Exhibit 99.1
[ABC LOGO]
News Release
For more information contact:
W. Edwin Lane, Jr.
Chief Financial Officer
ABC BANCORP REPORTS
FOURTH QUARTER EARNINGS
January 13, 2004
ABC BANCORP (Nasdaq:ABCB), Moultrie, Georgia, reported net income of $3.6 million, or $.37 per basic share, for the quarter ended December 31, 2003. Net income for the same quarter a year ago was $2.7 million, or $.28 per basic share. The results represent a 33% increase in net income and a 32% increase in net income per basic share over the same period last year.
Net income for the years ended December 31, 2003 and 2002 was $12.0 million and $10.4 million, respectively, an increase of 15%. Net income per basic share for the years ended December 31, 2003 and 2002 was $1.23 and $1.05, respectively, an increase of 17%.
The annualized return on average assets for the quarter ended December 31, 2003 and 2002 was 1.25% and .92%, respectively. The annualized return on average equity for the quarter ended December 31, 2003 and 2002 was 12.76% and 10.26%, respectively.
The return on average assets for the year ended December 31, 2003 and 2002 was 1.04% and .90%, respectively. The return on average equity for the year ended December 31, 2003 and 2002 was 10.85% and 9.81%, respectively.
Included in fourth quarter 2003 non-interest income was approximately $400,000 that was attributable to two nonrecurring transactions. The first was a gain of approximately $176,000, net of taxes, on the sale of a subsidiary bank’s former office during the fourth quarter of 2003. The second was the reversal of potential recourse liability of approximately $224,000, net of taxes, that was recorded in connection with the sale during 2002 of the Company’s $4.5 million credit card portfolio. The recourse liability expired during the fourth quarter of 2003.
The Company recorded loan loss provisions of $3.9 million and $5.6 million during the year ended December 31, 2003 and 2002, respectively. The allowance for loan losses totaled $15.0 million and $14.9 million as of December 31, 2003 and 2002, respectively. The allowance for loan losses, as a percentage of total loans, was 1.78% as of the end of both years.
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ABC BANCORP
News Release
January 13, 2004
Loans charged off (net of recoveries) totaled $3.9 million and $5.7 million for the year ended December 31, 2003 and 2002, respectively. The ratio of loans charged off (net of recoveries) to average loans was .47% and .69% for the year ended December 31, 2003 and 2002, respectively.
Non-performing assets totaled $8.0 million and $9.3 million as of December 31, 2003 and 2002, respectively. As compared to the previously reported balance of $9.2 million as of September 30, 2003, non-performing assets decreased $1.2 million, or 13%, during the quarter ended December 31, 2003.
The ratio of the allowance for loan losses to non-performing assets was 188% and 161% as of December 31, 2003 and 2002, respectively. The same ratio, as previously reported, was 167% as of September 30, 2003.
Jack Hunnicutt, ABC Bancorp’s Chairman and CEO, said, “During 2003, we focused on three things: preserving asset quality, minimizing shrinkage of our net interest margin and controlling expenses. As for asset quality, non-performing assets decreased 14% during the year, our charge-off ratio was 22 basis points lower than the previous year, and the ratio of loan loss reserve’s coverage of non-performing assets increased 26 basis points during the year.”
Hunnicutt continued, “Because of the record low interest rate environment, we fully expected our net interest margin to decrease during 2003. To lessen the effect, we avoided paying the relatively high interest rates on non-core deposits that some banks in our markets offered, and we instead relied on lower cost alternative funding. This strategy achieved the desired results, but resulted in some deposit shrinkage. Another strategy we took to offset the expected loss of net interest income was to substantially reduce controllable, nonessential expenses.”
