SOURCE: St. Joseph Capital Corporation

July 27, 2005 18:14 ET

St. Joseph Capital Corporation Announces Second Quarter Results

MISHAWAKA, IN -- (MARKET WIRE) -- July 27, 2005 -- The chairman, president and chief executive officer of St. Joseph Capital Corp. (NASDAQ: SJOE), John W. Rosenthal, today announced that the Company posted second quarter net income of $815,000, or $0.43 fully diluted income per common share, an increase of 50.9%, compared to $540,000 earned in the same quarter a year ago. The Company also declared a quarterly dividend of $0.05 per common share to be paid on September 15, 2005 to shareholders of record on September 1, 2005.

Chairman Rosenthal stated, "During the quarter we made substantial new investments in the future growth and development of St. Joseph Capital Bank by hiring new team members to further develop our presence in the Elkhart County market and to expand our market share in St. Joseph County and surrounding regions. In addition to these investments, the yield curve continued to flatten. This phenomenon puts pressure on the net interest margins of most banks -- including ours. Yet even with all these different challenges and circumstances we are extremely proud to have produced record results in profitability."

For the second consecutive quarter, no provision for loan loss expense was recorded. The loan portfolio remains fully performing with no past due or non-accrual loans and the allowance for loan losses to loans ratio remains strong at 1.16% as of June 30, 2005.

Total assets at the end of the second quarter reached $446.8 million, an increase of 42.4% compared to June 30, 2004. Deposits increased to $331.4 million at June 30, 2005, up $122.3 million or 58.5% from $209.1 million at June 30, 2004. Net loans grew by $64.4 million or 26.7% year over year and reached $305.2 million at quarter end. Securities available for sale grew by $47.2 million or 97.9% year-over-year. A detailed review of St. Joseph Capital Corporation's performance is included with this release.

St. Joseph Capital Corporation is a bank holding company whose headquarters are located in Mishawaka, Indiana. Its primary operating subsidiary, St. Joseph Capital Bank, provides a broad array of banking services to businesses and individuals in the Michiana area. St. Joseph Capital Bank employs numerous delivery channels for their financial services including a unique courier service and electronic banking accessed via their website, www.sjcb.com. St. Joseph Capital Bank is a member of the Federal Deposit Insurance Corporation.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by St. Joseph Capital Corporation with the Securities and Exchange Commission. St. Joseph Capital Corporation undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.


                   ST. JOSEPH CAPITAL CORPORATION
        Condensed Consolidated Statements of Income (Unaudited)
            (Dollars in thousands, except per share data)

                             Three Months Ended       Six Months Ended
                           June 30,    June 30,     June 30,     June 30,
                             2005        2004         2005         2004
                           --------    --------     --------     --------
Interest income
   Loans, including fees   $  4,217    $  2,936     $  8,110     $  5,816
   Securities and other
    interest income             993         496        1,873          959
                           --------    --------     --------     --------
                              5,210       3,432        9,983        6,775
Interest expense
   Deposits                   1,980         544        3,656        1,156
   Securities sold under
    agreements to repurchase
    and other borrowings        702         602        1,256        1,169
                           --------    --------     --------     --------
                              2,682       1,146        4,912        2,325
                           --------    --------     --------     --------
Net interest income           2,528       2,286        5,071        4,450
Provision for loan losses         -          84            -          128
                           --------    --------     --------     --------

Net interest income after
 provision for loan losses    2,528       2,202        5,071        4,322

Noninterest income
   Gain on sales of
    securities available
    for sale, net                11           -           11           77
   Other noninterest income     238         135          484          265
                           --------    --------     --------     --------
                                249         135          495          342
Noninterest expense
   Employee compensation
    and benefits              1,159       1,024        2,275        2,081
   Stock option expense          35          26           70           52
   Occupancy and
    equipment expense           132          95          246          194
   Other expense                437         334          840          721
                           --------    --------     --------     --------
                              1,763       1,479        3,431        3,048
                           --------    --------     --------     --------
Income before income taxes    1,014         858        2,135        1,616
Income tax expense              199         318          524          550
                           --------    --------     --------     --------
Net income                 $    815    $    540     $  1,611     $  1,066
                           ========    ========     ========     ========

Basic income per
 common share              $    .47    $    .31     $    .93     $    .62
                           ========    ========     ========     ========
Diluted income per
 common share              $    .43    $    .30     $    .86     $    .59
                           ========    ========     ========     ========


                ST. JOSEPH CAPITAL CORPORATION
       Condensed Consolidated Balance Sheets (Unaudited)
                   (Dollars in thousands)

                                    June 30, 2005   June 30, 2004
                                       --------        --------

ASSETS
  Total cash and cash equivalents      $ 26,549        $ 16,824
  Securities available for sale          95,436          48,195
  Federal Home Loan Bank (FHLB) stock     3,152           2,601
  Loans receivable                      308,750         244,293
  Less: Allowance for loan losses         3,578           3,445
                                       --------        --------
    Loans receivable, net               305,172         240,848
  Premises and equipment, net             3,203           1,323
  Interest receivable and other assets   13,330           3,873
                                       --------        --------
    Total assets                       $446,842        $313,664
                                       ========        ========

