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Skylands Community Bank

Hackettstown, NJ · Cert 33141

FDIC

Q3 2011

$1.4BAssets
$922.0MLoans
$1.1BDeposits
$179.9MEquity
Loan mix
77%RE $469.6M20%C&I $122.5M2%Consumer $15.0MQ3 2010Q3 2011
Deposit mix
83%Interest-bearing $923.5M17%Noninterest $188.9MQ3 2010Q3 2011

NIM

4.89%Q3 ’094.36%Q3 ’104.33%Q3 ’11-3%+10%

Non-interest income vs. expense

2.26%Q3 ’092.22%Q3 ’102.49%Q3 ’11-8%+15%

Executive Summary

  • Earnings: ROA of -0.28%, down 124 bps year over year; NIM at 3.75%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.71%.
  • Funding: loans stand at 82.89% of deposits as of Q3 2011.

Financial Results

Return on Assets (quarter, annualized)

-0.28%-124 bps YoY

Net Interest Margin (quarter, annualized)

3.75%+34 bps YoY

Efficiency Ratio (quarter, annualized)

55.53%+182 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ3 2010Q4 2010Q1 2011Q2 2011Q3 2011YoY ΔTrend
Earnings
Return on Assets0.96%0.92%0.64%-0.49%-0.28%-124 bps
Return on Equity8.01%7.60%5.04%-3.81%-2.13%-1,013 bps
Net Interest Margin3.41%3.34%3.62%3.73%3.75%+34 bps
Efficiency Ratio53.71%55.99%53.64%50.83%55.53%+182 bps
Non-Interest Burden1.60%1.64%1.68%1.65%1.84%+24 bps
Growth
Asset Growth (YoY)7.37%6.50%2.12%-4.85%-7.74%-1,511 bps
Loan Growth (YoY)0.07%-0.66%-0.13%-0.69%-0.62%-69 bps
Deposit Growth (YoY)8.93%10.85%4.86%-3.08%-7.10%-1,603 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.27%1.88%0.93%2.06%0.71%+44 bps
Allowance / Loans1.89%1.59%1.72%2.30%2.95%+107 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 Capital11.57%11.97%12.35%12.19%12.43%+86 bps
Equity / Assets11.93%12.41%12.90%13.01%13.28%+134 bps
Liquidity & Funding
Loans / Deposits77.48%79.00%82.16%82.43%82.89%+541 bps
Liquid Assets / Assets0.11%0.42%0.07%0.09%0.24%+13 bps
CRE / Total Capitaln/an/an/an/an/an/an/a