Hunnicutt concluded, “The national economy showed signs of rebounding during the fourth quarter of 2003, and pertinent indicators suggest economic growth should continue during 2004. As the economy’s momentum increases, several things should occur that would positively impact ABC’s profitability. The Federal Reserve Bank could raise interest rates, which would positively impact ABC’s net interest margin. Also, businesses could expand and jobs would subsequently be created, positively affecting ABC’s loan growth and improving ABC’s gross revenue stream. All of these possible occurrences give us optimism that there are ample opportunities in 2004 to increase ABC’s profitability, and we plan to work diligently to take full advantage of these opportunities. Quality growth, both internally and through external expansion, will be our main focus in 2004, with continued concentration on asset quality and expense control being strong secondary focuses.”
Total average assets were $1.2 billion as of both years ended December 31, 2003 and 2002. Average net loans were $826 million and $813 million as of December 31, 2003 and 2002, respectively, an increase of 2%. Average total deposits were $890 million and $894 million as of December 31, 2003 and 2002, respectively, a decrease of less than 1%.
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ABC BANCORP
News Release
January 13, 2004
At its December 2003 meeting, ABC Bancorp’s Board of Directors declared a cash dividend of $.14 per share payable on January 9, 2004 to shareholders of record as of December 31, 2003.
In a press release dated November 7, 2003, ABC Bancorp announced the retirement of Kenneth J. Hunnicutt as President of ABC. In the same press release, Edwin W. Hortman, Jr. was named President and Chief Operating Officer of ABC. Hunnicutt will also retire as Chief Executive Officer on December 31, 2004, and Hortman will assume that position. Hunnicutt will continue to serve as non-executive Chairman of the Board and Executive Consultant of ABC.
ABC Bancorp is headquartered in Moultrie, Georgia and has 11 banking subsidiaries with 35 locations in southern Georgia, southern Alabama and central Florida.
ABC Bancorp Common Stock is quoted on the Nasdaq National Market under the symbol “ABCB”.
The preceding release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe”, “estimate”, “expect”, “intend”, “anticipate” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates which they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.
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ABC BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)
(dollars in thousands except per share data)
QUARTER ENDED | YEAR-TO-DATE | |||||||||||||||
12/31/03 | 12/31/02 | 12/31/03 | 12/31/02 | |||||||||||||
EARNINGS SUMMARY | ||||||||||||||||
Net interest income | $ | 10,650 | $ | 10,843 | $ | 42,270 | $ | 46,309 | ||||||||
Provision for loan losses | 902 | 1,617 | 3,945 | 5,574 | ||||||||||||
Non-interest income | 4,102 | 4,155 | 14,786 | 15,610 | ||||||||||||
Non-interest expense | 8,370 | 9,315 | 35,147 | 40,913 | ||||||||||||
Income taxes | 1,893 | 1,336 | 5,954 | 5,077 | ||||||||||||
Net income | $ | 3,587 | $ | 2,730 | $ | 12,010 | $ | 10,355 | ||||||||
PER SHARE SUMMARY | ||||||||||||||||
Common shares outstanding | 9,783,854 | 9,770,936 | 9,783,854 | 9,770,936 | ||||||||||||
Weighted average shares | 9,783,854 | 9,784,197 | 9,772,166 | 9,858,463 | ||||||||||||
Income per weighted avg share – basic | $ | 0.37 | $ | 0.28 | $ | 1.23 | $ | 1.05 | ||||||||
