FINANCIAL HIGHLIGHTS
Keystone recognized net income of $20.2 million or earnings per share of $0.41
for the second quarter, compared with $24.6 million or $0.50 per share for the
prior year. Amounts for the six months ended June 30, 2000 were net income of
$40.0 million or $0.82 per share, compared with $45.7 million or $0.92 per share
for the same period last year. Amounts for 1999 exclude special charges
associated with internal restructuring which reduced earnings per share by $0.01
for the quarter and by $0.26 for the six months ended June 30, 1999.
Earnings for the second quarter of 2000 resulted in a return on average assets
of 1.16% and a return on average equity of 14.51%. While average earning assets
increased 4.6% from the same quarter last year, the current interest rate
environment created pressure on the net interest margin, which declined from
4.31% in the second quarter of 1999, to 4.07% in the second quarter of 2000.
Similarly, net interest income declined 1.4% during the same period.
Noninterest sources of revenue were also impacted by the higher interest rate
environment as demand for fixed rate mortgages declined. As a result of lower
fixed-rate originations and sales, mortgage banking revenue levels declined from
the second quarter of 1999 to the same quarter in 2000. Other income declined in
the same period as 1999 amounts included the benefit of a pension plan
curtailment gain.
Total noninterest expenses increased 3.5% from the second quarter of 1999 to the
same quarter in 2000. The provision for credit losses increased 17% and was
responsive to loan growth. Total risk elements expressed as a percentage of
loans increased to 1.34%. The increase is associated with the migration of a
limited number of commercial real estate loans into nonaccrual status during the
quarter.
Keystone's equity to assets ratio reached 8.05% at June 30, 2000. All regulatory
capital measures were in excess of the threshold for "well capitalized"
designation.
<TABLE>
<CAPTION>
2000 1999
-----------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Key ratios excluding special charges: Quarter Quarter Quarter Quarter Quarter Annual
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings per share - basic $ 0.41 $ 0.41 $ 0.29 $ 0.49 $ 0.50 $ 1.71
Earnings per share - diluted $ 0.41 $ 0.41 $ 0.29 $ 0.49 $ 0.50 $ 1.70
Return on average assets 1.16% 1.16% 0.81% 1.40% 1.48% 1.23%
Return on average equity 14.51% 14.18% 9.21% 16.33% 17.49% 13.72%
Net interest margin 4.07% 3.99% 4.08% 4.26% 4.31% 4.21%
Noninterest income/revenues 27.61% 27.10% 27.09% 28.01% 29.98% 28.24%
Provision for credit losses/
average loans 0.41% 0.34% 1.21% 0.30% 0.36% 0.53%
Noninterest expense/revenues 61.34% 62.14% 60.11% 58.13% 55.87% 59.10%
Nonperforming assets to loans 0.89% 0.86% 0.70% 0.82% 0.73% -
90 day past due loans to loans 0.45% 0.44% 0.50% 0.44% 0.56% -
-----------------------------------------------------------------------------------------------------
Total risk elements to loans 1.34% 1.30% 1.20% 1.26% 1.29% -
=====================================================================================================
Allowance for credit losses to loans 1.34% 1.34% 1.35% 1.35% 1.35% -
Allowance for credit losses to
nonperforming loans 162% 169% 214% 182% 206% -
Net charge-offs/average loans 0.32% 0.28% 1.13% 0.37% 0.35% 0.54%
Equity to assets 8.05% 7.93% 7.99% 8.52% 8.54% -
-----------------------------------------------------------------------------------------------------
</TABLE>
*Including the impact of special charges associated with litigation resolution
and the unification of Keystone's seven banks under a single charter, reported
performance ratios for 1999 were as follows:
Fourth Third Second
Quarter Quarter Quarter Annual
---------------------------------------------------------------------------
Earnings per share - basic -$0.36 $0.46 $0.49 $0.76
Earnings per share - diluted -$0.37 $0.46 $0.49 $0.75
Return on average assets -1.03% 1.31% 1.45% 0.55%
Return on average equity -12.12% 15.37% 17.19% 6.33%
Noninterest expense/revenues 114.54% 60.50% 56.55% 78.14%
---------------------------------------------------------------------------
<PAGE>
PER SHARE STATISTICS
Diluted Earnings per Share (excluding special charges)
--------------------------------------------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter Total
--------------------------------------------------------------------------------
2000 $ 0.41 $ 0.41 $ 0.82
1999 $ 0.29 $ 0.49 $ 0.50 $ 0.42 $ 1.70
