GLK Great Lakes Bancorp New

Great Lakes Bancorp, Inc. (NYSE: GLK) today announced a net loss for the third quarter and nine-months ended September 30, 2006 of $9 thousand, or $0.00 per share, and $143 thousand, or $0.02 per share, respectively. The Bank generated net income of $281 thousand, or $0.07 per share, and $1.2 million, or $0.27 per share, respectively, for the comparable periods of 2005. The 2006 results reflect improvement in net interest income and noninterest income, offset by higher operating costs associated with the Bank�s aggressive branch expansion and significant personnel additions to its lending and support functions and senior management team. Per share amounts reflect a significant increase in shares outstanding resulting from the merger with Bay View Capital Corporation on May 1, 2006. Andrew W. Dorn, Jr., President and Chief Executive Officer, was pleased to cite the Bank�s progress in executing its business strategy. �Our current financial results reflect our steady commitment to completing our retail branch network, growing our lending businesses and building the workforce we need to support our long-term objectives. The current interest rate environment continues to be challenging and increasing our access to low-cost funding remains a high priority.� Net interest income for the quarter increased $545 thousand, or 15.8 percent, to $4.0 million compared to the third quarter of 2005. This increase resulted from significant growth of the Bank�s loan portfolios as average loan balances increased by $104.0 million, or 27.0 percent, to $489.7 million for the current quarter, offset in part, by higher interest costs. Average interest-bearing liabilities increased $13.1 million to $710.6 million and average rates paid on those liabilities increased to 3.99 percent in the 2006 quarter, from 3.05 percent in the 2005 quarter, reflecting the highly competitive retail market. Net interest margins were 2.03 percent for the current quarter compared to 1.93 percent for the comparable 2005 quarter. Provisions for loan losses were $29 thousand in the current quarter compared to $216 thousand in the 2005 quarter. This decrease was due mainly to a decision made during the quarter to reduce formula-based reserve factors in certain commercial loan portfolios that continued to exhibit positive credit quality experience. The overall credit quality of the Bank�s loan portfolios remained strong compared to prior periods, as measured by the levels of non-accrual loans and loan charge-offs, and loan loss allowance coverage statistics. Noninterest income for the current quarter increased $237 thousand, or 68.3 percent, to $584 thousand compared to the third quarter of 2005. Service charges on deposit accounts increased by $70 thousand, loan fee income increased $66 thousand and other fees and service charges increased $58 thousand. Noninterest expenses increased $1.3 million, or 41.0 percent, to $4.6 million for the quarter compared to the third quarter of 2005. While expenses increased across all categories, the most significant were salaries and employee benefits - up $843 thousand, advertising and professional services - up $174 thousand, and occupancy, equipment and furnishing expenses - up $138 thousand. These cost increases reflected the Bank�s continued commitment to aggressive build-out of the branch network and significant additions to the workforce. As of September 30, 2006, the Bank had 234 FTE employees and 14 branches in operation, compared to 173 FTE employees and 9 branches in operation one year ago. Results for the nine-month period ended September 30, 2006 reflected similar developments. Net interest income increased $504 thousand, or 4.6 percent, to $11.3 million. This increase resulted from significant growth in the loan portfolios with average loan balances up $118.6 million, or 34.9 percent, period to period, offset in part, by higher interest costs. Average interest-bearing liabilities increased $41.8 million to $722.8 million and average rates paid on those liabilities increased to 3.80 percent in the 2006 period from 2.81 percent in the 2005 period. Net interest margins were 1.98 percent for the first nine months of 2006 compared to 2.08 percent for the 2005 period. Provisions for loan losses were down for the first nine months of 2006 compared to 2005, and noninterest income was up in all categories of fee income. Noninterest expenses increased $3.2 million, or 32.8 percent, to $13.0 million for the nine months, with an increase in salaries and employee benefits comprising $2.3 million, or 70.6 percent, of the increase. At September 30, 2006, the Bank had total assets of $869.3 million, representing an increase of $94.2 million, or 12.2 percent, since the end of 2005. Assets of the Bank increased by $136.5 million as a result of the merger with Bay View on May 1, 2006 and in the third quarter the Bank used available cash from this transaction to pay down short-term repurchase obligations by $68.5 million. The Bank has three branches currently under construction, one of which is slated to open in November in an intercity neighborhood of Buffalo that is undergoing economic resurgence. �Our people are extremely excited about the opening of our Connecticut Street office,� stated Mr. Dorn. �Returning full service banking to the predominantly low and moderate income residents of this re-emerging neighborhood will be a big win for Buffalo and the benefits of operating in a designated Banking Development District will be a big win for our Bank.