St. Joseph Capital Corporation Announces Second Quarter Results

The chairman, president, and chief executive officer of St. Joseph Capital Corp. (NASDAQ: SJOE), John W. Rosenthal, today announced that the Company posted second quarter net income of $582,000, or $0.31 fully diluted income per common share, an increase of 13.9% compared to the first quarter of this year, but down 28.6% compared to the same quarter a year ago. The second quarter was aided by a pre-tax recovery of $125,000 from the claim filed with the Company's insurance carrier for the previously disclosed international wire transfer fraud perpetrated on the bank during the first quarter of 2006. The Company also declared a quarterly dividend of $0.06 per common share to be paid on September 15, 2006 to shareholders of record on September 1, 2006.

Chairman Rosenthal stated, "In the most direct terms, the story behind our performance centers mainly on our 'spread' business being negatively impacted by a burdensome interest rate environment -- that is to say, the flat yield curve. Unfortunately, the shape of the yield curve is a variable over which we have no control. Looking ahead, some experts believe the slowing growth rate for the U.S. Economy currently being reported will lessen investors' inflation fears. This combination of reduced inflation pressure and the slowing rate of overall economic growth could allow the Fed to lower short-term rates in the not-too-distant future to stimulate economic growth. Should this scenario unfold, we expect that it will have a positive impact on our net interest margin."

"We continue our rigorous sales efforts to grow loans and deposits as well as control our non-interest expenses. I'm happy to report that we achieved solid results in all of those areas. Specifically, total loans and deposits grew by 13.2% and 13.5%, respectively, from the same quarter last year. Core non-interest expenses were up by 6.5% over the same time period, excluding the insurance recovery posted in the current quarter," Rosenthal continued.

Total assets at the end of the second quarter reached $490.9 million, an increase of 9.9% compared to June 30, 2005. Deposits increased to $376.3 million at June 30, 2006, up $44.9 million or 13.5% from $331.4 million at June 30, 2005. Gross loans grew by $40.7 million or 13.2% year over year and reached $349.4 million at quarter end. Securities available for sale decreased by $16.7 million or 17.5% year over year. A detailed review of St. Joseph Capital Corporation's performance is included with this release.

St. Joseph Capital Corporation is a bank holding company whose headquarters are located in Mishawaka, Indiana. Its primary operating subsidiary, St. Joseph Capital Bank, provides a broad array of banking services to businesses and individuals in the Michiana area. St. Joseph Capital Bank employs numerous delivery channels for their financial services including a unique courier service and electronic banking accessed via their website, www.sjcb.com. St. Joseph Capital Bank is a member of the Federal Deposit Insurance Corporation.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by St. Joseph Capital Corporation with the Securities and Exchange Commission. St. Joseph Capital Corporation undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.


                  ST. JOSEPH CAPITAL CORPORATION
       Consolidated Statements of Operations (Unaudited)
         (Dollars in thousands, except per share data)

                               Three Months Ended  Six Months Ended
                               June 30,  June 30,  June 30,  June 30,
                                 2006      2005      2006      2005
                               --------  --------  --------  --------
Interest income
  Loans, including fees        $  5,714  $  4,217  $ 11,060  $  8,110
  Securities and other
   interest income                  883       993     1,738     1,873
                               --------  --------  --------  --------
                                  6,597     5,210    12,798     9,983
Interest expense
  Deposits                        3,406     1,979     6,353     3,656
  Securities sold under
   agreements to repurchase
   and other borrowings             985       703     1,868     1,256
                               --------  --------  --------  --------
                                  4,391     2,682     8,221     4,912
                               --------  --------  --------  --------
Net interest income               2,206     2,528     4,577     5,071
Provision for loan losses             -         -         -         -
                               --------  --------  --------  --------

Net interest income after
 provision for loan losses        2,206     2,528     4,577     5,071

Noninterest income
  Service charges on deposit
   accounts                         102       121       192       223
  Other noninterest income          180       128       336       272
                               --------  --------  --------  --------
                                    282       249       528       495
Noninterest expense
  Employee compensation and
   benefits                       1,278     1,159     2,534     2,275
  Stock option expense               75        35       110        70
  Occupancy and equipment
    expense                         133       132       275       246
  Fraud Loss                       (125)        -        52         -
  Other expense                     391       437       748       840
                               --------  --------  --------  --------
                                  1,752     1,763     3,719     3,431
                               --------  --------  --------  --------
Income before income taxes          736     1,014     1,386     2,135
Income tax expense                  154       199       293       524
                               --------  --------  --------  --------
Net income                     $    582  $    815  $  1,093  $  1,611
                               ========  ========  ========  ========

Basic income per
 common share                  $    .33  $    .47  $    .62  $    .93
                               ========  ========  ========  ========
Diluted income per
 common share                  $    .31  $    .43  $    .59  $    .86
                               ========  ========  ========  ========



                  ST. JOSEPH CAPITAL CORPORATION
        Condensed Consolidated Balance Sheets (Unaudited)
                      (Dollars in thousands)