Dividends declared per share | $ | 0.14 | $ | 0.12 | $ | 0.52 | $ | 0.48 | ||||||||
OPERATING RATIOS (annualized) | ||||||||||||||||
Net interest rate spread (a) | 3.72 | % | 3.61 | % | 3.63 | % | 4.02 | % | ||||||||
Net interest margin (a) | 4.06 | % | 4.00 | % | 3.99 | % | 4.41 | % | ||||||||
Return on average assets | 1.25 | % | 0.92 | % | 1.04 | % | 0.90 | % | ||||||||
Return on average equity | 12.76 | % | 10.26 | % | 10.85 | % | 9.81 | % | ||||||||
Efficiency (b) | 56.74 | % | 62.11 | % | 61.60 | % | 66.08 | % | ||||||||
ENDING BALANCES | ||||||||||||||||
Total assets | $ | 1,168,029 | $ | 1,192,477 | $ | 1,168,029 | $ | 1,192,477 | ||||||||
Earning assets | 1,070,454 | 1,095,507 | 1,070,454 | $ | 1,095,507 | |||||||||||
Intangible assets | 22,517 | 23,549 | 22,517 | $ | 23,549 | |||||||||||
Loans, net of reserve | 825,576 | 818,579 | 825,576 | $ | 818,579 | |||||||||||
Allowance for loan losses | 14,963 | 14,868 | 14,963 | $ | 14,868 | |||||||||||
Deposits | 906,523 | 916,185 | 906,523 | $ | 916,185 | |||||||||||
Stockholders’ equity | 113,613 | 107,484 | 113,613 | $ | 107,484 | |||||||||||
Book value per share | $ | 11.61 | $ | 11.00 | $ | 11.61 | $ | 11.00 | ||||||||
Tangible book value per share | $ | 9.31 | $ | 8.59 | $ | 9.31 | $ | 8.59 | ||||||||
Stockholders’ equity to total assets | 9.73 | % | 9.01 | % | 9.73 | % | 9.01 | % |
(a) | Computed using fully taxable-equivalent net income. |
(b) | Computed by dividing non-interest expense by the sum of net interest income and non-interest income. |
(c) | Computed by adding nonperforming loans, foreclosed real estate and repossessed collateral. |
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ABC BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)
(dollars in thousands except per share data)
QUARTER ENDED | YEAR-TO-DATE | |||||||||||||||
12/31/03 | 12/31/02 | 12/31/03 | 12/31/02 | |||||||||||||
AVERAGE BALANCES | ||||||||||||||||
Total assets | $ | 1,144,774 | $ | 1,181,122 | $ | 1,156,635 | $ | 1,150,266 | ||||||||
Earning assets | 1,057,673 | 1,093,680 | 1,068,921 | 1,058,221 | ||||||||||||
Loans, net of reserve | 829,147 | 825,562 | 825,989 | 813,332 | ||||||||||||
Deposits | 880,089 | 905,584 | 889,664 | 893,759 | ||||||||||||
Equity | 112,419 | 106,456 | 110,694 | 105,569 | ||||||||||||
ASSET QUALITY | ||||||||||||||||
Nonperforming loans | $ | 6,506 | $ | 7,561 | $ | 6,506 | $ | 7,561 | ||||||||
Nonperforming assets (c) | 7,944 | 9,250 | 7,944 | 9,250 | ||||||||||||
Net loan charge-offs (recoveries) | 1,372 | 1,557 | 3,850 | 5,650 | ||||||||||||
Allowance for loan loss to loans | 1.78 | % | 1.78 | % | 1.78 | % | 1.78 | % | ||||||||
Net loan charge-offs (recoveries) to average loans | 0.17 | % | 0.19 | % | 0.47 | % | 0.69 | % | ||||||||
Nonperforming loans to gross loans | 0.77 | % | 0.91 | % | 0.77 | % | 0.91 | % | ||||||||
Nonperforming assets to allowance for loan loss | 53.09 | % | 62.21 | % | 53.09 | % | 62.21 | % | ||||||||
Allowance for loan loss to nonperforming assets | 188.37 | % | 160.74 | % | 188.37 | % | 160.74 | % | ||||||||
Nonperforming assets to total assets | 0.68 | % | 0.78 | % | 0.68 | % | 0.78 | % |
12/31/03 | REQUIRED | EXCESS | |||||||||||||||||||||
REGULATORY CAPITAL RATIOS | |||||||||||||||||||||||
Leverage | 10.77 | % | 4.00 | % | 6.77 | % | |||||||||||||||||
Risk-based | |||||||||||||||||||||||
Core Capital | 13.85 | % | 4.00 | % | 9.85 | % | |||||||||||||||||
Total Capital | 15.60 | % | 8.00 | % | 7.60 | % |
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