ê/2ÿ ñHZd 1$&|&A%|Page #*ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ)ñ'Consolidated Statements of Income:&ñ'For the year ended December 31, ñ"1997 ñ"1996 ñ"1995)ñ'Interest income: Loans and leasesñ"$56,490,102ñ"$52,202,866ñ"$38,176,878ñ'Investment securities:ñ'Taxableñ"7,310,668ñ"6,876,348ñ"4,501,359ñ'Tax-exemptñ"275,351ñ"332,866ñ"447,353ñ'Loans held for saleñ"34,690,675ñ"30,943,144ñ"20,726,833ñ 'Federal funds soldñ "674,459ñ "1,290,212ñ "2,035,770ñ "-----------ñ "-----------ñ "-----------ñ 'Total interest incomeñ "99,441,255ñ "91,645,436ñ "65,888,193ñ "-----------ñ "-----------ñ "-----------!ñ 'Interest expense: Depositsñ "19,962,887ñ "17,732,481ñ "14,868,026ñ'Short-term borrowingsñ"23,788,247ñ"22,115,307ñ"11,978,591ñ'Long-term debtñ"831,354ñ"1,777,521ñ"1,721,670ñ"-----------ñ"-----------ñ"-----------ñ'Total interest expenseñ"44,582,488ñ"41,625,309ñ"28,568,287ñ"-----------ñ"-----------ñ"-----------ñ'Net interest incomeñ"54,858,767ñ"50,020,127ñ"37,319,906,ñ'Provision for loan and lease losses - ñ'Note 5ñ"6,238,000ñ"4,553,000ñ"3,198,000ñ"-----------ñ"-----------ñ"-----------7ñ'Net interest income after provision for possibleñ'loan and lease lossesñ"48,620,767ñ"45,467,127ñ"34,121,906ñ"-----------ñ"-----------ñ"-----------0ñ'Other income: Loan origination incomeñ"41,370,257ñ"43,779,433ñ"32,133,179ñ'Gain on sale of loansñ"38,609,567ñ"34,247,800ñ"21,005,875ñ'Loan servicing feesñ"53,257,304ñ"46,876,741ñ"36,155,560)ñ'Gain on sale of mortgage servicingñ"32,630,789ñ"16,378,230ñ"15,271,081%ñ'Brokerage fees and commissionsñ"703,218ñ"1,219,310ñ"2,792,436ñ'Trust feesñ"2,109,001ñ"1,995,153ñ"2,009,864*ñ 'Service charges on deposit accountsñ "1,490,806ñ "1,444,669ñ "1,238,731/ñ!'Insurance commissions, fees and premiumsñ!"1,615,311ñ!"1,544,053ñ!"1,304,625 ñ"'Otherñ""2,778,073ñ""2,495,236ñ""2,205,780ñ#"-----------ñ#"-----------ñ#"-----------ñ$"174,564,326ñ$"149,980,625ñ$"114,117,131ñ%"-----------ñ%"-----------ñ%"-----------!ñ&'Other expense: Salariesñ&"86,532,643ñ&"79,016,893ñ&"61,082,725*ñ''Pension and other employee benefitsñ'"13,723,509ñ'"12,579,018ñ'"10,638,338ñ('Office expenseñ("10,582,520ñ("10,387,037ñ("7,859,511ñ)'Premises and equipmentñ)"16,621,449ñ)"13,902,901ñ)"12,307,288'ñ*'Amortization of servicing assetsñ*"15,754,963ñ*"14,331,423ñ*"4,865,340 ñ+'Marketing and developmentñ+"7,697,141ñ+"7,364,604ñ+"6,845,335 ñ,'Otherñ,"25,621,340ñ,"20,578,538ñ,"12,191,298ñ-"-----------ñ-"-----------ñ-"-----------ñ."176,533,565ñ."158,160,414ñ."115,789,835ñ/"-----------ñ/"-----------ñ/"-----------!