Bank's Tier I leverage ratio was 7.77% at June 30, 2005. 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 $10.2 million, representing 407.32% of non-performing loans and .77% of total loans, net, at June 30, 2005. Non-performing loans declined from $8.4 million or .65% of total loans, net, as of June 30, 2004 to $2.5 million or .19% of total loans, net, as of the current quarter. The Bank's return on average tangible equity was 18.88% for the quarter and 18.28% for the six months ended June 30, 2005.

Commenting on Atlantic Bank's financial performance, Thomas M. O'Brien, President and CEO stated, "This quarter we again posted a significant increase in earnings over the comparable prior year period. We are proud of this achievement and believe that our company-wide focus on building relationships by profitably satisfying our clients' financial needs has been key to our ever-increasing profitability and growing value of our franchise."

Established in 1926, Atlantic Bank of New York is one of the top 20 commercial banks serving the New York area. With $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 $73 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.