UNIZ Unizan Financial (MM)

CANTON, Ohio, Oct. 21 /PRNewswire-FirstCall/ -- Unizan Financial Corp. (NASDAQ:UNIZ), today reported net income of $5.7 million for the quarter ended September 30, 2005, or $0.26 per diluted share, a 14% increase compared with net income of $5.0 million, or $0.23 per diluted share, for the second quarter of 2005 and a 98% increase compared with net income of $2.9 million, or $0.13 per diluted share, for the quarter ended September 30, 2004. "Our third quarter results continue to reflect solid improvement in our net income during the first nine months of 2005," said Roger L. Mann, Unizan Financial Corp. President and Chief Executive Officer. "I continue to be extremely pleased with the commitment demonstrated by our staff as we progress through the 2005 calendar year," concluded Mann. Net income for the nine months ended September 30, 2005 was $15.2 million, or $0.69 per diluted share, compared to $8.4 million, or $0.38 per diluted share, for the same period in 2004. Net interest income - Net interest income was $16.9 million for the three months ended September 30, 2005, down 0.9% from the previous quarter and up 5.0% from the same quarter last year. The net interest margin was 3.05% for the third quarter of 2005 compared to 3.07% for the second quarter of 2005 and 2.75% for the third quarter of 2004 while average earning assets during the third quarter of 2005 declined 1.3% from the prior quarter and 5.7% from the year ago quarter. Provision for loan losses - The provision for loan losses was $1.7 million for the three months ended September 30, 2005, compared to $1.4 million in the previous quarter and $3.8 million in the third quarter of 2004. The provision for the third quarter of 2004 was impacted by increases in non-performing and impaired loans as well as by higher loss factors being applied to certain loan types. Net charge-offs were $2.5 million for the third quarter of 2005 compared to $2.0 million in the previous quarter and $2.3 million in the year ago quarter. The increase in net charge-offs from the second quarter of 2005 was primarily attributed to one aircraft loan charge-off in the amount of $590 thousand. No aircraft loans were charged-off in the second quarter of 2005 or third quarter of 2004. The allowance for loan losses as a percentage of total loans was 1.40% at September 30, 2005 as compared to 1.41% at year end 2004 and 1.39% at September 30, 2004. Other income - Other income was $8.7 million for the third quarter of 2005 compared with $7.1 million for the second quarter of 2005 and $7.2 million for the third quarter of 2004. Results for the third quarter of 2005 benefited from additional bank owned life insurance income attributed to death benefit claims totaling $836 thousand and an $800 thousand gain on the sale of agreements with merchant services customers. The third quarter 2004 results included a $488 thousand gain from the sale of the Company's Wooster Financial Center. Trust, financial planning, brokerage and insurance sale revenue decreased $368 thousand, or 15.8%, as compared to the prior quarter and increased $171 thousand, or 9.5%, as compared to the year ago quarter. The decrease from the previous quarter was mainly attributed to the seasonality of tax related fee income during the second quarter while the increase from a year ago mainly resulted from improved market conditions. Customer service fees, representing service charges on deposits and fees for other banking services, increased by $39 thousand, or 2.3%, from the second quarter of 2005 and decreased by $102 thousand, or 5.5%, from the third quarter of 2004. The increase compared to the prior quarter was mainly attributed to pricing changes for insufficient funds transactions while the decrease from the third quarter of 2004 continued to result from changes in consumer behavior as well as increases in earnings credits due to higher short term interest rates which offset business account service