GLK Great Lakes Bancorp New

BUFFALO, N.Y., May 8 /PRNewswire-FirstCall/ -- Great Lakes Bancorp, Inc. (NYSE:GLK), the bank holding company of Greater Buffalo Savings Bank, today announced its first quarter results and Board of Director authorization for the Company to repurchase up to 5% of its outstanding common stock over the next six months. The Company reported a net loss of $593 thousand or $0.05 per share for the current quarter ended March 31, 2007, compared to a net loss of $81 thousand or $0.02 per share for the first quarter of 2006. Per share amounts reflect a significant increase in outstanding shares resulting from the merger with Bay View Capital Corporation on May 1, 2006. The 2007 results reflect increases in net interest income and noninterest income, offset by higher operating costs associated with the Bank's branch development and personnel additions to its lending, support functions and senior management team. Andrew W. Dorn, Jr., President and Chief Executive Officer, was pleased to cite positive first quarter developments. "The Board's approval of a stock buyback program reflects a strong vote of confidence in our business strategy and senior management team. We strongly believe that the purchase of our own stock is our best investment alternative at the present time." "We're also very excited about hiring Peter Babiarz as our new Chief Credit Officer during the quarter to round out our senior management team. Peter brings a wealth of experience in the commercial lending arena to our organization and will play a key role in maintaining credit quality as we continue to grow our loan portfolios. Completion of our retail branch network later in the year is on target, our new mortgage banking initiatives in Buffalo and Long Island are likewise progressing well, and operating costs for the quarter were in line with expectations." Net interest income increased by $321 thousand, or 9.3%, to $3.8 million for the current quarter compared to the first quarter of 2006. This increase reflects significant growth in the Bank's loan portfolios as average loan balances increased by $98.4 million, or 23.0%, to $525.4 million. The positive impact of lending growth was offset in part by higher funding costs. While average interest-bearing liabilities were down by $3.4 million comparing the two quarters, the average rates paid on those liabilities increased significantly from 3.58% to 4.16%. Net interest margins were 1.99% for the current quarter compared to 1.92% for the first quarter of 2006. Provisions for loan losses of $267 thousand for the current quarter were up by $27 thousand from $240 thousand for the first quarter of 2006. Noninterest income for the current quarter was up $259 thousand, or 62.4%, to $674 thousand from the first quarter of 2006, reflecting increases across all categories. Noninterest expenses increased by $1.2 million, or 31.5%, to $5.2 million for the current quarter compared to the first quarter of 2006. Expenses increased across all categories with employee and occupancy costs representing the largest increases as the Bank focused on completing its retail branch network and made significant additions to its workforce. At March 31, 2007, the Company had total assets of $904.8 million compared to $884.4 million at the end of 2006. The Company was required to adopt a new accounting standard in the quarter pertaining to income tax contingencies which resulted in an increase in deferred tax assets of $13.1 million associated with the Bay View acquisition and a corresponding decrease in related goodwill. Mr. Dorn was upbeat about the Bank's future earnings prospects. "While the current interest rate environment continues to challenge our industry, our focus on growing the loan portfolios and increasing sources of low-cost funding will undoubtedly produce positive future results. Development of our branch network is nearing completion and we're looking forward to stabilizing our expense base and reaping the benefits of our investment." Earnings Conference Call Andrew W. Dorn, Jr., President and CEO, and Michael J. Rogers, Executive Vice President and CFO, will host a conference call on May 10, 2007 at 4:30 p.m. eastern time to discuss these earnings results. The Company's executives will answer questions concerning business developments and financial results. Some of the responses to these questions may