EX-99.1 2 a4743589ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Alabama National BanCorporation Announces Third Quarter 2004 Earnings BIRMINGHAM, Ala.--(BUSINESS WIRE)--Oct. 18, 2004--Alabama National BanCorporation ("ANB") (NASDAQ:ALAB) today announced record earnings for the quarter and nine months ended September 30, 2004. For the quarter, ANB reported earnings of $14.7 million, up 39.0% from the 2003 third quarter. Diluted earnings per share of $0.86 were up 7.5% from the year ago quarter. Cash earnings per diluted share of $0.90 were up 9.5% from the 2003 third quarter. Third quarter 2004 return on average equity was 11.77% and return on average assets was 1.15%, compared to third quarter 2003 ratios of 15.55% and 1.12%, respectively. Average equity and average assets were both higher in the 2004 third quarter as compared to the year ago quarter by approximately $120.8 million in intangible assets associated with the Cypress Bank and Indian River National Bank acquisitions completed during February 2004 and the Coquina Bank acquisition completed in July 2004. Third quarter 2004 return on average tangible equity and return on average tangible assets were 17.19% and 1.19%, respectively. Net revenue, defined as net interest income plus noninterest income (excluding securities gains or losses and asset disposition gains or losses), grew to $62.2 million in the 2004 third quarter, up 19.6% from $52.1 million in the year ago quarter. Net revenue per diluted share in the 2004 third quarter was down 7.5% from the year ago quarter due to a 15.1% decline in noninterest income and an increase in the number of diluted shares outstanding. Within noninterest income, investment services revenue and revenue from the sale of mortgages declined 41.1% and 47.9%, respectively, from the levels of the 2003 third quarter. Noninterest income (excluding securities gains or losses and asset disposition gains or losses) represented 29.9% of total third quarter 2004 net revenue, as compared with 40.3% in the 2003 third quarter. Year-to-date earnings for the nine months ended September 30, 2004 were $39.3 million, an increase of 29.7% over the $30.3 million in earnings reported for the same period in 2003. Diluted earnings per share for the 2004 nine months of $2.50 were up 6.5% from the $2.35 reported in the 2003 nine months. Cash earnings per diluted share were $2.60 for the 2004 nine months, an 8.5% increase over the $2.39 earned in the first nine months of 2003. "We are pleased to report these third quarter results for Alabama National," said John H. Holcomb, III, Chairman and CEO. "Our employees have delivered strong loan and deposit growth, and we are excited about the opportunities we face in our markets. We are particularly proud of our excellent employees in the coastal markets impacted by the four hurricanes that hit the region during the quarter. They confirmed our belief about their dedication to their customers and to the company through their performance during a very difficult time." During the 2004 third quarter, ANB completed an underwritten offering of common stock, issuing a total of 977,500 shares including the underwriters' 15% over-allotment option. ANB raised approximately $49.7 million in net proceeds through this offering. Total assets at quarter end of $5.14 billion were up 33.5% from September 30, 2003's $3.85 billion, driven largely by the acquisitions of Cypress Bank, Indian River National Bank, and Coquina Bank in 2004. In addition to the growth through acquisitions, the company's organic growth continued at a solid rate, with 13.0% annualized loan growth since year-end 2003, excluding the three 2004 acquisitions. Annualized loan growth for the third quarter (excluding the third quarter acquisition of Coquina Bank) was 14.8% over June 30, 2004 balances. Deposits grew 32.1% to $3.63 billion at September 30, 2004, compared to $2.75 billion