Exhibit 99 (a)
99(a)
Press Release on Fourth Quarter 2000 Earnings
Distributed on January 24, 2001
[TYPE] Ex-99
NEWS RELEASE
Contact: Michael B. High, CFO/Executive Vice President
(610) 941-4804
Dorothy Jaworski, Director of Investor Relations
(484) 322-4822
For immediate release:
Progress Financial Corporation Announces Fourth Quarter Operating Earnings
of $1.8 Million, or $.31 per share
Blue Bell, PA, January 24, 2001 - Progress Financial Corporation (the
"Company"- Nasdaq: PFNC) today reported fourth quarter 2000 operating earnings
of $1.8 million, or diluted earnings per share of $.31, before gains on sale of
securities and the Maryland Leasing Division and other charges amounting to
$420,000 or $.07 per share. After the one-time gains and charges, the Company
reported fourth quarter 2000 net income of $1.4 million, or diluted earnings per
share of $.24 compared to net income of $2.0 million, or diluted earnings per
share of $.33, for the fourth quarter of 1999. Results for the fourth quarter of
1999 included $931,000 of client warrant income compared to $41,000 of client
warrant income during the current quarter.
Net income for the twelve months ended December 31, 2000 totaled $7.3
million, or diluted earnings per share of $1.22, compared to net income of $6.7
million, or diluted earnings per share of $1.10, for the twelve months ended
December 31, 1999. Results for the twelve months ended December 31, 2000
included $3.5 million of client warrant income compared to $4.2 million for the
comparable period in 1999.
Commenting on the fourth quarter results, W. Kirk Wycoff, President and
CEO, stated, "Although the quarter included a number of non-recurring items of
income and expense, I am delighted with core operating earnings, and the nearly
20% increase in deposits from our franchise expansion. We are especially
pleased with the growth in fee income primarily due to an $808,000 increase in
mutual fund,
Progress Financial Corporation
Fourth Quarter
Page 2
annuity and insurance commissions, a $205,000 increase in management fees
generated by the Company's subsidiary Progress Capital Management, Inc. which
manages the mezzanine debt and venture capital funds, and a $426,000 increase in
consulting fees generated by the Company's subsidiary KMR Management, Inc. which
provides financial and operational management consulting services for commercial
clients."
Average earning assets for the fourth quarter of 2000 were $835.2 million
compared to $668.2 million for the same period in 1999. The growth in assets
relates primarily to higher commercial loan production and an increase in
available for sale securities funded by significant deposit growth. Average
loans (gross) increased $87.5 million, or 18%, compared to the same quarter of
1999. Consequently, tax-equivalent interest income for the fourth quarter of
2000 increased $4.4 million, or 31%, over the same period in 1999. Net interest
income increased $1.1 million, or 15%, compared to the fourth quarter of 1999.
The net interest margin was 3.99% compared to 4.29% for the same period in 1999.
Loans and leases outstanding totaled $543.1 million at December 31, 2000
compared to $503.7 million at December 31, 1999. This increase was primarily due
to a $56.2 million increase in commercial business loans and a $16.3 million
increase in commercial real estate loans. These increases were partially offset
by a $30.8 million decrease in lease receivables due to the previously announced
sale of the Company's Maryland-based leasing division. The Company reported
non-performing assets of $5.8 million at December 31, 2000 and December 31,
1999. The Company's non-performing assets to total assets ratio at December 31,
2000 was .63% compared to .75% at December 31, 1999. The
non-performing loans to assets ratio was .44% at December 31, 2000 compared to
.74% at December 31, 1999.
During the quarter ended December 31, 2000, the Company recorded a $1.7
million provision for loan and lease losses (including the previously announced
$1.2 million additional provision) due to loan and lease growth and the level of
non-performing and delinquent loans and leases. This resulted in a $441,000
increase in the provision for loan and lease losses from the comparable period
in 1999. Net charge-offs increased by $290,000 from the comparable quarter in
1999. The ratio of the allowance for loan and lease losses to total loans and
leases has increased significantly to 1.36% at December 31, 2000 compared to
1.18% at December 31, 1999.
