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Keystone Savings Bank

Bethlehem, PA · Cert 28166

FDIC

Q4 2007

$2.9BAssets
$1.9BLoans
$2.0BDeposits
$321.6MEquity
Loan mix
82%RE $1.3B17%C&I $0.3B0%Consumer $0.0BQ4 2006Q4 2007
Deposit mix
96%Interest-bearing $1.9B4%Noninterest $0.1BQ4 2006Q4 2007

NIM

4.72%Q4 ’055.14%Q4 ’065.26%Q4 ’07+1%-6%

Non-interest income vs. expense

2.19%Q4 ’052.53%Q4 ’062.66%Q4 ’07-30%+59%

Executive Summary

  • Earnings: ROA of 0.57%, down 44 bps year over year; NIM at 2.35%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.12%.
  • Funding: loans stand at 94.87% of deposits as of Q4 2007.

Financial Results

Return on Assets (quarter, annualized)

0.57%-44 bps YoY

Net Interest Margin (quarter, annualized)

2.35%-14 bps YoY

Efficiency Ratio (quarter, annualized)

69.91%+1,212 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2006Q1 2007Q2 2007Q3 2007Q4 2007YoY ΔTrend
Earnings
Return on Assets1.01%0.90%0.55%0.70%0.57%-44 bps
Return on Equity8.27%7.36%4.66%6.23%5.12%-315 bps
Net Interest Margin2.49%2.46%2.46%2.41%2.35%-14 bps
Efficiency Ratio57.80%62.34%65.28%65.95%69.91%+1,212 bps
Non-Interest Burden0.86%1.20%1.30%1.28%1.38%+51 bps
Growth
Asset Growth (YoY)-5.33%-2.71%-2.98%-1.55%0.13%+546 bps
Loan Growth (YoY)9.44%15.58%15.17%14.30%15.42%+597 bps
Deposit Growth (YoY)3.00%3.47%3.96%1.62%2.57%-43 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.15%0.09%0.00%0.00%0.12%-3 bps
Allowance / Loans1.05%0.97%0.98%1.00%1.00%-5 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital13.23%12.82%11.04%10.73%10.10%-313 bps
Equity / Assets12.33%12.22%11.24%11.25%10.97%-136 bps
Liquidity & Funding
Loans / Deposits84.31%87.88%88.59%93.80%94.87%+1,056 bps
Liquid Assets / Assets1.45%1.20%1.05%1.02%0.94%-51 bps
CRE / Total Capitaln/an/an/an/an/an/an/a