charges. Gains on sales of loans totaled $1.3 million, compared with $1.1 million in the second quarter of 2005 and $1.0 million in the third quarter of 2004. During the third quarter of 2005, gains from the sale of the guaranteed portion of Small Business Administration (SBA) and other government guaranteed loans were $1.0 million, compared with $944 thousand of gains in the second quarter of 2005 and $898 thousand of gains in the third quarter of 2004. Gains from the sale of residential mortgage loans in the third quarter of 2005 were $222 thousand on sales of loans totaling $18.4 million compared with $125 thousand of gains on the sale of $12.3 million of loans in the second quarter of 2005 and $110 thousand of gains on sales of $11.7 million of loans in the third quarter of 2004. The increase from the prior quarter resulted primarily from the seasonality of mortgage origination activity while the increase from the year ago quarter was mainly attributed to lower market interest rates for fixed rate loans in 2005. There were no net security gains or losses in the third quarter of 2005 or the second quarter of 2005 compared to $60 thousand of losses in the third quarter of 2004. The net losses in the third quarter of 2004 resulted primarily from the sale of the Company's equity securities portfolio. Other expense - Other expense was $16.1 million for the three months ended September 30, 2005, up $606 thousand, or 3.9%, from the previous quarter and up $466 thousand, or 3.0%, from the same quarter a year ago. The increase from the previous quarter was primarily attributed to salaries and benefits expense which increased $233 thousand, due mainly to benefit and incentive costs, and other operating expenses which increased $330 thousand, due mainly to $230 of non credit related losses. The increase compared to the prior year quarter was primarily due to increases in accounting, legal and professional fees, offset in part by the recognition in the year ago quarter of $357 thousand for merger related severance and benefit accruals. Accounting, legal and other professional fees totaled $1.4 million, $1.6 million and $535 thousand for the quarters ended September 30, 2005, June 30, 2005 and September 30, 2004, respectively. Such costs for the September 2005 and June 2005 quarters were primarily attributed to filling staffing vacancies, outsourcing certain functions that were previously performed internally, and activities associated with reviewing, implementing and maintaining controls in accordance with provisions of Section 404 of the Sarbanes-Oxley Act of 2002. The September 2004 quarter included $119 thousand of merger related legal and professional fees as compared to minimal amounts in the 2005 quarters. Provision for income taxes - The effective tax rate for the three months ended September 30, 2005 was 26.9% compared to 30.1% in the previous quarter and 26.3% for the same quarter last year. The decrease in the effective tax rate as compared to the prior quarter was a result of tax exempt income, primarily earnings on bank owned life insurance, representing a relatively greater portion of pre-tax earnings. Balance sheet - Total assets at September 30, 2005 were $2.46 billion compared to $2.57 billion at the end of 2004 and $2.59 billion a year ago. Compared to a year ago, loans decreased by $153.3 million, or 8.1%, which continues to be primarily attributed to the closing of the aircraft lending centers, less emphasis being placed on indirect consumer lending, competitive factors involving rate and structure and a reduction in lending staff in areas where there is significant market overlap with Huntington Bancshares Incorporated ("Huntington" - see Pending Merger below). Total deposits decreased by $50.4 million, or 2.7%, from the end of 2004 and by $27.4 million, or 1.5%, from a year ago while total borrowings have declined by $71.1 million from year end 2004 and by $116.1 million from a year ago. Asset quality - At