Exhibit 99
| News Release |
Date: October 23, 2003 |
| Phone Number: 805/473-6803 |
Contact: James G. Stathos |
| NASDAQ Symbol: MDST |
Title: Executive Vice President and Chief Financial Officer |
| Web site: www.midstatebank.com |
Mid-State Bancshares Reports Strong Earnings Increase of 26.6%
ARROYO GRANDE, CA — Mid-State Bancshares (the Company) [Nasdaq: MDST], the holding company for Mid-State Bank & Trust (the Bank), reported net income of $9.0 million for the three months ended September 30, 2003, a 26.6% increase over third quarter 2002 earnings of $7.1 million. Diluted earnings per share were $0.37 in the third quarter of 2003 compared to $0.29 in the like 2002 period. For the nine months year-to-date, net income was up 17.2% to $24.8 million in 2003 from $21.1 million in 2002, representing diluted earnings per share of $1.01 and $0.85, respectively.
President and Chief Executive Officer James W. Lokey said, “We are pleased with the Company’s results. We believe the economy may be showing its first signs of recovery and this can only be of further benefit to Mid-State’s earnings.”
“We again experienced strong results from our mortgage banking operation,” said Lokey. “The gain on sale from mortgage loans held for sale totaled $3.0 million in the first nine months of 2003 compared to $0.4 million in the 2002 period. Similarly, the gain on sale was $1.0 million in the third quarter of 2003, up from $0.2 million in 2002.” Also contributing to the improvement in earnings in 2003 was a one-time-only gain on the sale of bank property totaling $273,000 (pre-tax) in July.
Total assets of the Company were up 8.2% to $2.086 billion from $1.928 billion at September 30, 2003. This growth was fueled by an increase in deposits of 9.5% to $1.795 billion, up from $1.639 billion one year earlier. The growth in deposits was centered in core deposits. While time deposits decreased to $392.4 million from $405.2 million one year earlier, all other categories of demand, NOW, money market and savings increased to $1.402 billion from $1.234 billion one year earlier. In an ongoing effort to improve earnings, the
Company continues to focus its attention on attracting lower cost core deposits while trying to remain competitive in retaining time deposits. Loan activity over the last year has been slow with the loan portfolio down slightly to $1.091 billion at June 30, 2003, compared to one year earlier. Consequently, the growth in deposits has funded a $130.6 million increase in investments and Fed Funds sold along with a $38.3 million increase in the total of mortgage loans available for sale.
The Company continued its stock repurchase program, repurchasing a total of 207,541 and 625,830 shares, respectively, for the three month and nine month periods ending September 30, 2003. In the comparable 2002 periods, the amount of stock repurchased totaled 215,120 and 315,058. Management estimates that the effect of the stock repurchase program in 2003 has been to increase earnings per share by approximately one cent per share in the third quarter compared to what it would have been had no program been in place this year. In other matters concerning capital, the dividend declared during the third quarter of 2003 was increased to $0.13 per share up from $0.10 per share one year earlier.
Non-performing asset levels totaled $15.8 million compared to $10.7 million one year earlier. The level of non-performing assets as a percent of total assets was 0.8% compared to the 0.6% level of one year ago. The level of non-performing assets is centered primarily in two lending relationships secured by real estate (total $13.3 million). Management has established specific reserves that would offset potential losses, if any, arising from less than full recovery of the loans from the supporting collateral. One property has now been foreclosed upon, residing on the Consolidated Statement of Financial Position under “Other Real Estate Owned” (total $3.3 million). The ratio of the Company’s allowances for losses to non-performing loans was 149% compared to 178% 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 September 30, 2003 determined that the allowance was adequate to cover losses inherent in the portfolio.
Mid-State Bancshares is a $2.1 billion holding company for Mid-State Bank & Trust, an independent, community bank serving California’s San Luis Obispo, Santa Barbara, and Ventura Counties. Since opening its doors in 1961, the Bank has grown to 39 offices serving almost 100,000 households.
2
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.
