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<PAGE>
Exhibit 7.1
YORK FINANCIAL CORP. AND SUBSIDIARIES
Selected Financial Data
<TABLE>
<CAPTION>
Selected Financial Condition Data (in thousands, unaudited)
September 30 June 30
2000 2000
------------ ------------
<S> <C> <C>
Total assets $ 1,702,730 $ 1,673,645
Loans held for sale, net 5,755 4,415
Marketable securities and cash 423,925 427,810
Loans receivable, net 1,200,073 1,171,211
Other assets 72,977 70,209
Total deposits $ 1,162,392 $ 1,170,728
Other borrowings 408,579 370,390
Other liabilities 18,513 22,649
Total liabilities 1,589,484 1,563,767
Total stockholders' equity 113,246 109,878
<CAPTION>
Selected Operating Data (in thousands, unaudited)
Three months ended September 30
2000 1999
------------ ------------
<S> <C> <C>
Interest income $ 29,680 $ 24,024
Interest expense 21,352 14,737
Net interest income 8,328 9,287
Provision for loan losses 260 600
Net interest income after provision for loan losses 8,068 8,687
Total noninterest income 2,099 1,354
Total noninterest expense 7,419 7,408
Income before income taxes 2,748 2,633
Provision for income taxes 720 304
Net income $ 2,028 $ 2,329
Per share data (unaudited):
Basic earnings per share $ 0.20 $ 0.23
Diluted earnings per share $ 0.20 $ 0.23
Cash dividends paid per share $ 0.13 $ 0.12
Weighted average shares 10,030,533 9,975,447
Weighted average shares - assuming dilution 10,294,489 10,238,646
</TABLE>
1
<PAGE>
Earnings Per Share
The Corporation computed earnings per share in accordance with Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share". The
following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended September 30,
2000 1999
----------- -----------
<S> <C> <C>
Net Income (in thousands) $ 2,028 $ 2,329
=========== ===========
Weighted-average shares outstanding 10,030,533 9,975,447
Effect of dilutive securities:
Employee Stock Options 263,956 263,199
----------- -----------
Weighted-average shares plus assumed
conversion of dilutive securities 10,294,489 10,238,646
=========== ===========
Basic earnings per share $ 0.20 $ 0.23
=========== ===========
Diluted earnings per share $ 0.20 $ 0.23
=========== ===========
</TABLE>
Other Borrowings
Other borrowings consist of the following:
<TABLE>
<CAPTION>
Three Months Fiscal Year
Ended Ended
September 30 June 30
2000 2000
---------------------------------
(In Thousands)
<S> <C> <C>
FHLB loans payable to FHLB Pittsburgh, secured by all
FHLB stock and certain first mortgage loans: $ 384,019 $346,333
Other borrowings 15,556 15,557
Repurchase agreements: 9,004 8,500
---------------------------------
Total Borrowings $ 408,579 $370,390
=================================
</TABLE>
2
<PAGE>
Asset Quality
An analysis of the allowance for loan losses, for the periods indicated is
as follows:
<TABLE>
<CAPTION>
Three Months Ended Fiscal Year Ended
September 30, 2000 June 30, 2000
------------------ ------------------
(Dollars in thousands)
<S> <C> <C>
Total allowance for loan losses at beginning of period $ 11,254 $ 10,803
Loans charged-off:
Residential mortgage 222 1,036
Consumer 51 394
------------------ ------------------
Total charged-offs 273 1,430
------------------ ------------------
Recoveries:
Residential mortgage 1 189
Commercial 2 24
Consumer 16 8
------------------ ------------------
Total recoveries 19 221
------------------ ------------------
Net loans charged-off 254 1,209
Provision for loan losses 260 1,660
------------------ ------------------
Total allowance for loan losses at end of period $ 11,260 $ 11,254
================== ==================
Percentage of net charge-offs to average loans outstanding
during the period 0.02% 0.11%
================== ==================
Percentage of allowance for loan losses to adjusted total loans 0.93% 0.95%
================== ==================
</TABLE>
3
<PAGE>
An analysis of nonperforming assets is summarized as follows:
<TABLE>
<CAPTION>
At September 30, At June 30,
2000 2000
---------------- ----------------
(Dollars in thousands)
<S> <C> <C>
Loans accounted for on a nonaccrual basis:
Residential mortgage $ 259 $ 263
Commercial 258 -
---------------- ----------------
Total nonaccrual loans 517 263
---------------- ----------------
Accruing loans which are contractually past due 90
