SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
April 22, 2002
- --------------------------------------------------------------------------------
(Date of earliest event reported)
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Progress Financial Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-14815 25-2413363
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(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identified No.)
4 Sentry Parkway, Suite 200, Blue Bell, Pennsylvania 19422-0764
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(Address of principal executive offices) (Zip Code)
(610)-825-8800
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name,former address and former fiscal year,if changed since last report)
Exhibit Index appears on page 4
Item 5. Other Events
On April 22, 2002 Progress Financial Corporation reported first quarter net
income of $750,000 or diluted earnings of $.12 per share. For further
information see the press release attached as Exhibit 99(a) and incorporated
herein by reference.
On April 22, 2002, Progress Financial Corporation distributed an earnings
package to analysts. For further information see the attached Exhibit 99(b) and
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROGRESS FINANCIAL CORPORATION
Dated: April 22, 2002 By: /s/ Michael B. High
-----------------------------------
Michael B. High
Chief Operating Officer and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
99(a) Press Release on First Quarter 2002 earnings distributed
on April 22, 2002
99(b) Analyst package distributed on April 22, 2002
Exhibit 99(a)
Press Release on First Quarter 2002 Earnings
Progress Financial Corporation Announces First Quarter
Net Income of $750,000 or $.12 per share
FOR IMMEDIATE RELEASE Contacts:
April 22, 2002 Michael B. High, COO/CFO
610-941-4804
mhigh@progressbank.com
Dorothy Jaworski, Director of Investor Relations
484-322-4822
djaworski@progressbank.com
Progress Financial Corporation Announces First Quarter Net Income up 76%
at $750,000 or $.12 per share
Blue Bell, PA, April 22, 2002 - Progress Financial Corporation (the
"Company" - Nasdaq: PFNC), reported first quarter 2002 net income of $750,000,
or diluted earnings per share of $.12 compared to net income of $425,000, or
diluted earnings per share of $.07 for the first quarter of 2001. Net income
increased during the quarter by more than 76% over the first quarter 2001.
Commenting on the first quarter results, W. Kirk Wycoff, President and CEO,
stated, "In the first quarter we completed the sale of several portfolios which
reduced our total loan levels. Despite the decline of $53 million in loan and
lease receivables our net interest margin decreased only 5 basis points from the
previous quarter. As we expand our community based banking strategy, we expect
our net interest margins to improve from this level. The first quarter was also
helped by significant increases in bank fees and the profitable results of PFR,
our wealth management group."
Tax-equivalent net interest income decreased $1.2 million, or 14%, as
compared to the first quarter of 2001. The net interest margin for the first
quarter of 2002 was 3.53% compared to 4.03% for the same period in 2001 and
3.58% for the fourth quarter of 2001. In addition to the sale of loan
portfolios during the quarter, the reversal of interest income on three loans
placed on non-accrual also had a negative impact on the net interest margin of
14 basis points.
The provision for loan and lease losses was $1.4 million for the three
months ended March 31, 2002, compared to $1.0 million for the same period in
2001. The provision was increased during the first quarter of 2002 primarily due
to the higher level of charge-offs in the residual TechBanc portfolio.
Non-interest income for the three months ended March 31, 2002 amounted to
$4.5 million compared to $3.1 million for the same period in 2001. The quarter
ended March 31, 2002 included income of $1.4 million from the sale of client
warrants as compared to losses of $2.0 million from client warrants during the
first quarter of 2001, due to the permanent impairment of equity securities
received from warrants. There was no gain or loss on sale of securities during
the first quarter of 2002 as compared to gain on sale of securities of $1.3
million for same quarter in 2001. Fee income for the quarter decreased $712,000
primarily due to the decline in private equity fund management fees from the
Company's subsidiary, Progress Capital Management, Inc., as the Company exited
the venture fund management business at December 31, 2001, and a reduction in
consulting fees from the Company's subsidiary, KMR Management, Inc. Service
charges on deposits amounted to $854,000 during the first quarter of 2002
compared to $585,000 for the comparable quarter in 2001. This 46% growth is
primarily attributable to the new deposit products implemented during the
quarter.
Total non-interest expense was $8.9 million for the three months ended
March 31, 2002 compared to $9.5 million for same period in 2001. Salaries and
employee benefits decreased $589,000 mainly due to Progress Capital Management,
Inc. exiting the fund management business and lower staffing levels as Progress
Leasing Company ceased originating new leases. Professional services expenses
decreased by $237,000 primarily due to a reduction in the business activities of
KMR Management, Inc. (KMR). Other expenses increased by $208,000 mainly due to
certain costs associated with the sale of warrants and an uncollectible
receivable from a client of KMR.
Average earning assets for the first quarter of 2002 were $809.6 million
compared to $829.5 million for the same period in 2001. The decline was
primarily due to lower commercial business loan volume as a result of the
TechBanc sale which was partially offset with higher levels of investments in
mortgage-backed securities. Tax-equivalent interest income for the first quarter
of 2002 decreased $4.3 million, or 25%, over the same period in 2001 while
interest expense decreased $3.1 million, or 34%, for the same period.