3
Consolidated Financial Data - Mid-State Bancshares
(Unaudited) |
| Quarter Ended |
| Year-to-Date |
| ||||||||
(In thousands) |
| Sept. 30, 2003 |
| Sept. 30, 2002 |
| Sept. 30, 2003 |
| Sept. 30, 2002 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest Income (not taxable equivalent) |
| $ | 26,643 |
| $ | 27,164 |
| $ | 78,715 |
| $ | 82,225 |
|
Interest Expense |
| 2,157 |
| 4,021 |
| 7,559 |
| 12,978 |
| ||||
Net Interest Income |
| 24,486 |
| 23,143 |
| 71,156 |
| 69,247 |
| ||||
Provision for Loan Losses |
| — |
| — |
| 260 |
| 600 |
| ||||
Net Interest Income after provision for loan losses |
| 24,486 |
| 23,143 |
| 70,896 |
| 68,647 |
| ||||
Non-interest income |
| 7,838 |
| 5,794 |
| 22,236 |
| 17,522 |
| ||||
Non-interest expense |
| 18,589 |
| 17,886 |
| 54,990 |
| 53,104 |
| ||||
Income before income taxes |
| 13,735 |
| 11,051 |
| 38,142 |
| 33,065 |
| ||||
Provision for income taxes |
| 4,760 |
| 3,965 |
| 13,364 |
| 11,925 |
| ||||
Net Income |
| $ | 8,975 |
| $ | 7,086 |
| $ | 24,778 |
| $ | 21,140 |
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Quarter Ended |
| Year-to-Date |
| ||||||||
(In thousands, except per share data) |
| Sept. 30, 2003 |
| Sept. 30, 2002 |
| Sept. 30, 2003 |
| Sept. 30, 2002 |
| ||||
Per share: |
|
|
|
|
|
|
|
|
| ||||
Net Income - basic |
| $ | 0.39 |
| $ | 0.30 |
| $ | 1.06 |
| $ | 0.88 |
|
Net Income - diluted |
| $ | 0.37 |
| $ | 0.29 |
| $ | 1.01 |
| $ | 0.85 |
|
Weighted average shares used in Basic E.P.S. calculation |
| 23,287 |
| 23,924 |
| 23,441 |
| 24,026 |
| ||||
Weighted average shares used in Diluted E.P.S. calculation |
| 24,350 |
| 24,815 |
| 24,487 |
| 24,860 |
| ||||
Cash dividends |
| $ | 0.13 |
| $ | 0.10 |
| $ | 0.37 |
| $ | 0.30 |
|
Book value at period-end |
|
|
|
|
| $ | 11.25 |
| $ | 10.57 |
| ||
Tangible book value at period end |
|
|
|
|
| $ | 9.43 |
| $ | 8.79 |
| ||
Ending Shares |
|
|
|
|
| 23,191 |
| 23,839 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Financial Ratios |
|
|
|
|
|
|
|
|
| ||||
Return on assets |
| 1.72 | % | 1.47 | % | 1.65 | % | 1.51 | % | ||||
Return on tangible assets |
| 1.76 | % | 1.50 | % | 1.69 | % | 1.54 | % | ||||
Return on equity |
| 13.61 | % | 11.31 | % | 12.77 | % | 11.69 | % | ||||
Return on tangible equity |
| 16.22 | % | 13.63 | % | 15.25 | % | 14.18 | % | ||||
Net interest margin (not taxable equivalent) |
| 5.14 | % | 5.28 | % | 5.23 | % | 5.43 | % | ||||
Net interest margin (taxable equivalent yield) |
| 5.53 | % | 5.61 | % | 5.63 | % | 5.74 | % | ||||
Net loan losses to avg. loans |
| 0.38 | % | 0.62 | % | 0.09 | % | 0.25 | % | ||||
Efficiency ratio |
| 57.5 | % | 61.8 | % | 58.9 | % | 61.2 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Period Averages |
|
|
|
|
|
|
|
|
| ||||
Total Assets |
| $ | 2,069,078 |
| $ | 1,914,466 |
| $ | 2,002,806 |
| $ | 1,877,434 |
|
Total Tangible Assets |
| 2,026,932 |
| 1,872,173 |
| 1,960,666 |
| 1,834,976 |
| ||||
Total Loans (includes loans held for sale) |
| 1,140,493 |
| 1,081,936 |
| 1,129,684 |
| 1,112,715 |
| ||||
Total Earning Assets |
| 1,889,499 |
| 1,739,554 |
| 1,818,879 |
| 1,705,685 |
| ||||
Total Deposits |