Non-interest income for the quarter ended December 31, 2000 amounted to
$6.5 million, compared to $6.1 million for the same period in 1999. During the
quarter, the Company recognized $41,000 in client warrant income compared to
$931,000 in the same period of 1999. Loss in the unconsolidated entities was
$802,000 during the quarter ended December 31, 2000 compared with income from
equity in unconsolidated entities of $1.9 million in the 1999 quarter. The loss
in the unconsolidated entities primarily relates to the Ben Franklin Mezzanine
Debt Fund and NewSpring Ventures Venture Capital Fund. The Company recognized a
$1.7 million gain on the sale of its Maryland-based leasing division which
closed during the fourth quarter of 2000. Fee income increased $1.4 million
primarily due to an $808,000 increase in mutual fund annuity and insurance
commissions, a $205,000 increase in management fees generated by the Company's
subsidiary Progress Capital Management, Inc., which manages the mezzanine debt
and venture capital funds, and an increase of $426,000 in consulting fees
generated by the Company's subsidiary KMR Management, Inc., which provides
financial and operational management consulting services for commercial clients.
During the fourth quarter, the Company decided to sell its AMIC Division of
Progress Realty Advisors which conducts business primarily in Virginia and North
Carolina. As a result, the Company recognized a one-time expense of $373,000
relating to reduction of goodwill associated with the AMIC Division.
Total non-interest expense was $10.8 million for the quarter ended December
31, 2000 compared to $9.1 million for the quarter ended December 31, 1999.
Excluding non-recurring expense of $373,000 related to the sale of the AMIC
Division in the fourth quarter of 2000, non-interest expense increased $1.4
million. This increase was primarily due to increases in salaries and employee
benefits of $1.1 million as a result of additional employees to staff three new
bank branches, the acquisition of KMR Management, Inc., the staffing of Progress
Capital Management, Inc., and from other new positions established within the
Company. Occupancy and furniture, fixtures and equipment expenses increased
$298,000 mainly due to a new operations center, bringing data processing
in-house, and new branch openings. Capital securities expense increased $173,000
due to the issuance of $6.0 million of 11.445% capital securities in July 2000.
Total assets increased to $914.2 million at December 31, 2000 from $768.9
million at December 31, 1999. Total deposits increased to $617.5 million at
December 31, 2000 from $521.4 million at December 31, 1999. Deposit growth of
18.4% was primarily the result of new commercial business customer relationships
and retail branch expansion.
Progress Financial Corporation is a unitary thrift holding company
headquartered in Blue Bell, Pennsylvania. The business of the Company consists
primarily of the operation of Progress Bank, which serves businesses and
consumers through sixteen full service offices. The Company also offers a
diversified array of financial services including equipment leasing through
Progress Leasing Company, with offices in Blue Bell, Pennsylvania, and financial
planning services and investments through Progress Financial Resources, Inc.,
headquartered in Philadelphia, Pennsylvania; and asset based lending through
Progress Business Credit. In addition, the Company also conducts commercial
mortgage banking and brokerage services through Progress Realty Advisors, Inc.
with locations in Blue Bell, Pennsylvania; Richmond and Chesapeake, Virginia;
Woodbridge, New Jersey; and Raleigh, North Carolina. The Company also receives
fees for the construction and development of assisted living communities through
Progress Development Corporation; venture capital activities managed by Progress
Capital Management, Inc.; and financial and operational management consulting
services for commercial clients through KMR Management, Inc. located in Willow
Grove, Pennsylvania. The Company's common stock is traded on the Nasdaq Stock
Market, National Market under the Symbol "PFNC".