September 30, 2005, non-performing loans were $29.5 million, or 1.69% of total loans, compared to $30.2 million, or 1.61% of total loans, at December 31, 2004 and $29.2 million, or 1.53% of total loans, at September 30, 2004. Delinquent loans to total loans declined to 1.46% at September 30, 2005 compared to 1.60% at both December 31, 2004 and September 30, 2004. Non-performing loans, excluding the portion of the loans guaranteed by the government, were $22.9 million at September 30, 2005 compared to $22.9 million at December 31, 2004 and $22.2 million at September 30, 2004. Pending Merger On October 6, 2005, Huntington announced that the Office of the Comptroller of the Currency has lifted its formal written agreement dated February 28, 2005 with The Huntington National Bank. Huntington also announced that, although the Federal Reserve written agreements remain in effect, Huntington intends to proceed with the filing of the application to acquire the Company. As announced November 12, 2004, the Company and Huntington entered into an amendment to their January 26, 2004 merger agreement extending the term of the agreement for one year from January 27, 2005 to January 27, 2006. About Unizan Unizan Financial Corp., a $2.5 billion holding company, is a financial services organization headquartered in Canton, Ohio. The company operates 42 full-service retail financial centers in five metropolitan markets in Ohio - Canton, Columbus, Dayton, Newark and Zanesville. Through Unizan Financial Corp.'s subsidiaries, Unizan Bank, National Association; Unizan Financial Services Group, National Association; Unizan Banc Financial Services, Inc.; and Unizan Financial Advisors, Inc., the company offers its client base corporate and retail banking, internet banking and wealth management products and services. Additionally, the company operates government guaranteed loan programs through its business lending centers in Cincinnati, Cleveland, Columbus and Dayton, Ohio; Detroit, Michigan; Mt. Arlington, New Jersey and Indianapolis, Indiana. For more information on Unizan Financial Corp. and its subsidiaries, visit the company on the Web at http://www.unizan.com/. Unizan Financial Corp. NONPERFORMING AND UNDERPERFORMING ASSETS (dollars in thousands) 9/30/05 6/30/05 3/31/05 Non-performing loans: Commercial $2,029 $3,284 $1,588 Commercial real estate 4,642 5,255 6,477 Government guaranteed 8,862 8,559 8,690 Aircraft 2,085 2,734 2,950 Residential real estate 10,064 9,214 8,931 Direct installment loans 47 30 28 Indirect installment loans 2 6 67 Home equity 1,810 1,646 1,418 Total non-performing loans 29,541 30,728 30,149 Less: Government guaranteed amount 6,601 6,483 6,739 Total non-performing loans excluding government guaranteed amount $22,940 $24,245 $23,410 Total non-performing loans $29,541 $30,728 $30,149 Other assets owned 2,619 2,133 1,604 Total non-performing assets 32,160 32,861 31,753 Less: Government guaranteed amount 6,948 6,829 7,085 Total non-performing assets excluding government guaranteed amount $25,212 $26,032 $24,668 Restructured loans $5,247 $5,302 $5,339 Ratio of: Non-performing loans to total loans 1.69% 1.72% 1.65% Non-performing assets to total assets 1.31% 1.32% 1.26% Non-performing assets to total loans + other assets 1.84% 1.84% 1.74% Allowance to total loans 1.40% 1.42% 1.42% Allowance to non-performing loans 82.69% 82.25% 85.80% Ratio of (excluding government guaranteed amount): Non-performing loans to total loans 1.31% 1.36% 1.29% Non-performing assets to total assets 1.02% 1.05% 0.98% Non-performing assets to total loans + other assets 1.44% 1.46% 1.35% Allowance to non-performing loans 106.48% 104.24% 110.50% NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES Average loans and leases: Commercial $142,061 $149,892 $159,226 Commercial real estate 597,232 605,529 607,789 Government guaranteed 74,238 73,627 75,817 Aircraft 80,808 87,516 100,834 Residential real estate 427,798 436,273 439,089 Indirect installment loans 