1998 $ 0.48 $ 0.50 $ 0.48 $ 0.46 $ 1.92
--------------------------------------------------------------------------------
Average Diluted Shares Outstanding
--------------------------------------------------------------------------------
Fourth Third Second First Average
Quarter Quarter Quarter Quarter for Year
--------------------------------------------------------------------------------
2000 48,990,000 48,870,000 48,930,000
1999 48,847,000 48,836,000 48,927,000 50,115,000 49,186,000
1998 51,624,000 51,875,000 52,095,000 52,557,000 52,042,000
--------------------------------------------------------------------------------
Book Value per Share
--------------------------------------------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter
--------------------------------------------------------------------------------
2000 $11.54 $11.39
1999 $11.29 $12.04 $11.89 $11.99
1998 $13.12 $13.39 $13.05 $13.13
--------------------------------------------------------------------------------
Tangible Book Value per Share
--------------------------------------------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter
--------------------------------------------------------------------------------
2000 $10.48 $10.30
1999 $10.18 $10.89 $10.71 $10.79
1998 $11.92 $12.20 $11.83 $11.94
--------------------------------------------------------------------------------
<TABLE>
QUARTER-END INFORMATION
(dollars in thousands) 2000 1999
------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans $4,609,584 $4,532,893 $4,459,546 $4,388,555 $4,432,600
Earning assets 6,529,833 6,481,023 6,232,166 6,372,096 6,263,529
Intangible assets 52,109 53,110 54,147 56,172 57,247
Total assets 7,038,933 7,012,346 6,887,508 6,877,563 6,748,497
Deposits 5,039,143 5,051,649 4,960,334 4,913,753 5,026,958
Long-term debt (excluding FHLB) 131,784 130,018 129,920 129,938 129,955
Total shareholders' equity 566,312 556,351 550,025 585,844 576,151
Unrealized securities gains(losses), net (18,022) (17,723) (16,287) (10,619) (6,666)
------------------------------------------------------------------------------------------------------------
Number of shares outstanding 49,082,788 48,843,604 48,731,057 48,647,898 48,456,882
------------------------------------------------------------------------------------------------------------
QUARTER-END CAPITAL RATIOS
2000 1999
--------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
--------------------------------------------------------------------------------------------------------
Equity to assets 8.05% 7.93% 7.99% 8.52% 8.54%
Tier one capital/Risk adjusted assets 10.59% 10.51% 10.54% 11.33% 11.38%
Total capital/Risk adjusted assets 11.82% 11.73% 11.78% 12.57% 12.63%
Leverage ratio 7.67% 7.63% 7.48% 8.04% 7.93%
---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<PAGE>
CONDENSED CONSOLIDATED QUARTERLY AVERAGE
STATEMENTS OF CONDITION
2000 1999
-----------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
-----------------------------------------------------------------------------------------------------
Assets
Earning Assets:
<S> <C> <C> <C> <C> <C>
Loans and leases $4,602,041 $4,490,075 $4,421,098 $4,395,983 $4,418,446
Loans held for resale 137,666 119,744 112,389 97,311 92,352
Federal funds sold and other 117,062 99,217 120,546 116,712 50,215
Taxable investment securities 1,401,000 1,433,574 1,441,442 1,449,896 1,442,224
Nontaxable investment securities 255,083 252,448 253,077 241,912 223,986
-----------------------------------------------------------------------------------------------------
Total Earning Assets 6,512,852 6,395,058 6,348,552 6,301,814 6,227,223
Cash and due from banks 177,456 187,187 218,574 204,265 205,248
Allowance for credit losses (62,224) (61,051) (59,481) (60,300) (60,087)
Intangible assets 50,143 53,470 55,623 56,692 57,765
Other assets 318,872 320,082 315,911 284,622 264,280
-----------------------------------------------------------------------------------------------------
Total assets $6,997,099 $6,894,746 $6,879,179 $6,787,093 $6,694,429
-----------------------------------------------------------------------------------------------------
Liabilities and equity
Interest-bearing liabilities:
Deposits less than $100,000:
Now/Savings accounts $730,411 $742,975 $763,136 $790,241 $812,437
Money market accounts 809,499 787,598 793,144 795,353 783,236
Time deposits 2,336,438 2,348,820 2,357,464 2,495,748 2,545,283
Deposits greater than $100,000 492,159 458,853 378,696 250,330 269,040
Short-term borrowings 382,949 343,413 337,642 361,677 357,295