contain information that has not been previously disclosed. Interested parties may access the conference call by calling (973) 935-2048. Participants are asked to call in a few minutes prior to the call to allow time for registration. Internet access to the call is also available (listen only) by clicking "Webcasts & Presentations" on the Company's website at http://www.greatlakesbancorp.com/. A replay of the call will be available through July 10, 2007 by calling (973) 341-3080 and entering the pin number, 8769189. The archived webcast will also be available on the Company's website at the address above for an extended period of time. Annual Meeting of Shareholders As previously announced, the Company will hold its 2007 annual meeting of shareholders on May 15, 2007 at 10:00 a.m. local time at its Main Office at 2421 Main Street, Buffalo, New York. About Great Lakes Bancorp Great Lakes Bancorp, Inc. is the bank holding company for Greater Buffalo Savings Bank, a Buffalo-based, full-service community bank that serves residents and businesses located throughout Western New York. The Bank has 15 full-service offices in operation with two additional offices currently under construction. More information about Greater Buffalo Savings Bank can be found on the Internet at http://www.gbsb.com/. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current plans and expectations, which are subject to a number of risk factors and uncertainties that could cause future results to differ materially from historical performance or future expectations. These differences may be the result of various factors, including changes in general, national or regional economic conditions, changes in loan default and charge-off rates, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in interest rates, changes in levels of income and expense in noninterest income and expense related activities, competition, and other risk factors. For further information on these risk factors and uncertainties, please see Great Lakes Bancorp's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2006. Great Lakes Bancorp undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or other changes. GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data 2007 First Year ended Fourth Quarter December 31, Quarter SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) Interest income $11,112 42,729 10,840 Interest expense 7,340 27,594 7,049 Net interest income 3,772 15,135 3,791 Provision for loan losses 267 1,030 443 Net interest income after provision for loan losses 3,505 14,105 3,348 Noninterest income: Service charges on deposit accounts 176 654 174 Other fees and service charges 159 535 156 Earnings on bank-owned life insurance 121 469 121 Loan fee income 120 338 91 Gain on sale of mortgage loans 62 16 16 Other operating income 36 174 42 Total noninterest income 674 2,186 600 Noninterest expense: Salaries and employee benefits 3,042 10,687 3,067 Occupancy, equipment and furnishings 732 2,472 690 Data processing and operations 268 962 272 Professional services 204 726 269 Advertising 134 705 113 Printing, postage and supplies 109 441 109 Other operating expenses 672 2,122 637 Total noninterest expense 5,161 18,115 5,157 Income (loss) before income taxes (982) (1,824) (1,209) Income tax provision (benefit) (389) (928) (456) Net income (loss) $(593) (896) (753) SELECTED OPERATING DATA Net income (loss) per share - Basic and diluted $(0.05) (0.10) (0.07) Net income (loss) (annualized): Return on average assets (0.27)% (0.10) (0.34) Return on average equity (1.77)% (0.88) (2.19) Efficiency ratio 114.3 % 103.0 115.7 FTE personnel - end of period 245 239 239 Number of branches - end of period 15 14 14 Stock price (NYSE:GLK)(1): High $14.69 20.98 16.63 Low $11.90 13.82 13.82 Close $12.00 14.04 14.04 2006 Third Second First Quarter Quarter Quarter SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) Interest income 11,137 10,957 9,795 Interest expense 7,141 7,060 6,344 Net interest income 3,996 3,897 3,451 Provision for loan losses 29 318 240 Net interest income after provision for loan losses 3,967 3,579 3,211 Noninterest income: Service charges on deposit accounts 184 161 135 Other fees and service charges 137 131 111 Earnings on bank-owned life insurance 117 116 115 Loan fee income 88 135 24 Gain on sale of mortgage loans - - - Other operating income 58 44 30 Total