Progress Financial Corporation
Consolidated Statements of Financial Condition
(Dollars in Thousands)
December 31, December 31,
2000 1999
--------------- -------------
Assets: (Unaudited) (Audited)
Cash and due from banks:
Non-interest bearing $25,360 $15,648
Interest bearing 59,637 24,278
Trading securities - 3,267
Investments and mortgage-backed securities
Available for sale at fair value (amortized cost: $207,795 and $147,529) 205,166 149,518
Held to maturity at amortized cost (fair value: $40,225 and $32,914) 41,940 34,309
Loans and leases, net ((net)of reserve: $7,407 and $5,927) 535,712 497,738
Premises and equipment 18,343 15,600
Other assets 28,091 27,395
Net assets of discontinued operations --- 1,188
-------- ---------
Total assets $914,249 $768,941
======== ========
Liabilities and Shareholders' Equity
Liabilities:
Deposits $617,543 $521,439
Short-term borrowings 79,360 50,767
Other liabilities 31,954 22,475
Long-term Debt:
Federal Home Loan Bank advances 102,000 85,000
Other debt 10,000 24,000
Subordinated Debt 3,000 3,000
--------- --------
Total liabilities 843,857 706,681
Corporation-obligated mandatorily redeemable capital securities of --------- --------
subsidiary trust holding solely junior subordinated debentures of the 20,232 14,451
Corporation
Commitments and contingencies - -
Shareholders' equity:
Serial preferred - 1,000,000 shares authorized but unissued - -
Junior participating preferred stock - $.01 par value - 1,010 shares - -
authorized but unissued
Common stock, $1 par value; 12,000,000 shares authorized; 5,814,000 and
5,680,000 shares issued; including treasury shares of 125,000 and 152,000;
and unallocated shares held by the Employee Stock Ownership Plan of 0 and 5,814 5,680
14,000
Other shareholders' equity, net 46,145 40,895
Net accumulated other comprehensive income (loss) (1,799) 1,234
--------- --------
Total shareholders' equity 50,160 47,809
Total liabilities, Corporation-obligated mandatorily redeemable capital --------- --------
securities of subsidiary trust holding and shareholders' equity $914,249 $768,941
========= ========
Progress Financial Corporation
Consolidated Statements of Operations
(Dollars in Thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
------ ------- ------ -------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Interest income:
Loans and leases, including fees $13,644 $10,860 $51,132 $40,952
Mortgage-backed securities 3,125 2,055 10,461 8,008
Investment securities 1,121 838 4,115 2,346
Other 426 223 1,320 868
------- ------- ------- -------
Total interest income 18,316 13,976 67,028 52,174
Interest expense:
Deposits 7,003 4,808 24,162 16,759
Short-term borrowings 1,572 432 4,707 2,199
Long-term borrowings 1,494 1,570 6,306 6,474
------- ------- ------- -------
Total interest expense 10,069 6,810 35,175 25,432
Net interest income 8,247 7,166 31,853 26,742
Provision for loan and lease losses 1,666 1,225 4,416 3,548
------- ------- ------- -------
Net interest income after provision for loan a 6,581 5,941 27,437 23,194
lease losses
Non-interest income:
Service charges on deposits 514 584 2,236 2,097
Lease financing fees 397 298 1,433 1,223
Mutual fund, annuity and insurance commissions 1,710 902 4,605 2,669
Loan brokerage and advisory fees 540 688 2,193 2,385
Gain (loss) from sale of securities 270 (125) 533 (347)
Gain from sale of leasing division 1,686 - 1,686 -
Client warrant income 41 931 3,523 4,188
Equity (loss) in unconsolidated entities (802) 1,909 (2,791) 2,524
Fees and other 2,189 882 6,124 2,848
------- ------- ------- -------
Total non-interest income 6,545 6,069 19,542 17,587
------- ------- ------- -------
Non-interest expense:
Salaries and employee benefits 5,406 4,300 20,180 15,850
Occupancy 618 448 2,302 1,495
Data processing 223 353 1,098 1,171
Furniture, fixtures and equipment 563 435 2,147 1,477
Professional services 827 641 2,466 1,943
Capital securities expense 572 399 1,907 1,595
Other 2,584 2,483 8,206 8,117
------- ------- ------- -------
