Great Lakes Bancorp Announces 2007 Second Quarter Results

BUFFALO, N.Y., July 31 /PRNewswire-FirstCall/ -- Great Lakes Bancorp, Inc. , the bank holding company for Greater Buffalo Savings Bank, today announced a net loss for the second quarter and six months ended June 30, 2007 of $270 thousand ($0.02 per share) and $863 thousand ($0.08 per share), respectively. This compares to a net loss of $53 thousand ($0.01 per share) for the second quarter of 2006 and $134 thousand ($0.02 per share) for the first half of 2006.

The 2007 results reflect increases in net interest income and noninterest income, offset by higher operating costs associated with the Bank's branch development and personnel additions to its lending, support functions and management team. In addition, the Company recorded reductions in loan loss allowance on strong credit quality that benefited 2007 results.

Andrew W. Dorn, Jr., President and Chief Executive Officer, was upbeat on the Bank's results for the second quarter. "Despite a challenging interest rate environment, our net interest income continued to improve on strong loan growth and the credit quality of our loan portfolios is very strong. Branch development has remained on track resulting in the opening of our 16th office in Orchard Park in July."

Net interest income increased $41 thousand, or 1.1%, to $3.9 million for the current quarter compared with the second quarter of 2006. Interest income increased $474 thousand in the current quarter, as average loan balances increased $81.4 million, or 17.7%, to $540.1 million. Interest expense increased $433 thousand in the current quarter compared with the 2006 quarter. While average interest-bearing liabilities were down by $18.1 million comparing the two quarters, average rates paid on these liabilities increased from 3.83% to 4.17%. Net interest margins improved slightly from 1.97% in the 2006 quarter to 2.03% in the current quarter.

The Company reduced loan loss allowance in the current quarter benefiting results by $380 thousand. This compared to additional loan loss provisions of $318 thousand recognized in the second quarter of 2006. The $380 thousand benefit reflects the workout of two commercial credit issues that arose in the fourth quarter of 2006 and reductions in formula-based reserves on the Company's automobile loan portfolios that continued to exhibit minimal losses.

Noninterest income increased by $415 thousand, or 70.7%, to $1.0 million for the current quarter compared with the second quarter of 2006. Noninterest income was up across all categories with the largest increase coming from the Company's mortgage banking activities.

Noninterest expense increased by $1.3 million, or 28.8%, to $5.7 million for the current quarter compared with the second quarter of 2006. Expenses increased across most categories, with employee and occupancy costs representing the largest increases as the Bank focused on completing its retail branch network and made significant additions to its workforce.

Results for the first half of 2007 reflected similar developments. Net interest income was up $362 thousand to $7.7 million as compared with the first half of 2006. Reductions in loan loss allowance benefited the first half of 2007 by $113 thousand compared to additional loan loss provisions of $558 thousand recorded in the first half of 2006. Noninterest income

increased $674 thousand and noninterest expense was up by $2.5 million in the first half of 2007 as compared with the 2006 period.

At June 30, 2007, the Company had total assets of $892.0 million compared to $942.2 million at June 30, 2006.

Earnings Conference Call

Andrew W. Dorn, Jr., President and CEO, and Michael J. Rogers, Executive Vice President and CFO, will host a conference call on August 1, 2007 at 4:30 p.m. eastern time to discuss the results of the second quarter and to provide an update on business developments and strategy. Some of the responses to these questions may contain information that has not been previously disclosed. Interested parties may access the conference call by dialing toll- free [phone]. Participants are asked to call in a few minutes prior to the call to allow time for registration. Internet access to the call is also available (audio only) by clicking "Webcasts & Presentations" on the Company's website at http://www.greatlakesbancorp.com/. A replay of the call will be available through October 1, 2007 by calling [phone] and entering the pin number, 9030744. The archived webcast will also be available on the Company's website at the address above for an extended period of time.

About Great Lakes Bancorp

Great Lakes Bancorp, Inc. is the bank holding company for Greater Buffalo Savings Bank, a Buffalo-based, full-service community bank that serves residents and businesses located throughout Western New York. The Bank has 16 full-service offices in operation with one additional office currently under construction. More information about Greater Buffalo Savings Bank can be found on the Internet at http://www.gbsb.com/.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current plans and expectations, which are subject to a number of risk factors and uncertainties that could cause future results to differ materially from historical performance or future expectations.