FHLB Borrowings 738,099 725,546 696,945 534,614 405,461
Long-term debt, other 131,210 129,914 129,930 129,948 130,030
-----------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 5,620,765 5,537,119 5,456,957 5,357,911 5,302,782
-----------------------------------------------------------------------------------------------------
Noninterest-bearing deposits 685,446 657,453 676,687 691,552 682,793
Other liabilities 131,008 137,151 159,177 157,477 144,222
-----------------------------------------------------------------------------------------------------
Total liabilities 6,437,219 6,331,723 6,292,821 6,206,940 6,129,797
-----------------------------------------------------------------------------------------------------
Shareholders' equity 559,879 563,023 586,358 580,153 564,632
-----------------------------------------------------------------------------------------------------
Total liabilities and
shareholders equity $6,997,099 $6,894,746 $6,879,179 $6,787,093 $6,694,429
-----------------------------------------------------------------------------------------------------
Change in Average Balances (1)
2000 1999
-----------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
-----------------------------------------------------------------------------------------------------
Loans 4.2% 1.0% -1.6% -3.5% -4.9%
Total assets 4.5% 1.6% -0.7% -1.7% -2.6%
Deposits -0.8% -2.6% -4.0% -3.0% -2.0%
Shareholders'equity -0.8% -8.2% -14.3% -14.3% -16.9%
-----------------------------------------------------------------------------------------------------
</TABLE>
(1) Compares the current quarter to the comparable quarter of the prior year.
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands) 2000 1999
-----------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter Annual
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest income $ 131,233 $ 125,136 $ 124,087 $ 121,957 $ 119,410 $ 486,031
Tax equivalent adjustment 2,172 2,208 2,279 2,128 2,180 8,657
-----------------------------------------------------------------------------------------------------------------
133,405 127,344 126,366 124,085 121,590 494,688
Interest expense 67,399 63,750 61,319 56,726 54,666 228,658
-----------------------------------------------------------------------------------------------------------------
Net interest income 66,006 63,594 65,047 67,359 66,924 266,030
Provision for credit losses 4,637 3,788 13,473 3,290 3,950 23,376
-----------------------------------------------------------------------------------------------------------------
Net interest income after provision 61,369 59,806 51,574 64,069 62,974 242,654
Noninterest income 25,175 23,635 24,170 26,202 28,655 104,683
Security transactions 119 85 (1,512) 729 20 (338)
Noninterest expense 55,931 54,203 102,192 56,602 54,046 289,674
-----------------------------------------------------------------------------------------------------------------
Income before income taxes 30,732 29,323 (27,960) 34,398 37,603 57,325
Income taxes 8,366 7,260 (12,324) 9,798 11,219 11,592
Tax equivalent adjustment 2,172 2,208 2,279 2,128 2,180 8,657
-----------------------------------------------------------------------------------------------------------------
NET INCOME $ 20,194 $ 19,855 $ (17,915) $ 22,472 $ 24,204 $ 37,076
-----------------------------------------------------------------------------------------------------------------
Tax effect of security transactions $ 42 $ 30 $ (529) $ 255 $ 7 $ (118)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
ANALYSIS OF NONINTEREST INCOME
(dollars in thousands) 2000 1999
----------------------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter Annual
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Trust and investment advisory fees $ 7,490 $ 7,108 $ 6,982 $ 6,784 $ 7,326 $ 27,766
Service charges on deposit accounts 4,965 4,833 5,556 4,822 4,458 19,173
Fee income 5,997 6,161 6,202 7,668 6,860 26,989
Mortgage banking income 1,937 1,480 2,026 2,374 3,479 11,461
Reinsurance income 871 937 365 856 1,045 3,113
Other income 3,915 3,116 3,039 3,698 5,487 16,181
----------------------------------------------------------------------------------------------------------------------------
Total noninterest income $ 25,175 $ 23,635 $ 24,170 $ 26,202 $ 28,655 104,683
----------------------------------------------------------------------------------------------------------------------------
Noninterest income to average assets (1) 1.45% 1.38% 1.39% 1.53% 1.72% 1.54%