at September 30, 2003, also largely due to the recent acquisitions. Quarter-end share owners' equity was $521.2 million, or $30.70 per share, and tangible book value per share was $21.44. During the 2004 third quarter, ANB recognized $574 thousand in net charge-offs, representing 0.07% of average loans on an annualized basis. On a year-to-date basis, net charge-offs of $1.7 million represent a 0.07% annualized rate. Quarter-end nonperforming assets of $9.9 million were 0.29% of period end loans and other real estate. The allowance for loan losses covered nonperforming loans 556%. ANB is a bank holding company operating 83 banking locations through thirteen bank subsidiaries in Alabama, Florida and Georgia. Alabama subsidiaries include: Birmingham-based National Bank of Commerce (NBC), First American Bank in Decatur/Huntsville, Athens and Auburn/Opelika; First Citizens Bank in Talladega; Bank of Dadeville; Alabama Exchange Bank in Tuskegee and First Gulf Bank in Baldwin County. Florida subsidiaries are: Citizens & Peoples Bank, N.A. in Pensacola; Community Bank of Naples, N.A.; Millennium Bank in Gainesville; Public Bank in metropolitan Orlando; Cypress Coquina Bank in Ormond Beach; and Indian River National Bank in Vero Beach. ANB has one subsidiary in Georgia, Georgia State Bank in metropolitan Atlanta. ANB provides full banking services to individuals and businesses. Brokerage services are provided to customers through NBC's wholly owned subsidiary, NBC Securities, Inc. Investments are not bank guaranteed, not FDIC insured and may lose value. Insurance services are provided through ANB Insurance Services, Inc., a wholly owned subsidiary of First American Bank. Alabama National BanCorporation common stock is traded on the NASDAQ National Market System under the symbol "ALAB." Conference Call Instructions Alabama National will discuss the 2004 third quarter results and its goals and general outlook for the remainder of the year in a conference call to be held Tuesday, October 19, 2004 at 9:00 a.m. Central Time. A listen-only simulcast and replay of Alabama National's conference call will be available on-line at the following Internet links: www.alabamanational.com, under "In The News," or www.viavid.net, on October 19, beginning at 9:00 a.m. Central Time. The on-line replay will follow immediately and continue for 30 days. For live interactive access to the teleconference, please dial 800-938-1464 at 9:00 a.m. Central Time on October 19. For those without internet access, a telephonic replay will be available through November 19 by dialing 800-642-1687 and entering Conference ID number 1207024. This press release contains financial information determined by methods other than in accordance with Generally Accepted Accounting Principles ("GAAP"). These "non-GAAP" financial measures are "net revenue" (net revenue per share), "cash earnings" (cash earnings per share), "tangible book value" (tangible book value per share), "return on average tangible equity" and "return on average tangible assets." ANB's management uses these non-GAAP measures in its analysis of ANB's performance. Net revenue is defined as the sum of net interest income plus noninterest income, less any gains or losses from securities sales or asset dispositions. ANB's management believes this measure is useful as an indicator of the company's revenue-generating ability. Gains and losses from securities sales and asset dispositions are excluded from this figure because they are viewed as non-recurring and transactional in nature and could distort the measure. Net revenue per diluted share is defined as net revenue divided by diluted common shares outstanding. Cash earnings is defined as net income plus amortization expense (net of tax) applicable to intangible assets that do not qualify as regulatory capital. Cash earnings per basic and diluted share is defined as cash earnings divided by