UNIZ Unizan Financial (MM)

Unizan Reports First Quarter 2005 Financial Results CANTON, Ohio, April 25 /PRNewswire-FirstCall/ -- Unizan Financial Corp. (NASDAQ:UNIZ), today reported net income of $4.5 million for the quarter ended March 31, 2005, or $0.20 per diluted share, a 38% increase compared with net income of $3.3 million or, $0.15 per diluted share, reported for the quarter ended December 31, 2004 and an 88% increase compared with net income of $2.4 million, or $0.11 per diluted share, for the quarter ended March 31, 2004. "Our first quarter results reflect solid improvement in our net income during the period," said Roger L. Mann, Unizan Financial Corp. President and Chief Executive Officer. "I am extremely pleased with the commitment demonstrated by our staff as we enter the 2005 calendar year, "concluded Mann. Net interest income -- Net interest income was $16.8 million for the three months ended March 31, 2005, down 2.7% from the previous quarter and 10.7% from the same quarter last year. These decreases were primarily attributed to lower levels of average earning assets which declined 2.5% during the first quarter of 2005 as compared to the fourth quarter of 2004 and 7.9% as compared to the first quarter of 2004. The net interest margin was 3.02% for the first quarter of 2005 compared to 2.97% for the fourth quarter of 2004 and 3.08% for the first quarter of 2004. Provision for loan losses -- The provision for loan losses was $1.3 million for the three months ended March 31, 2005, compared to $1.4 million for the previous quarter and $1.0 million for the first quarter of 2004. Net charge-offs for the three months ended March 31, 2005 were $1.8 million compared to $1.5 million for the fourth quarter of 2004 and $1.0 million for the first quarter of 2004. The increase in net charge-offs from the fourth quarter of 2004 was mainly attributed to increases in commercial and commercial real estate loan charge-offs while the increase from the year ago quarter was generally in all loan categories. The allowance for loan losses as a percentage of total loans was 1.42%, 1.41% and 1.25% at March 31, 2005, December 31, 2004 and March 31, 2004, respectively. Other income -- Other income, excluding net gains and losses on securities, was $7.0 million for the first quarter of 2005 compared with $6.8 million for the fourth quarter of 2004 and $6.9 million for the first quarter of 2004. Gains on sales of loans for the 2005 quarter totaled $1.2 million, compared with $1.1 million in the fourth quarter of 2004 and $1.2 million in the first quarter of 2004. Gains from the sale of the guaranteed portion of Small Business Administration (SBA) and other government guaranteed loans were $1.2 million in the first quarter of 2005, compared with $1.0 million in the fourth quarter of 2004 and $797 thousand in the first quarter of 2004. Gains on the sale of residential mortgage loans in the first quarter of 2005 were $30 thousand compared with $113 thousand in the fourth quarter of 2004 and $448 thousand in the first quarter of 2004. Fees associated with the mortgage related business have declined from a year ago as a result of the rise in interest rates and fewer customers benefiting from refinancing. No securities gains or losses were recorded in the first quarter of 2005 as compared to net losses of $3.3 million in the fourth quarter of 2004 and net gains of $71 thousand in the first quarter of 2004. The fourth quarter 2004 results included a $3.4 million pre-tax other-than-temporary impairment charge associated with adjustable rate perpetual preferred stock issued by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Other expense -- Other expense was $16.1 million for the three months ended March 31, 2005, up $1.1 million, or 7.3%, from the previous quarter and down $5.3 million, or 24.6%, from the same quarter last year. The increase from the prior quarter was primarily attributed to a $1.5 million increase in salaries and