days or more:
Residential mortgage 6,357 6,428
Consumer 938 723
---------------- ----------------
Total of 90 days past due loans 7,295 7,151
---------------- ----------------
Total of nonaccrual and 90 days past due loans $ 7,812 $ 7,414
================ ================
As a percent of total loans 0.65% 0.63%
================ ================
Real estate owned:
Residential mortgage $ 1,775 $ 2,300
Land 905 1,113
Allowance for real estate losses (16) (55)
---------------- ----------------
Total real estate owned $ 2,664 $ 3,358
================ ================
As a percent of total assets 0.16% 0.20%
================ ================
Total nonperforming assets $ 10,476 $ 10,772
================ ================
As a percent of total assets 0.62% 0.64%
================ ================
</TABLE>
4
<PAGE>
Capital
OTS regulated thrifts must comply with various capital standards. A
reconciliation of York Federal's regulatory capital to capital using generally
accepted accounting principles (GAAP) as of September 30, 2000 follows:
<TABLE>
<CAPTION>
Tangible Core Risk-based
capital capital capital
------------ ------------- -------------
<S> <C> <C> <C>
GAAP capital at York Financial $ 113,246 $ 113,246 $ 113,246
Capital attributed to affiliates 4,824 4,824 4,824
------------ ------------- -------------
GAAP capital at York Federal 118,070 118,070 118,070
Capital adjustments:
Unrealized losses on securities
available for sale, net of taxes 4,977 4,977 4,977
Allowance for loan losses - - 11,260
Purchased mortgage servicing rights (187) (187) (187)
Investment in real estate - - (639)
------------ ------------- -------------
Regulatory capital $ 122,860 $ 122,860 $ 133,481
============ ============= =============
Capital Ratios at York Federal 7.2% 7.2% 13.1%
Required Regulatory Capital 1.5% 4.0% 8.0%
Required Capital to be deemed "well capitalized" N/A 5.0% 10.0%
</TABLE>
5
<PAGE>
Net Interest Income
The components of net interest income for the three month periods ended
September 30, 2000 and September 30, 1999 is presented in the following table:
<TABLE>
<CAPTION>
Three Months Ended September 30
Yield/ 2000 1999
Rate at ------------------------------------- -----------------------------------
Sept. 30, Average Yield/ Average Yield/
2,000 Balance Interest Rate Balance Interest Rate
-------- -------------- ---------- -------- ------------ ---------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) (2) (3) 7.75% $ 1,190,353 $ 22,933 7.71% $ 981,012 $ 18,402 7.50%
Securities held for trading - - - - 3,726 64 6.87
Securities available for sale 6.52 347,337 5,773 6.65 323,114 4,909 6.08
Securities held to maturity 7.31 53,702 838 6.18 33,359 561 6.68
Other interest-earning assets 6.55 8,143 136 6.54 6,877 88 5.01
-------- -------------- --------- -------- ------------ --------- --------
Total interest-earning assets 7.47 1,599,535 29,680 7.42 1,348,088 24,024 7.13
Noninterest-earning assets 83,824 84,520
-------------- ------------
Total $ 1,683,359 $ 1,432,608
============== ============
Interest-bearing liabilities:
Deposits
NOW accounts 1.34 $ 113,416 536 1.87 $ 110,235 452 1.63
Savings accounts 2.50 41,925 263 2.50 52,900 333 2.50
Money market accounts 5.37 324,852 4,335 5.29 323,700 3,413 4.18
Certificate accounts 6.04 661,961 9,952 5.96 596,764 8,103 5.39
Borrowings 6.65 375,796 6,266 6.62 184,225 2,436 5.25
-------- -------------- --------- -------- ------------ --------- --------
Total interest-bearing liabilities 5.64 1,517,950 21,352 5.58 1,267,824 14,737 4.61
-------- --------- -------- --------- --------
Noninterest-bearing deposits 28,357 28,547
Noninterest-bearing liabilities 26,259 27,032
-------------- ------------
1,572,566 1,323,403
Stockholders' equity 110,793 109,205
-------------- ------------
Total $ 1,683,359 $ 1,432,608
============== ============
Ratio of interest-earning assets
to interest-bearing liabilities 1.05x 1.06x
============== ============
Net interest income/interest rate
spread 1.83% $ 8,328 1.84% $ 9,287 2.51%
======== ========= ======== ========= =======
Net interest-earning
assets/margin on
interest-earning assets $ 81,585 2.12% $ 80,264 2.79%
============== ======== ============ ========
</TABLE>
(1) Average balances include loans on nonaccrual status.