ñ0'Income before income taxesñ0"46,651,528ñ0"37,287,338ñ0"32,449,202ñ1'Income taxesñ1"17,734,000ñ1"14,859,000ñ1"12,366,000ñ2"28,917,528ñ2"22,428,338ñ2"20,083,202ñ3"-----------ñ3"-----------ñ3"-----------(ñ4'Distribution on company-obligated'ñ5'mandatorily redeemable preferred/ñ6'securities of subsidiary trust - Note 15ñ6"4,473,378ñ6"-ñ6"-ñ7"-----------ñ7"-----------ñ7"-----------2ñ8'Net income available to common shareholdersñ8"$24,444,150ñ8"$22,428,338ñ8"$20,083,202pñ9' =========== =========== ===========(ñ:'Earnings per Basic - Note 17 ñ:"$2.19 ñ:"$1.97 ñ:"$1.78ñ;"===========ñ;"===========ñ;"===========*ñ<'share of common Diluted - Note 17 ñ<"$2.15 ñ<"$1.95 ñ<"$1.76ñ="===========ñ="===========ñ="===========<ñ>'stock: Dividends per share of common stock ñ>"$0.28 ñ>"$0.24 ñ>"$0.22Pñ?'The accompanying notes are an integral part of the consolidated financialñ@'statements."ñA'Consolidated Balance Sheet:ñB'December 31, ñB"1997 ñB"19963ñD'Assets: Cash and due from banksñD"$56,523,723ñD"$71,365,788<ñE'Interest-bearing deposits with financial institutionsñE"18,240,229ñE"11,343,546%ñF'Investment securities - Note 3ñF"77,341,443ñF"85,785,764,ñG'Mortgage loans held for sale - Note 9ñG"528,738,820ñG"446,897,5258ñH'Loans and leases, net of unearned income - Note 4ñH"611,092,809ñH"533,050,282#ñI'Less: Allowance for loan andñJ'lease losses - Note 5ñJ"(8,811,645)ñJ"(6,874,944)ñK"--------------ñK"------------ñL"602,281,164ñL"526,175,338 ñM'Servicing assets - Note 6ñM"83,043,939ñM"72,121,663ñN'Accounts receivableñN"54,260,792ñN"37,941,660"ñO'Accrued interest receivableñO"14,778,885ñO"6,724,973&ñP'Premises and equipment - Note 7ñP"21,040,206ñP"18,687,620ñQ'Other assetsñQ"40,544,715ñQ"23,078,227ñR"--------------ñR"------------ñS"$1,496,793,916ñS"$1,300,122,104ñT"==============ñT"============ñV'Liabilities and%ñW'Shareholders' Equity: DepositsñX'Noninterest-bearingñX"$287,555,280ñX"$371,911,039ñY'Interest-bearingñY"346,012,401ñY"201,737,661,ñZ'Certificates of deposit over $100,000ñZ"86,027,844ñZ"66,504,205ñ["--------------ñ["------------ñ\"719,595,525ñ\"640,152,905%ñ^'Short-term borrowings - Note 9ñ^"512,275,185ñ^"461,866,326ñ_'Long-term debt - Note 10ñ_"7,095,718ñ_"17,658,925ñ`'Other liabilitiesñ`"81,917,591ñ`"61,541,868ña"--------------ña"------------ñb'Total liabilitiesñb"1,320,884,019ñb"1,181,220,024ñc"--------------ñc"------------9ñe'Company-obligated mandatorily redeemable preferred/ñf'securities of subsidiary trust - Note 15ñf"47,926,556ñf"-ñh'Shareholders' equity&ñi'Preferred stock, no par value -,ñj'authorized 50,000 shares; none issuedñj"-ñj"-#ñk'Common stock; no par value -+ñl'authorized 40,000,000 shares; issued4ñm'11,701,040 shares in 1997 and 1996; including0ñn'700,640 and 332,268 shares in treasury in"ño'1997 and 1996, respectivelyño"29,965,287ño"29,965,287!ñp'Additional paid-in capitalñp"779,976ñp"-3ñq'Net unrealized gain on investment securities6ñr'net of deferred income taxes of $30,683 in 1997ñs'and $20,463 in 1996. ñs"54,895 ñs"56,523ñt'Retained earningsñt"115,413,986ñt"94,083,540ñu"--------------ñu"------------ñv"146,214,144ñv"124,105,350#ñw'Less treasury stock, at costñw"(18,230,803)ñw"(5,203,270)ñx"--------------ñx"------------!ñy'Total shareholders' equityñy"127,983,341ñy"118,902,080ñz"--------------ñz"------------ñ{"$1,496,793,916ñ{"$1,300,122,104ñ|"==============ñ|"==============ñ~"Net Unrealizedñ"Additionalñ"Gain (Loss) ñ€"Commonñ€"Paid-Inñ€"on Investmentñ€"Retainedñ€"Treasury ñ"Stockñ"Capitalñ"Securitiesñ"Earnings ñ"Stock.