basic and diluted common shares outstanding. ANB's management includes cash earnings measures to compare the company's earnings exclusive of non-cash amortization expense and because it is a measure used by many investors as part of their analysis of ANB's performance. Tangible book value is defined as total equity reduced by recorded intangible assets. Tangible book value per share is defined as tangible book value divided by total common shares outstanding. This measure is important to many investors in the marketplace that are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill, an intangible asset that is recorded in a purchase business combination, has the effect of increasing total book value while not increasing the tangible assets of the company. For companies such as Alabama National that have engaged in multiple business combinations purchase accounting requires the recording of significant amounts of goodwill related to such transactions. Return on average tangible equity is defined as annualized earnings for the period divided by average equity reduced by average goodwill and other intangible assets. Return on average tangible assets is defined as annualized earnings for the period divided by average assets reduced by average goodwill and other intangible assets. ANB's management includes these measures because it believes that they are important when measuring the Company's performance exclusive of the effects of goodwill and other intangibles recorded in recent acquisitions, and these measures are used by many investors as part of their analysis of ANB. These disclosures should not be viewed as a substitute for results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Refer to the "Reconciliation Table" in the attached schedules for a more detailed analysis of these non-GAAP performance measures and the most directly comparable GAAP measures. This press release contains forward-looking statements as defined by federal securities laws. Statements contained in this press release which are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. ANB undertakes no obligation to update these statements following the date of this press release. In addition, ANB, through its senior management, may make from time to time forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of ANB's senior management based upon current information and involve a number of risks and uncertainties. Certain factors which could affect the accuracy of such forward-looking statements are identified in the public filings made by ANB with the Securities and Exchange Commission, and forward looking statements contained in this press release or in other public statements of ANB or its senior management should be considered in light of those factors. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements. ALABAMA NATIONAL BANCORPORATION (Unaudited Financial Highlights) (in thousands, except per share amounts and percentages) Three Months Ended September 30, ----------------- Percentage 2004 2003 Change (b) -------- -------- ----------- Net interest income $43,614 $31,098 40.2% Noninterest income 18,566 21,872 (15.1) Total revenue 62,180 52,970 17.4 Provision for loan and lease losses 1,624 1,396 16.3 Noninterest expense 38,208 35,625 7.3 Net income before income taxes 22,348 15,949 40.1 Income taxes 7,642 5,368 42.4 Net income $14,706 $10,581 39.0 Weighted average common and common equivalent shares outstanding Basic 16,765 12,935 29.6% Diluted 17,013 13,161 29.3 Net income per common share Basic $.88 $.82 7.2% Diluted .86 .80 7.5 Cash earnings (a) Total $15,264 $10,783 41.6% Basic .91 .83 9.2 Diluted .90 .82 9.5 Cash dividends declared on common stock $.3125 $.285 Return on average assets 1.15% 1.12% Return on average tangible assets 1.19 1.13 Return on average equity 11.77 15.55 Return on average tangible equity 17.19 18.01 Noninterest Income Service charge income $4,537 $3,623 25.2% Investment services income 2,685 4,555 (41.1) Securities brokerage and trust income 4,056 3,995 1.5 Gain on sale of mortgages 2,852 5,478 (47.9) Gain (loss) on disposal of assets (68) 914 NM Securities gains - 4 NM Bank owned life insurance 637 684 (6.9) Insurance commissions 833 797 4.5 Other 3,034 1,822 66.5 -------- -------- Total noninterest income $18,566 $21,872 (15.1) ======== ======== (a) Cash basis earnings exclude the effect on earnings of amortization expense applicable to intangible assets that do not qualify as regulatory capital. (b) Percentage change based on actual not rounded values. NM - Not meaningful Nine Months Ended September 30, ------------------ Percentage 2004 2003 Change (b) --------- -------- ----------- Net interest income $117,918 $88,458 33.3% Noninterest income 55,494 62,153 (10.7) Total revenue 173,412 150,611 15.1 Provision for loan and lease losses 4,130 3,911 5.6 Noninterest expense 109,991 101,453 8.4 Net income before income taxes 59,291 45,247 31.0 Income taxes 20,034 14,977 33.8 Net income $39,257 $30,270 29.7 Weighted average common and common equivalent shares outstanding Basic 15,427 12,678 21.7% Diluted 15,680 12,875 21.8 Net income per common share Basic $2.54 $2.39 6.6% Diluted 2.50 2.35 6.5 Cash earnings (a) Total $40,718 $30,816 32.1% Basic 2.64 2.43 8.6 Diluted 2.60 2.39 8.5 Cash dividends declared on common stock $.9375 $.855 Return on average assets 1.11% 1.14% Return on average tangible assets 1.14 1.15 Return on average equity 12.39 16.07 Return on average tangible equity 17.47 17.97 Noninterest Income Service charge income $12,868 $10,436 23.3% Investment services income 9,865 16,087 (38.7) Securities brokerage and trust income 12,352 12,018 2.8 Gain on sale of mortgages 8,885 13,427 (33.8) Gain (loss) on disposal of assets (31) 881 NM Securities gains - 43 NM Bank owned life insurance 2,047 2,052 (.2) Insurance commissions 2,570 2,435 5.5 Other 6,938 4,774 45.3 --------- -------- Total noninterest income $55,494 $62,153 (10.7) ========= ======== (a) Cash basis earnings exclude the effect on earnings of amortization expense applicable to intangible assets that do not qualify as regulatory capital. (b) Percentage change based on actual not rounded values. NM - Not meaningful September 30, ----------------------- Percentage 2004 2003 Change ----------- ----------- ----------- Total assets $5,144,106 $3,852,941 33.5% Earning assets 4,650,375 3,465,292 34.2 Securities (a) 1,170,793 823,526 42.2 Loans held for sale 22,634 37,744 (40.0) Loans and leases, net of unearned income 3,400,297 2,548,353 33.4 Allowance for loan and lease losses 45,903 36,979 24.1 Deposits 3,634,724 2,752,516 32.1 Short-term borrowings 40,000 61,150 (34.6) Long-term debt 403,792 315,040 28.2 Stockholders' equity 521,231 272,139 91.5 (a) Excludes trading securities ASSET QUALITY ANALYSIS (in thousands, except percentages) As of/For the Three Months Ended September June 30, September 30, 2004 2004 30, 2003 ---------- ------- ---------- Nonaccrual loans $8,252 $8,307 $6,357 Restructured loans - - - Loans past due 90 days or more and still accruing 0 0 0 Total nonperforming loans 8,252 8,307 6,357 Other real estate owned 1,639 1,969 2,517 Total nonperforming assets 9,891 10,276 8,874 Total non performing assets as a percentage of period-end loans and other real estate (a) 0.29% 0.32% 0.35% Allowance for loan and lease losses 45,903 43,484 36,979 Provision for loan and lease losses 1,624 1,278 1,396 Loans charged off 825 1,790 702 Loan recoveries 251 1,604 690 Net loan and lease losses 574 186 12 Allowance for loan and lease losses as a percentage of period-end loans and leases (a) 1.35% 1.36% 1.45% Allowance for loan and lease losses as a percentage of period-end nonperforming loans 556.27 523.46 581.71 Net losses to average loans and leases (annualized) 0.07 0.02 0.00 For the Nine Months Ended September 