� Mr. Dorn was equally upbeat about the Bank�s strategic accomplishments in 2006. �We�ve greatly enhanced our support infrastructure and lending teams, added three Bay View directors to our Board, each of whom has a lifetime of experience operating and overseeing profitable banks, and built an accomplished senior management team. We are confident these actions will provide long-term shareholder value.� Profile - Great Lakes Bancorp, Inc. is the bank holding company for Greater Buffalo Savings Bank, a Buffalo-based, full-service community savings bank that serves residents and businesses located throughout Western New York. Conference Call � A conference call will be held at 4:00 p.m. Eastern Time on Wednesday, November 1, 2006 to discuss these third quarter results, as well as the Company�s strategy and future outlook. Those wishing to participate may dial 1-866-838-2056. A replay of the call will be available until December 31, 2006 by dialing 1-888-284-7564, and entering the pass code: 199171. Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of Great Lakes Bancorp, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities:(1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in nonperforming loans that could result from an economic downturn;(4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans. GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data � Quarterly Trends Nine months ended 2006� � 2005� September 30, Third Second First Fourth Third 2006� � 2005� Quarter Quarter Quarter Quarter Quarter � � � � � � � � � � � � SELECTED INCOME STATEMENT DATA (Amounts in thousands) � � � � � � � � � � � � � � � � Interest income $ 31,889� 25,158� 11,137� 10,957� 9,795� 9,128� 8,814� Interest expense � 20,545� � 14,318� � 7,141� � 7,060� � 6,344� � 5,912� � 5,363� Net interest income 11,344� 10,840� 3,996� 3,897� 3,451� 3,216� 3,451� Provision for loan losses � 587� � 722� � 29� � 318� � 240� � 212� � 216� Net interest income after provision for loan losses � 10,757� � 10,118� � 3,967� � 3,579� � 3,211� � 3,004� � 3,235� � Noninterest income: Service charges on deposit accounts 480� 304� 184� 161� 135� 129� 114� Other fees and service charges 379� 223� 137� 131� 111� 94� 79� Earnings on bank-owned life insurance 348� 355� 117� 116� 115� 116� 116� Loan fee income 247� 58� 88� 135� 24� 27� 22� Gain (loss) on sale of securities, net -� 120� -� -� -� (3,147) -� Loss on sale of loans -� -� -� -� -� (226) -� Other operating income � 132� � 39� � 58� � 44� � 30� � 25� � 16� � Total noninterest income � 1,586� � 1,099� � 584� � 587� � 415� � (2,982) � 347� � Noninterest expense: Salaries and employee benefits 7,620� 5,358� 2,716� 2,596� 2,308� 2,060� 1,873� Occupancy, equipment and furnishings 1,782� 1,544� 630� 595� 557� 487� 492� Data processing and operations 690� 589� 240� 229� 221� 200� 237� Advertising 592� 488� 202� 198� 192� 3� 122� Professional services 457� 267� 167� 154� 136� 96� 73� Printing, postage and supplies 332� 339� 123� 99� 110� 37� 97� Other operating expenses � 1,485� � 1,171� � 544� � 539� � 402� � 380� � 385� � Total noninterest expense � 12,958� � 9,756� � 4,622� � 4,410� � 3,926� � 3,263� � 3,279� � Income (loss) before income taxes (615) 1,461� (71) (244) (300) (3,241) 303� Income tax provision (benefit) � (472) � 294� � (62) � (191) � (219) � (1,606) � 22� � Net income (loss) $ (143) � 1,167� � (9) � (53) � (81) � (1,635) � 281� � � � � � � � � � � � � � � � � SELECTED OPERATING DATA � � � � � � � � � � � � � � � Net income (loss) per share � Basic and diluted $ (0.02) 0.27� 0.00� (0.01) (0.02) (0.38) 0.07� � Net income (loss) (annualized): Return on average assets (0.02)% 0.21� 0.00� (0.02) (0.04) (0.84) 0.15� Return on average equity (0.21)% 3.96� (0.03) (0.21) (0.94) (17.26) 2.97� Efficiency ratio 98.7% 81.4� 99.5� 96.9� 99.9� 94.6� 84.8� � FTE personnel � end of period 234� 173� 234� 233� 204� 185� 173� Number of branches � end of period 14� 9� 14� 12� 10� 10� 9� � Stock price (NYSE: GLK)(1): High $ 20.98� -� 17.45� 20.98� -� -� -� Low $ 14.05� -� 14.05� 16.89� -� -� -� Close $ 16.07� -� 16.07� 17.48� -� -� -� GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2006 Quarter-End 2005 Quarter-End September 30, June 30, March 31, December 31, September 