----------------------------------------------------------------------------------------------------------------------------
(1) Annualized
ANALYSIS OF NONINTEREST EXPENSE
(dollars in thousands) 2000 1999
----------------------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter Annual
----------------------------------------------------------------------------------------------------------------------------
Salaries expense $ 22,121 $ 21,932 $ 20,983 $ 22,383 $ 21,952 $ 89,149
Employee benefits 4,593 4,155 4,287 3,812 3,979 17,701
Occupancy expense 4,757 5,049 4,558 4,378 4,494 18,169
Furniture and equipment expense 5,406 5,831 5,423 5,152 5,158 21,103
Litigation resolution expense - - 43,658 - - 43,658
Restructuring-related charges - - 4,904 2,215 650 26,917
Other expense 19,054 17,236 18,379 18,662 17,813 72,978
----------------------------------------------------------------------------------------------------------------------------
Total noninterest expense $ 55,931 $ 54,203 $ 102,192 $ 56,602 $ 54,046 $ 289,674
----------------------------------------------------------------------------------------------------------------------------
Noninterest expense to average assets(1)(2) 3.21% 3.16% 3.09% 3.18% 3.20% 3.23%
----------------------------------------------------------------------------------------------------------------------------
Noninterest expense to revenues (2) 61.34% 62.14% 60.11% 58.13% 55.87% 59.10%
----------------------------------------------------------------------------------------------------------------------------
E.O.P. full-time equivalent employees 2,618 2,509 2,553 2,517 2,598
============================================================================================================================
(1) Annualized
(2) Excluding special charges
</TABLE>
<PAGE>
<TABLE>
NET INTEREST INCOME ANALYSIS
Second Quarter
-------------------------------------------------------------------------------------------------
2000 1999
-------------------------------------------------------------------------------------------------
(dollars in thousands) Amount Rate Amount Rate Change
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income:*
Loans - Commercial $19,960 9.21 % $17,519 8.05 % $ 2,441
Commercial - Real Estate 37,392 8.77 33,737 8.51 3,655
Consumer - Mortgage 15,544 7.93 13,566 7.77 1,978
Consumer 27,875 9.13 28,298 9.10 (423)
Loans held for resale 2,916 8.52 1,878 8.13 1,038
Investments 27,842 6.73 25,995 6.24 1,847
Federal funds sold and other 1,876 6.45 597 4.81 1,279
-------------------------------------------------------------------------------------------------
133,405 8.23 121,590 7.83 11,815
-------------------------------------------------------------------------------------------------
Interest expense:
Deposits - NOW/Savings 2,311 1.27 3,035 1.50 (724)
Money Market 7,284 3.62 5,461 2.80 1,823
Time 39,058 5.55 34,396 4.90 4,662
Short-term borrowings 5,535 5.81 3,791 4.26 1,744
FHLB borrowings 11,045 6.02 5,651 5.59 5,394
Long-term debt, other 2,166 6.64 2,332 7.19 (166)
-------------------------------------------------------------------------------------------------
67,399 4.82 54,666 4.13 12,733
-------------------------------------------------------------------------------------------------
Net interest income $66,006 $66,924 $ (918)
-------------------------------------------------------------------------------------------------
Spread 3.41 3.70
-------------------------------------------------------------------------------------------------
Net interest margin 4.07 % 4.31 %
-------------------------------------------------------------------------------------------------
*Fully taxable equivalent
Year-to-Date
-------------------------------------------------------------------------------------------------
2000 1999
-------------------------------------------------------------------------------------------------
(dollars in thousands) Amount Rate Amount Rate Change
-------------------------------------------------------------------------------------------------
Interest income:*
Loans - Commercial $38,290 8.93 % $34,346 8.05 % $ 3,944
Commercial - Real Estate 72,141 8.59 66,700 8.56 5,441
Consumer - Mortgage 30,206 7.89 27,507 7.78 2,699
Consumer 55,239 9.05 57,638 9.11 (2,399)
Loans held for resale 5,550 8.67 3,492 8.04 2,058
Investments 56,027 6.71 52,687 6.18 3,340
Federal funds sold and other 3,296 6.13 1,867 4.94 1,429
------------------------------------------------------------------------------------------------
260,749 8.11 244,237 7.80 $ 16,512