30, --------------- Percentage 2004 2003 Change ------- ------- ----------- Provision for loan and lease losses $4,130 $3,911 5.6% Loans charged off 3,944 2,696 46.3 Loan recoveries 2,245 2,065 8.7 Net loan and lease losses 1,699 631 169.3 Net losses to average loans and leases 0.07% 0.04% (a) Excludes loans held for sale NM - Not meaningful TAXABLE EQUIVALENT YIELDS/RATES Three Months Ended September June 30, September 30, 2004 2004 30, 2003 ---------- ------ ---------- Interest income: Interest and fees on loans 5.73% 5.55% 5.86% Interest on securities: Taxable 4.05 3.91 3.65 Non-taxable 6.05 6.10 6.82 Total interest earning assets 5.27 5.08 5.27 Interest expense: Interest on deposits 1.54 1.52 1.78 Interest on short-term borrowing 1.99 1.79 1.87 Interest on long-term debt 3.41 3.27 3.79 Total interest bearing liabilities 1.72 1.66 1.87 Net interest spread 3.55 3.42 3.40 Net interest margin 3.81 3.64 3.63 Nine Months Ended September 30, ------------- 2004 2003 ------ ------ Interest income: Interest and fees on loans 5.65% 6.02% Interest on securities: Taxable 3.93 4.06 Non-taxable 6.20 7.11 Total interest earning assets 5.18 5.48 Interest expense: Interest on deposits 1.56 1.98 Interest on short-term borrowing 1.77 1.95 Interest on long-term debt 3.37 3.89 Total interest bearing liabilities 1.70 2.06 Net interest spread 3.48 3.42 Net interest margin 3.71 3.67 STOCKHOLDERS' EQUITY AND CAPITAL RATIOS As of September 30, --------------- 2004 2003 ------- ------- Stockholders' Equity: Equity to assets 10.13% 7.06% Leverage ratio 8.89 7.58 Book value per common share (a) $30.70 $21.23 Tangible book value per common share (a)(b) 21.44 18.38 Ending shares outstanding 16,976 12,819 (a) Includes a cumulative mark to market adjustment to equity of $0.01 and $0.04 per share at September 30, 2004 and 2003, respectively. (b) Total equity reduced by intangible assets divided by common shares outstanding. RECONCILIATION TABLE (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ----------------------- 2004 2003 2004 2003 ----------- ----------- ----------- ----------- Total revenue $62,180 $52,970 $173,412 $150,611 Securities gains - (4) - (43) Disposal of assets 68 (914) 31 (881) Net revenue $62,248 $52,052 $173,443 $149,687 Net income $14,706 $10,581 $39,257 $30,270 Amortization of intangibles, net of tax 558 202 1,461 546 Cash earnings $15,264 $10,783 $40,718 $30,816 Net income per basic share $0.88 $0.82 $2.54 $2.39 Amortization of intangibles per basic share 0.03 0.01 0.10 0.04 Cash earnings per basic share $0.91 $0.83 $2.64 $2.43 Net income per diluted share $0.86 $0.80 $2.50 $2.35 Amortization of intangibles per diluted share 0.04 0.02 0.10 0.04 Cash earnings per diluted share $0.90 $0.82 $2.60 $2.39 Book value $521,231 $272,139 $521,231 $272,139 Intangible assets (157,308) (36,475) (157,308) (36,475) Tangible book value $363,923 $235,664 $363,923 $235,664 Book value per common share $30.70 $21.23 $30.70 $21.23 Effect of intangible assets per share (9.26) (2.85) (9.26) (2.85) Tangible book value per share $21.44 $18.38 $21.44 $18.38 Average assets $5,075,045 $3,740,130 $4,710,523 $3,545,449 Average intangible assets (156,690) (36,950) (123,007) (26,652) Average tangible assets $4,918,355 $3,703,180 $4,587,516 $3,518,797 Return on average assets 1.15% 1.12% 1.11% 1.14% Effect of average intangible assets 0.04 0.01 0.03 0.01 Return on average tangible assets 1.19% 1.13% 1.14% 1.15% Average equity $497,023 $269,979 $423,176 $251,861 Average intangible assets (156,690) (36,950) (123,007) (26,652) Average tangible equity $340,333 $233,029 $300,169 $225,209 Return on average equity 11.77% 15.55% 12.39% 16.07% Effect of average intangible assets 5.42 2.46 5.08 1.90 Return on average tangible equity 17.19% 18.01% 17.47% 17.97% Alabama National BanCorporation and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (In thousands, except share amounts) September 30, September 