                                         June 30,   June 30,
                                           2006       2005
ASSETS
  Total cash and cash equivalents       $  44,415  $  26,549
  Securities available for sale            78,703     95,436
  Federal Home Loan Bank (FHLB) stock       3,250      3,152
  Loans receivable                        349,400    308,750
  Less: Allowance for loan losses           3,578      3,578
                                        ---------  ---------
    Loans receivable, net                 345,822    305,172
  Premises and equipment, net               3,217      3,203
  Interest receivable and other assets     15,499     13,330
                                        ---------  ---------
      Total assets                      $ 490,906  $ 446,842
                                        =========  =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
  Total deposits                        $ 376,251  $ 331,364
  Federal fund purchased                        -     27,000
  Securities sold under agreements
   to repurchase                           10,992      7,829
  FHLB advances                            63,000     41,740
  Subordinated debentures                   8,000      8,000
  Interest payable and other
   liabilities                              3,223      2,891
                                        ---------  ---------
      Total liabilities                   461,466    418,824
  Total shareholders' equity               29,440     28,018
                                        ---------  ---------
      Total liabilities and
       shareholders' equity             $ 490,906  $ 446,842
                                        =========  =========



                      St. Joseph Capital Corporation
        Selected Quarterly Consolidated Financial Data (Unaudited)
              (Dollars in thousands, except per share data)

                       Three      Three      Three      Three      Three
                       Months     Months     Months     Months     Months
                     ---------  ---------  ---------  ---------  ---------
                                           December   September
                     June 30,   March 31,     31,        30,     June 30,
                     ---------  ---------  ---------  ---------  ---------
                       2006       2006       2005       2005       2005
                     ---------  ---------  ---------  ---------  ---------

EARNINGS
  Net interest
   income            $   2,206  $   2,371  $   2,556  $   2,584  $   2,528
  Provision for loan
   loss                      -          -          -          -          -
  Noninterest income       282        246        229        232        249
  Noninterest
   expense               1,752      1,967      1,672      1,745      1,763
  Net income               582        511        806        803        815
  Basic earnings per
   share                  0.33       0.29       0.46       0.46       0.47
  Diluted earnings
   per share         $    0.31  $    0.28  $    0.43  $    0.43  $    0.43
  Average shares
   outstanding       1,768,291  1,758,269  1,749,120  1,746,401  1,741,803
  Average diluted
   shares
   outstanding       1,856,690  1,854,894  1,855,800  1,875,652  1,875,958

PERFORMANCE RATIOS
  Return on average
   assets*                0.50%      0.46%      0.71%      0.72%      0.77%
  Return on average
   common equity *        7.92%      7.24%     11.49%     11.58%     12.00%
  Net interest
   margin (fully-tax
   equivalent)*           2.14%      2.37%      2.53%      2.60%      2.69%
  Efficiency ratio       70.46%     75.12%     60.04%     61.95%     63.49%

CAPITAL
  Average equity to
   average assets          6.4%       6.3%       6.2%       6.2%       6.4%
  Tier 1 leverage
   capital ratio           8.5%       8.6%       8.5%       8.4%       8.8%
  Tier 1 risk-based
   capital ratio          10.8%      10.9%      10.7%      10.8%      10.9%
  Total risk-based
   capital ratio          11.8%      11.9%      11.7%      11.8%      12.0%
  Book value per
   share                 16.54      16.63      16.53      16.32      16.06

ASSET QUALITY
  Net charge-offs    $       -  $       -  $       -  $       -  $       -
  Net charge-offs to
   average loans *        0.00%      0.00%      0.00%      0.00%      0.00%
  Allowance for loan
   losses            $   3,578  $   3,578  $   3,578  $   3,578  $   3,578
  Allowance for loan
   losses to total
   loans                  1.02%      1.03%      1.06%      1.08%      1.16%
  Nonperforming
   loans             $      83  $       -  $       -  $       -  $       -
  Other real estate
   owned             $       -  $       -  $       -  $       -  $       -
  Nonperforming
   loans to total
   loans                  0.02%      0.00%      0.00%      0.00%      0.00%
  Nonperforming
   assets to total
   assets                 0.02%      0.00%      0.00%      0.00%      0.00%

END OF PERIOD BALANCES
  Total assets       $ 490,906  $ 460,780  $ 481,128  $ 450,767  $ 446,842
  Total earning
   assets              454,296    431,952    425,934    415,748    409,301
  Total loans          349,400    345,953    338,705    330,972    308,750
  Total deposits       376,251    330,081    343,398    332,876    331,364
  Stockholders'
   equity               29,440     29,596     28,941     28,537     28,018

AVERAGE BALANCES
  Total assets       $ 463,556  $ 451,645  $ 447,615  $ 440,751  $ 423,181
  Total earning
   assets              436,081    425,312    419,884    413,442    397,011
  Total loans          347,900    338,723    331,579    317,514    293,490
  Total deposits       348,202    343,345    346,684    337,573    326,163
  Stockholders'
   equity               29,483     28,608     27,819     27,519     27,250


  * annualized for quarterly data


Contacts:
John Rosenthal:
574-273-9700
Email Contact

Mark Secor:
800-890-2798
Email Contact
Fax: 574-243-9670

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