Total non-interest expense 10,793 9,059 38,306 31,648
------- ------- ------- -------
Income from continuing operations before income taxes 2,333 2,951 8,673 9,133
Income tax expense 907 994 3,016 3,101
------- ------- ------- -------
Income from continuing operations 1,426 1,957 5,657 6,032
Gain on sale of discontinued operations, net of tax - - 1,519 -
Income from discontinued operations, net of tax - 4 123 639
------- ------- ------- -------
Net income $1,426 $ 1,961 $ 7,299 $6,671
======= ======= ======= =======
Basic income from continuing operations per common $.25 $.33 $.98 $1.04
share
Diluted income from continuing operations per common $.24 $.32 $.95 $.99
share
Basic net income per common share $.25 $.33 $1.26 $1.15
Diluted net income per common share $.24 $.32 $1.22 $1.10
Dividends per common share $.06 $.05 $.21 $.17
Basic average common shares outstanding 5,731,664 5,851,322 5,793,607 5,778,014
Diluted average common shares outstanding 5,889,374 6,064,781 5,984,594 6,085,859
Progress Financial Corporation
Supplemental Data
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
--------------- --------------------- ---------------- ---------------
(Dollars in Thousands, except per share data)
Profitability Measures:
Return on average assets .63% 1.08% .88% .98%
Return on average equity 11.41 17.33 15.16 15.47
Net interest spread (FTE) 3.27 3.67 3.50 3.63
Net interest margin (FTE) 3.99 4.29 4.17 4.24
Efficiency ratio 74.37 65.12 71.40 65.01
Diluted net income per common share (1) $ .24 $ .33 $ 1.22 $ 1.10
Selected Loan Data:
Non-performing assets $5,784 $5,767 $5,784 $5,767
Ratio of non-performing assets to total assets .63% .75% .63% .75%
Ratio of allowance for loan and lease losses
to total loan and leases receivable 1.36 1.18 1.36 1.18
Ratio of allowance for loan and lease losses
to non-performing loan and leases receivable 183.61 103.96 183.61 103.96
Loan delinquency ratio 2.25 2.21 2.25 2.21
Ratio of loans and leases to deposits 87.95 96.59 87.95 96.59
Selected Equity Data:
Book value per share (1) $8.82 $8.26 $8.82 $8.26
Tangible book value per share (1) 8.28 7.41 8.28 7.41
Dividends per common share (1) .06 .05 .21 .17
Average equity to average assets 5.56% 6.23% 5.78% 6.33%
Tier 1 risk-based capital ratio (Bank) 9.79 8.90 9.79 8.90
Total risk-based capital ratio (Bank) 11.04 10.01 11.04 10.01
Tier 1 leverage ratio (Bank) 6.46 6.30 6.46 6.30
Selected Average Balances:
Loans, gross $565,995 $478,535 $541,178 $454,479
Earning assets 835,202 668,187 773,271 635,453
Total assets 894,731 720,182 833,305 680,857
Deposits 604,321 502,207 561,450 452,998
Equity 49,723 44,899 48,141 43,131
(1) Per share amounts have been restated to reflect the 5% stock dividend distributed to shareholders on August
31, 2000.
Progress Financial Corporation
Supplemental Balances
Period-End Balances At : December 31, 2000 December 31, 1999 % Change
---------------------- ---------------------- ----------------------
Loans and Leases, Net:
Commercial business $175,972 $119,807 46.9%
Commercial real estate 178,874 162,588 10.0
Construction, net of loans in process 60,172 58,813 2.3
Single family residential real estate 34,676 40,554 (14.5)
Consumer 37,242 34,918 6.7
Leases receivable 56,183 86,985 (35.4)
---------------------- ---------------------- ----------------------
Total loans and leases 543,119 503,665 7.8
Allowance for loan and lease losses (7,407) (5,927) 25.0
---------------------- ---------------------- ----------------------
Loans and leases, net $535,712 $497,738 7.6%
====================== ====================== ======================
Deposits:
Non-interest-bearing demand deposits $ 88,356 $ 65,305 35.3%
NOW and SuperNow 104,047 80,086 29.9
Money Market 37,157 35,015 6.1
Passbook and Statement Savings 27,337 31,517 (13.3)
Time deposits 360,646 309,516 16.5
---------------------- ---------------------- ----------------------
Total Deposits $617,543 $521,439 18.4%
====================== ====================== ======================
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