30, 2004 2003 ----------- ----------- Assets Cash and due from banks $144,110 $140,451 Interest-bearing deposits in other banks 16,313 24,471 Federal funds sold and securities purchased under resell agreements 39,844 31,172 Trading securities, at fair value 494 26 Investment securities (fair value $533,526 and $295,079, respectively) 533,492 295,605 Securities available for sale, at fair value 637,301 527,921 Loans held for sale 22,634 37,744 Loans and leases 3,403,695 2,551,300 Unearned income (3,398) (2,947) ----------- ----------- Loans and leases, net of unearned income 3,400,297 2,548,353 Allowance for loan and lease losses (45,903) (36,979) ----------- ----------- Net loans and leases 3,354,394 2,511,374 Property, equipment and leasehold improvements, net 94,792 77,242 Goodwill 145,169 31,572 Other intangible assets, net 12,139 4,903 Cash surrender value of life insurance 63,898 58,035 Receivable from investment division customers 34,394 72,495 Other assets 45,132 39,930 ----------- ----------- Total assets $5,144,106 $3,852,941 =========== =========== Liabilities and Stockholders' Equity Deposits: Noninterest bearing $599,117 $426,639 Interest bearing 3,035,607 2,325,877 ----------- ----------- Total deposits 3,634,724 2,752,516 Federal funds purchased and securities sold under repurchase agreements 460,493 337,991 Treasury, tax and loan accounts 895 706 Accrued expenses and other liabilities 49,279 43,877 Payable for securities purchased for investment division customers 33,692 69,522 Short-term borrowings 40,000 61,150 Long-term debt 403,792 315,040 ----------- ----------- Total liabilities 4,622,875 3,580,802 Common stock, $1 par, 27,500,000 shares authorized; 16,975,772 and 12,819,788 shares issued at September 30, 2004 and 2003, respectively 16,976 12,820 Additional paid-in capital 340,400 125,823 Retained earnings 163,690 133,027 Treasury stock at cost, 723 shares at September 30, 2003 - (24) Accumulated other comprehensive income, net of tax 165 493 ----------- ----------- Total stockholders' equity 521,231 272,139 ----------- ----------- Total liabilities and stockholders' equity $5,144,106 $3,852,941 =========== =========== Alabama National BanCorporation and Subsidiaries Consolidated Statements of Income (Unaudited) (In thousands, except per share data) For the three months ended For the nine months September 30, ended September 30, ------------------ ------------------- 2004 2003 2004 2003 --------- -------- --------- --------- Interest income: Interest and fees on loans and leases $48,320 $37,578 $132,632 $108,041 Interest on securities 11,981 7,428 31,833 23,878 Interest on deposits in other banks 18 26 46 86 Interest on trading securities 9 27 44 76 Interest on federal funds sold and securities purchased under resell agreements 244 198 544 531 -------- -------- --------- --------- Total interest income 60,572 45,257 165,099 132,612 Interest expense: Interest on deposits 11,924 10,355 33,403 32,495 Interest on federal funds purchased and securities sold under repurchase agreements 1,394 815 3,354 2,435 Interest on short-term borrowings 186 315 765 1,313 Interest on long-term debt 3,454 2,674 9,659 7,911 -------- -------- --------- --------- Total interest expense 16,958 14,159 47,181 44,154 -------- -------- --------- --------- Net interest income 43,614 31,098 117,918 88,458 Provision for loan losses 1,624 1,396 4,130 3,911 -------- -------- --------- --------- Net interest income after provision for loan losses 41,990 29,702 113,788 84,547 Noninterest income: Securities gains - 4 - 43 Gain (loss) on disposition of assets (68) 914 (31) 881 Service charges on deposit accounts 4,537 3,623 12,868 10,436 Investment services income 2,685 4,555 9,865 16,087 Securities brokerage and trust income 4,056 3,995 12,352 12,018 Gain on sale of mortgages 2,852 5,478 8,885 13,427 Bank owned life insurance 637 684 2,047 2,052 Insurance commissions 