Exhibit 20
News Release
Date: January 31, 2003 |
| Phone Number: 805/473-6803 |
Contact: James G. Stathos |
| NASDAQ Symbol: “MDST” |
Title: Chief Financial Officer |
| Website: www.midstatebank.com |
MID-STATE OPERATING RESULTS INCREASE 5%
FOR FOURTH QUARTER AND 9% FOR THE FULL YEAR
Arroyo Grande, California - Mid-State Bancshares (the Company), the holding company for Mid-State Bank & Trust (the Bank), reported net income of $8.7 million for the three months ended December 31, 2002, a 2.7% increase over the comparable 2001 period’s earnings of $8.5 million. For the full year 2002, net income was $29.9 million, up 8.9% from the $27.4 million generated in 2001. Diluted earnings per share were $0.35 in the fourth quarter of 2002 and $1.20 for the full year, up from $0.34 and $1.18, respectively, reported in the comparable 2001 periods.
Results in these periods included certain non-recurring items. Operating results, which adjust net income for these non-recurring items, in the fourth quarter of 2002 were $8.2 million, up 5.0% from the $7.8 million results for the three months ended December 31, 2001. Similarly, operating results were $29.3 million in 2002, up 9.0% from the $26.9 million comparable 2001 figure. In 2002, non recurring items related to the tax provision and in 2001, significant items included a $1.6 million after-tax recovery of interest income on a loan previously charged-off, a $1.0 million after-tax gain on the sale of the Company’s credit card portfolio, and a $1.7 million additional provision for loan losses charged to expense, after-tax.
“Amidst a challenging economic environment, the Company’s solid results are a pleasure to report,” noted Mr. James W. Lokey, President and Chief Executive Officer. “We are especially encouraged that in spite of the narrowing of margins and the sluggishness of loan growth, fourth quarter results were buoyed by continued core deposit growth and a robust mortgage banking operation. Moreover, our continuing emphasis on cost control has resulted in a reduction in non interest expense to 3.75% of average assets in 2002, down from 4.12% in the prior year.”
Credit quality at the Bank remains strong. Non-performing asset levels totaled $16.8 million off a low base of $3.7 million one year earlier. The level of non-performing assets as a percent of total assets was 0.9% compared to the 0.2% level of one year ago. The level of non-performing assets is centered primarily in two real estate secured loans (total $14.4 million) for which Management anticipates the collateral supports full recovery of the loans. The ratio of the Company’s allowances for losses to non-performing loans was 114% compared to 562% one year earlier. On a quarterly basis, management performs an analysis of the adequacy of the allowance for loan losses. The results of this analysis for the quarter ended December 31, 2002 determined that the allowance was adequate to cover losses inherent in the portfolio and therefore no additional provision for loan losses was recorded in the quarter.
Direct comparability of 2002 results with 2001 is complicated by the Company’s acquisition of Americorp (parent of the former American Commercial Bank in Ventura) on September 28, 2001. 2001 results reflect just three months of the acquisition compared to a full 12 months in 2002. Goodwill created as a result of the merger amounted to $32.2 million and 2.5 million shares were issued in connection with the acquisition. Coupled with a lower interest rate environment, these factors are the major reasons why certain financial ratios, such as return on assets and return on equity, are somewhat lower in 2002 compared to 2001. The accompanying data page displays certain significant financial ratios and other key data.
Total assets of the Company were up 4.4% from $1.854 billion one year earlier to $1.935 billion at December 31, 2002. This growth was fueled primarily by an increase in deposits of 3.7% to $1.653 billion, up from $1.584 billion one year earlier. The growth in deposits was centered in core deposits. While Time Deposits decreased from $447.6 million one year earlier to $399.6 million at period end, all other categories of Demand, NOW, Money Market and Savings increased to $1.253 billion from $1.137 billion one year earlier. In an ongoing effort to improve earnings, the Company continues to focus its attention on attracting lower cost core deposits and has consciously chosen not to pay higher rates on certain more expensive Time Deposits. Loan activity over the last year has been slow with loans declining by $39 million from $1.150 billion to $1.111 billion at period-end.
During 2002, the Company has continued its stock repurchase program, repurchasing a total of 477,264 shares with 162,206 of those occurring during the fourth quarter. In 2001, the Company repurchased 454,126 shares with 140,570 of those occurring during the fourth quarter. Additionally, dividends declared during 2002 totaled $0.41 per share, up from $0.37 declared during 2001.