benefits expense. Such expenses in the fourth quarter of 2004 benefited from various accrual reductions related to benefits, incentive compensation and year end bonuses that resulted from declines in staffing levels throughout the year as well as the Company not meeting various performance targets. The decrease from the year ago quarter primarily related to a $4.8 million decrease in salaries and benefits which was mainly attributed to the prior year period including a $3.6 million pre-tax expense recognized in relation to the exercise of certain stock options. Also, salaries and benefits expense in general have declined as a result of lower staffing levels. Total full time equivalent employees have decreased from 728 at March 31, 2004 to 627 at December 31, 2004 and 619 at March 31, 2005. Other expense also included accounting and other professional fees totaling $1.1 million, $1.4 million and $1.5 million for the quarters ended March 31, 2005, December 31, 2004 and March 31, 2004, respectively. Such fees for the March 2005 and the December 2004 quarters were primarily attributed to activities associated with implementing the provisions of Section 404 of the Sarbanes- Oxley Act of 2002 as well as filling staffing vacancies, whereas the March 2004 quarter included $1.2 million of merger-related professional fees as compared to minimal amounts in the March 2005 and December 2004 quarters. Provision for income taxes -- The effective tax rate for the three months ended March 31, 2005 was 28.4% compared to 22.9% in the previous quarter and 28.9% in the same quarter last year. Lower pre-tax earnings levels in the fourth quarter of 2004 and first quarter of 2004 as compared to the first quarter of 2005 had the effect of reducing the effective tax rate, while the non tax deductible nature of a portion of the merger-related expenses in the first quarter of 2004 had the effect of increasing the effective tax rate in that period. Balance sheet -- Total assets at March 31, 2005 were $2.52 billion compared to $2.57 billion at the end of 2004 and $2.76 billion a year ago. Assets declined 2.1% from year end 2004 and 8.8% from March 31, 2004. Compared to a year ago, securities declined by 12.6% while loans decreased by 7.6%. These declines continue to be primarily attributed to the closing of the aircraft lending centers, less emphasis being placed on indirect consumer lending, competitive factors involving rate and structure, fewer lending officers originating new loans due to turnover of customer relationship managers in areas where there is significant market overlap with Huntington Bancshares Incorporated ("Huntington" - see Pending Merger below) and the sale of the trust preferred securities portfolio, which totaled $41.8 million, in the second quarter of 2004. Total deposits decreased by $15.4 million, or 0.8%, from the end of 2004 and by $120.8 million, or 6.2%, from a year ago while total borrowings have declined by $40.6 million from year end 2004 and by $129.3 million from a year ago. Asset quality -- At March 31, 2005, non-performing loans were $30.1 million, or 1.66% of total loans, compared to $30.2 million, or 1.61% of total loans, at December 31, 2004 and $28.6 million, or 1.45% of total loans, at March 31, 2004. Delinquent loans to total loans declined to 1.38% at March 31, 2005 compared to 1.60% at December 31, 2004 and 1.67% at March 31, 2004. Non-performing loans, excluding the portion of the loans guaranteed by the government, were $23.4 million at March 31, 2005 compared to $22.9 million at December 31, 2004 and $21.7 million at March 31, 2004. The $554 thousand or 2.4% increase in non-performing loans since December 31, 2004 is primarily attributed to a $556 thousand increase in non-performing residential real estate loans and a $192 thousand increase in non-performing home equity loans. The $1.7 million increase in non-performing loans from March 31, 2004 was mainly due to a $947 thousand increase in non-performing