SOURCE: St. Joseph Capital Corporation

October 21, 2005 19:12 ET

St. Joseph Capital Corporation Announces Third Quarter Results -- Loan Growth Remains Strong

MISHAWAKA, IN -- (MARKET WIRE) -- October 21, 2005 -- The chairman, president and chief executive officer of St. Joseph Capital Corporation (NASDAQ: SJOE), John Rosenthal, today announced that the Company's consolidated net income for the three month period ended September 30, 2005, was $803,000 compared to $633,000 for the same period in 2004 for an increase of $170,000 or 26.9%. Earnings per common share (EPS) for the three months ended September 30, 2005 increased to $0.46 basic and $0.43 fully-diluted, compared to $0.37 basic and $0.35 fully-diluted EPS for the three months ended September 30, 2004. The increase in net income for the three months ended September 30, 2005 compared to the same period in the prior year was comprised of an increase in net interest income after provision for loan losses of $231,000, an increase in non-interest income of $64,000, and a decrease in tax expense of $104,000. These were offset by an increase in non-interest expense of $229,000.

Consolidated net income for the nine month period ended September 30, 2005 was $2.4 million compared to $1.7 million for the same period in 2004 for an increase of $715,000 or 42.1%. Earnings per common share for the nine months ended September 30, 2005 increased to $1.39 basic and $1.29 fully-diluted, compared to $0.98 basic and $0.94 fully-diluted EPS for the nine months ended September 30, 2004. The increase in net income for the first nine months of 2005 compared to the same period in the prior year was comprised of an increase in net interest income after provision for loan losses of $979,000, an increase in non-interest income of $217,000, and a decrease in tax expense of $130,000. These were offset by an increase in non-interest expense of $611,000.

Total assets as of September 30, 2005 reached $450.8 million, an increase of $111.6 million or 32.9% compared to September 30, 2004. Loan growth during the third quarter remained strong, increasing by $22.2 million or 7.3% over last quarter and $65.8 million, or 25.2% from a year ago. The attached financial statements provide additional information and performance measurements.

Addressing the results for the quarter, Chairman Rosenthal stated, "The Fed continues to raise short-term managed rates but, until very recently, the long-end of the curve has not moved in the same proportion to short rates. This situation has resulted in the so-called flat yield curve. All banks, ours included, are challenged by a flat yield curve. We believe this will be a temporary phenomenon and we are well positioned for when the yield curve returns to its historic shape."

In addition to disclosing third quarter results, Chairman Rosenthal announced that a fourth consecutive quarterly dividend of $.05 per common share will be paid on December 15, 2005 to shareholders of record on December 1, 2005.

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.

This news release is believed accurate as of the date it was issued. However, it may become outdated over time, and should not be relied on as factually correct after its issue date.

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
             Consolidated Statements of Operations (Unaudited)
               (Dollars in thousands, except per share data)

                                    Three Months Ended   Nine Months Ended
                                    Sept. 30, Sept. 30, Sept. 30, Sept. 30,
                                       2005      2004      2005      2004
Interest income
   Loans, including fees             $ 4,775   $ 3,261   $12,885   $ 9,078
   Securities and other interest
    income                               916       502     2,789     1,460
                                     -------   -------   -------   -------
                                       5,691     3,763    15,674    10,538
Interest expense
   Deposits                            2,341       711     5,997     1,867
   Securities sold under agreements
    to repurchase and other
    borrowings                           766       604     2,023     1,773
                                     -------   -------   -------   -------
                                       3,107     1,315     8,020     3,640
                                     -------   -------   -------   -------
Net interest income                    2,584     2,448     7,654     6,898
Provision for loan losses                  -        95         -       223
                                     -------   -------   -------   -------

Net interest income after provision
 for loan losses                       2,584     2,353     7,654     6,675