30, � � � � � � � � � � � � SELECTED BALANCE SHEET DATA (Dollar amounts in thousands) � � � � � � � � � � � � Cash: Cash and cash equivalents $ 13,305� 83,246� 37,655� 95,500� 24,796� Restricted cash � 3,900� � 17,970� � -� � -� � -� Total cash 17,205� 101,216� 37,655� 95,500� 24,796� � Investment securities: Available for sale 242,360� 247,783� 257,312� 212,025� 295,534� Held-to-maturity � 16,004� � 16,011� � 16,018� � 16,024� � 16,031� Total investment securities 258,364� 263,794� 273,330� 228,049� 311,565� � Loans: Real estate loans: Residential 247,135� 241,530� 231,838� 223,917� 226,381� Home equity 53,235� 50,671� 50,550� 49,874� 49,989� Commercial 69,878� 70,773� 65,628� 51,758� 44,405� Construction 23,543� 11,077� 8,649� 5,319� 4,256� Commercial and industrial 53,791� 52,671� 41,358� 36,940� 32,879� Automobile loans 43,284� 43,249� 40,270� 37,626� 33,761� Other consumer loans � 769� � 554� � 521� � 491� � 448� Total loans 491,635� 470,525� 438,814� 405,925� 392,119� Allowance for loan losses (3,375) (3,370) (3,074) (2,910) (2,772) Deferred loan costs, net � 6,761� � 6,688� � 6,542� � 6,321� � 5,924� Total loans, net 495,021� 473,843� 442,282� 409,336� 395,271� � Net deferred tax asset 42,109� 43,424� 3,087� 1,731� 1,477� Goodwill 12,271� 11,721� -� -� -� Total assets 869,290� 942,124� 798,416� 775,101� 771,083� Total interest-earning assets 766,067� 841,861� 755,549� 730,672� 735,985� � Deposits: Noninterest-bearing checking 29,022� 29,194� 25,535� 23,846� 22,265� Interest-bearing checking 43,443� 40,908� 42,288� 43,579� 46,668� Savings and money market � 230,037� � 259,480� � 272,351� � 260,561� � 263,235� Total core deposits 302,502� 329,582� 340,174� 327,986� 332,168� Certificates of deposit � 354,018� � 323,448� � 306,345� � 293,098� � 259,886� Total deposits 656,520� 653,030� 646,519� 621,084� 592,054� � Short-term borrowings 9,539� 12� 20,501� 20,900� 19,400� Repurchase agreements 44,000� 112,500� 82,000� 82,000� 108,000� Subordinated debentures 12,372� 12,372� 12,372� 12,372� 12,372� Total interest-bearing liabilities 693,409� 748,720� 735,857� 712,510� 709,561� Net interest-earning assets 72,658� 93,141� 19,692� 18,162� 26,424� Stockholders� equity 136,288� 133,907� 33,735� 35,593� 36,465� Tangible stockholders� equity (2) 124,017� 122,186� 33,735� 35,593� 36,465� Securities available for sale - fair value adjustment included in stockholders� equity $ (2,432) (4,863) (4,524) (2,743) (3,506) Common shares outstanding 10,915,274� 10,913,535� 4,300,436� 4,300,436� 4,300,436� GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2006� 2005� September30, June30, March31, December31, September30, � � � � � � CAPITAL RATIOS � � � � � � � � � � � � Tier 1 risk-based capital 19.81% 18.87� 11.80� 11.64� 12.38� Total risk based capital 20.49% 19.52� 12.52� 12.32� 13.04� Tier 1 (core) capital 11.60% 11.86� 6.39� 6.52� 6.82� Equity to assets 15.68% 14.21� 4.23� 4.59� 4.73� Tangible stockholders� equity to tangible assets (2) 14.47% 13.13� 4.23� 4.59� 4.73� � Stockholders� equity per share $ 12.49� 12.27� 7.84� 8.28� 8.48� Tangible stockholders� equity per share (2) $ 11.36� 11.20� 7.84� 8.28� 8.48� � � � � � � � � � � � � ASSET QUALITY DATA (Dollar amounts in thousands) � � � � � � � � � � � � Nonaccrual loans $ 1,186� 1,113� 753� 625� 374� Accruing loans past due 90 days or more � -� � 560� � 201� � 662� � 682� Total non-performing loans 1,186� 1,673� 954� 1,287� 1,056� Foreclosed assets � 82� � 583� � 121� � 126� � 112� Total non-performing assets $ 1,268� � 2,256� � 1,075� � 1,413� � 1,168� � Provision for loan losses $ 29� 318� 240� 212� 216� Net loan charge-offs $ (24) (22) (76) (19) (5) Net charge-offs to average loans 0.02% 0.02� 0.07� 0.02� 0.01� Total non-performing loans to total loans 0.24% 0.35� 0.21� 0.31� 0.27� Total non-performing assets to total assets 0.15% 0.24� 0.13� 0.18� 0.15� Allowance for loan losses to total loans 0.68% 0.71� 0.69� 0.71� 0.70� Allowance for loan losses to non-performing loans 284.62% 201.42� 322.38� 226.04� 262.57� GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) Quarterly Trends Nine months ended 2006� 2005� September 30, Third Second First Fourth Third 2006� 2005� Quarter Quarter Quarter Quarter Quarter � � � � � � � � � � � � � � � SELECTED AVERAGE BALANCES (Dollar amounts in thousands) � � � � � � � � � � � � � � � � Taxable securities $ 252,842� 339,438� 252,513� 261,667� 244,255� 291,911� 315,851� Tax-exempt securities 15,165� 12,863� 15,157� 15,165� 15,174� 15,182� 15,190� Loans 458,707� 340,123� 489,694� 458,721� 427,017� 413,394� 385,660� Total interest-earning assets 781,198� 706,111� 793,263� 807,686� 742,082� 731,615� 722,159� Allowance for loan losses (3,146) (2,436) (3,319) (3,151) (2,965) (2,835) (2,679) Noninterest-earning assets 74,194� 37,956� 102,581� 75,144� 44,194� 38,891� 40,690� Total assets 852,246� 741,631� 892,525� 879,679� 783,311� 767,671� 