84,309 88,535 93,285 Home equity 324,405 325,013 322,376 Other consumer 34,310 31,233 32,277 Total average loans and leases $1,765,161 $1,797,618 $1,830,693 Net charge-offs (recoveries): Commercial $402 $88 $284 Commercial real estate 6 910 419 Government guaranteed 233 170 84 Aircraft 628 - 17 Residential real estate 226 204 153 Indirect installment loans 347 271 542 Home equity 343 174 135 Other consumer 311 207 148 Total $2,496 $2,024 $1,782 Net charge-offs (recoveries) to average loans and leases (annualized): Commercial 1.13% 0.23% 0.71% Commercial real estate 0.00% 0.60% 0.28% Government guaranteed 1.26% 0.92% 0.44% Aircraft 3.11% 0.00% 0.07% Residential real estate 0.21% 0.19% 0.14% Indirect installment loans 1.65% 1.22% 2.32% Home equity 0.42% 0.21% 0.17% Other consumer 3.63% 2.65% 1.83% Total 0.57% 0.45% 0.39% Unizan Financial Corp. NONPERFORMING AND UNDERPERFORMING ASSETS (dollars in thousands) 12/31/04 09/30/04 Non-performing loans: Commercial $1,689 $1,683 Commercial real estate 6,453 5,620 Government guaranteed 9,266 9,438 Aircraft 2,826 2,450 Residential real estate 8,375 8,577 Direct installment loans 111 63 Indirect installment loans 204 160 Home equity 1,226 1,183 Total non-performing loans 30,150 29,174 Less: Government guaranteed amount 7,294 7,023 Total non-performing loans excluding government guaranteed amount $22,856 $22,151 Total non-performing loans $30,150 $29,174 Other assets owned 2,612 2,254 Total non-performing assets 32,762 31,428 Less: Government guaranteed amount 7,976 7,759 Total non-performing assets excluding government guaranteed amount $24,786 $23,669 Restructured loans $2,430 $2,461 Ratio of: Non-performing loans to total loans 1.61% 1.53% Non-performing assets to total assets 1.27% 1.21% Non-performing assets to total loans + other assets 1.75% 1.65% Allowance to total loans 1.41% 1.39% Allowance to non-performing loans 87.42% 90.45% Ratio of (excluding government guaranteed amount): Non-performing loans to total loans 1.22% 1.17% Non-performing assets to total assets 0.96% 0.91% Non-performing assets to total loans + other assets 1.32% 1.24% Allowance to non-performing loans 115.31% 119.12% NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES Average loans and leases: Commercial $187,149 $195,561 Commercial real estate 607,848 636,693 Government guaranteed 72,949 64,643 Aircraft 111,681 121,690 Residential real estate 441,000 444,772 Indirect installment loans 101,154 108,903 Home equity 326,656 326,582 Other consumer 34,756 36,250 Total average loans and leases $1,883,193 $1,935,094 Net charge-offs (recoveries): Commercial $473 $175 Commercial real estate 1,060 772 Government guaranteed 422 353 Aircraft 612 (47) Residential real estate 190 236 Indirect installment loans 1,191 416 Home equity 424 164 Other consumer 723 216 Total $5,095 $2,285 Net charge-offs (recoveries) to average loans and leases (annualized): Commercial 1.01% 0.36% Commercial real estate 0.70% 0.49% Government guaranteed 2.31% 2.18% Aircraft 2.19% -0.15% Residential real estate 0.17% 0.21% Indirect installment loans 4.71% 1.53% Home equity 0.52% 0.20% Other consumer 8.32% 2.38% Total 1.08% 0.47% Unizan Financial Corp. Average Balance Sheet and Related Yields Three Months Ended September 30, 2005 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $10,076 $87 3.43 % Securities 464,571 4,686 4.00 Total loans (2) 1,765,161 28,104 6.32 Total interest-earning assets (3) 2,239,808 32,877 5.82 Nonearning assets: Cash and due from banks 51,435 Other nonearning assets 204,278 Allowance for loan losses (24,836) Total assets $2,470,685 Interest bearing liabilities: Demand deposits $185,831 $377 0.80 % Savings deposits 526,153 3,468 2.62 Time deposits 884,591 7,813 3.50 Total deposits 1,596,575 11,658 2.90 Subordinated note 20,619 504 9.70 Other borrowings 294,922 3,518 4.73 Total borrowings 315,541 4,022 5.06 Total interest bearing liabilities 1,912,116 15,680 3.25 Noninterest bearing liabilities: Demand deposits 