ñ‚'---------------------------------------ñ‚"---------------ñ‚"------------ñ‚"-------------ñ‚"--------------ñ‚"--------------!ñƒ'Balance at January 1, 1995ñƒ"$29,965,287 ñƒ"$-ñƒ"$(279,063)ñƒ"$57,080,536ñƒ"$5,662,814ñ„'Net incomeñ„"-ñ„"-ñ„"-ñ„"20,083,202ñ„"-(ñ…'Cash dividends - $.022 per share*ñ…"-ñ…"-ñ…"-ñ…"(2,482,705)ñ…"-&ñ†'Unrealized losses on investmentñ‡'securitiesñ‡"-ñ‡"-ñ‡"269,406ñ‡"-ñ‡"-/ñˆ'Tax benefit on exercise of stock options$ñ‰'Purchase of 177,570 shares ofñŠ'treasury stock*ñŠ"-ñŠ"-ñŠ"-ñŠ"-ñŠ"2,887,6110ñ‹'Sale of 247,826 shares of treasury stock*ñ‹"(704,394)ñ‹"-ñ‹"(33,322)ñ‹"(3,163,565)ñŒ"------------ñŒ"-----------ñŒ"-----------ñŒ"------------ñŒ"-----------#ñ'Balance at December 31, 1995ñ"29,965,287ñ"-ñ"(9,657)ñ"74,647,711ñ"5,386,860ñŽ'Net incomeñŽ"-ñŽ"-ñŽ"-ñŽ"22,428,338ñŽ"-(ñ'Cash dividends - $0.24 per share*ñ"-ñ"-ñ"-ñ"(2,725,921)ñ"-%ñ'Unrealized gains on investmentñ‘'securitiesñ‘"-ñ‘"- ñ‘"66,180ñ‘"-ñ‘"-/ñ’'Tax benefit on exercise of stock optionsñ’" 516,431#ñ“'Purchase of 89,428 shares ofñ”'treasury stock*ñ”"-ñ”"-ñ”"-ñ”"-ñ”"1,930,8310ñ•'Sale of 128,368 shares of treasury stock*ñ•" -ñ•"(516,431)ñ•"-ñ•"(266,588)ñ•"(2,114,421)ñ–"------------ñ–"-----------ñ–"-----------ñ–"------------ñ–"-----------#ñ—'Balance at December 31, 1996ñ—"29,965,287ñ—"- ñ—"56,523ñ—"94,083,540ñ—"5,203,270ñ˜'Net incomeñ˜"-ñ˜"-ñ˜"-ñ˜"24,444,150ñ˜"-'ñ™'Cash dividends - $0.28 per shareñ™"-ñ™"-ñ™"-ñ™"(3,113,704)ñ™"-$ñš'Unrealized loss on investmentñ›'securitesñ›"-ñ›"-ñ›"(1,628)ñ›"-ñ›"-/ñœ'Tax benefit on exercise of stock options ñœ" -ñœ"575,702ñœ"-ñœ"-ñœ"-$ñ'Purchase of 470,491 shares ofñž'treasury stockñž"-ñž"-ñž"-ñž"-ñž"14,411,445/ñŸ'Sale of 102,119 shares of treasury stock ñŸ" -ñŸ"204,274ñŸ"-ñŸ"-ñŸ"(1,383,912)ñ "------------ñ "-----------ñ "-----------ñ "------------ñ "-----------#ñ¡'Balance at December 31, 1997ñ¡"$29,965,287ñ¡"$779,976ñ¡"$54,895ñ¡"$115,413,986ñ¡"$18,230,803ñ¢"============ñ¢"===========ñ¢"===========ñ¢"============ñ¢"===========Eñ£'*Adjusted for the two-for-one stock split on December 30,1996.Pñ¤'The accompanying notes are an integral part of the consolidated financialñ¥'statements.&ñ§'For the year ended December 31, ñ§"1997 ñ§"1996 ñ§"1995ñ©'Net Incomeñ©"$24,444,150ñ©"$22,428,338ñ©"$20,083,202;ñª'Adjustment to Depreciation and amortizationñª"20,265,379ñª"20,367,079ñª"9,605,234Añ«'reconcile net Provision for loan and lease lossesñ«"6,238,000ñ«"4,553,000ñ«"3,198,000Fñ¬'income to cash Amortization of premiums, less accretion*ñ­'used by operating of discountsñ­"1,715,575ñ­"1,588,570ñ­"574,9568ñ®'activities: Mortgage loan originationsñ®"(5,397,338,225)ñ®"(5,085,625,446)ñ®"(3,559,310,152)ñ¯'Sale of mortgage loansñ¯"5,315,496,930ñ¯"5,019,183,189ñ¯"3,335,616,389)ñ°'Gain on sale of mortgage servicingñ°"(32,630,789)ñ°"(16,378,230)ñ°"(15,271,081)ñ±'Other, netñ±"(31,294,699)ñ±"(22,240,852)ñ±"(5,906,443)ñ²"---------------ñ²"---------------ñ²"---------------!