VIST VISTERRA, INC.

WYOMISSING, Pa., Jan. 27 /PRNewswire-FirstCall/ -- VIST Financial Corp. ("Company") (NASDAQ:VIST), reported net income for the quarter ended December 31, 2008 was $1,772,000, a 12.8% decrease over net income of $2,032,000 for the same period in 2007. Net income for the twelve months ended December 31, 2008 was $191,000, a 97.4% decrease over net income of $7,470,000 for the same period in 2007. Total revenue for the quarter ended December 31, 2008 was $20,037,000 as compared to $22,130,000 for the same period in 2007, a 9.5% decrease. Total revenue for the twelve months ended December 31, 2008 was $77,251,000 as compared to $85,784,000 for the same period in 2007, a 9.9% decrease. On December 19, 2008, as part of the United States Department of the Treasury's TARP Capital Purchase Program ("CPP"), the Company issued 25,000 shares of preferred stock for an aggregate purchase price of $25 million in cash. For a complete discussion of the perpetual preferred issuance, please see the Assets, Liabilities and Shareholders' Equity later in this release. Commenting on the fourth quarter 2008 and full year performance, Robert D. Davis, President and Chief Executive Officer of VIST Financial Corp. said, "Our fourth quarter and calendar year over year performance reflects the tumultuous events of 2008. As the year progressed, the contagion of a seemingly controllable sub-prime mortgage crisis produced an impact on the global and national economy of unprecedented dimensions. Despite the economic headwinds faced by VIST Financial and all financial services firms, our company continues to be well capitalized at both the holding company and bank level, which will allow our company to navigate through 2009 and beyond. As previously announced, VIST Financial applied for and received $25 million in Tier 1 Capital on December 19, 2008. Proceeds from the Capital Purchase Program were granted to eligible financial institutions committed to supporting future growth in their communities." Davis continued, "The primary use of $25 million will be used to support loan growth in our market consistent with our commercial client-centered strategy. Validation of the use of these proceeds continues to be reflected in fourth quarter loan growth of over $17 million and annual loan growth of over $65 million, or 8% respectively, for both periods." "In addition to the strength of our capital position, our operating earnings before extraordinary charges, including the one time non-cash charge related to our investment in preferred shares of Freddie Mac and Fannie Mae, continue to be strong. While VIST Financial is fortunate to have a strong and experienced senior management team, the Company has delayed any senior management salary increases for 2009 until such time as reported earnings meet levels consistent with shareholder expectations. Based on 2008 results there were no bonuses paid to senior managers for 2008." Commenting on overall asset quality trends, Davis concluded, "Management is confident we have taken prudent action in charging off under-collateralized and non-performing loans as identified in a thorough review of our entire loan portfolio." Included in the operating results for the twelve and three months ended December 31, 2008, were pretax losses on the sale of equity securities of approximately $7.3 million and $454,000, respectively, relating to perpetual preferred stock associated with Fannie Mae and Freddie Mac. Also included in the operating results for the twelve months ended December 31, 2008 were pretax losses on the sale of the Company's equity holdings of $141,000 in Fannie Mae common stock and $104,000 in Wachovia Corporation common stock. The total amount of pretax losses on the sale of the Company's equity holdings included in the operating results for the twelve and three months ended December 31, 2008, were approximately $7.5 million and $454,000, respectively. Under section 301 of the Emergency Economic Stabilization Act of 2008 ("EESA"), signed into law on October 3, 2008, the capital loss resulting from the sale of $7.3 million and $454,000 Fannie Mae and Freddie Mac perpetual preferred stock charged to earnings for the twelve and three months ended December 31, 2008, respectively, is treated as an ordinary loss. The ordinary loss treatment