(2) Average balances include loans held for sale.
(3) Interest includes amortization of loan fees.
6
<PAGE>
The volume/rate analysis shown in the following table presents a
comparative analysis of reported interest income and expense in relation to
changes in specific asset and liability account balances (volume) and
corresponding interest rates (rate) for the three month periods ended September
30, 2000 and September 30, 1999.
<TABLE>
<CAPTION>
Three Months Ended September 30
2000 compared to 1999
Increase (Decrease) Due to:
--------------------------------------------------
Volume Rate Net
----------- ---------------- --------------
(In thousands)
<S> <C> <C> <C>
Interest income:
Loans $4,021 $ 510 $4,531
Securities held for trading (64) - (64)
Securities available for sale 388 476 864
Securities held to maturity 255 22 277
Other interest-earning assets 18 30 48
----------- ----------------- --------------
Total 4,618 1,038 5,656
Interest expense:
Deposits
NOW accounts 14 70 84
Savings accounts (69) (1) (70)
Money market accounts 12 910 922
Certificate accounts 933 916 1,849
Borrowings 3,062 768 3,830
----------- ----------------- --------------
Total 3,952 2,663 6,615
----------- ----------------- --------------
Net interest income $ 666 $ (1,625) $ (959)
=========== ================= ==============
</TABLE>
7
<PAGE>
Noninterest Income
Other income was $2.1 million for the three months ended September 30,
2000, an increase of $0.7 million from the three months ended September 30,
1999. The following table presents an analysis of noninterest income for the
three month periods ended September 30, 2000 and 1999.
Changes in Noninterest Income (All dollar amounts presented in table are in
000's)
<TABLE>
<CAPTION>
Three months ended September 30,
------------------------------------------------------
Noninterest Income: 2000 1999 % Change
------------------ ------------------ ----------
<S> <C> <C> <C>
Mortgage Banking $ 340 $ 583 (41.7%)
Gain on sales of real estate 20 39 (48.7%)
Fees and service charges 1,275 974 30.9%
Loss from joint ventures and partnerships (322) (806) (60.0%)
Other operating income 786 564 39.4%
------------------ ------------------
Total noninterest income $ 2,099 $ 1,354 55.0%
================== ==================
</TABLE>
Other Expenses
Other expenses of $7.4 million remained unchanged for the three months
ended September 30, 2000 as compared to the same period in 1999. The following
table presents an analysis of noninterest expense for the three month periods
ended September 30, 2000 and 1999.
Changes in Noninterest Expense (All dollar amounts presented in table are in
000's)
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------------------
2000 1999 % Change
-------------- -------------- --------------
<S> <C> <C> <C>
Noninterest Expense:
Salaries and benefits $ 3,853 $ 3,613 6.6%
Occupancy 1,002 966 3.7%
Federal deposit insurance 59 164 (64.0%)
Real estate 140 203 (31.0%)
Data processing 421 387 8.8%
Advertising 299 383 (21.9%)
Other 1,645 1,692 (2.8%)
-------------- --------------
Total noninterest expense $ 7,419 $ 7,408 0.1%
============== ==============
</TABLE>
8
<PAGE>
Provision for Income Taxes
The provision for income taxes of $720,000 for the three months ended
September 30, 2000 represents an effective tax rate of 26.2% as compared to
11.6% for the same period last year. Income tax expense for the Corporation is
different than the amounts computed by applying the statutory federal income tax
rate to income before income taxes as follows:
<TABLE>
<CAPTION>
Three months ended Fiscal year ended
September 30, 2000 June 30, 2000
------------------- -------------
(Percentage of income before income taxes)
<S> <C> <C>
Income tax expense at federal statutory rate 35.0 % 35.0 %
Tax-exempt income (0.9) (0.6)
State income taxes, net of federal benefit 0.5 0.2
Executive retirement (2.2) (1.5)
Federal tax credits (6.5) (13.0)
Other 0.3 (1.1)
---------------------------------------
Effective tax rate 26.2 % 19.0 %
---------------------------------------
</TABLE>
9
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