For over 40 years, Mid-State Bank has provided its customers with a friendly, home-based, community oriented bank. With assets of $1.9 billion and 39 office locations, Mid-State Bank & Trust serves over 100,000 Central Coast households and employs some 800 San Luis Obispo, Santa Barbara, and Ventura County residents. Mid-State Bank & Trust . . . Partners in Your Community Since 1961.
This Press Release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act. All of the statements contained in the Press Release, other than statements of historical fact, should be considered forward-looking statements, including, but not limited to, those concerning (i) the Company’s strategies, objectives and plans for expansion of its operations, products and services, and growth of its portfolio of loans, investments and deposits, (ii) the Company’s beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the operation, (iii) the Company’s beliefs as to the adequacy of its existing and anticipated allowances for loan and real estate losses and (iv) the Company’s beliefs and expectations concerning future operating results. Although the Company believes the expectations reflected in those forward-looking statements are reasonable, it can give no assurance that those expectations will prove to have been correct. All subsequent written and oral forward-looking statements by or attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this qualification. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are not intended to give any assurance as to future results. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Please See Pertinent Financial Data Attached.
# # #
2
Consolidated Financial Data – Mid–State Bancshares
|
| Quarter Ended |
| Year–to–Date |
| ||||||||
(in thousands, except per share data) |
| Dec. 31, 2002 |
| Dec. 31, 2001 |
| Dec. 31, 2002 |
| Dec. 31, 2001 |
| ||||
Interest Income (not taxable equivalent) |
| $ | 27,107 |
| $ | 29,356 |
| $ | 109,332 |
| $ | 114,002 |
|
Interest Expense |
| 3,404 |
| 5,964 |
| 16,381 |
| 26,480 |
| ||||
Net Interest Income |
| 23,703 |
| 23,392 |
| 92,951 |
| 87,522 |
| ||||
Provision for Loan Losses |
| – |
| 300 |
| 600 |
| 4,100 |
| ||||
Net Interest Income after provision for loan losses |
| 23,703 |
| 23,092 |
| 92,351 |
| 83,422 |
| ||||
Non–interest income |
| 6,419 |
| 7,475 |
| 24,321 |
| 23,254 |
| ||||
Non–interest expense |
| 17,441 |
| 16,848 |
| 70,925 |
| 64,744 |
| ||||
Income before income taxes |
| 12,681 |
| 13,719 |
| 45,747 |
| 41,932 |
| ||||
Provision for income taxes |
| 3,966 |
| 5,236 |
| 15,892 |
| 14,530 |
| ||||
Net Income |
| $ | 8,715 |
| $ | 8,483 |
| $ | 29,855 |
| $ | 27,402 |
|
|
| Quarter Ended |
| Year-to-Date |
| ||||||||
(in thousands, except per share data) |
| Dec. 31, 2002 |
| Dec. 31, 2001 |
| Dec. 31, 2002 |
| Dec. 31, 2001 |
| ||||
Per share: |
|
|
|
|
|
|
|
|
| ||||
Net Income - basic |
| $ | 0.37 |
| $ | 0.35 |
| $ | 1.25 |
| $ | 1.22 |
|
Net Income - diluted |
| $ | 0.35 |
| $ | 0.34 |
| $ | 1.20 |
| $ | 1.18 |
|
Weighted average shares used in Basic E.P.S. calculation |
| 23,773 |
| 24,108 |
| 23,962 |
| 22,452 |
| ||||
Weighted average shares used in Diluted E.P.S. calculation |
| 24,769 |
| 24,908 |
| 24,837 |
| 23,252 |
| ||||
Cash dividends |
| $ | 0.11 |
| $ | 0.10 |
| $ | 0.41 |
| $ | 0.37 |
|
Book value at period–end |
|
|
|
|
| $ | 10.72 |
| $ | 9.74 |
| ||
Tangible Book value at period–end |
|
|
|
|
| $ | 8.94 |
| $ | 7.96 |
| ||
Ending Shares |
|
|
|
|
| 23,697 |
| 24,089 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Financial Ratios |
|
|
|
|
|
|
|
|
| ||||