760,170� � Interest-bearing liabilities: Interest-bearing checking 42,241� 49,554� 40,916� 42,924� 42,905� 45,075� 52,067� Savings 116,567� 270,787� 98,476� 113,834� 137,822� 180,627� 243,463� Money market 132,852� 15,554� 141,166� 140,278� 116,844� 79,362� 16,954� Certificates of deposit 324,072� 214,916� 349,826� 319,300� 302,571� 272,238� 252,586� Borrowings � 107,102� 130,261� 80,222� 122,468� 119,041� 129,623� 132,480� Total interest-bearing liabilities 722,834� 681,072� 710,606� 738,804� 719,183� 706,925� 697,550� � Noninterest-bearing checking 27,100� 19,645� 30,606� 25,411� 25,226� 21,896� 21,272� Total liabilities 761,456� 704,649� 757,459� 778,762� 748,019� 732,093� 722,601� Stockholders� equity 90,790� 36,982� 135,066� 100,917� 35,292� 35,578� 37,569� Net earning assets $ 58,364� 25,039� 82,657� 68,882� 22,899� 24,690� 24,609� Weighted average common shares outstanding - basic and diluted 8,007,137� 4,300,436� 10,914,896� 8,733,392� 4,300,436� 4,300,436� 4,300,436� � Average loans to average deposits 74.5% 61.7� 77.7� 74.4� 71.2� 71.6� 68.2� Average loans to average assets 53.8% 45.9� 54.9� 52.1� 54.5� 53.9� 50.7� � � � � � � � � � � � � � � � � SELECTED AVERAGE YIELDS/RATES � � � � � � � � � � � � � � Total investment securities 4.95% 4.27� 4.98� 4.98� 4.90� 4.43� 4.21� Loans 5.87% 5.40� 5.99� 5.86� 5.75� 5.49� 5.48� Total interest-earning assets 5.49% 4.80� 5.60� 5.47� 5.39� 4.99� 4.88� Interest-bearing checking 1.44% 1.94� 1.28� 1.48� 1.57� 1.68� 1.91� Savings 2.28% 2.43� 2.24� 2.28� 2.31� 2.38� 2.42� Money market 3.88% 1.67� 3.92� 3.92� 3.76� 3.43� 2.40� Certificates of deposit 4.25% 3.26� 4.46� 4.25� 4.01� 3.77� 3.55� Borrowings 4.93% 3.32� 5.58� 4.92� 4.50� 4.18� 3.79� Total interest-bearing liabilities 3.80% 2.81� 3.99� 3.83� 3.58� 3.32� 3.05� Net interest rate spread 1.69% 1.99� 1.61� 1.64� 1.81� 1.67� 1.83� Contribution of interest-free funds 0.29% 0.09� 0.42� 0.33� 0.11� 0.11� 0.10� Net interest rate margin 1.98% 2.08� 2.03� 1.97� 1.92� 1.78� 1.93� (1) Stock price data is provided for post-merger dates only (May 1, 2006 through the end of the current period). (2) Excludes goodwill recognized in connection with the Bay View merger. Great Lakes Bancorp, Inc. (NYSE: GLK) today announced a net loss for the third quarter and nine-months ended September 30, 2006 of $9 thousand, or $0.00 per share, and $143 thousand, or $0.02 per share, respectively. The Bank generated net income of $281 thousand, or $0.07 per share, and $1.2 million, or $0.27 per share, respectively, for the comparable periods of 2005. The 2006 results reflect improvement in net interest income and noninterest income, offset by higher operating costs associated with the Bank's aggressive branch expansion and significant personnel additions to its lending and support functions and senior management team. Per share amounts reflect a significant increase in shares outstanding resulting from the merger with Bay View Capital Corporation on May 1, 2006. Andrew W. Dorn, Jr., President and Chief Executive Officer, was pleased to cite the Bank's progress in executing its business strategy. "Our current financial results reflect our steady commitment to completing our retail branch network, growing our lending businesses and building the workforce we need to support our long-term objectives. The current interest rate environment continues to be challenging and increasing our access to low-cost funding remains a high priority." Net interest income for the quarter increased $545 thousand, or 15.8 percent, to $4.0 million compared to the third quarter of 2005. This increase resulted from significant growth of the Bank's loan portfolios as average loan balances increased by $104.0 million, or 27.0 percent, to $489.7 million for the current quarter, offset in part, by higher interest costs. Average interest-bearing liabilities increased $13.1 million to $710.6 million and average rates paid on those liabilities increased to 3.99 percent in the 2006 quarter, from 3.05 percent in the 2005 quarter, reflecting the highly competitive retail market. Net interest margins were 2.03 percent for the current quarter compared to 1.93 percent for the comparable 2005 quarter. Provisions for loan losses were $29 thousand in the current quarter compared to $216 thousand in the 2005 quarter. This decrease was due mainly to a decision made during the quarter to reduce formula-based reserve factors in certain commercial loan portfolios that continued to exhibit positive credit quality experience. The overall credit quality of the Bank's loan portfolios remained strong compared to prior periods, as measured by the levels of non-accrual loans and loan charge-offs, and loan loss allowance coverage statistics. Noninterest income for the current quarter increased $237 thousand, or 68.3 percent, to $584 thousand compared to the third quarter of 2005. Service charges on deposit