LARL Laurel Capital

ALLISON PARK, Pa., Oct. 26 /PRNewswire-FirstCall/ -- Laurel Capital Group, Inc. (NASDAQ:LARL) today reported net income for the quarter ended September 30, 2005 of $490,000 or $.25 per diluted share compared to net income of $488,000 or $.25 per diluted share for the quarter ended September 30, 2004. The slight increase in income for the quarter reflects the combined effects of a $49,000 increase in net interest income after provision for possible loan losses partially offset by a $35,000 increase in operating expenses, a $26,000 decrease in other operating income, and a $14,000 decrease in the provision for income taxes. At September 30, 2005, Laurel Capital Group, Inc. had total assets of $309.0 million, loans receivable, net, of $213.0 million and total deposits of $254.9 million. The $3.3 million increase in loans receivable during the first quarter of fiscal 2006 was primarily due to an increase in the single- family residential loan portfolio. Additionally, stockholders' equity amounted to $27.9 million or $14.05 per share at September 30, 2005 compared to $27.5 million or $14.26 per share at September 30, 2004 and $27.8 million or $14.31 per share at June 30, 2005. The decrease in stockholders' equity per share was primarily the result of an increase in the total number of shares outstanding reflecting the exercise of stock options. Non-performing assets, which consist of loans delinquent 90 days and over and other real estate owned, decreased $1.2 million to $800,000 or .25% of total assets at September 30, 2005 compared to $2.0 million or .66% of total assets at September 30, 2004 and $1.0 million or .33% of total assets at June 30, 2005. Laurel Capital Group, Inc., headquartered in Allison Park, PA, is the holding company for Laurel Savings Bank. Laurel Savings Bank is a 118-year- old, Pennsylvania-chartered, FDIC-insured savings bank with eight full-service offices located in Allegheny and Butler counties offering a wide variety of financial services and products to customers throughout the Pittsburgh metropolitan area. The Company's filings with the Securities and Exchange Commission are available electronically on the Internet and can be found at http://www.sec.gov/edgar/searchedgar/webusers.htm. This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ materially from those currently anticipated due to a number of factors. Such factors include, but are not limited to, changes in interest rates which could affect the net interest margin and net interest income, the possibility that increased demand or prices for the Company's financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company's filings with the Securities and Exchange Commission. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data September 30, 2005 (Dollars in thousands, Fiscal 2006 except per share data) At or For the Fiscal 2005 (Unaudited) Three Months At or For the Ended: Three Months Ended: September 30, June 30, March 31, December 31, 2005 2005 2005 2004 Earnings Interest Income $3,565 $3,489 $3,525 $3,424 Interest Expense 1,711 1,637 1,578 1,563 Net Interest Income Before Provision for Loan Losses 1,854 1,852 1,947 1,861 Provision for Loan Losses - - 3 3 Net Interest Income after Provision for Loan Losses 1,854 1,852 1,944 1,858 Net Gain on Sale of Investment and Mortgage-Backed Securities - 15 - - Gain on Sale of Loans Held for Sale 6 2 1 - Other Income (Excluding Gains on Sale) 337 343 352 359 Operating Expenses 1,507 1,560 1,533 1,549 Income before Income Taxes 690 652 764 668 Provision for Income Taxes 200 74 242 207 Net Income $490 $578 $522 $461 Profitability Ratios (annualized where applicable) Return on Average Assets 0.63% 0.75% 0.68% 0.60% Return on Average Stockholders' Equity 7.05% 8.40% 7.58% 6.68% Yield on Interest-Earning