noninterest income 584 587 415 Noninterest expense: Salaries and employee benefits 2,716 2,596 2,308 Occupancy, equipment and furnishings 630 595 557 Data processing and operations 240 229 221 Professional services 167 154 136 Advertising 202 198 192 Printing, postage and supplies 123 99 110 Other operating expenses 544 539 402 Total noninterest expense 4,622 4,410 3,926 Income (loss) before income taxes (71) (244) (300) Income tax provision (benefit) (62) (191) (219) Net income (loss) (9) (53) (81) SELECTED OPERATING DATA Net income (loss) per share - Basic and diluted 0.00 (0.01) (0.02) Net income (loss) (annualized): Return on average assets 0.00 (0.02) (0.04) Return on average equity (0.03) (0.21) (0.94) Efficiency ratio 99.5 96.9 99.9 FTE personnel - end of period 234 233 204 Number of branches - end of period 14 12 10 Stock price (NYSE:GLK)(1): High 17.45 20.98 17.86 Low 14.05 16.89 16.74 Close 16.07 17.48 17.45 (1) Stock price data prior to the May 1, 2006 merger is that of Bay View Capital Corporation. GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2007 2006 March 31, December 31, September 30, June 30, March 31, SELECTED BALANCE SHEET DATA (Dollar amounts in thousands) Cash: Cash and cash equivalents $15,549 14,026 13,305 83,246 37,655 Restricted cash 3,851 3,923 3,900 17,970 - Total cash 19,400 17,949 17,205 101,216 37,655 Investment securities: Available for sale 226,808 233,853 242,360 247,783 257,312 Held-to-maturity 15,989 15,997 16,004 16,011 16,018 Total investment securities 242,797 249,850 258,364 263,794 273,330 Loans: Real estate loans: Residential 253,626 253,709 247,135 241,530 231,838 Home equity 53,337 53,676 53,235 50,671 50,550 Commercial 89,706 78,666 69,878 70,773 65,628 Construction 30,066 25,481 23,543 11,077 8,649 Commercial and industrial 62,530 55,055 53,791 52,671 41,358 Automobile loans 46,151 43,719 43,284 43,249 40,270 Other consumer loans 765 659 769 554 521 Total loans 536,181 510,965 491,635 470,525 438,814 Allowance for loan losses (3,950) (3,781) (3,375) (3,370) (3,074) Deferred loan costs, net 6,707 6,744 6,761 6,688 6,542 Total loans, net 538,938 513,928 495,021 473,843 442,282 Net deferred tax asset 56,221 43,106 42,160 43,475 3,138 Goodwill 19 12,832 12,271 11,721 - Total assets 904,829 884,412 869,341 942,175 798,467 Total interest- earning assets 796,321 778,617 766,067 841,861 755,549 Deposits: Noninterest-bearing checking 28,522 37,145 29,022 29,194 25,535 Interest-bearing checking 47,788 45,139 43,443 40,908 42,288 Savings and money market 217,668 214,454 230,037 259,480 272,351 Total core deposits 293,978 296,738 302,502 329,582 340,174 Certificates of deposit 342,903 337,918 354,018 323,448 306,345 Total deposits 636,881 634,656 656,520 653,030 646,519 Short-term borrowings 25,787 17,900 9,539 12 20,501 Long-term borrowings 96,372 86,372 56,372 124,872 94,372 Total interest- bearing liabilities 730,518 701,783 693,409 748,720 735,857 Net interest- earning assets 65,803 76,834 72,658 93,141 19,692 Shareholders' equity 135,623 135,510 136,208 133,827 33,655 Tangible shareholders' equity (1) 135,604 122,678 123,937 122,106 33,655 Securities available for sale - fair value adjustment included in shareholders' equity $(1,789) (2,437) (2,432) (4,863) (4,524) Common shares outstanding 10,921,796 10,921,796 10,915,274 10,913,535 4,300,436 (1) Excludes goodwill recognized in connection with the Bay View merger. GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2007 2006 March 31, December 31, September 30, June 30, March 31, CAPITAL RATIOS Tier 1 risk- based capital 18.78% 20.23 21.55 18.87 11.80 Total risk based capital 19.57% 21.03 22.30 19.52 12.52 Tier 1 (core) capital 11.28% 11.65 11.60 11.86 6.39 Equity to assets 14.99% 15.32 15.67 14.20 4.21 Tangible shareholders' equity to tangible assets(1) 14.99% 14.08 14.46 13.12 4.21 Shareholders' equity per share $12.42 12.41 12.48 12.26 7.83 Tangible shareholders' equity per share(1) $12.42 11.23 11.35 11.19 7.83 ASSET QUALITY DATA (Dollar amounts in thousands) Nonaccrual loans $3,688 3,548 1,186 1,113 753 Accruing loans past due 90 days or more - - - 560 201 Total non- performing loans 3,688 3,548 1,186 1,673 954 Foreclosed assets 77 91 82 583 121 Total non- performing assets $3,765 3,639 1,268 2,256 1,075 Provision for loan losses $267 443 29 318 240 Net loan charge-offs $(98) (37) (24) (22) (76) Net charge-offs to average loans 