| 1,787,933 |
| 1,641,953 |
| 1,724,251 |
| 1,610,677 |
| ||||
Common Equity |
| 261,692 |
| 248,608 |
| 259,408 |
| 241,725 |
| ||||
Common Tangible Equity |
| 219,546 |
| 206,315 |
| 217,268 |
| 199,267 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Balance Sheet - At Period-End |
|
|
|
|
|
|
|
|
| ||||
Cash and due from banks |
|
|
|
|
| $ | 109,469 |
| $ | 110,454 |
| ||
Investments and Fed Funds Sold |
|
|
|
|
| 767,741 |
| 637,124 |
| ||||
Loans held for sale |
|
|
|
|
| 42,075 |
| 3,760 |
| ||||
Loans, net of deferred fees, before allowance for loan losses |
|
|
|
|
| 1,091,113 |
| 1,106,184 |
| ||||
Allowance for Loan Losses |
|
|
|
|
| (16,871 | ) | (17,465 | ) | ||||
Goodwill and other intangibles |
|
|
|
|
| 42,217 |
| 42,254 |
| ||||
Other assets |
|
|
|
|
| 50,405 |
| 45,711 |
| ||||
Total Assets |
|
|
|
|
| $ | 2,086,149 |
| $ | 1,928,022 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Non-interest bearing deposits |
|
|
|
|
| $ | 436,565 |
| $ | 391,350 |
| ||
Interest bearing deposits |
|
|
|
|
| 1,358,227 |
| 1,247,987 |
| ||||
Other borrowings |
|
|
|
|
| 7,907 |
| 11,573 |
| ||||
Allowance for losses - unfunded commitments |
|
|
|
|
| 1,862 |
| 1,687 |
| ||||
Other liabilities |
|
|
|
|
| 20,767 |
| 23,515 |
| ||||
Shareholders’ equity |
|
|
|
|
| 260,821 |
| 251,910 |
| ||||
Total Liabilities and Shareholders’ equity |
|
|
|
|
| $ | 2,086,149 |
| $ | 1,928,022 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Asset Quality & Capital - At Period-End |
|
|
|
|
|
|
|
|
| ||||
Non-accrual loans |
|
|
|
|
| $ | 12,562 |
| $ | 10,729 |
| ||
Loans past due 90 days or more |
|
|
|
|
| — |
| 4 |
| ||||
Other real estate owned |
|
|
|
|
| 3,279 |
| — |
| ||||
Total non performing assets |
|
|
|
|
| $ | 15,841 |
| $ | 10,733 |
| ||
|
|
|
|
|
|
|
|
|
| ||||
Allowance for losses to loans, gross (1) |
|
|
|
|
| 1.7 | % | 1.7 | % | ||||
Non-accrual loans to total loans, gross |
|
|
|
|
| 1.2 | % | 1.0 | % | ||||
Non performing assets to total assets |
|
|
|
|
| 0.8 | % | 0.6 | % | ||||
Allowance for losses to non performing loans (1) |
|
|
|
|
| 149.1 | % | 178.4 | % | ||||
|
|
|
|
|
|
|
|
|
| ||||
Equity to average assets (leverage ratio) |
|
|
|
|
| 10.2 | % | 10.5 | % | ||||
Tier One capital to risk-adjusted assets |
|
|
|
|
| 14.7 | % | 14.5 | % | ||||
Total capital to risk-adjusted assets |
|
|
|
|
| 16.0 | % | 15.7 | % |
(1) Includes allowance for loan losses and allowance for losses - unfunded commitments
4
Consolidated Financial Data - Mid-State Bancshares
(Unaudited) |
| Quarter Ended |
| |||||||||||||
(In thousands) |
| Sept. 30, 2003 |
| June 30, 2003 |
| Mar. 31, 2003 |
| Dec. 31, 2002 |
| Sept. 30, 2002 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest Income (not taxable equivalent) |
| $ | 26,643 |
| $ | 26,207 |
| $ | 25,865 |
| $ | 27,107 |
| $ | 27,164 |
|
Interest Expense |
| 2,157 |
| 2,568 |
| 2,834 |
| 3,404 |
| 4,021 |
| |||||
Net Interest Income |
| 24,486 |
| 23,639 |
| 23,031 |
| 23,703 |
| 23,143 |
| |||||
Provision for Loan Losses |
| — |
| 150 |
| 110 |
| — |
| — |
| |||||
Net Interest Income after provision for loan losses |
| 24,486 |
| 23,489 |
