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Sky Financial Posts 7.2% Second Quarter Gain
BOWLING GREEN, Ohio -- Sky Financial Group Inc. today reported second quarter net income of $40.2 million, up 7.2% versus $37.5 million for the second quarter last year. Second quarter earnings per share were 43 cents, up 2.4% from 42 cents for the second quarter last year. Return on average assets and return on average equity were 1.33% and 15.25%, respectively, for the second, compared to 1.24% and 16.78% for the 2003 period."Our solid second quarter financial results included key accomplishments that will contribute to our continued future earnings growth," said Marty E. Adams, chairman and chief executive officer, "Our loan growth was very strong, increasing nearly $240 million during the quarter and our fee income, excluding mortgage banking, rose over 20% from last year's second quarter."For the six months ended June 30, Sky reported net income of $98.9 million, or $1.05 per share, increasing from $73.6 million, or 83 cents per share, reported for the first six months last year. Year-to-date net income included $18.7 million, or 20 cents per share, from discontinued operations related to Sky's dental finance unit, which was sold in the first quarter. For the prior year to-date, discontinued operations contributed $0.9 million, or 1 cent per share."As we start the third quarter, we were very pleased to complete our merger with Second Bancorp July 1 and the core systems conversion July 5," Adams said.With the acquisition of Second Bancorp Inc., headquartered in Warren, Ohio, and its wholly-owned subsidiary Second National Bank with $2.1 billion in assets, Sky had $14.3 billion in total assets and $10.0 billion in total deposits."Based on our solid performance for the first half of the year and with the completion of the Second Bancorp merger, we currently project 2004 earnings of $1.92 to $1.96 per share, and core operating earnings of $1.76 to $1.80 per share," said Kevin Thompson, chief financial officer.Net interest income for the second quarter was $102.7 million, up 5.8% from $97.0 million in the second quarter last year. The net interest margin for the second quarter was 3.69%, the same as the previous quarter and an increase of 3 basis points from the second quarter of 2003, the company reported.Average loans for the quarter increased 6.6%. Average deposits, excluding time deposits, grew 9.6% from the second quarter last year. Average total deposits for the second quarter were up 4.3% from the second quarter last year, but declined 1.7% when the acquisitions were excluded.Non-interest revenues were $49.6 million for the second quarter, up 5.4% from $47.1 million in the 2003 quarter, offsetting a reduction in mortgage banking revenues. Excluding mortgage banking and net securities transactions, non-interest revenues were up 20.3% with strong results compared to the same quarter last year. Brokerage and insurance commissions were up 24.4%, trust services income was up 12.3% and service charges on deposits increased 17.1%. For the quarter, in a less favorable rate environment, mortgage originations declined and mortgage banking revenues were down $7.0 million, or 50.5% from the year-ago quarter. Securities transactions included net gains of $2.9 million in the second quarter this year versus $0.1 million in the second quarter last year.Non-interest expenses for the second quarter were $82.3 million compared to $80.1 million in the second quarter last year, which included $3.5 million in merger, integration and restructuring expenses to complete the acquisition of Metropolitan Financial Corp. Excluding merger, integration and restructuring expenses, non-interest expenses were $82.3 million compared to $76.6 million in the second quarter last year. Expenses have increased over the prior year's second quarter mainly due to the acquisitions of Metropolitan Financial Corp., GLB Bancorp. and three insurance agencies over the last year. The efficiency ratio, on a core operating basis excluding the merger, integration and restructuring expenses, was 53.75% for the quarter, compared to 52.88% for the same quarter last year.Visit Sky Bank at www.skyfi.com."