aircraft loans and a $764 thousand increase in non-performing commercial real estate loans. Pending Merger As previously announced, the Company has extended its agreement to merge with Huntington to January 27, 2006. As reported, Huntington continues to have ongoing discussions with the staff of the Securities and Exchange Commission ("SEC") regarding resolution of its previously announced formal investigation into certain financial accounting matters relating to fiscal years 2002 and earlier and certain related disclosure matters. Also, Huntington has entered into formal supervisory agreements with its banking regulators, the Federal Reserve Board and Office of the Comptroller of the Currency, providing for a comprehensive action plan designed to address its financial reporting and accounting policies, procedures and controls, and its corporate governance practices. Huntington remains in active dialogue with banking regulators concerning these and related matters and is working diligently to resolve them in a full and comprehensive manner. Pending the successful resolution of these matters, Huntington has indicated its intention to resubmit its applications for regulatory approval of the merger with Unizan Financial Corp. About Unizan Unizan Financial Corp., a $2.5 billion holding company, is a financial services organization headquartered in Canton, Ohio. The company operates 42 full-service retail financial centers in five metropolitan markets in Ohio -- Canton, Columbus, Dayton, Newark and Zanesville. Through Unizan Financial Corp.'s subsidiaries, Unizan Bank, National Association; Unizan Financial Services Group, National Association; Unizan Banc Financial Services, Inc.; and Unizan Financial Advisors, Inc., the company offers its client base corporate and retail banking, internet banking and wealth management products and services. Additionally, the company operates government guaranteed loan programs through its business lending centers in Cincinnati, Cleveland, Columbus and Dayton, Ohio; Detroit, Michigan; Mt. Arlington, New Jersey and Indianapolis, Indiana. For more information on Unizan Financial Corp. and its subsidiaries, visit the company on the Web at http://www.unizan.com/ . Unizan Financial Corp. CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data) 3/31/05 12/31/04 09/30/04 ASSETS Federal funds sold and interest bearing deposits with banks $13,149 $7,139 $8,408 Securities, net 419,750 422,566 404,104 Federal Home Loan Bank stock, at cost 36,572 36,170 35,788 Loans originated and held for sale 2,066 1,256 2,353 Loans: Commercial, financial and agricultural 236,062 268,339 266,262 Aircraft 93,527 106,845 117,497 Commercial real estate 610,945 607,470 610,061 Residential real estate 437,819 439,866 441,338 Consumer 442,783 450,617 465,591 Total Loans less unearned income 1,821,136 1,873,137 1,900,749 Less allowance for loan losses 25,868 26,356 26,387 Net loans 1,795,268 1,846,781 1,874,362 Total earning assets 2,292,673 2,340,268 2,351,402 Cash and cash equivalents 45,347 52,057 61,072 Premises and equipment, net 22,111 22,226 22,787 Goodwill 91,971 91,971 91,971 Other intangible assets 14,823 15,473 16,157 Accrued interest receivable and other assets 76,884 77,195 76,500 Total Assets $2,517,941 $2,572,834 $2,593,502 LIABILITIES Deposits: Non-interest bearing deposits $209,872 $231,004 $213,621 Demand - interest bearing 202,651 219,249 229,938 Savings 528,266 526,972 517,295 Certificates and other time deposits 884,518 863,501 856,914 Total deposits 1,825,307 1,840,726 1,817,768 Total borrowings 353,791 394,373 439,400 Accrued taxes, expenses and other liabilities 25,973 25,810 26,148 Total Liabilities 2,205,071 2,260,909 2,283,316 SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 100,000,000 shares authorized; 22,123,069 shares issued) 22,123 22,123 22,123 Paid-in capital 220,669 220,741 221,141 Retained earnings 76,405 74,854 74,560 Stock held by deferred compensation plan, 127,063; 