allowed the Company to recognize a tax benefit of approximately $2.5 million. Due to technical provisions within the accounting pronouncements governing the timing of the tax treatment of the ordinary loss, the Company recorded the $2.5 million tax benefit in the fourth quarter of 2008. Net Interest Income For the twelve months ended December 31, 2008, net interest income before the provision for loan losses increased 5.3% to $35,341,000 compared to $33,569,000 for the same period in 2007. The increase in net interest income for the twelve months resulted from a 3.5% decrease in total interest income to $65,978,000 from $68,404,000 and a 12.1% decrease in total interest expense to $30,637,000 from $34,835,000. For the three months ended December 31, 2008, net interest income before the provision for loan losses increased 0.8% to $8,595,000 compared to $8,529,000 for the same period in 2007. The increase in net interest income for the three months resulted from a 7.3% decrease in total interest income to $16,091,000 from $17,350,000 and a 15.0% decrease in total interest expense to $7,496,000 from $8,821,000. The decrease in total interest income for the twelve and three months ended December 31, 2008, resulted primarily from lower interest rates compared to the same periods in 2007. Average earning assets for the twelve and three month periods ended December 31, 2008, increased $104,402,000 and $97,777,000, respectively, compared to the same periods in 2007 due primarily to strong growth in commercial loans and available for sale investment securities. The decrease in total interest expense for the twelve and three months ended December 31, 2008, resulted primarily from lower interest rates compared to the same periods in 2007. Average interest-bearing liabilities for the twelve and three months ended December 31, 2008, increased $104,474,000 and $101,745,000, respectively, compared to the same periods in 2007. The increases in interest-bearing liabilities are due primarily to an increase in average interest-bearing deposits for the twelve and three months ended December 31, 2008, of $38,619,000 and $103,156,000, respectively, and from an increase in average securities sold under agreements to repurchase and average long term borrowings for the twelve months ended December 31, 2008 of $66,532,000. The provision for loan losses for the twelve months ended December 31, 2008, was $4,835,000 compared to $998,000 for the same period in 2007. The provision for loan losses for the three months ended December 31, 2008, was $2,250,000 compared to $400,000 for the same period in 2007. As of December 31, 2008, the allowance for loan losses was $8,124,000 compared to $7,264,000 as of December 31, 2007, an increase of 11.8%. The increase in the provision is due primarily to an increase in outstanding loans and the result of management's evaluation and classification of the credit quality of the loan portfolio utilizing a qualitative and quantitative internal loan review process. At December 31, 2008, total non-performing loans were $10,844,000 or 1.2% of total loans compared to $6,557,000 or 0.8% of total loans at December 31, 2007. The $4,287,000 increase in non-performing loans from December 31, 2007 to December 31, 2008, was due primarily to three commercial real estate loans totaling approximately $4,645,000. Management has determined that the current allowance for loan losses is adequate as of December 31, 2008. Net interest income after the provision for loan losses for the twelve and three months ended December 31, 2008, was $30,506,000 and $6,345,000, respectively, compared to $32,571,000 and $8,129,000, respectively, for the same periods in 2007. For the twelve months ended December 31, 2008, the net interest margin on a fully taxable equivalent basis was 3.45% compared to 3.63% for the same period in 2007. For the three months ended December 31, 2008, the net interest margin on a fully taxable equivalent basis was 3.27% compared to 3.57% for the same period in 2007. The decrease in net interest margin for the comparative twelve and three month periods ended December 31, 2008, was due mainly to lower yields on commercial loans resulting from decreases in short-term interest rates over the same periods in 2007 offset by strong organic commercial loan originations and