213,734 Other liabilities 24,705 Shareholders' equity 320,130 Total liabilities and equity $2,470,685 Net interest income and interest rate spread (3) $17,197 2.57 % Net interest margin (4) 3.05 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. Unizan Financial Corp. Average Balance Sheet and Related Yields Three Months Ended September 30, 2004 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $9,113 $21 0.92 % Securities 431,971 3,309 3.05 Total loans (2) 1,935,094 26,704 5.49 Total interest-earning assets (3) 2,376,178 30,034 5.03 Nonearning assets: Cash and due from banks 58,010 Other nonearning assets 206,434 Allowance for loan losses (24,783) Total assets $2,615,839 Interest bearing liabilities: Demand deposits $231,466 $308 0.53 % Savings deposits 505,279 1,561 1.23 Time deposits 886,615 7,189 3.23 Total deposits 1,623,360 9,058 2.22 Subordinated note 20,619 505 9.74 Other borrowings 418,646 4,071 3.87 Total borrowings 439,265 4,576 4.14 Total interest bearing liabilities 2,062,625 13,634 2.63 Noninterest bearing liabilities: Demand deposits 222,458 Other liabilities 22,138 Shareholders' equity 308,618 Total liabilities and equity $2,615,839 Net interest income and interest rate spread (3) $16,400 2.40 % Net interest margin (4) 2.75 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. Unizan Financial Corp. Average Balance Sheet and Related Yields Nine Months Ended September 30, 2005 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $13,399 $253 2.52 % Securities 455,582 13,297 3.90 Total loans (2) 1,797,584 82,497 6.14 Total interest-earning assets (3) 2,266,565 96,047 5.67 Nonearning assets: Cash and due from banks 50,347 Other nonearning assets 204,075 Allowance for loan losses (25,503) Total assets $2,495,484 Interest bearing liabilities: Demand deposits $197,610 $1,069 0.72 % Savings deposits 525,217 8,904 2.27 Time deposits 879,646 22,367 3.40 Total deposits 1,602,473 32,340 2.70 Subordinated note 20,619 1,514 9.82 Other borrowings 316,868 10,589 4.47 Total borrowings 337,487 12,103 4.79 Total interest bearing liabilities 1,939,960 44,443 3.06 Noninterest bearing liabilities: Demand deposits 214,242 Other liabilities 24,099 Shareholders' equity 317,183 Total liabilities and equity $2,495,484 Net interest income and interest rate spread (3) $51,604 2.61 % Net interest margin (4) 3.04 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. Unizan Financial Corp. Average Balance Sheet and Related Yields Nine Months Ended September 30, 2004 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $6,535 $42 0.86 % Securities 480,472 12,703 3.53 Total loans (2) 1,956,844 81,978 5.60 Total interest-earning assets (3) 2,443,851 94,723 5.18 Nonearning assets: Cash and due from banks 58,164 Other nonearning assets 208,312 Allowance for loan losses (24,607) Total assets $2,685,720 Interest bearing liabilities: Demand deposits $245,507 $997 0.54 % Savings deposits 513,807 4,058 1.05 Time deposits 920,700 21,969 3.19 Total deposits 1,680,014 27,024 2.15 Subordinated note 20,619 1,514 9.81 Other borrowings 436,032 11,765 3.60 Total borrowings 456,651 13,279 3.88 Total interest bearing liabilities 2,136,665 40,303 2.52 Noninterest bearing liabilities: Demand deposits 218,612 Other liabilities 23,554 Shareholders' equity 306,889 Total liabilities and equity $2,685,720 Net interest income and interest rate spread (3) $54,420 2.66 % Net interest margin (4) 2.97 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except share and per share data) Year to Date 09/30/2005 09/30/2004 Interest income: Interest on federal funds sold and interest bearing deposits with banks $253 $42 Interest and dividends on securities 12,490 11,906 Interest and fees on loans and loans held for sale 82,459 81,940 Total interest income 95,202 93,888 Interest expense: Interest on deposits 32,340 27,024 Interest on borrowings 12,103 13,279 Total interest expense 44,443 40,303 Net interest income 50,759 53,585 Provision for loan losses 4,374 7,700 