------------------------------------------------------------------------------------------------
Interest expense:
Deposits - NOW/Savings 4,671 1.28 6,087 1.51 (1,416)
Money Market 13,987 3.52 10,749 2.78 3,238
Time 76,260 5.44 70,045 4.96 6,215
Short-term borrowings 10,108 5.60 7,505 4.26 2,603
FHLB borrowings 21,620 5.94 11,558 5.64 10,062
Long-term debt, other 4,503 6.94 4,669 7.24 (166)
------------------------------------------------------------------------------------------------
131,149 4.73 110,613 4.18 20,536
------------------------------------------------------------------------------------------------
Net interest income $129,600 $133,624 $ (4,024)
------------------------------------------------------------------------------------------------
Spread 3.38 3.62
------------------------------------------------------------------------------------------------
Net interest margin 4.03 % 4.26 %
------------------------------------------------------------------------------------------------
*Fully taxable equivalent
</TABLE>
<PAGE>
<TABLE>
PERIOD-END LOAN PORTFOLIO ANALYSIS
(dollars in thousands) 2000 1999
---------------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial:
Commercial and industrial $ 644,941 $ 617,562 $ 609,708 $ 625,162 $ 648,804
Floor plan financing 171,137 180,458 183,357 156,965 180,601
Obligations of political subdivisions 63,138 61,760 62,173 62,212 62,722
--------------------------------------------------------------------------------------------------------------------
879,216 859,780 855,238 844,339 892,127
--------------------------------------------------------------------------------------------------------------------
Commercial real estate:
Commercial and industrial 1,430,335 1,407,020 1,379,520 1,366,960 1,346,405
Multi-family residential 85,189 82,880 83,725 79,864 79,903
Obligations of political subdivisions 43,805 44,178 46,037 46,855 54,748
Construction and land development 134,717 122,782 116,139 107,765 108,098
Agricultural 22,467 16,936 14,880 13,931 13,421
---------------------------------------------------------------------------------------------------------------------
1,716,513 1,673,796 1,640,301 1,615,375 1,602,575
--------------------------------------------------------------------------------------------------------------------
Consumer:
Real estate 804,725 771,816 739,198 703,083 694,684
Installment 347,800 388,554 403,580 420,343 458,420
Home equity 587,970 576,593 580,195 570,106 538,398
Personal lines of credit 43,150 42,035 42,005 40,177 39,411
Lease financing 230,210 220,319 199,029 195,132 206,985
---------------------------------------------------------------------------------------------------------------------
2,013,855 1,999,317 1,964,007 1,928,841 1,937,898
---------------------------------------------------------------------------------------------------------------------
Total Loans $ 4,609,584 $4,532,893 $ 4,459,546 $ 4,388,555 $ 4,432,600
---------------------------------------------------------------------------------------------------------------------
</TABLE>
RISK ELEMENTS ANALYSIS
<TABLE>
(dollars in thousands) 2000 1999
----------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------------------------------------
Nonperforming assets:
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $ 37,248 $ 35,055 $ 27,183 $ 31,659 $ 28,177
Troubled debt restructurings 830 833 841 854 952
Other real estate 3,017 3,203 3,170 3,488 3,339
----------------------------------------------------------------------------------------------------
Total nonperforming assets 41,095 39,091 31,194 36,001 32,468
Loans 90 days or more past due 20,856 20,031 22,508 19,290 24,757
----------------------------------------------------------------------------------------------------
Total risk elements $ 61,951 $ 59,122 $ 53,702 $ 55,291 $ 57,225
----------------------------------------------------------------------------------------------------
Delinquent loans to period-end loans* 1.74% 1.53% 1.73% 1.71% 1.75%
----------------------------------------------------------------------------------------------------
Nonperforming assets to period-end loans 0.89% 0.86% 0.70% 0.82% 0.73%
----------------------------------------------------------------------------------------------------
Total risk elements to period-end loans 1.34% 1.30% 1.20% 1.26% 1.29%
----------------------------------------------------------------------------------------------------
*The numerator consists of loans 30 days or more past due.