Assets 4.82% 4.75% 4.81% 4.71% Cost of Interest-Bearing Liabilities 2.63% 2.54% 2.46% 2.41% Average Interest Rate Spread 2.19% 2.21% 2.35% 2.30% Net Interest Margin 2.55% 2.52% 2.65% 2.56% Operating Expenses to Average Assets 1.95% 2.02% 1.98% 2.02% Efficiency Ratio (1) 68.69% 71.90% 67.24% 69.77% Per Common Share Data Shares Outstanding (at period end) 1,984,628 1,943,000 1,940,021 1,940,021 Average Shares Outstanding -Basic 1,963,743 1,942,255 1,940,021 1,936,811 Average Shares Outstanding -Diluted 1,996,242 1,989,273 1,998,902 2,000,559 Earnings Per Share -Basic $0.25 $0.30 $0.27 $0.24 Earnings Per Share -Diluted $0.25 $0.29 $0.26 $0.23 Cash Dividends Paid $0.20 $0.20 $0.20 $0.20 Book Value (period end) $14.05 $14.31 $14.07 $14.28 Tangible Book Value (period end) $12.41 $12.60 $12.31 $12.48 Market Value of Outstanding Shares $23.00 $20.56 $21.88 $21.54 (period end closing price) LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data September 30, 2005 (Dollars in thousands, Fiscal 2005 Fiscal 2004 except per share data) At or For the At or For the (Unaudited) Three Months Three Months Ended: Ended: September 30, June 30, March 31, 2004 2004 2004 Earnings Interest Income $3,324 $3,115 $3,316 Interest Expense 1,516 1,427 1,471 Net Interest Income Before Provision for Loan Losses 1,808 1,688 1,845 Provision for Loan Losses 3 3 3 Net Interest Income after Provision for Loan Losses 1,805 1,685 1,842 Net Gain on Sale of Investment and Mortgage-Backed Securities - - 22 Gain on Sale of Loans Held for Sale 6 7 - Other Income (Excluding Gains on Sale) 363 363 339 Operating Expenses 1,472 1,480 1,577 Income before Income Taxes 702 575 626 Provision for Income Taxes 214 144 193 Net Income $488 $431 $433 Profitability Ratios (annualized where applicable) Return on Average Assets 0.64% 0.57% 0.57% Return on Average Stockholders' Equity 7.14% 6.34% 6.32% Yield on Interest-Earning Assets 4.58% 4.37% 4.65% Cost of Interest-Bearing Liabilities 2.34% 2.28% 2.32% Average Interest Rate Spread 2.24% 2.09% 2.33% Net Interest Margin 2.49% 2.36% 2.59% Operating Expenses to Average Assets 1.93% 1.96% 2.09% Efficiency Ratio (1) 67.80% 72.94% 72.59% Per Common Share Data Shares Outstanding (at period end) 1,928,604 1,928,604 1,925,228 Average Shares Outstanding-Basic 1,928,604 1,922,740 1,904,878 Average Shares Outstanding -Diluted 1,988,809 1,985,426 1,992,913 Earnings Per Share -Basic $0.25 $0.22 $0.23 Earnings Per Share -Diluted $0.25 $0.22 $0.22 Cash Dividends Paid $0.20 $0.20 $0.20 Book Value (period end) $14.26 $14.06 $14.29 Tangible Book Value (period end) $12.41 $12.16 $12.28 Market Value of Outstanding Shares $22.65 $21.15 $23.74 (period end closing price) (1) Equals total operating expenses (excluding net income or loss on other real estate owned) divided by total operating income (excluding gains on sale of assets available for sale). Gains and losses on the sales of loans and securities available for sale are excluded since they are generally considered by the Company's management to be non-recurring in nature. Similarly, net income or loss on other real estate owned is excluded since it is also generally considered by the Company's management to be non-recurring in nature. The efficiency ratio is not a financial measurement required by Generally Accepted Accounting Principles (GAAP) used in the United States of America. However, the Company believes such information is useful to investors in evaluating the Company\'s operations. As a result of rounding, the sum of quarterly amounts may not equal the year-to-date amounts. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data September 30, 2005 (Dollars in thousands) (Unaudited) Fiscal 2006 Fiscal 2005 Sept. 30, June 30, March 31, Dec. 31, Balance Sheet Data (As Of) 2005 2005 2005 2004 Total Assets $309,034 $309,801 $307,742 $308,499 Mortgage Loans 175,097 172,854 165,008 159,464 Commercial and Other Loans 690 665 731 1,174 Consumer Loans 37,265 36,230 36,748 37,289 Total Loans Receivable, Net 213,052 209,749 202,487 197,927 Cash and Investment Securities 66,832 69,428 72,697 76,032 Mortgage-Backed Securities 11,684 13,002 15,002 17,068 Savings Deposits 254,893 254,891 253,282 254,652 FHLB Advances 21,600 21,602 21,604 21,605 Stockholders' Equity 27,873 27,804 27,293 27,702 Asset Quality (As Of Or For The FYTD Period (2)) Non-Performing Loans $752 $970 $833 $1,205 Non-Performing Assets 787 1,007 961 1,555 Allowance for Loan Losses 1,999 1,989 1,998 1,988 Net Loan Charge-Offs (Recoveries) (10) 52 43 50 Non-Performing Loans to Total Loans, Net 0.35% 0.46% 0.41% 0.61% Non-Performing Assets to Total Assets 0.25% 0.33% 0.31% 0.50% Allowance for Loan Losses/ Total Loans 0.94% 0.95% 0.99% 1.00% Allowance for Loan Losses/ Non-Performing Loans 265.82% 205.05% 239.86% 164.98% Net Loan Charge-Offs (Recoveries)/Avg Loans (0.0047)% 0.0263% 0.0222% 0.0264% Ratios (As Of Or For The FYTD Period (2)) Dividend Payout Ratio 81.50% 77.59% 81.40% 83.33% Average Equity to Average Assets 8.98% 8.96% 8.97% 8.99% Core Capital - Tier I (3) 7.80% 7.91% 7.64% 7.71% Risk-Based Capital -Tier I (3) 14.93% 15.33% 14.83% 14.98% Risk-Based Capital -Tier II (3) 16.17% 16.59% 16.08% 16.24% Leverage Multiple (4) 11.09x 11.14x 11.28x 11.14x Other Data (As Of) Stockholders of Record 368 372 374 376 Number of Full-Service Banking Offices 8 8 8 8 (2) Fiscal Year To Date (3) Ratios for Laurel Savings Bank. (4) Total assets divided by stockholders' equity. LAUREL CAPITAL GROUP, INC. Selected Consolidated Financial Data September 30, 2005 (Dollars in thousands) (Unaudited) Fiscal 2005 Fiscal 2004 Sept. 30, June 30, March 31, Dec. 31, Balance Sheet Data (As Of) 2004 2004 2004 2003 Total Assets $306,633 $299,375 $301,251 $302,725 Mortgage Loans 147,361 133,920 127,900 118,205 Commercial and Other Loans 1,095 1,475 2,269 2,254 Consumer Loans 37,643 37,896 38,247 39,551 Total Loans Receivable, Net 186,099 173,291 168,416 160,010 Cash and Investment Securities 84,305 87,554 99,038 113,575 Mortgage-Backed Securities 19,231 21,024 15,452 10,640 Savings Deposits 251,553 246,179 247,677 248,803 FHLB Advances 21,607 21,609 21,610 21,612 Stockholders' Equity 27,505 27,125 27,519 27,145 Asset Quality (As Of Or For The FYTD Period (2)) Non-Performing Loans $1,985 $2,156 $1,741 $1,595 Non-Performing Assets 2,025 2,156 1,753 1,608 Allowance for Loan Losses 1,992 2,032 2,017 1,984 Net Loan Charge-Offs (Recoveries) 43 (14) (5) 28 Non-Performing Loans to Total Loans, Net 1.07% 1.24% 1.03% 1.00% Non-Performing Assets to Total Assets 0.66% 0.72% 0.58% 0.53% Allowance for Loan Losses/ Total Loans 1.07% 1.17% 1.20% 1.24% Allowance for Loan Losses/ Non-Performing Loans 100.35% 94.25% 115.85% 124.39% Net Loan Charge-Offs (Recoveries)/Avg Loans 0.0233% (0.0084)% (0.0030)% 0.0170% Ratios (As Of Or For The FYTD Period (2)) Dividend Payout Ratio 80.00% 94.13% 95.24% 95.24% Average Equity to Average Assets 8.96% 8.89% 8.87% 8.77% Core Capital - Tier I (3) 7.70% 7.76% 7.70% 7.63% Risk-Based Capital -Tier I (3) 15.21% 15.65% 15.30% 15.39% Risk-Based Capital -Tier II (3) 16.46% 16.90% 16.60% 16.69% Leverage Multiple (4) 11.15x 11.04x 10.95x 11.15x Other Data (As Of) Stockholders of Record 381 383 387 393 Number of Full-Service Banking Offices 8 8 8 8 (2) Fiscal Year To Date (3) Ratios for Laurel Savings Bank. (4) Total assets divided by stockholders' equity. DATASOURCE: Laurel Capital Group, Inc. CONTACT: Edwin R. Maus, President-CEO, +1-412-487-7404 ext. 303, or , or John A. Howard, Jr., Sr. Vice-President-CFO, +1-412-487-7404 ext. 311, or , both of Laurel Capital Group, Inc.

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