Net interest income after provision for loan losses 46,385 45,885 Other income: Trust, financial planning, brokerage and insurance sales 6,543 5,796 Customer service fees 5,044 5,546 Gains on sale of loans 3,523 2,939 Security gains, net - 192 Other operating income 7,624 6,946 Total other income 22,734 21,419 Other expense: Salaries, wages, pension and benefits 23,455 31,479 Occupancy expense 2,611 2,537 Furniture and equipment expense 1,505 1,627 Taxes other than income taxes 2,025 1,797 Intangible amortization expense 1,917 2,504 Other operating expense 16,326 15,687 Total other expense 47,839 55,631 Income before income taxes 21,280 11,673 Provision for income taxes 6,049 3,251 Net Income $15,231 $8,422 Earnings per share: Basic $0.69 $0.39 Diluted $0.69 $0.38 Dividends per share $0.405 $0.405 Weighted average number of shares: Basic 22,114,826 21,805,547 Diluted 22,229,672 22,005,003 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method. Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except share and per share data) Three months ended 9/30/05 6/30/05 3/31/05 Interest income: Interest on federal funds sold and interest bearing deposits with banks $87 $95 $71 Interest and dividends on securities 4,420 4,202 3,868 Interest and fees on loans and loans held for sale 28,092 27,478 26,889 Total interest income 32,599 31,775 30,828 Interest expense: Interest on deposits 11,658 10,762 9,920 Interest on borrowings 4,022 3,946 4,135 Total interest expense 15,680 14,708 14,055 Net interest income 16,919 17,067 16,773 Provision for loan losses 1,650 1,429 1,295 Net interest income after provision for loan losses 15,269 15,638 15,478 Other income: Trust, financial planning, brokerage and insurance sales 1,964 2,332 2,247 Customer service fees 1,752 1,713 1,579 Gains on sale of loans 1,267 1,069 1,187 Security gains/(losses), net - - - Other operating income 3,683 1,950 1,991 Total other income 8,666 7,064 7,004 Other expense: Salaries, wages, pension and benefits 7,850 7,617 7,988 Occupancy expense 872 831 908 Furniture and equipment expense 516 486 503 Taxes other than income taxes 659 687 679 Intangible amortization expense 634 634 650 Other operating expense 5,618 5,288 5,419 Total other expense 16,149 15,543 16,147 Income before income taxes 7,786 7,159 6,335 Provision for income taxes 2,091 2,156 1,802 Net Income $5,695 $5,003 $4,533 Earnings per share: Basic $0.26 $0.23 $0.21 Diluted $0.26 $0.23 $0.20 Dividends per share $0.135 $0.135 $0.135 Weighted average number of shares: Basic 22,150,784 22,104,216 22,088,798 Diluted 22,263,301 22,225,063 22,200,120 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method. Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except share and per share data) Three months ended 12/31/04 09/30/04 Interest income: Interest on federal funds sold and interest bearing deposits with banks $25 $21 Interest and dividends on securities 3,742 3,040 Interest and fees on loans and loans held for sale 27,452 26,693 Total interest income 31,219 29,754 Interest expense: Interest on deposits 9,392 9,058 Interest on borrowings 4,596 4,576 Total interest expense 13,988 13,634 Net interest income 17,231 16,120 Provision for loan losses 1,425 3,750 Net interest income after provision for loan losses 15,806 12,370 Other income: Trust, financial planning, brokerage and insurance sales 2,065 1,793 Customer service fees 1,784 1,854 Gains on sale of loans 1,117 1,008 Security gains/(losses), net (3,348) (60) Other operating income 1,870 2,626 Total other income 3,488 7,221 Other expense: Salaries, wages, pension and benefits 6,489 8,211 Occupancy expense 802 875 Furniture and equipment expense 533 520 Taxes other than income taxes 510 557 Intangible amortization expense 684 868 Other operating expense 6,030 4,652 Total other expense 15,048 15,683 Income before income taxes 4,246 3,908 Provision for income taxes 972 1,029 Net Income $3,274 $2,879 Earnings per share: Basic $0.15 $0.13 Diluted $0.15 $0.13 Dividends per share $0.135 $0.135 Weighted average number of shares: Basic 22,066,952 21,910,942 Diluted 22,211,146 22,052,059 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method. Unizan Financial Corp. CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data) 9/30/05 6/30/05 3/31/05 ASSETS Federal funds sold and interest bearing deposits with banks $7,843 $6,040 $13,149 Securities, net 427,149 424,481 419,750 Federal Home Loan Bank stock, at cost 37,471 37,016 36,572 Loans originated and held for sale 2,385 3,988 2,066 Loans: Commercial, financial and agricultural 220,980 225,747 236,062 Aircraft 76,440 83,342 93,527 Commercial real estate 593,322 597,409 610,945 Residential real estate 421,066 431,219 437,819 Consumer 435,618 442,003 442,783 Total Loans less unearned income 1,747,426 1,779,720 1,821,136 Less allowance for loan losses 24,426 25,273 25,868 Net loans 1,723,000 1,754,447 1,795,268 Total earning assets 2,222,274 2,251,245 2,292,673 Cash and cash equivalents 57,232 55,965 45,347 Premises and equipment, net 21,719 21,818 22,111 Goodwill 91,971 91,971 91,971 Other intangible assets 13,556 14,190 14,823 Accrued interest receivable and other assets 77,605 78,221 76,884 Total Assets $2,459,931 $2,488,137 $2,517,941 LIABILITIES Deposits: Non-interest bearing deposits $219,659 $213,026 $209,872 Demand - interest bearing 185,664 196,842 202,651 Savings and money market 517,668 527,784 528,266 Certificates and other time deposits 867,339 891,351 884,518 Total deposits 1,790,330 1,829,003 1,825,307 Total borrowings 323,293 316,261 353,791 Accrued taxes, expenses and other liabilities 26,826 25,698 25,973 Total Liabilities 2,140,449 2,170,962 2,205,071 SHAREHOLDERS' EQUITY Common stock, $1.00 stated value 22,173 22,123 22,123 Paid-in capital 221,570 220,537 220,669 Retained earnings 81,125 78,423 76,405 Stock held by deferred compensation compensation plan (2,183) (2,189) (2,243) Treasury stock, at cost (15) (92) (646) Accumulated other comprehensive loss (3,188) (1,627) (3,438) Total Shareholders' Equity 319,482 317,175 312,870 Total Liabilities and Shareholders' Equity $2,459,931 $2,488,137 $2,517,941 Unizan Financial Corp. CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data) 12/31/04 09/30/04 ASSETS Federal funds sold and interest bearing deposits with banks $7,139 $8,408 Securities, net 422,566 404,104 Federal Home Loan Bank stock, at cost 36,170 35,788 Loans originated and held for sale 1,256 2,353 Loans: Commercial, financial and agricultural 268,339 266,262 Aircraft 106,845 117,497 Commercial real estate 607,470 610,061 Residential real estate 439,866 441,338 Consumer 450,617 465,591 Total Loans less unearned income 1,873,137 1,900,749 Less allowance for loan losses 26,356 26,387 Net loans 1,846,781 1,874,362 Total earning assets 2,340,268 2,351,402 Cash and cash equivalents 52,057 61,072 Premises and equipment, net 22,226 22,787 Goodwill 91,971 91,971 Other intangible assets 15,473 16,157 Accrued interest receivable and other assets 77,195 76,500 Total Assets $2,572,834 $2,593,502 LIABILITIES Deposits: Non-interest bearing deposits $231,004 $213,621 Demand - interest bearing 219,249 229,938 Savings and money market 526,972 517,295 Certificates and other time deposits 863,501 856,914 Total deposits 1,840,726 1,817,768 Total borrowings 394,373 439,400 Accrued taxes, expenses and other liabilities 25,810 26,148 Total Liabilities 2,260,909 2,283,316 SHAREHOLDERS' EQUITY Common stock, $1.00 stated value 22,123 22,123 Paid-in capital 220,741 221,141 Retained earnings 74,854 74,560 Stock held by deferred compensation plan (2,279) (2,112) Treasury stock, at cost (1,137) (1,647) Accumulated other comprehensive loss (2,377) (3,879) Total Shareholders' Equity 311,925 310,186 Total Liabilities and Shareholders' Equity $2,572,834 $2,593,502 Unizan Financial Corp. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) 2005 2005 2005 2004 2004 EARNINGS 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr Net Interest Income FTE (1) 17,197 17,350 17,056 17,510 16,400 Provision for loan losses 1,650 1,429 1,295 1,425 3,750 Other income 8,666 7,064 7,004 6,836 7,281 Security gains/ (losses), net - - - (3,348) (60) Other expenses 16,149 15,543 16,147 15,048 15,683 FTE adjustment (1) 278 283 283 279 280 Net income 5,695 5,003 4,533 3,274 2,879 Net income per share - diluted 0.26 0.23 0.20 0.15 0.13 PERFORMANCE RATIOS Return on average assets (ROA) 0.91% 0.80% 0.73% 0.50% 0.44% Return on average common equity (ROE) 7.06% 6.34% 5.84% 4.16% 3.71% Tangible return on average tangible assets (2) 1.02% 0.91% 0.83% 0.60% 0.55% Tangible return on avg. tangible common equity (2) 11.31% 10.35% 9.67% 7.20% 6.85% Net interest margin FTE (1) 3.05% 3.07% 3.02% 2.97% 2.75% Efficiency ratio(3) 59.99% 61.07% 64.41% 58.86% 62.03% MARKET DATA Book value/common share 14.44 14.34 14.16 14.17 14.06 Tangible book value/ common share 9.67 9.54 9.33 9.29 9.16 Period-end common share mkt value 24.21 26.79 26.00 26.35 27.61 Market as a % of book 167.6% 186.8% 183.6% 186.0% 196.4% Cash dividends/ common share 0.135 0.135 0.135 0.135 0.135 Common stock dividend payout ratio 52.4% 59.7% 65.8% 91.0% 103.3% Average basic common shares 22,150,784 22,104,216 22,088,798 22,066,952 21,910,942 Average diluted common shares 22,263,301 22,225,063 22,200,120 22,211,146 22,052,059 Period end common shares 22,122,286 22,119,382 22,098,482 22,017,113 22,059,010 Common stock market capitalization 535,581 592,578 574,561 580,151 609,049 ASSET QUALITY Gross charge-offs 3,480 3,164 2,558 7,194 2,952 Net charge-offs 2,496 2,024 1,782 5,095 2,285 Delinquency Ratio 1.46% 1.32% 1.38% 1.60% 1.60% Allowance for loan losses 24,426 25,273 25,868 26,356 26,387 Non-accrual loans 29,535 30,341 29,423 28,294 26,628 Past due 90 days or more & accruing 6 387 726 1,856 2,546 Other assets owned 2,619 2,133 1,604 2,612 2,254 Nonperforming assets (NPAs) 32,160 32,861 31,753 32,762 31,428 Restructured loans 5,247 5,302 5,339 2,430 2,461 Net charge-off ratio 0.57% 0.45% 0.39% 1.08% 0.47% Allowance/loans 1.40% 1.42% 1.42% 1.41% 1.39% NPL to loans 1.69% 1.72% 1.65% 1.61% 1.53% NPA to loans + other assets 1.84% 1.84% 1.74% 1.75% 1.65% Allowance to NPLs 82.69% 82.25% 85.80% 87.42% 90.45% AVERAGE BALANCES Assets 2,470,685 2,497,436 2,518,865 2,579,517 2,615,839 Deposits 1,810,309 1,822,754 1,817,157 1,820,310 1,845,818 Loans 1,765,161 1,797,618 1,830,693 1,883,193 1,935,094 Earning assets 2,239,808 2,269,382 2,291,068 2,349,292 2,376,178 Shareholders' equity 320,130 316,386 314,984 313,231 308,618 ENDING BALANCES Assets 2,459,931 2,488,137 2,517,941 2,572,834 2,593,502 Deposits 1,790,330 1,829,003 1,825,307 1,840,726 1,817,768 Loans 1,749,811 1,783,708 1,823,202 1,874,393 1,903,102 Goodwill and other intangible assets 105,527 106,161 106,794 107,444 108,128 Earning assets 2,222,274 2,251,245 2,292,673 2,340,268 2,351,402 Total shareholders' equity 319,482 317,175 312,870 311,925 310,186 (1) - FTE defined as fully tax-equivalent (2) - Net income adjusted for amortization of intangibles, after tax, divided by average total assets or average total equity, as applicable, reduced by average goodwill and other intangibles. (3) - Excludes amortization of intangibles. Fourth quarter 2004 excludes $246 pre-tax merger related professional fees and severance accruals. Third quarter 2004 excludes $488 pre-tax gain on sale of Wooster Financial Center and $476 pre-tax merger related professional fees and severance accruals. Certain previously reported amounts may have been reclassified to conform to current reporting presentation. DATASOURCE: Unizan Financial Corp. CONTACT: Investors, Roger L. Mann, President and Chief Executive Officer, +1-330-438-1118, or +1-866-235-7203, or , or Media, Sandy K. Upperman, Vice President, Corporate Communications, +1-330-438-4858, or , both of Unizan Financial Corp. Web site: http://www.unizan.com/ Company News On-Call: http://www.prnewswire.com/comp/127633.html

Copyright