</TABLE>
<PAGE>
<TABLE>
COMPONENTS OF NONPERFORMING ASSETS
(dollars in thousands) 2000 1999
------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial $ 8,291 $ 7,971 $ 7,641 $ 13,944 $ 9,259
Commercial real estate 26,488 22,926 15,208 14,097 14,943
Consumer 3,299 4,991 5,175 4,472 4,927
------------------------------------------------------------------------------------------
Nonaccrual and restructured loans 38,078 35,888 28,024 32,513 29,129
Other real estate 3,017 3,203 3,170 3,488 3,339
------------------------------------------------------------------------------------------
Total nonperforming assets $ 41,095 $ 39,091 $ 31,194 $ 36,001 $32,468
------------------------------------------------------------------------------------------
ALLOWANCE FOR CREDIT LOSSES
(dollars in thousands) 2000 1999
------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------------------
Balance at beginning of period $ 60,614 $ 59,975 $ 59,110 $ 59,971 $ 59,857
Loans charged-off:
Commercial (604) (263) (6,218) (697) (426)
Real estate secured (1,939) (827) (3,411) (822) (577)
Consumer (1,761) (2,816) (2,792) (2,671) (2,952)
Lease financing (386) (529) (823) (410) (480)
------------------------------------------------------------------------------------------
Total loans charged-off (4,690) (4,435) (13,244) (4,600) (4,435)
------------------------------------------------------------------------------------------
Recoveries:
Commercial 191 54 147 38 34
Real estate secured 191 730 190 62 276
Consumer 544 463 240 317 249
Lease financing 117 39 59 32 40
------------------------------------------------------------------------------------------
Total recoveries 1,043 1,286 636 449 599
------------------------------------------------------------------------------------------
Net loans charged-off (3,647) (3,149) (12,608) (4,151) (3,836)
Provision for credit losses 4,637 3,788 13,473 3,290 3,950
------------------------------------------------------------------------------------------
Balance at end of period $ 61,604 $ 60,614 $ 59,975 $ 59,110 $ 59,971
------------------------------------------------------------------------------------------
Net loans charged-off to
average loans* 0.32% 0.28% 1.13% 0.37% 0.35%
------------------------------------------------------------------------------------------
Provision for credit losses
to average loans* 0.41% 0.34% 1.21% 0.30% 0.36%
------------------------------------------------------------------------------------------
Allowance for credit losses
to loans 1.34% 1.34% 1.35% 1.35% 1.35%
------------------------------------------------------------------------------------------
*Annualized
</TABLE>
<PAGE>
<TABLE>
OTHER RATIOS
2000 1999
---------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment portfolio - market to amortized cost 97.8% 97.8% 97.8% 98.7% 99.2%
Dividend payout ratio (excluding special charges) 70.3% 71.3% 101.0% 59.2% 58.0%
Loans to deposits ratio, average 91.1% 89.9% 89.0% 87.5% 86.8%
---------------------------------------------------------------------------------------------------------------
FEE GENERATION ACTIVITY
(dollars in thousands)
2000 1999
---------------------------------------------------------------------------------------------------------------
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
---------------------------------------------------------------------------------------------------------------
Mortgage loans originated $ 172,407 $ 127,661 $ 144,266 $ 138,235 $ 148,657
Mortgage loans sold 39,201 48,082 53,847 76,447 84,079
End of period mortgages serviced for others 998,847 1,000,706 998,863 996,855 982,885
End of period indirect loans securitized & serviced 8,194 11,996 16,628 24,341 29,252
---------------------------------------------------------------------------------------------------------------
</TABLE>
MARKET PRICE AND DIVIDENDS DECLARED
-----------------------------------------------------------------------------
Closing Bid Price Range
-----------------------------------------------------------------------------
Dividends
Quarter High Low Declared
-----------------------------------------------------------------------------
2000
-----------------------------------------------------------------------------
I $20.13 $14.34 $0.29
II 22.38 14.81 0.29
-----------------------------------------------------------------------------
$0.58
-----------------------------------------------------------------------------
1999
-----------------------------------------------------------------------------
I $37.19 $32.25 $0.29
II 33.06 29.50 0.29
III 29.56 23.75 0.29
IV 25.34 20.00 0.29
-----------------------------------------------------------------------------
$1.16
-----------------------------------------------------------------------------
1998
-----------------------------------------------------------------------------
I $42.00 $36.00 $0.28
II 41.53 34.00 0.28
III 37.13 27.88 0.28
IV 37.00 25.72 0.29
-----------------------------------------------------------------------------
$1.13
-----------------------------------------------------------------------------