| 22,921 |
| 23,703 |
| 23,143 |
| |||||
Non-interest income |
| 7,838 |
| 7,484 |
| 6,914 |
| 6,419 |
| 5,794 |
| |||||
Non-interest expense |
| 18,589 |
| 18,026 |
| 18,375 |
| 17,441 |
| 17,886 |
| |||||
Income before income taxes |
| 13,735 |
| 12,947 |
| 11,460 |
| 12,681 |
| 11,051 |
| |||||
Provision for income taxes |
| 4,760 |
| 4,587 |
| 4,017 |
| 3,966 |
| 3,965 |
| |||||
Net Income |
| $ | 8,975 |
| $ | 8,360 |
| $ | 7,443 |
| $ | 8,715 |
| $ | 7,086 |
|
|
| Quarter Ended |
|
|
| Quarter Ended |
|
|
| |||||||
(In thousands, except per share data) |
| Sept. 30, 2003 |
| June 30, 2003 |
| Mar. 31, 2003 |
| Dec. 31, 2002 |
| Sept. 30, 2002 |
| |||||
Per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Net Income - basic |
| $ | 0.39 |
| $ | 0.36 |
| $ | 0.32 |
| $ | 0.37 |
| $ | 0.30 |
|
Net Income - diluted |
| $ | 0.37 |
| $ | 0.34 |
| $ | 0.30 |
| $ | 0.35 |
| $ | 0.29 |
|
Weighted average shares used in Basic E.P.S. calculation |
| 23,287 |
| 23,442 |
| 23,598 |
| 23,773 |
| 23,924 |
| |||||
Weighted average shares used in Diluted E.P.S. calculation |
| 24,350 |
| 24,477 |
| 24,638 |
| 24,769 |
| 24,815 |
| |||||
Cash dividends |
| $ | 0.13 |
| $ | 0.13 |
| $ | 0.11 |
| $ | 0.11 |
| $ | 0.10 |
|
Book value at period-end |
| $ | 11.25 |
| $ | 11.22 |
| $ | 10.89 |
| $ | 10.72 |
| $ | 10.57 |
|
Tangible book value at period end |
| $ | 9.43 |
| $ | 9.41 |
| $ | 9.09 |
| $ | 8.94 |
| $ | 8.79 |
|
Ending Shares |
| 23,191 |
| 23,384 |
| 23,488 |
| 23,697 |
| 23,839 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Financial Ratios |
|
|
|
|
|
|
|
|
|
|
| |||||
Return on assets |
| 1.72 | % | 1.68 | % | 1.55 | % | 1.79 | % | 1.47 | % | |||||
Return on tangible assets |
| 1.76 | % | 1.72 | % | 1.58 | % | 1.83 | % | 1.50 | % | |||||
Return on equity |
| 13.61 | % | 12.82 | % | 11.84 | % | 13.72 | % | 11.31 | % | |||||
Return on tangible equity |
| 16.22 | % | 15.29 | % | 14.18 | % | 16.48 | % | 13.63 | % | |||||
Net interest margin (not taxable equivalent) |
| 5.14 | % | 5.26 | % | 5.29 | % | 5.36 | % | 5.28 | % | |||||
Net interest margin (taxable equivalent yield) |
| 5.53 | % | 5.67 | % | 5.69 | % | 5.73 | % | 5.61 | % | |||||
Net loan (recoveries) losses to avg. loans |
| 0.38 | % | (0.08% | ) | (0.03% | ) | 0.61 | % | 0.62 | % | |||||
Efficiency ratio |
| 57.5 | % | 57.9 | % | 61.4 | % | 57.9 | % | 62.3 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Period Averages |
|
|
|
|
|
|
|
|
|
|
| |||||
Total Assets |
| $ | 2,069,078 |
| $ | 1,990,671 |
| $ | 1,947,332 |
| $ | 1,935,767 |
| $ | 1,914,466 |
|
Total Tangible Assets |
| 2,026,932 |
| 1,948,523 |
| 1,905,206 |
| 1,893,659 |
| 1,872,173 |
| |||||
Total Loans (includes loans held for sale) |
| 1,140,493 |
| 1,132,369 |
| 1,115,920 |
| 1,098,947 |
| 1,081,936 |
| |||||
Total Earning Assets |
| 1,889,499 |
| 1,801,275 |
| 1,764,490 |
| 1,755,655 |
| 1,739,554 |
| |||||
Total Deposits |
| 1,787,933 |
| 1,711,342 |
| 1,672,208 |
| 1,661,588 |
| 1,641,953 |
| |||||
Common Equity |
| 261,692 |
| 261,509 |
| 254,950 |
| 251,922 |
| 248,608 |
| |||||
Common Tangible Equity |
| 219,546 |
| 219,361 |
| 212,824 |
| 209,814 |