Noninterest income
   Gain on sales of securities
    available for sale, net                -        29        11       106
   Other noninterest income              232       139       716       404
                                     -------   -------   -------   -------
                                         232       168       727       510
Noninterest expense
   Employee compensation and benefits  1,204     1,051     3,478     3,132
   Stock option expense                   35        26       105        78
   Occupancy and equipment expense       135        93       381       287
   Other expense                         371       346     1,211     1,067
                                     -------   -------   -------   -------
                                       1,745     1,516     5,175     4,564
                                     -------   -------   -------   -------
Income before income taxes             1,071     1,005     3,206     2,621
Income tax expense                       268       372       792       922
                                     -------   -------   -------   -------
Net income                           $   803   $   633   $ 2,414   $ 1,699
                                     =======   =======   =======   =======

Basic income per common share       $    .46   $   .37   $  1.39   $   .98
                                     =======   =======   =======   =======
Diluted income per common share     $    .43   $   .35   $  1.29   $   .94
                                     =======   =======   =======   =======



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

                                        September 30,       September 30,
                                           2005                 2004
ASSETS
     Total cash and cash equivalents       $ 18,936          $ 22,085
     Securities available for sale           84,718            48,229
     Federal Home Loan Bank (FHLB) stock      3,152             2,837
     Loans receivable                       330,972           265,102
     Less: Allowance for loan losses          3,578             3,540
                                           --------          --------
         Loans receivable, net              327,394           261,562
     Premises and equipment, net              3,294             1,320
     Interest receivable and other assets    13,273             3,132
                                           --------          --------
            Total assets                   $450,767          $339,165
                                           ========          ========

LIABILITIES AND SHAREHOLDERS' EQUITY
     Liabilities
      Total deposits                       $332,876          $254,599
      Securities sold under agreements
       to repurchase
        and other borrowings                 21,520            13,026
      FHLB advances                          57,000            41,740
      Subordinated debentures                 8,000             3,000
      Interest payable and other
       liabilities                            2,834               856
                                           --------          --------
            Total liabilities               422,230           313,221
      Total shareholders' equity             28,537            25,944
                                           --------          --------
            Total liabilities and
             shareholders' equity          $450,767          $339,165
                                           ========          ========



                      ST. JOSEPH CAPITAL CORPORATION
             Selected Consolidated Financial Data (Unaudited)
                               Year to Date
               (Dollars in thousands, except per share data)

                                        Nine Months           Nine Months
                                       September 30,         September 30,
                                           2005                   2004
EARNINGS
   Net interest income                    $     7,654          $     6,675
   Provision for loan loss                          -                  223
   Noninterest income                             727                  510
   Noninterest expense                          5,175                4,564
   Net income                                   2,414                1,699
   Basic earnings per share                      1.39                 0.98
   Diluted earnings per share             $      1.29          $      0.94
   Average shares outstanding               1,742,225            1,732,171
   Average diluted shares outstanding       1,870,254            1,804,804

PERFORMANCE RATIOS
   Return on average assets*                     0.73%                0.71%
   Return on average common equity *            11.73%                8.97%
   Net interest margin (fully-tax equivalent)*   2.69%                3.18%
   Efficiency ratio                             61.75%               63.52%

CAPITAL
   Average equity to average assets               6.2%                 7.9%
   Tier 1 leverage capital ratio                  8.4%                 9.0%
   Tier 1 risk-based capital ratio               10.8%                10.3%
   Total risk-based capital ratio                11.8%                11.4%
   Book value per share                   $     16.38          $     14.98

ASSET QUALITY
   Net charge-offs                        $         -          $         -
   Net charge-offs to average loans *            0.00%                0.00%
   Allowance for loan losses              $     3,578          $     3,540
   Allowance for loan losses to total
   loans                                        1.08%                 1.34%
   Nonperforming loans                    $         -          $         -
   Other real estate owned                $         -          $         -
   Nonperforming loans to total loans            0.00%                0.00%
   Nonperforming assets to total assets          0.00%                0.00%

END OF PERIOD BALANCES
   Total assets                           $   450,767          $   339,165
   Total earning assets                       415,748              320,983
   Total loans                                330,972              265,102
   Total deposits                             332,876              254,599
   Stockholders' equity                        28,537               25,944