LIABILITIES AND SHAREHOLDERS' EQUITY
 Liabilities
  Total deposits                       $331,364        $209,103
  Securities sold under agreements
   to repurchase and other borrowings    34,829          23,811
  FHLB advances                          41,740          52,020
  Subordinated debentures                 8,000           3,000
  Interest payable and other
   liabilities                            2,891             887
                                       --------        --------
    Total liabilities                   418,824         288,821
  Total shareholders' equity             28,018          24,843
                                       --------        --------
    Total liabilities and
     shareholders' equity              $446,842        $313,664
                                       ========        ========


                     ST. JOSEPH CAPITAL CORPORATION
         Selected Quarterly Consolidated Financial Data (Unaudited)

                               (Dollars in thousands)
Summary of Financial  June 30,   March 31,  Dec. 31,   Sept. 30,   June 30,
 Condition:             2005       2005       2004       2004       2004
                     ---------  ---------  ---------  ---------  ---------

Total assets         $ 446,842  $ 412,710  $ 399,059  $ 339,165  $ 313,664
Total cash and cash
 equivalents            26,549     16,158     45,332     22,085     16,824
Securities available
 for sale               98,588     91,474     58,230     48,229     48,195
Loans receivable,
 net of allowance
 for loan losses       305,172    286,384    278,421    261,562    240,848
Allowance for
 loan losses             3,578      3,578      3,578      3,540      3,445
Total deposits         331,364    325,866    312,657    254,599    209,103
FHLB advances and
 other debt             68,740     41,740     41,740     44,740     55,020
Total shareholders'
 equity                 28,018     26,494     26,532     25,944     24,843
Average shareholders'
 equity                 27,250     26,692     26,349     25,290     24,873
Average total assets   423,181    409,517    357,808    320,240    302,827

                        (Dollars in thousands, except per share data)
                                      Three Months Ended
Summary of Operating  June 30,   March 31,  Dec. 31,   Sept. 30,   June 30,
 Results:               2005       2005       2004       2004       2004
                     ---------  ---------  ---------  ---------  ---------
Total interest
 income              $   5,210  $   4,773  $   4,219  $   3,763  $   3,432
Total interest
 expense                 2,682      2,230      1,672      1,315      1,146
                     ---------  ---------  ---------  ---------  ---------
Net interest income      2,528      2,543      2,547      2,448      2,286
Provision for
 loan losses                 -          -         38         95         84
Total noninterest
 income                    249        246        219        168        135
Total noninterest
 expense                 1,763      1,668      1,660      1,516      1,479
                     ---------  ---------  ---------  ---------  ---------
Income before
 income taxes            1,014      1,121      1,068      1,005        858
Income tax expense         199        325        358        372        318
                     ---------  ---------  ---------  ---------  ---------
Net income           $     815  $     796  $     710  $     633  $     540
                     =========  =========  =========  =========  =========

Supplemental Data:
Return on average
 total assets             0.77%      0.79%      0.79%      0.79%      0.72%
Return on average
 shareholders' equity    12.00%     12.09%     10.73%      9.96%      8.73%
Net interest rate
 spread (1)               2.37%      2.51%      2.85%      2.96%      2.97%
Net yield on average
 interest-earning
 assets (2)               2.69%      2.78%      3.13%      3.26%      3.26%
Net interest income to
 noninterest expenses   143.39%    152.46%    153.43%    161.48%    154.56%
Average shareholders'
 equity to average
 total assets             6.44%      6.52%      7.36%      7.90%      8.21%
Average interest-
 earning assets to
 average interest-
 bearing liabilities    111.58%    111.54%    114.06%    117.73%    118.34%
Nonperforming assets
 to total assets          0.00%      0.00%      0.00%      0.00%      0.00%
Nonperforming loans
 to total loans
 receivable               0.00%      0.00%      0.00%      0.00%      0.00%
Allowance for loan
 losses to total loans
 receivable               1.16%      1.23%      1.27%      1.34%      1.41%
Allowance for loan
 losses to non-
 performing loans
 receivable               0.00%      0.00%      0.00%      0.00%      0.00%
Basic income per
 common share        $    0.47  $    0.46  $    0.41  $    0.37  $    0.31
Diluted income per
 common share        $    0.43  $    0.43  $    0.39  $    0.35  $    0.30
Dividends declared
 per common share    $    0.05  $    0.05  $    0.04  $    0.04  $    0.04
Book value per
 common share        $   16.06  $   15.22  $   15.27  $   14.98  $   14.34
Number of offices            2          1          1          1          1

(1) - Interest rate spread is calculated by subtracting average interest
      rate cost from average interest rate earned.
(2) - Net interest income, on a fully taxable equivilent basis, divided by
      average interest-earning assets.

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