833 797 2,570 2,435 Other 3,034 1,822 6,938 4,774 -------- -------- --------- --------- Total noninterest income 18,566 21,872 55,494 62,153 Noninterest expense: Salaries and employee benefits 19,630 16,874 56,301 48,732 Commission based compensation 4,357 6,062 13,906 18,285 Occupancy and equipment expenses 4,085 3,326 11,450 9,696 Amortization of intangibles 824 285 2,148 762 Penalty on long-term debt repayment - 822 - 822 Other 9,312 8,256 26,186 23,156 -------- -------- --------- --------- Total noninterest expense 38,208 35,625 109,991 101,453 -------- -------- --------- --------- Income before provision for income taxes 22,348 15,949 59,291 45,247 Provision for income taxes 7,642 5,368 20,034 14,977 -------- -------- --------- --------- Net income $14,706 $10,581 $39,257 $30,270 ======== ======== ========= ========= Net income per common share (basic) $.88 $.82 $2.54 $2.39 ======== ======== ========= ========= Weighted average common shares outstanding (basic) 16,765 12,935 15,427 12,678 ======== ======== ========= ========= Net income per common share (diluted) $.86 $.80 $2.50 $2.35 ======== ======== ========= ========= Weighted average common shares outstanding (diluted) 17,013 13,161 15,680 12,875 ======== ======== ========= ========= AVERAGE BALANCES, INCOME AND EXPENSES AND RATES (Amounts in thousands, except yields and rates) Three Months 09/30/04 ---------------------------- Average Income/ Yield/ Balance Expense Cost ----------- -------- ------- Assets: Earning assets: Loans and leases (1) $3,360,817 $48,442 5.73% Securities: Taxable 1,120,518 11,406 4.05 Tax exempt 57,312 871 6.05 Cash balances in other banks 5,242 18 1.37 Funds sold 58,722 244 1.65 Trading account securities 778 9 4.60 ----------- -------- Total earning assets (2) 4,603,389 60,990 5.27 ----------- -------- Cash and due from banks 160,867 Premises and equipment 90,134 Other assets 266,000 Allowance for loan and lease losses (45,345) ----------- Total assets $5,075,045 =========== Liabilities: Interest-bearing liabilities: Interest-bearing transaction accounts $751,808 $1,440 0.76 Savings deposits 873,149 2,120 0.97 Time deposits 1,449,082 8,364 2.30 Funds purchased 406,405 1,394 1.36 Other short-term borrowings 37,135 186 1.99 Long-term debt 403,007 3,454 3.41 ----------- -------- Total interest-bearing liabilities 3,920,586 16,958 1.72 ----------- -------- Demand deposits 602,994 Accrued interest and other liabilities 54,442 Stockholders' equity 497,023 ----------- Total liabilities and stockholders' equity $5,075,045 =========== Net interest spread 3.55% ======= Net interest income/margin on a taxable equivalent basis 44,032 3.81% ======= Tax equivalent adjustment (2) 418 -------- Net interest income/margin $43,614 3.77% ======== ======= Three Months 09/30/03 ---------------------------- Average Income/ Yield/ Balance Expense Cost ----------- -------- ------- Assets: Earning assets: Loans and leases (1) $2,549,891 $37,643 5.86% Securities: Taxable 768,416 7,061 3.65 Tax exempt 30,881 531 6.82 Cash balances in other banks 11,650 26 0.89 Funds sold 61,345 198 1.28 Trading account securities 3,191 27 3.36 ----------- -------- Total earning assets (2) 3,425,374 45,486 5.27 ----------- -------- Cash and due from banks 85,028 Premises and equipment 76,805 Other assets 189,257 Allowance for loan and lease losses (36,334) ----------- Total assets $3,740,130 =========== Liabilities: Interest-bearing liabilities: Interest-bearing transaction accounts $511,578 $931 0.72 Savings deposits 515,106 1,109 0.85 Time deposits 1,285,128 8,315 2.57 Funds purchased 342,499 815 0.94 Other short-term borrowings 66,750 315 1.87 Long-term debt 279,922 2,674 3.79 ----------- -------- Total interest-bearing liabilities 3,000,983 14,159 1.87 ----------- -------- Demand deposits 418,895 Accrued interest and other liabilities 50,273 Stockholders' equity 269,979 ----------- Total liabilities and