ñ³'Net cash used by operatingñ´'activitiesñ´"(93,103,679)ñ´"(56,124,352)ñ´"(211,409,895)?ñµ'Lending and Proceeds from maturities/calls of4ñ¶'investing activities: investment securities:ñ·'Held-to-maturityñ·"6,541,560ñ·"5,045,000ñ·"53,491,466ñ¸'Available-for-saleñ¸"7,534,330ñ¸"29,740,946ñ¸"9,507,979(ñ¹'Proceeds from sales of investmentñº'securities:ñ»'Available-for-saleñ»"26,309,090ñ»"2,028,462ñ»"3,008,031)ñ¼'Purchase of investment securities:ñ½'Held-to-maturityñ½"(3,868,050)ñ½"(14,286,470)ñ½"(35,814,475)ñ¾'Available-for-saleñ¾"(20,315,675)ñ¾"(36,371,550)ñ¾"(14,280,795)2ñ¿'Net (increase) decrease in interest-bearing+ñÀ'deposits with financial institutionsñÀ"(6,896,683)ñÀ"(3,405,806)ñÀ"4,226,466-ñÁ'Net increase in loans, excluding salesñÁ"(414,204,601)ñÁ"(258,412,078)ñÁ"(158,013,297)ñÂ'Sale of loansñÂ"331,860,775ñÂ"139,409,589ñÂ"51,583,722-ñÃ'Additions to mortgage servicing assetsñÃ"(63,175,866)ñÃ"(81,044,704)ñÃ"(49,486,423)%ñÄ'Proceeds from sale of mortgageñÅ'servicing assetsñÅ"69,129,416ñÅ"65,163,338ñÅ"30,190,930ñÆ'Other, netñÆ"(5,930,547)ñÆ"(5,650,679)ñÆ"(5,270,777)ñÇ"---------------ñÇ"---------------ñÇ"---------------ñÈ'Net cash used by lendingñÉ'and investing activitiesñÉ"(73,016,251)ñÉ"(157,783,952)ñÉ"(110,857,173)6ñÊ'Financing activities: Net increase in depositsñÊ"79,442,620ñÊ"76,154,258ñÊ"124,080,673!ñË'Net increase in short-termñÌ'borrowingsñÌ"50,408,859ñÌ"151,604,066ñÌ"216,297,587"ñÍ'Repayment of long-term debtñÍ"(10,563,207)ñÍ"(12,771,802)ñÍ"(7,747,676)#ñÎ'Proceeds from long-term debtñÎ"-ñÎ"8,839,536ñÎ"5,293,058,ñÏ'Sale of company-obligated manditorily)ñÐ'redeemable preferred securities of.ñÑ'` subsidiary trustñÑ"47,926,556ñÑ"-ñÑ"-!ñÒ'Purchase of treasury stockñÒ"(14,411,445)ñÒ"(1,930,831)ñÒ"(2,887,611)/ñÓ'Proceeds from sale of stock for employeeñÔ'benefit plansñÔ"1,588,186ñÔ"1,847,833ñÔ"3,130,243ñÕ'Dividends paidñÕ"(3,113,704)ñÕ"(2,725,921)ñÕ"(2,482,705)ñÖ"---------------ñÖ"---------------ñÖ"---------------ñ×'Net cash provided byñØ'financing activitiesñØ"151,277,865ñØ"221,017,139ñØ"335,683,569ñÙ"---------------ñÙ"---------------ñÙ"---------------*ñÚ'Net increase (decrease) in cash andñÛ'cash equivalentsñÛ"(14,842,065)ñÛ"7,108,835ñÛ"13,416,501-ñÜ'Cash and cash equivalents at beginningñÝ'of yearñÝ"71,365,788ñÝ"64,256,953ñÝ"50,840,452ñÞ"---------------ñÞ"---------------ñÞ"---------------/ñß'Cash and cash equivalents at end of yearñß"$56,523,723ñß"$71,365,788ñß"$64,256,953ñà"===============ñà"===============ñà"===============ñá'Supplementalñâ'disclosures of cashñã'flow information:!ñä'Cash paid during the year:ñå'Interestñå"$45,554,266ñå"$41,248,019ñå"$27,551,606ñæ"===============ñæ"===============ñæ"===============ñç'Income taxesñç"$9,912,325ñç"$26,230,350ñç"$23,829,990ñè"===============ñè"===============ñè"===============Pñé'The accompanying notes are an integral part of the consolidated financialñê'statements.