128,400; 122,209; 119,274 and 118,616 shares at cost, respectively (2,243) (2,279) (2,112) Treasury stock, 24,587; 43,956; 64,059; 327,256 and 368,389 shares at cost, respectively (646) (1,137) (1,647) Accumulated other comprehensive loss (3,438) (2,377) (3,879) Total Shareholders' Equity 312,870 311,925 310,186 Total Liabilities and Shareholders' Equity $2,517,941 $2,572,834 $2,593,502 Unizan Financial Corp. CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data) 06/30/04 03/31/04 ASSETS Federal funds sold and interest bearing deposits with banks $5,446 $5,080 Securities, net 408,021 487,316 Federal Home Loan Bank stock, at cost 35,410 35,061 Loans originated and held for sale 2,118 4,744 Loans: Commercial, financial and agricultural 269,219 258,677 Aircraft 126,824 134,889 Commercial real estate 646,900 662,289 Residential real estate 446,738 449,057 Consumer 469,236 464,323 Total Loans less unearned income 1,958,917 1,969,235 Less allowance for loan losses 24,922 24,611 Net loans 1,933,995 1,944,624 Total earning assets 2,409,912 2,501,436 Cash and cash equivalents 81,111 71,924 Premises and equipment, net 23,891 24,641 Goodwill 91,971 91,971 Other intangible assets 17,025 17,836 Accrued interest receivable and other assets 77,546 77,987 Total Assets $2,676,534 $2,761,184 LIABILITIES Deposits: Non-interest bearing deposits $221,027 $214,844 Demand - interest bearing 242,709 257,012 Savings 494,598 531,437 Certificates and other time deposits 908,903 942,850 Total deposits 1,867,237 1,946,143 Total borrowings 483,485 483,093 Accrued taxes, expenses and other liabilities 23,786 25,262 Total Liabilities 2,374,508 2,454,498 SHAREHOLDERS' EQUITY Common stock ($1.00 stated value, 100,000,000 shares authorized; 22,123,069 shares issued) 22,123 22,123 Paid-in capital 223,200 224,722 Retained earnings 74,654 74,461 Stock held by deferred compensation plan, 127,063; 128,400; 122,209; 119,274 and 118,616 shares at cost, respectively (2,039) (2,016) Treasury stock, 24,587; 43,956; 64,059; 327,256 and 368,389 shares at cost, respectively (9,282) (10,308) Accumulated other comprehensive loss (6,630) (2,296) Total Shareholders' Equity 302,026 306,686 Total Liabilities and Shareholders' Equity $2,676,534 $2,761,184 Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except share and per share data) Three months ended 3/31/05 12/31/04 09/30/04 Interest income: Interest on federal funds sold and interest bearing deposits with banks $71 $25 $21 Interest and dividends on securities 3,868 3,742 3,040 Interest and fees on loans and loans held for sale 26,889 27,452 26,693 Total interest income 30,828 31,219 29,754 Interest expense: Interest on deposits 9,920 9,392 9,058 Interest on borrowings 4,135 4,596 4,576 Total interest expense 14,055 13,988 13,634 Net interest income 16,773 17,231 16,120 Provision for loan losses 1,295 1,425 3,750 Net interest income after provision for loan losses 15,478 15,806 12,370 Other income: Trust, financial planning, brokerage and insurance sales 2,247 2,065 1,793 Customer service fees 1,579 1,784 1,854 Gains on sale of loans 1,187 1,117 1,008 Security gains/(losses), net - (3,348) (60) Other operating income 1,991 1,870 2,626 Total other income 7,004 3,488 7,221 Other expense: Salaries, wages, pension and benefits 7,988 6,489 8,211 Occupancy expense 908 802 875 Furniture and equipment expense 503 533 520 Taxes other than income taxes 679 510 557 Intangible amortization expense 650 684 868 Other operating expense 5,419 6,030 4,652 Total other expense 16,147 15,048 15,683 Income before income taxes 6,335 4,246 3,908 Provision for income taxes 1,802 972 1,029 Net Income $4,533 $3,274 $2,879 Earnings per share: Basic $0.21 $0.15 $0.13 Diluted $0.20 $0.15 $0.13 Dividends per share $0.135 $0.135 $0.135 Weighted average number of shares: Basic 22,088,798 22,066,952 21,910,942 Diluted 22,200,120 22,211,146 22,052,059 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method. Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except share and per share data) Three months ended 06/30/04 03/31/04 Interest income: Interest on federal funds sold and interest bearing deposits with banks $13 $8 Interest and dividends on securities 4,269 4,597 Interest and fees on loans and loans held for sale 27,573 27,674 Total interest income 31,855 32,279 Interest expense: Interest on deposits 8,816 9,150 Interest on borrowings 4,366 4,337 Total interest expense 13,182 13,487 Net interest income 18,673 18,792 Provision for loan losses 2,950 1,000 Net interest income after provision for loan losses 15,723 17,792 Other income: Trust, financial planning, brokerage and insurance sales 2,050 1,953 Customer service fees 1,848 1,844 Gains on sale of loans 686 1,245 Security gains/(losses), net 181 71 Other operating income 2,419 1,901 Total other income 7,184 7,014 Other expense: Salaries, wages, pension and benefits 10,494 12,774 Occupancy expense 795 867 Furniture and equipment expense 572 534 Taxes other than income taxes 610 630 Intangible amortization expense 811 825 Other operating expense 5,252 5,784 Total other expense 18,534 21,414 Income before income taxes 4,373 3,392 Provision for income taxes 1,242 980 Net Income $3,131 $2,412 Earnings per share: Basic $0.14 $0.11 Diluted $0.14 $0.11 Dividends per share $0.135 $0.135 Weighted average number of shares: Basic 21,771,251 21,733,289 Diluted 21,989,444 21,972,349 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method. Unizan Financial Corp. COMPARATIVE STATEMENTS OF INCOME (In thousands except share and per share data) For the three months ending 03/31/2005 03/31/2004 Interest income: Interest on federal funds sold and interest bearing deposits with banks $71 $8 Interest and dividends on securities 3,868 4,597 Interest and fees on loans and loans held for sale 26,889 27,674 Total interest income 30,828 32,279 Interest expense: Interest on deposits 9,920 9,150 Interest on borrowings 4,135 4,337 Total interest expense 14,055 13,487 Net interest income 16,773 18,792 Provision for loan losses 1,295 1,000 Net interest income after provision for loan losses 15,478 17,792 Other income: Trust, financial planning, brokerage and insurance sales 2,247 1,953 Customer service fees 1,579 1,844 Gains on sale of loans 1,187 1,245 Security gains, net - 71 Other operating income 1,991 1,901 Total other income 7,004 7,014 Other expense: Salaries, wages, pension and benefits 7,988 12,774 Occupancy expense 908 867 Furniture and equipment expense 503 534 Taxes other than income taxes 679 630 Intangible amortization expense 650 825 Other operating expense 5,419 5,784 Total other expense 16,147 21,414 Income before income taxes 6,335 3,392 Provision for income taxes 1,802 980 Net Income $4,533 $2,412 Earnings per share: Basic $0.21 $0.11 Diluted $0.20 $0.11 Dividends per share $0.135 $0.135 Weighted average number of shares: Basic 22,088,798 21,733,289 Diluted 22,200,120 21,972,349 NOTE: Per share data is based on the weighted average number of shares outstanding adjusted for stock dividends or splits calculated under the treasury method. Unizan Financial Corp. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) 2005 2004 2004 EARNINGS 1st Qtr 4th Qtr 3rd Qtr Net Interest Income FTE (1) $17,056 17,510 16,400 Provision for loan losses 1,295 1,425 3,750 Other income 7,004 6,836 7,281 Security gains/(losses), net - (3,348) (60) Other expenses 16,147 15,048 15,683 FTE adjustment (1) 283 279 280 Net income $4,533 3,274 2,879 Net income per share - diluted $0.20 0.15 0.13 PERFORMANCE RATIOS Return on average assets (ROA) 0.73% 0.50% 0.44% Return on average common equity (ROE) 5.84% 4.16% 3.71% Tangible return on average tangible assets 0.83% 0.60% 0.55% Tangible return on avg. tangible common equity 9.67% 7.20% 6.85% Net interest margin FTE (1) 3.02% 2.97% 2.75% Efficiency ratio (2) 64.41% 58.86% 62.03% MARKET DATA Book value/common share $14.16 14.17 14.06 Tangible book value/common share 9.33 9.29 9.16 