accounts increased by $70 thousand, loan fee income increased $66 thousand and other fees and service charges increased $58 thousand. Noninterest expenses increased $1.3 million, or 41.0 percent, to $4.6 million for the quarter compared to the third quarter of 2005. While expenses increased across all categories, the most significant were salaries and employee benefits - up $843 thousand, advertising and professional services - up $174 thousand, and occupancy, equipment and furnishing expenses - up $138 thousand. These cost increases reflected the Bank's continued commitment to aggressive build-out of the branch network and significant additions to the workforce. As of September 30, 2006, the Bank had 234 FTE employees and 14 branches in operation, compared to 173 FTE employees and 9 branches in operation one year ago. Results for the nine-month period ended September 30, 2006 reflected similar developments. Net interest income increased $504 thousand, or 4.6 percent, to $11.3 million. This increase resulted from significant growth in the loan portfolios with average loan balances up $118.6 million, or 34.9 percent, period to period, offset in part, by higher interest costs. Average interest-bearing liabilities increased $41.8 million to $722.8 million and average rates paid on those liabilities increased to 3.80 percent in the 2006 period from 2.81 percent in the 2005 period. Net interest margins were 1.98 percent for the first nine months of 2006 compared to 2.08 percent for the 2005 period. Provisions for loan losses were down for the first nine months of 2006 compared to 2005, and noninterest income was up in all categories of fee income. Noninterest expenses increased $3.2 million, or 32.8 percent, to $13.0 million for the nine months, with an increase in salaries and employee benefits comprising $2.3 million, or 70.6 percent, of the increase. At September 30, 2006, the Bank had total assets of $869.3 million, representing an increase of $94.2 million, or 12.2 percent, since the end of 2005. Assets of the Bank increased by $136.5 million as a result of the merger with Bay View on May 1, 2006 and in the third quarter the Bank used available cash from this transaction to pay down short-term repurchase obligations by $68.5 million. The Bank has three branches currently under construction, one of which is slated to open in November in an intercity neighborhood of Buffalo that is undergoing economic resurgence. "Our people are extremely excited about the opening of our Connecticut Street office," stated Mr. Dorn. "Returning full service banking to the predominantly low and moderate income residents of this re-emerging neighborhood will be a big win for Buffalo and the benefits of operating in a designated Banking Development District will be a big win for our Bank." Mr. Dorn was equally upbeat about the Bank's strategic accomplishments in 2006. "We've greatly enhanced our support infrastructure and lending teams, added three Bay View directors to our Board, each of whom has a lifetime of experience operating and overseeing profitable banks, and built an accomplished senior management team. We are confident these actions will provide long-term shareholder value." Profile - Great Lakes Bancorp, Inc. is the bank holding company for Greater Buffalo Savings Bank, a Buffalo-based, full-service community savings bank that serves residents and businesses located throughout Western New York. Conference Call - A conference call will be held at 4:00 p.m. Eastern Time on Wednesday, November 1, 2006 to discuss these third quarter results, as well as the Company's strategy and future outlook. Those wishing to participate may dial 1-866-838-2056. A replay of the call will be available until December 31, 2006 by dialing 1-888-284-7564, and entering the pass code: 199171. Forward-Looking Statements - This press release contains forward-looking statements with respect to the financial condition and results of operations of Great Lakes Bancorp, Inc. including, without limitations, statements relating to the earnings outlook of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following possibilities:(1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in nonperforming loans that could result from an economic downturn;(4) changes in legislation or regulatory requirements; (5) difficulties in continuing to improve operating efficiencies; (6) difficulties in the integration of acquired businesses; and (7) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans. -0- *T GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data Nine months ended September 30, -------------------------- 2006 2005 -------------------------- ========================== SELECTED INCOME STATEMENT DATA (Amounts in thousands) ====================================================================== Interest income $ 31,889 25,158 Interest expense 20,545 14,318 -------------------------- Net interest income 11,344 10,840 Provision for loan losses 587 722 -------------------------- Net interest income after provision for loan losses 10,757 10,118 -------------------------- Noninterest income: Service charges on deposit accounts 480 304 Other fees and service charges 379 223 Earnings on bank-owned life insurance 348 355 Loan fee income 247 58 Gain (loss) on sale of securities, net - 120 Loss on sale of loans - - Other operating income 132 39 -------------------------- Total noninterest income 1,586 1,099 -------------------------- Noninterest expense: Salaries and employee benefits 7,620 5,358 Occupancy, equipment and furnishings 1,782 1,544 Data processing and operations 690 589 Advertising 592 488 Professional services 457 267 Printing, postage and supplies 332 339 Other operating expenses 1,485 1,171 -------------------------- Total noninterest expense 12,958 9,756 -------------------------- Income (loss) before income taxes (615) 1,461 Income tax provision (benefit) (472) 294 -------------------------- Net income (loss) $ (143) 1,167 ========================== ====================================================================== SELECTED OPERATING DATA ====================================================================== Net income (loss) per share - Basic and diluted $ (0.02) 0.27 Net income (loss) (annualized): Return on average assets (0.02)% 0.21 Return on average equity (0.21)% 3.96 Efficiency ratio 98.7% 81.4 FTE personnel - end of period 234 173 Number of branches - end of period 14 9 Stock price (NYSE: GLK)(1): High $ 20.98 - Low $ 14.05 - Close $ 16.07 - Quarterly Trends --------------------------------------- 2006 2005 --------------------------------------- Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter ------- ------- ------- ------- ------- ======================================== SELECTED INCOME STATEMENT DATA (Amounts in thousands) ====================================================================== Interest income 11,137 10,957 9,795 9,128 8,814 Interest expense 7,141 7,060 6,344 5,912 5,363 ---------------------------------------- Net interest income 3,996 3,897 3,451 3,216 3,451 Provision for loan losses 29 318 240 212 216 ---------------------------------------- Net interest income after provision for loan losses 3,967 3,579 3,211 3,004 3,235 ---------------------------------------- Noninterest income: Service charges on deposit accounts 184 161 135 129 114 Other fees and service charges 137 131 111 94 79 Earnings on bank-owned life insurance 117 116 115 116 116 Loan fee income 88 135 24 27 22 Gain (loss) on sale of securities, net - - - (3,147) - Loss on sale of loans - - - (226) - Other operating income 58 44 30 25 16 ---------------------------------------- Total noninterest income 584 587 415 (2,982) 347 ---------------------------------------- Noninterest expense: Salaries and employee benefits 2,716 2,596 2,308 2,060 1,873 Occupancy, equipment and furnishings 630 595 557 487 492 Data processing and operations 240 229 221 200 237 Advertising 202 198 192 3 122 Professional services 167 154 136 96 73 Printing, postage and supplies 123 99 110 37 97 Other operating expenses 544 539 402 380 385 ---------------------------------------- Total noninterest expense 4,622 4,410 3,926 3,263 3,279 ---------------------------------------- Income (loss) before income taxes (71) (244) (300) (3,241) 303 Income tax provision (benefit) (62) (191) (219) (1,606) 22 ---------------------------------------- Net income (loss) (9) (53) (81) (1,635) 281 ======================================== ====================================================================== SELECTED OPERATING DATA ====================================================================== Net income (loss) per share - Basic and diluted 0.00 (0.01) (0.02) (0.38) 0.07 Net income (loss) (annualized): Return on average assets 0.00 (0.02) (0.04) (0.84) 0.15 Return on average equity (0.03) (0.21) (0.94) (17.26) 2.97 Efficiency ratio 99.5 96.9 99.9 94.6 84.8 FTE personnel - end of period 234 233 204 185 173 Number of branches - end of period 14 12 10 10 9 Stock price (NYSE: GLK)(1): High 17.45 20.98 - - - Low 14.05 16.89 - - - Close 16.07 17.48 - - - *T -0- *T GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2006 Quarter-End --------------------------------------- September 30, June 30, March 31, ------------- ------------ ------------ ====================================================================== SELECTED BALANCE SHEET DATA (Dollar amounts in thousands) ====================================================================== Cash: Cash and cash equivalents $ 13,305 83,246 37,655 Restricted cash 3,900 17,970 - --------------------------------------- Total cash 17,205 101,216 37,655 Investment securities: Available for sale 242,360 247,783 257,312 Held-to-maturity 16,004 16,011 16,018 --------------------------------------- Total investment securities 258,364 263,794 273,330 Loans: Real estate loans: Residential 247,135 241,530 231,838 Home equity 53,235 50,671 50,550 Commercial 69,878 70,773 65,628 Construction 23,543 11,077 8,649 Commercial and industrial 53,791 52,671 41,358 Automobile loans 43,284 43,249 40,270 Other consumer loans 769 554 521 --------------------------------------- Total loans 491,635 470,525 438,814 Allowance for loan losses (3,375) (3,370) (3,074) Deferred loan costs, net 6,761 6,688 6,542 --------------------------------------- Total loans, net 495,021 473,843 442,282 Net deferred tax asset 42,109 43,424 3,087 Goodwill 12,271 11,721 - Total assets 869,290 942,124 798,416 Total interest-earning assets 766,067 841,861 755,549 Deposits: Noninterest-bearing checking 29,022 29,194 25,535 Interest-bearing checking 43,443 40,908 42,288 Savings and money market 230,037 259,480 272,351 --------------------------------------- Total core deposits 302,502 329,582 340,174 Certificates of deposit 354,018 323,448 306,345 --------------------------------------- Total deposits 656,520 653,030 646,519 Short-term borrowings 9,539 12 20,501 Repurchase agreements 44,000 112,500 82,000 Subordinated debentures 12,372 12,372 12,372 Total interest-bearing liabilities 693,409 748,720 735,857 Net interest-earning assets 72,658 93,141 19,692 Stockholders' equity 136,288 133,907 33,735 Tangible stockholders' equity (2) 124,017 122,186 33,735 Securities available for sale - fair value adjustment included in stockholders' equity $ (2,432) (4,863) (4,524) Common shares outstanding 10,915,274 10,913,535 4,300,436 2005 Quarter-End -------------------------- December 31, September 30, ------------ ------------- ====================================================================== SELECTED BALANCE SHEET DATA (Dollar amounts in thousands) ====================================================================== Cash: Cash and cash equivalents 95,500 24,796 Restricted cash - - --------------------------- Total cash 95,500 24,796 Investment securities: Available for sale 212,025 295,534 Held-to-maturity 16,024 16,031 --------------------------- Total investment securities 228,049 311,565 Loans: Real estate loans: Residential 223,917 226,381 Home equity 49,874 49,989 Commercial 51,758 44,405 Construction 5,319 4,256 Commercial and industrial 36,940 32,879 Automobile loans 37,626 33,761 Other consumer loans 491 448 --------------------------- Total loans 405,925 392,119 Allowance for loan losses (2,910) (2,772) Deferred loan costs, net 6,321 5,924 --------------------------- Total loans, net 409,336 395,271 Net deferred tax asset 1,731 1,477 Goodwill - - Total assets 775,101 771,083 Total interest-earning assets 730,672 735,985 Deposits: Noninterest-bearing checking 23,846 22,265 Interest-bearing checking 43,579 46,668 Savings and money market 260,561 263,235 --------------------------- Total core deposits 327,986 332,168 Certificates of deposit 293,098 259,886 --------------------------- Total deposits 621,084 592,054 Short-term borrowings 20,900 19,400 Repurchase agreements 82,000 108,000 Subordinated debentures 12,372 12,372 Total interest-bearing liabilities 712,510 709,561 Net interest-earning assets 18,162 26,424 Stockholders' equity 35,593 36,465 Tangible stockholders' equity (2) 35,593 36,465 Securities available for sale - fair value adjustment included in stockholders' equity (2,743) (3,506) Common shares outstanding 4,300,436 4,300,436 *T -0- *T GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2006 2005 ----------------------------- ------------------- September June March December September 30, 30, 31, 31, 30, --------- --------- --------- --------- --------- ====================================================================== CAPITAL RATIOS ====================================================================== Tier 1 risk-based capital 19.81% 18.87 11.80 11.64 12.38 Total risk based capital 20.49% 19.52 12.52 12.32 13.04 Tier 1 (core) capital 11.60% 11.86 6.39 6.52 6.82 Equity to assets 15.68% 14.21 4.23 4.59 4.73 Tangible stockholders' equity to tangible assets (2) 14.47% 13.13 4.23 4.59 4.73 Stockholders' equity per share $ 12.49 12.27 7.84 8.28 8.48 Tangible stockholders' equity per share (2) $ 11.36 11.20 7.84 8.28 8.48 ====================================================================== ASSET QUALITY DATA (Dollar amounts in thousands) ====================================================================== Nonaccrual loans $ 1,186 1,113 753 625 374 Accruing loans past due 90 days or more - 560 201 662 682 ------------------------------------------------- Total non- performing loans 1,186 1,673 954 1,287 1,056 Foreclosed assets 82 583 121 126 112 ------------------------------------------------- Total non- performing assets $ 1,268 2,256 1,075 1,413 1,168 ================================================= Provision