a disciplined approach to deposit pricing. Non-Interest Income Total non-interest income for the twelve months ended December 31, 2008, decreased 35.1% to $11,273,000 compared to $17,380,000 for the same period in 2007. Total non-interest income for the three months ended December 31, 2008, decreased 17.4% to $3,946,000 compared to $4,780,000 for the same period in 2007, primarily due to the loss on the sale of certain equity holdings discussed below. Net securities losses were $7,230,000 for the twelve months ended December 31, 2008, compared to net securities losses of $2,324,000 for the same period in 2007. Net securities losses were $436,000 for the three months ended December 31, 2008, compared to net securities gains of $84,000 for the same period in 2007. Net securities losses for the twelve and three months ended December 31, 2008, were primarily due to the loss on the sale of approximately $7.3 million in perpetual preferred stock associated with the federal takeover of government sponsored enterprises ("GSE's") Fannie Mae and Freddie Mac, placed into conservatorship by the Federal Housing Finance Agency and the U.S. Treasury. Net securities losses for the twelve months ended December 31, 2007 were primarily due to the sale of $64.1 million in lower-yielding available for sale securities as part of a balance sheet restructuring completed in the first quarter of 2007. For the twelve months ended December 31, 2008, revenue from commissions and fees from insurance sales decreased 0.7% to $11,284,000 compared to $11,362,000 for the same period in 2007. For the three months ended December 31, 2008, revenue from commissions and fees from insurance sales increased 2.7% to $2,761,000 compared to $2,688,000 for the same period in 2007. The decrease for the comparative twelve month periods is mainly attributed to decreased contingency income while the increase for the comparative three month periods is mainly attributed to an increase in commission income on group insurance products offered through VIST Insurance, LLC, a wholly owned subsidiary of the Company. For the twelve months ended December 31, 2008, revenue from mortgage banking activity decreased to $897,000 from $1,894,000, or 52.6%, for the same period in 2007. For the three months ended December 31, 2008, revenue from mortgage banking activity decreased to $87,000 from $370,000, or 76.5%, for the same period in 2007. The decrease for the comparative twelve and three month periods is primarily due to a decline in the volume of loans sold into the secondary mortgage market. The Company operates its mortgage banking activities through VIST Mortgage, a division of VIST Bank. For the twelve months ended December 31, 2008, revenue from brokerage and investment advisory commissions and fee activity decreased to $813,000 from $886,000, or 8.2%, for the same period in 2007. For the three months ended December 31, 2008, revenue from brokerage and investment advisory commissions and fee activity decreased to $163,000 from $235,000, or 30.6%, for the same period in 2007. The decrease for the comparative twelve and three month periods is due primarily to a decrease in investment advisory service activity offered through VIST Capital Management, LLC, a wholly owned subsidiary of the Company. For the twelve months ended December 31, 2008, service charges on deposits increased to $2,964,000 from $2,657,000, or 11.6%, for the same period in 2007. For the three months ended December 31, 2008, service charges on deposits increased to $775,000 from $664,000, or 16.7%, for the same period in 2007. The increase for the comparative twelve and three month periods is due primarily to an increase in commercial account analysis fees, uncollected funds charges and non-sufficient funds charges. For the twelve months ended December 31, 2008, earnings on investment in life insurance increased to $690,000 from $667,000, or 3.4%, for the same period in 2007. For the three months ended December 31, 2008, earnings on investment in life insurance increased to $187,000 from $180,000, or 3.9%, for the same period in 2007. The increase for the comparative twelve and three month periods is due primarily to increased earnings credited on the Company's bank owned life insurance ("BOLI"). For the twelve months ended December 31, 2008, other