Period-end common share mkt value 26.00 26.35 27.61 Market as a % of book 183.6% 186.0% 196.4% Cash dividends/common share $0.135 0.135 0.135 Common stock dividend payout ratio 65.8% 91.0% 103.3% Average basic common shares 22,088,798 22,066,952 21,910,942 Average diluted common shares 22,200,120 22,211,146 22,052,059 Period end common shares 22,098,482 22,017,113 22,059,010 Common stock market capitalization $574,561 580,151 609,049 ASSET QUALITY Gross charge-offs $2,558 2,139 2,952 Net charge-offs 1,782 1,456 2,285 Delinquency Ratio 1.38% 1.60% 1.60% Allowance for loan losses $25,868 26,356 26,387 Non-accrual loans 29,423 28,294 26,628 Past due 90 days or more & accruing 726 1,856 2,546 Other assets owned 1,604 2,612 2,254 Nonperforming assets (NPAs) 31,753 32,762 31,428 Restructured loans 5,339 2,430 2,461 Net charge-off ratio 0.39% 0.31% 0.47% Allowance/loans 1.42% 1.41% 1.39% NPL to loans 1.65% 1.61% 1.53% NPA to loans + other assets 1.74% 1.75% 1.65% Allowance to NPLs 85.80% 87.42% 90.45% AVERAGE BALANCES Assets $2,518,865 2,579,517 2,615,839 Deposits 1,817,157 1,820,310 1,845,818 Loans 1,830,693 1,883,193 1,935,094 Earning assets 2,291,068 2,349,292 2,376,178 Shareholders' equity 314,984 313,231 308,618 ENDING BALANCES Assets $2,517,941 2,572,834 2,593,502 Deposits 1,825,307 1,840,726 1,817,768 Loans 1,823,202 1,873,137 1,900,749 Goodwill and other intangible assets 106,794 107,444 108,128 Earning assets 2,292,673 2,340,268 2,351,402 Total shareholders' equity 312,870 311,925 310,186 (1) - FTE defined as fully tax-equivalent (2) - Excludes amortization of intangibles and impairment of goodwill expenses. Fourth quarter 2004 excludes $246 pre-tax merger related professional fees and severance accrual. Third quarter 2004 excludes $488 pre-tax gain on sale of Wooster Financial Center and $476 pre- tax merger related professional fees and severance accrual. Second quarter 2004 excludes $1,427 pre-tax stock option expense and $823 pre-tax merger related professional fees and severance accrual. First quarter 2004 excludes $3,638 pre-tax stock option expense and $1,203 pre-tax merger related professional fees. Certain previously reported amounts may have been reclassified to conform to current reporting presentation. Unizan Financial Corp. CONSOLIDATED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data) 2004 2004 EARNINGS 2nd Qtr 1st Qtr Net Interest Income FTE (1) 18,959 19,061 Provision for loan losses 2,950 1,000 Other income 7,003 6,943 Security gains/(losses), net 181 71 Other expenses 18,534 21,414 FTE adjustment (1) 286 269 Net income 3,131 2,412 Net income per share - diluted 0.14 0.11 PERFORMANCE RATIOS Return on average assets (ROA) 0.46% 0.36% Return on average common equity (ROE) 4.12% 3.17% Tangible return on average tangible assets 0.57% 0.45% Tangible return on avg. tangible common equity 7.49% 6.05% Net interest margin FTE (1) 3.09% 3.08% Efficiency ratio (2) 59.60% 60.52% MARKET DATA Book value/common share 13.86 14.10 Tangible book value/common share 8.86 9.05 Period-end common share mkt value 26.10 24.91 Market as a % of book 188.3% 176.7% Cash dividends/common share 0.135 0.135 Common stock dividend payout ratio 93.8% 121.7% Average basic common shares 21,771,251 21,733,289 Average diluted common shares 21,989,444 21,972,349 Period end common shares 21,795,813 21,754,680 Common stock market capitalization 568,871 541,909 ASSET QUALITY Gross charge-offs 3,372 1,683 Net charge-offs 2,639 1,000 Delinquency Ratio 1.45% 1.67% Allowance for loan losses 24,922 24,611 Non-accrual loans 22,173 23,152 Past due 90 days or more & accruing 5,612 5,488 Other assets owned 3,850 1,793 Nonperforming assets (NPAs) 31,635 30,433 Restructured loans 2,496 2,530 Net charge-off ratio 0.54% 0.20% Allowance/loans 1.27% 1.25% NPL to loans 1.42% 1.45% NPA to loans + other assets 1.61% 1.54% Allowance to NPLs 89.70% 85.93% AVERAGE BALANCES Assets 2,713,206 2,728,886 Deposits 1,895,935 1,954,707 Loans 1,964,587 1,971,090 Earning