These differences may be the result of various factors, including changes in general, national or regional economic conditions, changes in loan default and charge-off rates, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in interest rates, changes in levels of income and expense in noninterest income and expense related activities, competition, and other risk factors.

For further information on these risk factors and uncertainties, please see Great Lakes Bancorp's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2006. Great Lakes Bancorp undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or other changes.

GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data Quarterly Trends Six months ended 2007 2006 June 30, Second First Fourth Third Second 2007 2006 Quarter Quarter Quarter Quarter Quarter SELECTED INCOME STATEMENT DATA (Dollar amounts in thousands) Interest income $ 22,543 20,752 11,431 11,112 10,840 11,137 10,957 Interest expense 14,833 13,404 7,493 7,340 7,049 7,141 7,060 Net interest income 7,710 7,348 3,938 3,772 3,791 3,996 3,897 Provision (credit) for loan losses (113) 558 (380) 267 443 29 318 Net interest income after provision (credit) for loan losses 7,823 6,790 4,318 3,505 3,348 3,967 3,579 Noninterest income: Service charges on deposit accounts 390 295 214 176 174 184 161 Other fees and service charges 344 243 185 159 156 137 131 Gain on sale of mortgage loans 325 - 263 62 16 - - Loan fee income 302 159 182 120 91 88 135 Earnings on bank-owned life insurance 243 231 122 121 121 117 116 Other operating income 72 74 36 36 42 58 44 Total noninterest income 1,676 1,002 1,002 674 600 584 587 Noninterest expense: Salaries and employee benefits 6,374 4,905 3,332 3,042 3,067 2,716 2,596 Occupancy, equipment and furnishings 1,478 1,152 746 732 690 630 595 Data processing and operations 567 450 299 268 272 240 229 Professional services 375 291 171 204 269 167 154 Advertising 273 390 139 134 113 202 198 Printing, postage and supplies 268 209 159 109 109 123 99 Other operating expenses 1,505 940 833 672 637 544 539 Total noninterest expense 10,840 8,337 5,679 5,161 5,157 4,622 4,410 Income (loss) before income taxes (1,341) (545) (359) (982) (1,209) (71) (244) Income tax provision (benefit) (478) (411) (89) (389) (456) (62) (191) Net income (loss) $ (863) (134) (270) (593) (753) (9) (53) SELECTED OPERATING DATA Net income (loss) per share - - Basic and diluted $ (0.08) (0.02) (0.02) (0.05) (0.07) 0.00 (0.01) Net income (loss) (annualized): Return on average assets (0.20)% (0.03) (0.12) (0.27) (0.34) 0.00 (0.02) Return on average equity (1.28)% (0.40) (0.80) (1.77) (2.19) (0.03) (0.21) Efficiency ratio 113.9% 98.3 113.4 114.3 115.7 99.5 96.9 FTE personnel - - end of period 260 233 260 245 239 234 233 Number of branches - - end of period 15 12 15 15 14 14 12 Stock price (1): High $ 14.74 20.98 14.74 14.69 16.63 17.45 20.98 Low $ 11.77 16.74 11.77 11.90 13.82 14.05 16.89 Close $ 13.21 17.48 13.21 12.00 14.04 16.07 17.48 (1) Stock price data prior to the May 1, 2006 merger is that of Bay View Capital Corporation. GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) 2007 2006 June 30, March 31, December 31, September 30, June 30, SELECTED BALANCE SHEET DATA (Dollar amounts in thousands) Cash: Cash and cash equivalents $ 14,210 15,549 14,026 13,305 83,246 Restricted cash 3,875 3,851 3,923 3,900 17,970 Total cash 18,085 19,400 17,949 17,205 101,216 Investment securities: Available for sale 216,541 226,808 233,853 242,360 247,783 Held-to-matur- ity 15,981 15,989 15,997 16,004 16,011 Total investment securities 232,522 242,797 249,850 258,364 263,794 Loans: Real estate loans: Residential 252,240 253,626 