income including gain on sale of loans decreased to $1,855,000 from $2,238,000, or 17.1%, for the same period in 2007. For the three months ended December 31, 2008, other income including gain on sale of loans decreased to $409,000 from $559,000, or 26.8%, for the same period in 2007. The decrease for the comparative twelve and three month periods is due primarily to a decrease in merchant commission income and a declining volume of SBA loans sold. Non-Interest Expense Total non-interest expense for the twelve months ended December 31, 2008, increased 7.1% to $43,638,000 compared to $40,735,000 for the same period in 2007. Total non-interest expense for the three months ended December 31, 2008, increased 10.3% to $11,469,000 compared to $10,397,000 for the same period in 2007. Salaries and benefits were $22,078,000 for the twelve months ended December 31, 2008, an increase of 2.4% compared to $21,561,000 for the same period in 2007. Salaries and benefits were $5,569,000 for the three months ended December 31, 2008, an increase of 4.0% compared to $5,355,000 for the same period in 2007. Included in salaries and benefits for the twelve months ended December 31, 2008, and December 31, 2007, were stock-based compensation costs of $319,000 and $255,000, respectively. Included in salaries and benefits for the three months ended December 31, 2008, and December 31, 2007, were stock-based compensation costs of $61,000 and $65,000, respectively. Total commissions paid for the twelve months ended December 31, 2008 and 2007 were $1,557,000 and $1,575,000, respectively. Total commissions paid for the three months ended December 31, 2008 and 2007 were $258,000 and $353,000, respectively. For the twelve months ended December 31, 2008, occupancy expense and furniture and equipment expense increased to $7,397,000 from $6,854,000, or 7.9%, for the same period in 2007. For the three months ended December 31, 2008, occupancy expense and furniture and equipment expense increased to $2,108,000 from $1,683,000, or 25.3%, for the same period in 2007. The increase for the comparative twelve and three month periods is due primarily to an increase in building lease expense including a lease termination for a planned branch consolidation, equipment repairs expense and equipment and software maintenance expense. For the twelve months ended December 31, 2008, professional services expense increased to $2,594,000 from $1,835,000, or 41.4%, for the same period in 2007. For the three months ended December 31, 2008, professional services expense increased to $797,000 from $636,000, or 25.3%, for the same period in 2007. The increase for the comparative twelve and three month periods is due primarily to an increase in legal fees associated with the Company's name change to VIST Financial Corp., costs associated with the outsourcing of the internal audit function and other general Company business. For the twelve months ended December 31, 2008, outside processing expense increased to $3,334,000 from $3,203,000, or 4.1%, for the same period in 2007. For the three months ended December 31, 2008, outside processing expense increased to $875,000 from $808,000, or 8.3%, for the same period in 2007. The increase for the comparative twelve and three month periods is due primarily to costs incurred for computer services and network fees. For the twelve months ended December 31, 2008, advertising and marketing expense decreased to $1,635,000 from $1,672,000, or 2.2%, for the same period in 2007. For the three months ended December 31, 2008, advertising and marketing expense decreased to $233,000 from $501,000, or 53.5%, for the same period in 2007. The decrease for the comparative twelve month periods is due primarily to re-branding costs associated with the Company's name change to VIST Financial Corp. The decrease for the comparative twelve and three month periods is due primarily to reduced costs for market research and media advertisement. For the twelve months ended December 31, 2008, insurance expense increased to $1,262,000 from $614,000, or 105.5%, for the same period in 2007. For the three months ended December 31, 2008, insurance expense increased to $440,000 from $123,000, or 257.7%, for the same period in 2007. The increase in insurance expense for the comparative twelve and three month periods