CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share data) Year Ended December 31, =================================================================================================================================== 2003 2002 2001 Interest income Loans receivable Taxable ............................................................. $141,236 $129,279 $103,123 Tax exempt .......................................................... 707 638 438 Investment securities Taxable ............................................................. 6,105 9,086 11,207 Tax exempt .......................................................... 6,270 6,190 4,103 Federal funds sold .................................................... 487 557 899 Deposits with financial institutions .................................. 76 197 106 Federal Reserve and Federal Home Loan Bank stock ...................... 649 735 559 -------- -------- -------- Total interest income ............................................. 155,530 146,682 120,435 -------- -------- -------- Interest expense Deposits .............................................................. 34,858 39,700 45,856 Securities sold under repurchase agreements ........................... 1,521 2,060 3,208 Federal Home Loan Bank advances ....................................... 9,439 8,166 6,556 Trust preferred securities ............................................ 4,931 3,324 Other borrowings ...................................................... 1,639 509 454 -------- -------- -------- Total interest expense ........................................... 52,388 53,759 56,074 -------- -------- -------- Net interest income ...................................................... 103,142 92,923 64,361 Provision for loan losses ............................................. 9,477 7,174 3,576 -------- -------- -------- Net interest income after provision for loan losses .......................................... 93,665 85,749 60,785 -------- -------- -------- Other income Fiduciary activities .................................................. 6,736 6,258 5,429 Service charges on deposit accounts ................................... 11,105 9,330 5,729 Other customer fees ................................................... 4,124 3,918 3,166 Net realized gains (losses) on sales of available-for-sale securities .............................. 950 739 (200) Commission income ..................................................... 2,668 2,203 1,945 Earnings on cash surrender value of life insurance ................................................... 1,347 689 385 Net gains and fees on sales of loans .................................. 6,388 1,712 1,235 Other income .......................................................... 2,584 2,228 854 -------- -------- -------- Total other income ............................................... 35,902 27,077 18,543 -------- -------- -------- Other expenses Salaries and employee benefits ........................................ 50,484 39,150 24,711 Net occupancy expenses ................................................ 4,894 3,632 2,729 Equipment expenses .................................................... 8,073 6,709 4,521 Marketing expenses..................................................... 1,797 1,495 1,072 Outside data processing fees .......................................... 4,118 3,664 2,243 Printing and office supplies .......................................... 1,706 1,597 1,143 Goodwill and core deposit amortization................................. 3,704 2,589 1,682 Other expenses ........................................................ 16,503 12,173 7,094 -------- -------- -------- Total other expenses ............................................. 91,279 71,009 45,195 -------- -------- -------- Income before income tax ................................................. 38,288 41,817 34,133 Income tax expense .................................................... 10,717 13,981 11,924 -------- -------- -------- Net income ............................................................... $ 27,571 $ 27,836 $ 22,209 ======== ======== ======== Net income per share: Basic ................................................................. $ 1.51 $ 1.70 $ 1.63 Diluted ............................................................... 1.50 1.69 1.61 See notes to consolidated financial statements 24