253,709 247,135 241,530 Home equity 56,664 53,337 53,676 53,235 50,671 Commercial 87,622 89,706 78,666 69,878 70,773 Construction 19,904 30,066 25,481 23,543 11,077 Commercial and industrial 63,044 62,530 55,055 53,791 52,671 Automobile loans 49,315 46,151 43,719 43,284 43,249 Other consumer loans 1,106 765 659 769 554 Total loans 529,895 536,181 510,965 491,635 470,525 Allowance for loan losses (2,978) (3,950) (3,781) (3,375) (3,370) Deferred loan costs, net 6,750 6,707 6,744 6,761 6,688 Total loans, net 533,667 538,938 513,928 495,021 473,843 Net deferred tax asset(2) 56,950 56,221 43,106 42,160 43,475 Goodwill(2) 33 19 12,832 12,271 11,721 Total assets 891,973 904,829 884,412 869,341 942,175 Total interest- earning assets 782,185 796,321 778,617 766,067 841,861 Deposits: Noninterest- bearing checking 32,151 28,522 37,145 29,022 29,194 Interest- bearing checking 46,647 47,788 45,139 43,443 40,908 Savings and money market 216,848 217,668 214,454 230,037 259,480 Total core deposits 295,646 293,978 296,738 302,502 29,582 Certificates of deposit 350,397 342,903 337,918 354,018 323,448 Total deposits 646,043 636,881 634,656 656,520 653,030 Short-term borrowings 9,114 25,787 17,900 9,539 12 Long-term borrowings 91,372 96,372 86,372 56,372 124,872 Total interest- bearing liabilities 714,378 730,518 701,783 693,409 748,720 Net interest- earning assets 67,807 65,803 76,834 72,658 93,141 Shareholders' equity 134,330 135,623 135,510 136,208 133,827 Tangible shareholders' equity 134,297 135,604 122,678 123,937 122,106 Securities available for sale - fair value adjustment included in shareholders' equity $ (2,834) (1,789) (2,437) (2,432) (4,863) Common shares outstanding 10,925,218 10,921,796 10,921,796 10,915,274 10,913,535 (1) Excludes goodwill recognized in connection with the Bay View merger. (2) Includes $13.0 million that was reclassified from goodwill to deferred tax assets upon the adoption of FIN 48 in the first quarter of 2007. 2007 2006 June 30, March 31, Dec. 31, Sept. 30, June 30, CAPITAL RATIOS Tier 1 risk-based capital 18.8% 18.8 20.2 21.6 18.9 Total risk based capital 19.4% 19.6 21.0 22.3 19.5 Tier 1 (core) capital 11.2% 11.3 11.7 11.6 11.9 Equity to assets 15.1% 15.0 15.3 15.7 14.2 Tangible shareholders' equity to tangible assets (1) 15.1% 15.0 14.1 14.5 13.1 Shareholders' equity per share $12.30 12.42 12.41 12.48 12.26 Tangible shareholders' equity per share (1) $12.29 12.42 11.23 11.35 11.19 ASSET QUALITY DATA (Dollar amounts in thousands) Nonaccrual loans $1,481 3,688 3,548 1,186 1,113 Accruing loans past due 90 days or more 210 - - - 560 Total non-performing loans 1,691 3,688 3,548 1,186 1,673 Foreclosed assets 1,018 77 91 82 583 Total non-performing assets $2,709 3,765 3,639 1,268 2,256 Provision (credit) for loan losses $(380) 267 443 29 318 Net loan charge-offs $(592) (98) (37) (24) (22) Net charge-offs to average loans 0.44% 0.08 0.03 0.02 0.02 Total non-performing loans to total loans 0.32% 0.68 0.69 0.24 0.35 Total non-performing assets to total assets 0.30% 0.42 0.41 0.15 0.24 Allowance for loan losses to total loans 0.55% 0.73 0.73 0.68 0.71 Allowance for loan losses to non-performing loans 176.13% 107.11 106.58 284.62 201.42 (1) Excludes goodwill recognized in connection with the Bay View merger GREAT LAKES BANCORP, INC. Summary of Quarterly Financial Data (continued) Six months ended June 30, 2007 2006 SELECTED AVERAGE BALANCES (Dollar amounts in thousands) Taxable securities $ 231,288 253,009 Tax-exempt securities 15,135 15,170 Commercial loans: Commercial real estate 107,973 69,472 Commercial and industrial 60,509 41,214 Consumer loans: Residential mortgages 257,456 234,436 Home equity 52,924 