is due primarily to higher FDIC deposit insurance premiums resulting from the implementation of the FDIC risk-related premium assessment. Income Tax Expense Income tax expense for the twelve months ended December 31, 2008, was $(2,050,000), a 217.4% decrease compared to income tax expense of $1,746,000 for the twelve months ended December 31, 2007. Income tax expense for the three months ended December 31, 2008, was $(2,950,000), a 714.6% decrease compared to income tax expense of $480,000 for the three months ended December 31, 2007. The effective income tax rate for the twelve months ended December 31, 2008 and 2007 was 110.3% and 18.9%, respectively. The effective income tax rate for the three months ended December 31, 2008 and 2007 was 250.4% and 19.1%, respectively. The increase in the effective income tax rate for the comparative twelve and three month periods is due primarily to the timing of the tax benefit treatment of the pretax ordinary loss resulting from the $7.3 million of Fannie Mae and Freddie Mac perpetual preferred stock charged to earnings for the twelve and three months ended December 31, 2008, discussed earlier. The ordinary loss treatment allowed the Company to recognize the tax benefit of approximately $2.5 million in the fourth quarter of 2008. Also included in income tax expense for the twelve and three months ended December 31, 2008 and 2007 is a federal tax benefit from a $5,000,000 investment in an affordable housing, corporate tax credit limited partnership. Earnings Per Share Diluted earnings per share for the twelve months ended December 31, 2008, were $0.03 on average shares outstanding of 5,694,803, a 97.7% decrease as compared to diluted earnings per share of $1.31 on average shares outstanding of 5,696,103 for the twelve months ended December 31, 2007. Diluted earnings per share for the three months ended December 31, 2008, were $0.31 on average shares outstanding of 5,697,280, a 13.9% decrease as compared to diluted earnings per share of $0.36 on average shares outstanding of 5,677,792 for the three months ended December 31, 2007. The decrease in diluted earnings per share for the comparative twelve and three month periods ended December 31, 2008, is due primarily to the pretax ordinary loss resulting from the $7.3 million of Fannie Mae and Freddie Mac perpetual preferred stock charged to earnings discussed earlier. Assets, Liabilities and Shareholders' Equity Total assets as of December 31, 2008 increased $99,913,000, or 8.9%, to $1,224,864,000 compared to $1,124,951,000 at December 31, 2007. Total loans as of December 31, 2008 increased $65,307,000, or 8.0%, to $886,305,000 compared to $820,998,000 at December 31, 2007. Commercial loan balances as of December 31, 2008 increased $51,216,000, or 7.9%, to $701,964,000 compared to $650,748,000 at December 31, 2007. Total deposits increased $137,955,000, or 19.4%, to $850,600,000 compared to $712,645,000 at December 31, 2007. Total borrowings as of December 31, 2008, decreased $51,102,000, or 17.4%, to $243,221,000 compared to $294,323,000 at December 31, 2007. Shareholders' equity as of December 31, 2008 increased $15,897,000, or 14.9%, to $122,489,000 compared to $106,592,000 at December 31, 2007. On December 19, 2008, the Company issued to the United States Department of the Treasury ("Treasury") 25,000 shares of Series A, Fixed Rate, Cumulative Perpetual Preferred Stock ("Series A Preferred Stock") with a par value of $0.01 per share, a liquidation preference of $1,000 per share and a warrant ("Warrant") to purchase 364,078 shares of the Company's common stock, par value $5.00 per share, for an aggregate purchase price of $25,000,000 in cash. The Series A Preferred Stock will qualify as Tier 1 capital and will pay cumulative dividends at a rate of 5% per annum for the first five years, and 9% per annum thereafter. The Series A Preferred Stock may be redeemed by the Company after three years. Prior to the end of three years, the Series A Preferred Stock may be redeemed by the Company only with proceeds from the sale of qualifying equity securities of the Company. The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $10.30 per share of common stock. If the Company receives aggregate gross cash proceeds of not less than $25,000,000 from qualified equity offerings on or prior