Performance Analysis

1999

1998

I. Profitability

Return on Average Equity

10.94%

10.41%

ROE is the return on the shareholders investment in the bank.

Return on Average Assets

1.25%

1.21%

ROA is the return on all the assets of the bank.

Net Interest Income/Average Assets

4.16%

4.15%

Net interest margin is the income available to cover net overhead expenses, taxes, and dividends of the bank.

Overhead Expense/Average Assets

3.06%

2.93%

Overhead expense, includes salaries and benefits, occupancy expense, and other operating expenses.

II. Asset Quality

Nonperforming Loans/Gross Loans

1.28%

1.68%

This represents the percent of the bank's loans which are past due 90+ days or are not accruing interest.

Loan Loss Reserve/Total Loans

1.15%

1.09%

The loan loss reserve is the account against which future uncollectable loans will be charged.

Net Charge-offs/Average Loans

0.10%

0.11%

Net charge-offs are an indication of past loan quality, measuring loans, net of recovers, actually written off as losses.

III. Liquidity

$100,000 plus Time Deposits/Total Deposits

13.55%

12.46%

Large deposits are usually the most costly type of deposits a bank has. Amounts exceeding $100,000 are not covered by FDIC insurance.

IV. Capital

Primary Capital/Assets

11.84%

12.34%

Capital ratios indicate the degree of capital a bank has to deal with earnings problems. The regulatory minimum for these ratios is 5.5% for primary capital and 6.0% for total capital.

Total Capital/Assets

11.08%

11.63%