AVERAGE BALANCES
   Total assets                           $   440,751          $   320,240
   Total earning assets                       413,442              305,776
   Total loans                                317,514              251,053
   Total deposits                             299,975              191,613
   Stockholders' equity                        27,519               25,290

* annualized for year to date data



                      ST. JOSEPH CAPITAL CORPORATION
             Selected Consolidated Financial Data (Unaudited)
                                 Quarterly
               (Dollars in thousands, except per share data)

                    Three        Three     Three       Three      Three
                    Months       Months    Months      Months     Months
                    September    June       March      December   September
                     30,          30,       31,         31,        30,
                     2005         2005      2005        2004       2004
EARNINGS
   Net interest
    income      $      2,583 $    2,528  $    2,542 $     2,547  $    2,448
   Provision for
    loan loss              -          -           -          38          95
   Noninterest
    income               232        249         246         219         168
   Noninterest
    expense            1,744      1,763       1,667       1,660       1,516
   Net income            803        815         796         710         633
   Basic earnings
    per share           0.46       0.47        0.46        0.41        0.37
   Diluted
    earnings
    per share   $       0.43 $     0.43  $     0.43 $     0.39   $     0.35
   Average shares
    outstanding    1,746,401  1,741,803   1,738,382  1,735,978    1,732,445
   Average
    diluted shares
    outstanding    1,875,652  1,875,958   1,857,861  1,821,483    1,808,220

PERFORMANCE RATIOS
   Return on
    average assets*    0.72%      0.77%       0.79%      0.79%        0.79%
   Return on average
    common equity*    11.58%     12.00%      12.09%     10.72%        9.96%
   Net interest
    margin
    (fully-tax
     equivalent)*      2.60%      2.69%       2.78%      3.13%        3.20%
   Efficiency
    ratio             61.95%     63.49%      59.79%     60.01%       57.95%

CAPITAL
   Average equity
    to average
    assets              6.2%       6.4%        6.5%       7.4%         7.9%
   Tier 1 leverage
    capital ratio       8.4%       8.8%        8.5%       8.0%         9.0%
   Tier 1 risk-based
    capital ratio      10.8%      10.9%       11.4%       9.9%        10.3%
   Total risk-based
    capital ratio      11.8%      12.0%       12.6%      11.1%        11.4%
   Book value per
    share       $     16.34 $    16.09  $    15.24 $    15.28   $    14.98

ASSET QUALITY
   Net
    charge-offs $         - $       -   $        - $        -   $        -
   Net
    charge-offs
    to average
    loans*            0.00%      0.00%       0.00%      0.00%        0.00%
   Allowance for
    loan losses $    3,578 $    3,578  $    3,578 $    3,578   $    3,540
   Allowance for
    loan losses
    to total
    loans             1.08%      1.16%       1.23%      1.27%        1.34%
   Nonperforming
    loans       $        - $        - $         - $        -   $        -
   Other real
    estate
    owned       $        - $        - $         - $        -   $        -
   Nonperforming
    loans to
    total loans       0.00%      0.00%       0.00%      0.00%        0.00%
   Nonperforming
    assets to
    total assets      0.00%      0.00%       0.00%      0.00%        0.00%

END OF PERIOD BALANCES
   Total assets $  450,767 $  446,842 $   412,710 $  399,059   $   339,165
   Total earning
    assets         415,748    409,301     382,790    347,286       320,983
   Total loans     330,972    308,750     289,962    281,999       265,102
   Total deposits  332,876    331,364     325,866    312,657       254,599
   Stockholders'
    equity          28,537     28,018      26,494     26,532        25,944

AVERAGE BALANCES
   Total assets $  440,751 $  423,181 $   409,517 $  357,808   $   320,240
   Total earning
    assets         413,442    397,011     385,819    334,964       305,776
   Total loans     317,514    293,490     284,685    269,928       251,053
   Total deposits  299,975    288,660     290,061    215,313       191,613
   Stockholders'
    equity          27,519     27,250      26,692     26,349        25,290

* annualized for quarterly data

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