to December 31, 2009, the number of shares of common stock issuable pursuant to exercise of the Warrant will be reduced by one half of the original number of shares underlying the Warrant. Also, included in shareholders' equity is an unrealized loss position on available for sale securities, net of taxes, as of December 31, 2008, of $8,600,000 compared to an unrealized loss position on available for sale securities, net of taxes, of $1,116,000 at December 31, 2007. The increase in shareholders' equity for the comparative twelve and three month periods ended December 31, 2008, is due primarily to the issuance of preferred stock offset by the after tax ordinary loss resulting from the Fannie Mae and Freddie Mac perpetual preferred stock charged to earnings discussed earlier. Quarterly Shareholder and Investor Conference VIST Financial Corp. will be hosting a quarterly shareholder and investor conference call on Wednesday, January 28, 2009, at 8:30 a.m. ET. Interested parties can join the conference and have the ability to ask questions by calling 888-206-4863. The conference call is titled VIST Financial Corp Quarterly Earnings Call. The conference call will be available through our webcast at: http://tinyurl.com/VISTfc The conference call webcast can also be accessed through a link located under the Investor Relations page within VIST Financial Corp's website: http://www.vistfc.com/. The conference call will be archived for 90 days and will be available at the link above and on the Company's Investor Relations webpage. VIST Financial Corp. (formerly Leesport Financial Corp.) is a diversified financial services company headquartered in Wyomissing, PA, offering banking, insurance, investments, wealth management, and title insurance services throughout Berks, Southern Schuylkill, Montgomery, Delaware, Philadelphia and Lancaster Counties. This release may contain forward-looking statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond the Company's control. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company. VIST FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED SELECTED FINANCIAL DATA (Dollar amounts in thousands, except per share data) Quarter Ended Balances For the Twelve Months Ended December 31, December 31, 2008 2007 (unaudited) -------- -------- Assets Investment securities and interest bearing cash $235,760 $195,437 Mortgage loans held for sale 2,283 3,165 Loans: Commercial loans 701,964 650,748 Consumer loans 136,713 126,710 Mortgage loans 47,628 43,540 ------ ------ Total loans $886,305 $820,998 ======== ======== Earning assets $1,124,348 $1,019,600 Total assets 1,224,864 1,124,951 Liabilities and shareholders' equity Deposits: Non-interest bearing deposits 108,645 109,718 NOW, money market and savings 307,210 309,222 Time deposits 434,745 293,705 ------- ------- Total deposits $850,600 $712,645 ======== ======== Federal funds purchased $53,424 $118,210 Securities sold under agreements to repurchase 120,086 110,881 Long-term debt 50,000 45,000 Junior subordinated debt 19,711 20,232 Shareholders' equity $122,489 $106,592 Actual common shares outstanding 5,700,075 5,657,145 Book value per common share $17.10 $18.84 Asset Quality Data As Of and For The Period Ended Twelve Months Twelve Months December 31, December 31, 2008 2007 (unaudited) ------- ------ Non-accrual loans $10,704 $3,552 Loans past due 90 days or more still accruing 140 3,005 --- ----- Total non-performing loans 10,844 6,557 Other real estate owned 263 549 --- --- Total non-performing assets $11,107 $7,106 ======= ====== Renegotiated troubled debt 285 267 Loans outstanding at end of period $886,305 $820,998 Allowance for loan losses 8,124 7,264 Net charge-offs to average loans (annualized) 0.46% 0.17% Allowance for loan losses as a percent of total loans 0.92% 0.88% Allowance for loan losses as a percent of total non-performing loans 74.92% 110.78% VIST FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED SELECTED FINANCIAL DATA (Dollar amounts in thousands) Average Balances Average Balances For the Three For the Twelve Months Ended Months Ended (unaudited) (unaudited) ----------- ----------- December December December December 31, 31, 31, 31, 2008 2007 2008 2007 ---- ---- ---- ---- Assets Investment securities and interest bearing cash $217,113 $178,387 $209,633 $173,059 