assets 2,469,808 2,486,312 Shareholders' equity 305,902 306,128 ENDING BALANCES Assets 2,676,534 2,761,184 Deposits 1,867,237 1,946,143 Loans 1,958,917 1,969,235 Goodwill and other intangible assets 108,996 109,807 Earning assets 2,409,912 2,501,436 Total shareholders' equity 302,026 306,686 (1) - FTE defined as fully tax-equivalent (2) - Excludes amortization of intangibles and impairment of goodwill expenses. Fourth quarter 2004 excludes $246 pre-tax merger related professional fees and severance accrual. Third quarter 2004 excludes $488 pre-tax gain on sale of Wooster Financial Center and $476 pre- tax merger related professional fees and severance accrual. Second quarter 2004 excludes $1,427 pre-tax stock option expense and $823 pre-tax merger related professional fees and severance accrual. First quarter 2004 excludes $3,638 pre-tax stock option expense and $1,203 pre-tax merger related professional fees. Certain previously reported amounts may have been reclassified to conform to current reporting presentation. Unizan Financial Corp. Average Balance Sheet and Related Yields Three Months Ended March 31, 2005 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $14,071 $71 2.05 % Securities 446,304 4,138 3.76 Total loans (2) 1,830,693 26,902 5.96 Total interest-earning assets (3) 2,291,068 31,111 5.51 Nonearning assets: Cash and due from banks 48,892 Other nonearning assets 205,060 Allowance for loan losses (26,155) Total assets $2,518,865 Interest bearing liabilities: Demand deposits $208,896 $336 0.65 % Savings deposits 520,053 2,505 1.95 Time deposits 870,996 7,079 3.30 Total deposits 1,599,945 9,920 2.51 Subordinated note 20,619 489 9.62 Other borrowings 340,748 3,646 4.34 Total borrowings 361,367 4,135 4.64 Total interest bearing liabilities 1,961,312 14,055 2.91 Noninterest bearing liabilities: Demand deposits 217,212 Other liabilities 25,357 Shareholders' equity 314,984 Total liabilities and equity $2,518,865 Net interest income and interest rate spread (3) $17,056 2.60 % Net interest margin (4) 3.02 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. Unizan Financial Corp. Average Balance Sheet and Related Yields Three Months Ended March 31, 2004 Average Income/ (dollars in thousands) Balance Expense Rate (1) Interest-earning assets Interest bearing deposits and federal funds sold $4,395 $8 0.73 % Securities 510,827 4,853 3.82 Total loans (2) 1,971,090 27,687 5.65 Total interest-earning assets (3) 2,486,312 32,548 5.27 Nonearning assets: Cash and due from banks 57,353 Other nonearning assets 209,843 Allowance for loan losses (24,622) Total assets $2,728,886 Interest bearing liabilities: Demand deposits $258,295 $369 0.57 % Savings deposits 531,844 1,296 0.98 Time deposits 955,864 7,485 3.15 Total deposits 1,746,003 9,150 2.11 Subordinated note 20,619 505 9.85 Other borrowings 422,995 3,832 3.64 Total borrowings 443,614 4,337 3.93 Total interest bearing liabilities 2,189,617 13,487 2.48 Noninterest bearing liabilities: Demand deposits 208,704 Other liabilities 24,437 Shareholders' equity 306,128 Total liabilities and equity $2,728,886 Net interest income and interest rate spread (3) $19,061 2.79 % Net interest margin (4) 3.08 % (1) Calculated on an annualized basis. (2) Loan fees are included in interest income on loans. (3) Interest income is computed on a fully tax equivalent (FTE) basis, using a tax rate of 35%. (4) The net interest margin represents net interest income as a percentage of average interest-earning assets. Unizan Financial Corp. NONPERFORMING AND UNDERPERFORMING ASSETS (dollars in thousands) 3/31/05 12/31/04 09/30/04 06/30/04 03/31/04 Non-performing loans: Commercial $1,588 $1,689 $1,683 $3,180 $1,294 Commercial real estate 6,477 6,453 5,620 5,433 5,713 Government guaranteed 8,690 9,266 9,438 7,926 9,334 Aircraft 2,950 2,826 2,450 291 2,003 Residential real estate 8,931 8,375 8,577 9,563 8,713 Direct installment loans 28 111 63 45 161 Indirect installment loans 67 204 160 155 212 