50,262 Automobile 45,945 40,464 Other 1,246 524 Loans 532,797 442,956 Total interest-earning assets 787,186 775,066 Allowance for loan losses (3,763) (3,059) Noninterest-earning assets 108,666 59,816 Total assets 892,089 831,823 Interest-bearing liabilities: Interest-bearing checking 43,781 42,914 Savings 86,207 125,762 Money market 131,202 128,626 Certificates of deposit 342,658 310,982 Borrowings 114,401 120,763 Total interest-bearing liabilities 718,249 729,047 Noninterest-bearing checking 27,904 25,319 Total liabilities 756,435 763,617 Stockholders' equity 135,654 68,206 Net earning assets $ 68,937 46,019 Weighted average common shares outstanding - basic and diluted 10,922,965 6,529,160 Average loans to average deposits 84.3 % 69.9 Average loans to average assets 59.7 % 53.3 SELECTED AVERAGE YIELDS/RATES Total investment securities 5.05 % 4.94 Loans 6.18 % 5.81 Total interest-earning assets 5.81 % 5.43 Interest-bearing checking 1.21 % 1.52 Savings 2.17 % 2.30 Money market 3.91 % 3.85 Certificates of deposit 4.73 % 4.13 Borrowings 5.40 % 4.71 Total interest-bearing liabilities 4.16 % 3.71 Net interest rate spread 1.65 % 1.72 Contribution of interest-free funds 0.36 % 0.23 Net interest rate margin 2.01 % 1.95 (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. Summary of Quarterly Financial Data (continued) Quarterly Trends 2007 2006 Second First Fourth Third Second Quarter Quarter Quarter Quarter Quarter (Dollar amounts in thousands) Taxable securities 227,097 235,525 243,864 252,513 261,667 Tax-exempt securities 15,131 15,140 15,148 15,157 15,165 Commercial loans: Commercial real estate 110,708 105,208 91,778 85,811 76,566 Commercial and industrial 63,013 57,977 54,367 53,361 43,384 Consumer loans: Residential mortgages 258,192 256,711 254,557 246,749 238,862 Home equity 52,656 53,196 54,263 53,131 50,850 Automobile 47,145 44,731 43,223 43,285 41,820 Other 1,664 825 852 604 555 Loans 540,127 525,386 505,882 489,694 458,721 Total interest-earning assets 790,547 783,788 770,806 793,263 807,686 Allowance for loan losses (3,631) (3,896) (3,418) (3,319) (3,151) Noninterest-earning assets 108,536 108,797 105,386 102,631 75,217 Total assets 895,452 888,689 872,774 892,575 879,752 Interest-bearing liabilities: Interest-bearing checking 44,711 42,840 42,105 40,916 42,924 Savings 84,029 88,408 91,926 98,476 113,834 Money market 135,010 127,352 137,413 141,166 140,278 Certificates of deposit 346,116 339,162 344,353 349,826 319,300 Borrowings 110,832 118,010 76,722 80,222 122,468 Total interest-bearing liabilities 720,698 715,772 692,519 710,606 738,804 Noninterest-bearing checking 28,767 27,032 33,478 30,606 25,411 Total liabilities 759,905 752,928 736,434 757,589 778,915 Stockholders' equity 135,547 135,761 136,340 134,986 100,837 Net earning assets 69,849 68,016 78,287 82,657 68,882 Weighted average common shares outstanding - basic and diluted 10,923,665 10,921,796 10,921,583 10,914,896 8,733,392 Average loans to average deposits 84.6 84.1 77.9 74.1 71.5 Average loans to average assets 60.3 59.1 58.0 54.9 52.1 Total investment securities 5.05 5.04 5.01 4.98 4.98 Loans 6.20 6.15 5.96 5.99 5.86 Total interest-earning assets 5.83 5.78 5.61 5.60 5.47 Interest-bearing checking 1.19 1.22 1.19 1.28 1.48 Savings 2.16 2.18 2.22 2.24 2.28 Money market 3.92 3.91 3.91 3.92 3.92 Certificates of deposit 4.74 4.71 4.60 4.46 4.25 Borrowings 5.40 5.40 5.48 5.58 4.92 Total interest-bearing liabilities 4.17 4.16 4.04 3.99 3.83 Net interest rate spread 1.66 1.62 1.57 1.61 1.64 Contribution of interest-free funds 0.37 0.37 0.42 0.42 0.33 Net interest rate margin 2.03 1.99 1.99 2.03 1.97 (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.