for loan losses $ 29 318 240 212 216 Net loan charge-offs $ (24) (22) (76) (19) (5) Net charge-offs to average loans 0.02% 0.02 0.07 0.02 0.01 Total non-performing loans to total loans 0.24% 0.35 0.21 0.31 0.27 Total non-performing assets to total assets 0.15% 0.24 0.13 0.18 0.15 Allowance for loan losses to total loans 0.68% 0.71 0.69 0.71 0.70 Allowance for loan losses to non- performing loans 284.62% 201.42 322.38 226.04 262.57 *T -0- *T GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) Nine months ended September 30, ---------------------- 2006 2005 ----------- ---------- ====================================================================== SELECTED AVERAGE BALANCES (Dollar amounts in thousands) ====================================================================== Taxable securities $ 252,842 339,438 Tax-exempt securities 15,165 12,863 Loans 458,707 340,123 Total interest-earning assets 781,198 706,111 Allowance for loan losses (3,146) (2,436) Noninterest-earning assets 74,194 37,956 Total assets 852,246 741,631 Interest-bearing liabilities: Interest-bearing checking 42,241 49,554 Savings 116,567 270,787 Money market 132,852 15,554 Certificates of deposit 324,072 214,916 Borrowings 107,102 130,261 ----------- ---------- Total interest-bearing liabilities 722,834 681,072 Noninterest-bearing checking 27,100 19,645 Total liabilities 761,456 704,649 Stockholders' equity 90,790 36,982 Net earning assets $ 58,364 25,039 Weighted average common shares outstanding - basic and diluted 8,007,137 4,300,436 Average loans to average deposits 74.5% 61.7 Average loans to average assets 53.8% 45.9 ====================================================================== SELECTED AVERAGE YIELDS/RATES ====================================================================== Total investment securities 4.95% 4.27 Loans 5.87% 5.40 Total interest-earning assets 5.49% 4.80 Interest-bearing checking 1.44% 1.94 Savings 2.28% 2.43 Money market 3.88% 1.67 Certificates of deposit 4.25% 3.26 Borrowings 4.93% 3.32 Total interest-bearing liabilities 3.80% 2.81 Net interest rate spread 1.69% 1.99 Contribution of interest-free funds 0.29% 0.09 Net interest rate margin 1.98% 2.08 Quarterly Trends ------------------------------------------------------- 2006 2005 --------------------------------- --------------------- Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter ----------- ---------- ---------- ---------- ---------- ====================================================================== SELECTED AVERAGE BALANCES (Dollar amounts in thousands) ====================================================================== Taxable securities 252,513 261,667 244,255 291,911 315,851 Tax-exempt securities 15,157 15,165 15,174 15,182 15,190 Loans 489,694 458,721 427,017 413,394 385,660 Total interest- earning assets 793,263 807,686 742,082 731,615 722,159 Allowance for loan losses (3,319) (3,151) (2,965) (2,835) (2,679) Noninterest- earning assets 102,581 75,144 44,194 38,891 40,690 Total assets 892,525 879,679 783,311 767,671 760,170 Interest- bearing liabilities: Interest- bearing checking 40,916 42,924 42,905 45,075 52,067 Savings 98,476 113,834 137,822 180,627 243,463 Money market 141,166 140,278 116,844 79,362 16,954 Certificates of deposit 349,826 319,300 302,571 272,238 252,586 Borrowings 80,222 122,468 119,041 129,623 132,480 ----------- ---------- ---------- ---------- ---------- Total interest- bearing liabilities 710,606 738,804 719,183 706,925 697,550 Noninterest- bearing checking 30,606 25,411 25,226 21,896 21,272 Total liabilities 757,459 778,762 748,019 732,093 722,601 Stockholders' equity 135,066 100,917 35,292 35,578 37,569 Net earning assets 82,657 68,882 22,899 24,690 24,609 Weighted average common shares outstanding - basic and diluted 10,914,896 8,733,392 4,300,436 4,300,436 4,300,436 Average loans to average deposits 77.7 74.4 71.2 71.6 68.2 Average loans to average assets 54.9 52.1 54.5 53.9 50.7 ====================================================================== SELECTED AVERAGE YIELDS/RATES ====================================================================== Total investment securities 4.98 4.98 4.90 4.43 4.21 Loans 5.99 5.86 5.75 5.49 5.48 Total interest- earning assets 5.60 5.47 5.39 4.99 4.88 Interest- bearing checking 1.28 1.48 1.57 1.68 1.91 Savings 2.24 2.28 2.31 2.38 2.42 Money market 3.92 3.92 3.76 3.43 2.40 Certificates of deposit 4.46 4.25 4.01 3.77 3.55 Borrowings 5.58 4.92 4.50 4.18 3.79 Total interest- bearing liabilities 3.99 3.83 3.58 3.32 3.05 Net interest rate spread 1.61 1.64 1.81 1.67 1.83 Contribution of interest- free funds 0.42 0.33 0.11 0.11 0.10 Net interest rate margin 2.03 1.97 1.92 1.78 1.93 *T -0- *T (1) Stock price data is provided for post-merger dates only (May 1, 2006 through the end of the current period). (2) Excludes goodwill recognized in connection with the Bay View merger. *T