Home equity 1,418 1,226 1,183 1,192 1,210 Total non-performing loans 30,149 30,150 29,174 27,785 28,640 Less: Government guaranteed amount 6,739 7,294 7,023 6,080 6,965 Total non-performing loans excluding government guaranteed amount $23,410 $22,856 $22,151 $21,705 $21,675 Total non-performing loans $30,149 $30,150 $29,174 $27,785 $28,640 Other assets owned 1,604 2,612 2,254 3,850 1,793 Total non-performing assets 31,753 32,762 31,428 31,635 30,433 Less: Government guaranteed amount 7,085 7,976 7,759 6,816 7,541 Total non-performing assets excluding government guaranteed amount $24,668 $24,786 $23,669 $24,819 $22,892 Restructured loans $5,339 $2,430 $2,461 $2,496 $2,530 Ratio of: Non-performing loans to total loans 1.66% 1.61% 1.53% 1.42% 1.45% Non-performing assets to total assets 1.26% 1.27% 1.21% 1.18% 1.10% Non-performing assets to total loans + other assets 1.74% 1.75% 1.65% 1.61% 1.54% Allowance to total loans 1.42% 1.41% 1.39% 1.27% 1.25% Allowance to non-performing loans 85.80% 87.42% 90.45% 89.70% 85.93% Ratio of (excluding government guaranteed amount): Non-performing loans to total loans 1.29% 1.22% 1.17% 1.11% 1.10% Non-performing assets to total assets 0.98% 0.96% 0.91% 0.93% 0.83% Non-performing assets to total loans + other assets 1.35% 1.32% 1.24% 1.26% 1.16% Allowance to non-performing loans 110.50% 115.31% 119.12% 114.82% 113.55% NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES 3/31/05 12/31/04 09/30/04 Average loans and leases: Commercial $159,226 $187,149 $195,561 Commercial real estate 607,789 607,848 636,693 Government guaranteed 75,817 72,949 64,643 Aircraft 100,834 111,681 121,690 Residential real estate 439,089 441,000 444,772 Indirect installment loans 93,285 101,154 108,903 Home equity 322,376 326,656 326,582 Other consumer 32,277 34,756 36,250 Total average loans and leases $1,830,693 $1,883,193 $1,935,094 Net charge-offs (recoveries): Commercial $284 $65 $175 Commercial real estate 419 87 772 Government guaranteed 84 26 353 Aircraft 17 64 (47) Residential real estate 153 261 236 Indirect installment loans 542 436 416 Home equity 135 217 164 Other consumer 148 300 216 Total $1,782 $1,456 $2,285 Net charge-offs (recoveries) to average loans and leases (annualized): Commercial 0.71% 0.14% 0.36% Commercial real estate 0.28% 0.06% 0.49% Government guaranteed 0.44% 0.14% 2.18% Aircraft 0.07% 0.23% -0.15% Residential real estate 0.14% 0.24% 0.21% Indirect installment loans 2.32% 1.72% 1.53% Home equity 0.17% 0.27% 0.20% Other consumer 1.83% 3.45% 2.38% Total 0.39% 0.31% 0.47% NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES 06/30/04 03/31/04 Average loans and leases: Commercial $198,914 $188,992 Commercial real estate 653,138 664,241 Government guaranteed 61,280 61,676 Aircraft 132,578 133,725 Residential real estate 448,009 453,362 Indirect installment loans 116,422 123,426 Home equity 317,320 307,116 Other consumer 36,926 38,552 Total average loans and leases $1,964,587 $1,971,090 Net charge-offs (recoveries): Commercial $425 $(17) Commercial real estate 712 261 Government guaranteed 141 255 Aircraft 548 - Residential real estate (21) (50) Indirect installment loans 384 371 Home equity 196 11 Other consumer 254 169 Total $2,639 $1,000 Net charge-offs (recoveries) to average loans and leases (annualized): Commercial 0.85% -0.04% Commercial real estate 0.44% 0.16% Government guaranteed 0.92% 1.65% Aircraft 1.65% 0.00% Residential real estate -0.02% -0.04% Indirect installment loans 1.32% 1.20% Home equity 0.25% 0.01% Other consumer 2.75% 1.75% Total 0.54% 0.20% DATASOURCE: Unizan Financial Corp. CONTACT: Investors, Roger L. Mann, President and Chief Executive Officer, +1-330-438-1118, or +1-866-235-7203, or , or Media, Sandy K. Upperman, Vice President, Corporate Communications, +1-330-438-4858, or , both of Unizan Financial Corp. Web site: http://www.unizan.com/ Company News On-Call: http://www.prnewswire.com/comp/127633.html

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