Mortgage loans held for sale 1,182 2,952 1,433 3,705 Loans: Commercial loans 692,920 644,611 682,373 618,545 Consumer loans 134,744 127,173 129,845 128,479 Mortgage loans 47,137 42,196 45,617 40,711 ------ ------ ------ ------ Total loans $874,801 $813,980 $857,835 $787,735 ======== ======== ======== ======== Interest-earning assets $1,093,096 $995,319 $1,068,901 $964,499 Goodwill and intangible assets 44,663 43,173 43,516 43,406 Total assets 1,198,907 1,096,709 1,173,094 1,067,414 Liabilities and shareholders' equity Deposits: Non-interest bearing deposits 109,572 106,235 107,642 106,782 Interest bearing deposits: NOW, money market and savings 313,430 318,662 322,597 312,754 Time deposits 413,890 305,502 351,011 322,235 ------- ------- ------- ------- Total Interest-Bearing Deposits 727,320 624,164 673,608 634,989 ------- ------- ------- ------- -------- -------- -------- -------- Total deposits $836,892 $730,399 $781,250 $741,771 ======== ======== ======== ======== Short term borrowings $51,877 $106,116 $76,307 $76,805 Securities sold under agreements to repurchase 121,653 99,186 120,615 95,178 Long-term debt 55,870 25,217 58,811 17,716 Junior subordinated debt 20,108 20,400 20,133 20,312 Interest-bearing Liabilities 976,828 875,083 949,474 845,000 Shareholders' equity $101,343 $106,144 $105,006 $104,409 VIST FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED SELECTED FINANCIAL DATA (Dollar amounts in thousands, except per share data) For the Three For the Twelve Months Ended Months Ended (unaudited) (unaudited) ----------- ----------- December December December December 31, 31, 31, 31, 2008 2007 2008 2007 ---- ---- ---- ---- Interest income $16,091 $17,350 $65,978 $68,404 Interest expense 7,496 8,821 30,637 34,835 ----- ----- ------ ------ Net interest income 8,595 8,529 35,341 33,569 Provision for loan losses 2,250 400 4,835 998 ----- --- ----- --- Net Interest Income after provision for loan losses 6,345 8,129 30,506 32,571 ----- ----- ------ ------ Securities gains (losses), net (436) 84 (7,230) (2,324) Commissions and fees from insurance sales 2,761 2,688 11,284 11,362 Mortgage banking activities 87 370 897 1,894 Brokerage and investment advisory commissions and fees 163 235 813 886 Service charges on deposits 775 664 2,964 2,657 Earnings on investment in life insurance 187 180 690 667 Other income 409 559 1,855 2,238 --- --- ----- ----- Total non-interest income 3,946 4,780 11,273 17,380 ----- ----- ------ ------ Salaries and employee benefits 5,569 5,355 22,078 21,561 Occupancy expense 1,422 1,075 4,707 4,309 Furniture and equipment expense 686 608 2,690 2,545 Other operating expense 3,792 3,359 14,163 12,320 ----- ----- ------ ------ Total non-interest expense 11,469 10,397 43,638 40,735 ------ ------ ------ ------ (Loss) income before income taxes (1,178) 2,512 (1,859) 9,216 Income taxes (2,950) 480 (2,050) 1,746 ------ --- ------ ----- Net income $1,772 $2,032 $191 $7,470 ====== ====== ==== ====== Per Share Data: Basic average shares outstanding 5,697,280 5,659,352 5,689,421 5,671,951 Diluted average shares outstanding 5,697,280 5,677,792 5,694,803 5,696,103 Basic earnings per share $0.31 $0.36 $0.03 $1.32 Diluted earnings per share 0.31 0.36 0.03 1.31 Cash dividends per share 0.10 0.20 0.50 0.77 Profitability Ratios: Return on average assets 0.59% 0.74% 0.02% 0.70% Return on average shareholders' equity 6.96% 7.60% 0.18% 7.15% Return on average tangible equity (equity less goodwill and intangible assets) 12.44% 12.80% 0.31% 12.25% Net interest margin (fully taxable equivalent) 3.27% 3.57% 3.45% 3.63% Effective tax rate 250.42% 19.11% 110.27% 18.95% VIST FINANCIAL CORP. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share data) December 31, December 31, 2008 2007 ---- ---- Assets Cash and due from banks $18,964 $25,473 Interest-bearing deposits in banks 320 316 --- --- Total cash and cash equivalents 19,284 25,789 Mortgage loans held for sale 2,283 3,165 Securities available for sale 232,380 192,043 Securities held to maturity 3,060 3,078 Loans, net of allowance for loan losses 12/2008 - $8,124; 12/2008 - $7,264 878,181 813,734 Premises and equipment, net 6,591 6,892 Identifiable intangible assets 4,833 3,892 Goodwill 39,732 39,189 Bank owned life insurance 18,552 17,857 Other assets 19,968 19,312 ------ ------ Total assets $1,224,864 $1,124,951 SELECTED HIGHLIGHTS ========== ========== Liabilities and Cash Dividends Shareholders' Equity Declared Liabilities December 2007 $0.20 Deposits: March 2008 $0.20 Non-interest bearing $108,645 $109,718 June 2008 $0.20 Interest bearing 741,955 602,927 October 2008 $0.10 ------- ------- Total deposits 850,600 712,645 Securities sold under agreements to repurchase 120,086 110,881 Federal funds purchased 53,424 118,210 Long-term debt 50,000 45,000 Junior subordinated debt 19,711 20,232 Common Stock (VIST) Quarterly Closing Other liabilities 8,554 11,391 Price --------- --------- Total liabilities 1,102,375 1,018,359 12/31/2007 $17.85 --------- --------- 03/31/2008 $17.77 Shareholders' Equity 06/30/2008 $14.23 Preferred stock: $0.01 par 09/30/2008 $12.00 value; authorized 12/31/2008 $7.73 1,000,000 shares; $1,000 liquidiation preference per share; 25,000 shares issued at December 31, 2008 and no shares issued at December 31, 2007 22,693 - Common stock: $5.00 par value; Authorized 20,000,000 shares; 5,768,429 shares issued at December 31, 2008 and 5,746,998 shares issued at December 31, 2007 28,842 28,735 Stock Warrants 2,307 - Surplus 64,349 63,940 Retained earnings 14,383 17,039 Accumulated other comprehensive loss (8,600) (1,116) Treasury stock; 68,354 shares at December 31, 2008 and 89,853 shares at December 31, 2007, at cost (1,485) (2,006) ------ ------ Total shareholders' equity 122,489 106,592 ------- ------- Total liabilities and shareholders' equity $1,224,864 $1,124,951 ========== ========== VIST FINANCIAL CORP. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in thousands, except share data) Three Months Ended Year Ended December 31, December 31, 2008 2007 2008 2007 ---- ---- ---- ---- Interest Income Interest and fees on loans $13,049 $14,967 $54,532 $59,234 Interest on securities: Taxable 2,733 2,015 9,942 7,859 Tax-exempt 280 178 959 571 Dividend income 26 186 533 712 Other interest income 3 4 12 28 ------ ------ ------ ------ Total interest income 16,091 17,350 65,978 68,404 Interest Expense Interest on deposits 5,351 5,832 20,874 24,428 Interest on short-term borrowings 117 1,264 1,826 3,940 Interest on securities sold under agreements to repurchase 1,111 982 4,128 3,906 Interest on long-term debt 562 264 2,372 663 Interest on junior subordinated debt 355 479 1,437 1,898 ------ ------ ------ ------ Total interest expense 7,496 8,821 30,637 34,835 Net interest income 8,595 8,529 35,341 33,569 Provision for loan losses 2,250 400 4,835 998 ------ ------ ------ ------ Net interest income after provision for loan losses 6,345 8,129 30,506 32,571 Other income: Customer service fees 775 664 2,964 2,657 Mortgage banking activities, net 87 370 897 1,894 Commissions and fees from insurance sales 2,761 2,688 11,284 11,362 Broker and investment advisory commissions and fees 163 235 813 886 Earnings on investment in life insurance 187 180 690 667 Gain on sale of loans - 11 47 164 Gain (loss) on sales of securities (436) 84 (7,230) (2,324) Other income 409 548 1,808 2,074 ------ ------ ------ ------ Total other income 3,946 4,780 11,273 17,380 Other expense: Salaries and employee benefits 5,569 5,355 22,078 21,561 Occupancy expense 1,422 1,075 4,707 4,309 Furniture and equipment expense 686 608 2,690 2,545 Marketing and advertising expense 233 501 1,635 1,672 Identifiable intangible amortization 171 150 629 622 Professional services 797 636 2,594 1,835 Outside processing expense 875 808 3,334 3,203 Insurance expense 440 123 1,262 614 Other expense 1,276 1,141 4,709 4,374 ------ ------ ------ ------ Total other expense 11,469 10,397 43,638 40,735 (Loss) income before income taxes (1,178) 2,512 (1,859) 9,216 Income taxes (2,950) 480 (2,050) 1,746 ------ ------ ------ ------ Net income $1,772 $2,032 $191 $7,470 ====== ====== ====== ====== Per Share Data Average shares outstanding 5,697,280 5,659,352 5,689,421 5,671,951 Basic earnings per share $0.31 $0.36 $0.03 $1.32 Average shares outstanding for diluted earnings per share 5,697,280 5,677,792 5,694,803 5,696,103 Diluted earnings per share $0.31 $0.36 $0.03 $1.31 Cash dividends declared per share $0.10 $0.20 $0.50 $0.77 DATASOURCE: VIST Financial Corp. CONTACT: Edward C. Barrett, Chief Financial Officer, +1-610-603-7251 Web Site: http://www.vistfc.com/

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