| 206,315 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance Sheet - At Period-End |
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and due from banks |
| $ | 109,469 |
| $ | 124,176 |
| $ | 113,257 |
| $ | 128,036 |
| $ | 110,454 |
|
Investments and Fed Funds Sold |
| 767,741 |
| 680,320 |
| 669,990 |
| 625,483 |
| 637,124 |
| |||||
Loans held for sale |
| 42,075 |
| 49,875 |
| 26,794 |
| 22,560 |
| 3,760 |
| |||||
Loans, net of deferred fees, before allowance for loan losses |
| 1,091,113 |
| 1,102,210 |
| 1,095,355 |
| 1,087,551 |
| 1,106,184 |
| |||||
Allowance for Loan Losses |
| (16,871 | ) | (17,963 | ) | (17,576 | ) | (17,370 | ) | (17,465 | ) | |||||
Goodwill and other intangibles |
| 42,217 |
| 42,292 |
| 42,289 |
| 42,264 |
| 42,254 |
| |||||
Other assets |
| 50,405 |
| 43,344 |
| 47,772 |
| 46,216 |
| 45,711 |
| |||||
Total Assets |
| $ | 2,086,149 |
| $ | 2,024,254 |
| $ | 1,977,881 |
| $ | 1,934,740 |
| $ | 1,928,022 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non-interest bearing deposits |
| 436,565 |
| $ | 422,732 |
| $ | 397,622 |
| $ | 390,212 |
| $ | 391,350 |
| |
Interest bearing deposits |
| 1,358,227 |
| 1,317,402 |
| 1,304,525 |
| 1,262,735 |
| 1,247,987 |
| |||||
Other borrowings |
| 7,907 |
| 6,354 |
| 2,382 |
| 10,973 |
| 11,574 |
| |||||
Allowance for losses - unfunded commitments |
| 1,862 |
| 1,812 |
| 1,811 |
| 1,771 |
| 1,687 |
| |||||
Other liabilities |
| 20,767 |
| 13,594 |
| 15,777 |
| 14,914 |
| 23,514 |
| |||||
Shareholders’ equity |
| 260,821 |
| 262,360 |
| 255,764 |
| 254,135 |
| 251,910 |
| |||||
Total Liabilities and Shareholders’ equity |
| $ | 2,086,149 |
| $ | 2,024,254 |
| $ | 1,977,881 |
| $ | 1,934,740 |
| $ | 1,928,022 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Asset Quality & Capital - At Period-End |
|
|
|
|
|
|
|
|
|
|
| |||||
Non-accrual loans |
| $ | 12,562 |
| $ | 16,436 |
| $ | 16,799 |
| $ | 16,748 |
| $ | 10,729 |
|
Loans past due 90 days or more |
| — |
| 1 |
| — |
| — |
| 4 |
| |||||
Other real estate owned |
| 3,279 |
| — |
| — |
| — |
| — |
| |||||
Total non performing assets |
| $ | 15,841 |
| $ | 16,437 |
| $ | 16,799 |
| $ | 16,748 |
| $ | 10,733 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Allowance for losses to loans, gross (1) |
| 1.7 | % | 1.8 | % | 1.8 | % | 1.8 | % | 1.7 | % | |||||
Non-accrual loans to total loans, gross |
| 1.2 | % | 1.5 | % | 1.5 | % | 1.5 | % | 1.0 | % | |||||
Non performing assets to total assets |
| 0.8 | % | 0.8 | % | 0.8 | % | 0.9 | % | 0.6 | % | |||||
Allowance for losses to non performing loans (1) |
| 149.1 | % | 120.3 | % | 115.4 | % | 114.3 | % | 178.4 | % | |||||
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Equity to average assets (leverage ratio) |
| 10.2 | % | 10.5 | % | 10.6 | % | 10.6 | % | 10.5 | % | |||||
Tier One capital to risk-adjusted assets |
| 14.7 | % | 14.6 | % | 14.6 | % | 14.7 | % | 14.5 | % | |||||
Total capital to risk-adjusted assets |
| 16.0 | % | 15.8 | % | 15.9 | % | 16.0 | % | 15.7 | % |
(1) Includes allowance for loan losses and allowance for losses - unfunded commitments
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