0.08% 0.03 0.02 0.02 0.07 Total non-performing loans to total loans 0.68% 0.69 0.24 0.35 0.21 Total non-performing assets to total assets 0.42% 0.41 0.15 0.24 0.13 Allowance for loan losses to total loans 0.73% 0.73 0.68 0.71 0.69 Allowance for loan losses to non- performing loans 107.11% 106.58 284.62 201.42 322.38 (1) Excludes goodwill recognized in connection with the Bay View merger. GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2007 First Year ended Fourth Quarter December 31, Quarter SELECTED AVERAGE BALANCES (Dollar amounts in thousands) Taxable securities $235,525 250,579 243,864 Tax-exempt securities 15,140 15,161 15,148 Commercial loans: Commercial real estate 105,208 79,213 91,778 Commercial and industrial 57,977 47,591 54,367 Consumer loans: Residential mortgages 256,711 242,611 254,557 Home equity 53,196 51,994 54,263 Automobile 44,731 41,870 43,223 Other 825 627 852 Loans 525,386 470,597 505,882 Total interest-earning assets 783,788 778,578 770,806 Allowance for loan losses (3,896) (3,215) (3,418) Noninterest-earning assets 108,797 82,095 105,386 Total assets 888,689 857,458 872,774 Interest-bearing liabilities: Interest-bearing checking 42,840 42,207 42,105 Savings 88,408 110,356 91,926 Money market 127,352 134,001 137,413 Certificates of deposit 339,162 329,184 344,353 Borrowings 118,010 99,444 76,722 Total interest-bearing liabilities 715,772 715,192 692,519 Noninterest-bearing checking 27,032 28,708 33,478 Total liabilities 752,928 755,246 736,434 Shareholders' equity 135,761 102,212 136,340 Net earning assets $68,016 63,386 78,287 Weighted average common shares outstanding - basic and diluted 10,921,796 8,741,737 10,921,583 Average loans to average deposits 84.1% 73.0 77.9 Average loans to average assets 59.1% 54.9 58.0 SELECTED AVERAGE YIELDS/RATES Total investment securities 5.04% 4.97 5.01 Loans 6.15% 5.90 5.96 Total interest-earning assets 5.78% 5.52 5.61 Interest-bearing checking 1.22% 1.38 1.19 Savings 2.18% 2.27 2.22 Money market 3.91% 3.89 3.91 Certificates of deposit 4.71% 4.34 4.60 Borrowings 5.40% 5.04 5.48 Total interest-bearing liabilities 4.16% 3.86 4.04 Net interest rate spread 1.62% 1.66 1.57 Contribution of interest-free funds 0.37% 0.32 0.42 Net interest rate margin 1.99% 1.98 1.99 2006 Third Second First Quarter Quarter Quarter SELECTED AVERAGE BALANCES (Dollar amounts in thousands) Taxable securities 252,513 261,667 244,255 Tax-exempt securities 15,157 15,165 15,174 Commercial loans: Commercial real estate 85,811 76,566 62,300 Commercial and industrial 53,361 43,384 39,020 Consumer loans: Residential mortgages 246,749 238,862 229,961 Home equity 53,131 50,850 49,668 Automobile 43,285 41,820 39,093 Other 604 555 492 Loans 489,694 458,721 427,017 Total interest-earning assets 793,263 807,686 742,082 Allowance for loan losses (3,319) (3,151) (2,965) Noninterest-earning assets 102,631 75,217 44,245 Total assets 892,575 879,752 783,362 Interest-bearing liabilities: Interest-bearing checking 40,916 42,924 42,905 Savings 98,476 113,834 137,822 Money market 141,166 140,278 116,844 Certificates of deposit 349,826 319,300 302,571 Borrowings 80,222 122,468 119,041 Total interest-bearing liabilities 710,606 738,804 719,183 Noninterest-bearing checking 30,606 25,411 25,226 Total liabilities 757,589 778,915 748,150 Shareholders' equity 134,986 100,837 35,212 Net earning assets 82,657 68,882 22,899 Weighted average common shares outstanding - basic and diluted 10,914,896 8,733,392 4,300,436 Average loans to average deposits 74.1 71.5 68.3 Average loans to average assets 54.9 52.1 54.5 SELECTED AVERAGE YIELDS/RATES Total investment securities 4.98 4.98 4.90 Loans 5.99 5.86 5.75 Total interest-earning assets 5.60 5.47 5.39 Interest-bearing checking 1.28 1.48 1.57 Savings 2.24 2.28 2.31 Money market 3.92 3.92 3.76 Certificates of deposit 4.46 4.25 4.01 Borrowings 5.58 4.92 4.50 Total interest-bearing liabilities 3.99 3.83 3.58 Net interest rate spread 1.61 1.64 1.81 Contribution of interest-free funds 0.42 0.33 0.11 Net interest rate margin 2.03 1.97 1.92 DATASOURCE: Great Lakes Bancorp, Inc. CONTACT: Andrew W. Dorn, Jr., President and Chief Executive Officer, +1-716-961-1920, or Michael J. Rogers, Executive Vice President and Chief Financial Officer, +1-716-961-1980, both of Great Lakes Bancorp, Inc. Web site: http://www.greatlakesbancorp.com/

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