stockholders' equity $3,740,130 =========== Net interest spread 3.40% ======= Net interest income/margin on a taxable equivalent basis 31,327 3.63% ======= Tax equivalent adjustment (2) 229 -------- Net interest income/margin $31,098 3.60% ======== ======= (1) Average loans include nonaccrual loans. All loans and deposits are domestic. (2) Tax equivalent adjustments are based on the assumed rate of 34%, and do not give effect to the disallowance for Federal income tax purposes of interest expense related to certain tax-exempt assets. AVERAGE BALANCES, INCOME AND EXPENSES AND RATES (Amounts in thousands, except yields and rates) Nine Months 09/30/04 ----------------------------- Average Income/ Yield/ Balance Expense Cost ----------- --------- ------- Assets: Earning assets: Loans and leases (1) $3,142,319 $132,962 5.65% Securities: Taxable 1,029,276 30,274 3.93 Tax exempt 50,860 2,362 6.20 Cash balances in other banks 6,215 46 0.99 Funds sold 58,959 544 1.23 Trading account securities 1,319 44 4.45 ----------- --------- Total earning assets (2) 4,288,948 166,232 5.18 ----------- --------- Cash and due from banks 141,475 Premises and equipment 88,204 Other assets 234,469 Allowance for loan and lease losses (42,573) ----------- Total assets $4,710,523 =========== Liabilities: Interest-bearing liabilities: Interest-bearing transaction accounts $695,276 $3,868 0.74 Savings deposits 744,658 5,041 0.90 Time deposits 1,427,334 24,494 2.29 Funds purchased 392,212 3,354 1.14 Other short-term borrowings 57,785 765 1.77 Long-term debt 382,541 9,659 3.37 ----------- --------- Total interest-bearing liabilities 3,699,806 47,181 1.70 ----------- --------- Demand deposits 538,931 Accrued interest and other liabilities 48,610 Stockholders' equity 423,176 ----------- Total liabilities and stockholders' equity $4,710,523 =========== Net interest spread 3.48% ======= Net interest income/margin on a taxable equivalent basis 119,051 3.71% ======= Tax equivalent adjustment (2) 1,133 --------- Net interest income/margin $117,918 3.67% ========= ======= Nine Months 09/30/03 ----------------------------- Average Income/ Yield/ Balance Expense Cost ----------- --------- ------- Assets: Earning assets: Loans and leases (1) $2,404,068 $108,249 6.02% Securities: Taxable 749,279 22,765 4.06 Tax exempt 31,233 1,661 7.11 Cash balances in other banks 11,465 86 1.00 Funds sold 55,341 531 1.28 Trading account securities 2,689 76 3.78 ----------- --------- Total earning assets (2) 3,254,075 133,368 5.48 ----------- --------- Cash and due from banks 87,812 Premises and equipment 74,649 Other assets 163,433 Allowance for loan and lease losses (34,520) ----------- Total assets $3,545,449 =========== Liabilities: Interest-bearing liabilities: Interest-bearing transaction accounts $507,490 $3,482 0.92 Savings deposits 458,843 3,286 0.96 Time deposits 1,227,867 25,727 2.80 Funds purchased 310,743 2,435 1.05 Other short-term borrowings 89,904 1,313 1.95 Long-term debt 271,793 7,911 3.89 ----------- --------- Total interest-bearing liabilities 2,866,640 44,154 2.06 ----------- --------- Demand deposits 368,953 Accrued interest and other liabilities 57,995 Stockholders' equity 251,861 ----------- Total liabilities and stockholders' equity $3,545,449 =========== Net interest spread 3.42% ======= Net interest income/margin on a taxable equivalent basis 89,214 3.67% ======= Tax equivalent adjustment (2) 756 --------- Net interest income/margin $88,458 3.63% ========= ======= (1) Average loans include nonaccrual loans. All loans and deposits are domestic. (2) Tax equivalent adjustments are based on the assumed rate of 34%, and do not give effect to the disallowance for Federal income tax purposes of interest expense related to certain tax-exempt assets. CONTACT: Alabama National BanCorporation, Birmingham John H. Holcomb, III, 205-583-3648 or William E. Matthews, V, 205-583-3650 www.alabamanational.com