Return on assets |
| 1.79 | % | 1.80 | % | 1.58 | % | 1.75 | % | ||||
Return on tangible assets |
| 1.83 | % | 1.84 | % | 1.61 | % | 1.76 | % | ||||
Return on equity |
| 13.72 | % | 14.81 | % | 12.22 | % | 13.98 | % | ||||
Return on tangible equity |
| 16.48 | % | 18.20 | % | 14.79 | % | 14.90 | % | ||||
Net interest margin (not taxable equivalent) |
| 5.36 | % | 5.51 | % | 5.41 | % | 6.06 | % | ||||
Net interest margin (taxable equivalent yield) |
| 5.73 | % | 5.77 | % | 5.74 | % | 6.36 | % | ||||
Net loan losses to avg. loans |
| 0.61 | % | 0.68 | % | 0.19 | % | 0.20 | % | ||||
Efficiency ratio |
| 57.9 | % | 54.6 | % | 60.5 | % | 58.4 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Period Averages |
|
|
|
|
|
|
|
|
| ||||
Total Assets |
| $ | 1,935,767 |
| $ | 1,866,478 |
| $ | 1,892,137 |
| $ | 1,570,098 |
|
Total Tangible Assets |
| 1,893,659 |
| 1,824,168 |
| 1,849,767 |
| 1,557,995 |
| ||||
Total Loans & Leases |
| 1,098,947 |
| 1,154,284 |
| 1,109,245 |
| 999,501 |
| ||||
Total Earning Assets |
| 1,755,655 |
| 1,684,246 |
| 1,718,280 |
| 1,444,631 |
| ||||
Total Deposits |
| 1,661,588 |
| 1,583,958 |
| 1,623,510 |
| 1,351,256 |
| ||||
Common Equity |
| 251,922 |
| 227,250 |
| 244,295 |
| 195,955 |
| ||||
Common Tangible Equity |
| 209,814 |
| 184,940 |
| 201,925 |
| 183,852 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Balance Sheet–At Period–End |
|
|
|
|
|
|
|
|
| ||||
Cash and due from banks |
|
|
|
|
| $ | 128,036 |
| $ | 102,970 |
| ||
Investments and Fed Funds Sold |
|
|
|
|
| 625,483 |
| 524,345 |
| ||||
Loans held for sale |
|
|
|
|
| 22,560 |
| 13,604 |
| ||||
Loans, net of deferred fees, before allowance for loan losses |
|
|
|
|
| 1,087,551 |
| 1,136,108 |
| ||||
Allowance for Loan Losses |
|
|
|
|
| (17,370 | ) | (19,073 | ) | ||||
Goodwill and Other Intangibles |
|
|
|
|
| 42,264 |
| 42,742 |
| ||||
Other assets |
|
|
|
|
| 46,216 |
| 52,968 |
| ||||
Total Assets |
|
|
|
|
| $ | 1,934,740 |
| $ | 1,853,664 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Non–interest bearing deposits |
|
|
|
|
| $ | 390,212 |
| $ | 367,370 |
| ||
Interest bearing deposits |
|
|
|
|
| 1,262,735 |
| 1,216,796 |
| ||||
Other borrowings |
|
|
|
|
| 10,973 |
| 17,714 |
| ||||
Allowance for losses – unfunded commitments |
|
|
|
|
| 1,771 |
| 1,586 |
| ||||
Other liabilities |
|
|
|
|
| 14,914 |
| 15,647 |
| ||||
Shareholders' equity |
|
|
|
|
| 254,135 |
| 234,551 |
| ||||
Total Liabilities and Shareholders' equity |
|
|
|
|
| $ | 1,934,740 |
| $ | 1,853,664 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Asset Quality & Capital –At Period–End |
|
|
|
|
|
|
|
|
| ||||
Non–accrual loans |
|
|
|
|
| $ | 16,748 |
| $ | 2,986 |
| ||
Loans past due 90 days or more |
|
|
|
|
| 4 |
| 690 |
| ||||
Other real estate owned |
|
|
|
|
| – |
| – |
| ||||
Total non–performing assets |
|
|
|
|
| $ | 16,752 |
| $ | 3,676 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Loan loss allowance to loans, gross (1) |
|
|
|
|
| 1.8 | % | 1.8 | % | ||||
Non–accrual loans to total loans, gross |
|
|
|
|
| 1.5 | % | 0.3 | % | ||||
Non–performing assets to total assets |
|
|
|
|
| 0.9 | % | 0.2 | % | ||||
Allowance for loan losses to non–performing loans (1) |
|
|
|
|
| 114.3 | % | 562.0 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Equity to average assets (leverage ratio) |
|
|
|
|
| 10.6 | % | 10.2 | % | ||||
Tier One capital to risk–adjusted assets |
|
|
|
|
| 14.7 | % | 13.8 | % | ||||
Total capital to risk–adjusted assets |
|
|
|
|
| 16.0 | % | 15.0 | % |
(1) Includes allowance for loan losses and allowance for losses – unfunded commitments
3