Loans and leases outstanding totaled $477.9 million at March 31, 2002
compared to $530.5 million at December 31, 2001. This decrease was primarily due
to the sale of TechBanc loans to Comerica totaling $25.6 million, which were
primarily commercial business loans, as well as the ABL loan sale and payoffs of
commercial business loans. The Company reported non-performing assets of $13.6
million at March 31, 2002 compared to $10.9 million at December 31, 2001. The
increase in non-performing assets at March 31, 2002 is primarily the result of
additional real estate owned of $2.7 million relating to one commercial real
estate loan. The Company's non-performing assets to total assets ratio at March
31, 2002 was 1.55% compared to 1.28% at December 31, 2001 and .81% at March 31,
2001. The non-performing loans to assets ratio was 1.07% at March 31, 2002
compared to 1.10% at December 31, 2001 and .66% at March 31, 2001. The ratio of
the allowance for loan and lease losses to total loans and leases was 1.84% at
March 31, 2002 compared to 1.87% at December 31, 2001.
Total deposits decreased to $618.8 million at March 31, 2002 from $629.5
million at December 31, 2001 as a result of the sale of $46.2 million in
deposits to Comerica in January 2002 partially offset by $35.5 million in
deposit growth during the quarter. Total assets increased to $875.0 million at
March 31, 2002 from $851.4 million at December 31, 2001.
During February 2002, the Company closed a private placement offering of
common stock to accredited investors of 1,153,330 common shares priced at $7.50
a share, for total proceeds of $8.6 million and net proceeds of $8.3 million.
The Company contributed $4.2 million of the proceeds to Progress Bank to ensure
compliance with all capital levels required in the existing directive by Office
of Thrift Supervision ("OTS"). At March 31, 2002, Progress Bank's Tier 1
leverage ratios and total risked-based capital ratios were 8.28% and 14.93%,
respectively, which were in compliance with the directive capital requirements
of 8.00% and 14.00%, respectively.
In February 2002, the OTS approved the Company's revised Capital
Enhancement Plan and agreed to extend the dates by which the Bank must comply
with the designated ratio of classified assets to capital required by the
directive. As revised, the Bank's classified assets to capital ratio must not
exceed 25% on June 30, 2002 and must not exceed 20% on September 30, 2002. At
March 31, 2002, the Bank's classified assets to capital ratio was approximately
35%, a decline from 37% at December 31, 2001. The Bank is actively working to
resolve classified assets, however, no assurance can be given that additional
time may not be needed to achieve the required ratios.
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 twenty full service offices. The Company also offers financial
planning services, life insurance, and investments through Progress Financial
Resources, Inc., headquartered in Philadelphia, Pa. In addition, the Company
receives fees for financial and operational management consulting services for
commercial clients through KMR Management, Inc. located in Willow Grove, Pa. The
Company's common stock is traded on The Nasdaq Stock Market under the Symbol
"PFNC".
FINANCIAL DATA ATTACHED
Progress Financial Corporation
Consolidated Statements of Financial Condition
(Dollars in Thousands)
March 31, December 31,
2002 2001
--------------- --------------
Assets:
Cash and due from other financial institutions:
Non-interest earning $ 11,906 $ 21,250
Interest earning 12,130 11,276
Investments and mortgage-backed securities
Available for sale at fair value (amortized cost: $271,705 and $212,793) 269,849 211,828
Held to maturity at amortized cost (fair value: $63,612 and $38,020) 64,874 38,173
Loans and leases, net (net of reserve: $8,775 and $9,917) 469,173 495,025
Loans held for sale -- 25,587
Premises and equipment 25,704 26,038
Other assets 21,343 22,203
-------- --------
Total assets $874,979 $851,380
======== ========
Liabilities, Capital Securities and Shareholders' Equity
Liabilities:
Deposits $618,807 $629,523
Short-term borrowings 31,745 200
Other liabilities 13,498 10,430
Long-term debt:
Federal Home Loan Bank advances 117,000 117,000
Other debt 11,342 20,368
Subordinated debt 3,000 3,000
-------- --------
Total liabilities 795,392 780,521
-------- -------
Corporation-obligated mandatorily redeemable capital securities of
subsidiary trust holding solely junior subordinated debentures of the 20,267 20,260
Corporation
Commitments and contingencies -- --
Shareholders' equity:
Serial preferred - $.01 par value; 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; 7,034,000 and
5,818,000 shares issued and outstanding, including treasury shares of
84,000 and 84,000 and unallocated shares held by the Employee Stock 7,034 5,818
Ownership Plan of 182,000 and 182,000
Other common shareholders' equity, net 53,555 45,466
Net accumulated other comprehensive loss (1,269) (685)
-------- --------
Total shareholders' equity 59,320 50,599
-------- --------
Total liabilities, capital securities and shareholders' equity $874,979 $851,380
======== ========
Progress Financial Corporation
Consolidated Statements of Operations
(Dollars in Thousands, except per share data)
Three Months Ended
March 31,
2002 2001
---------- -------------
Interest income:
Loans and leases, including fees $ 8,950 $12,675
Mortgage-backed securities 3,370 3,277
Investment securities 606 990
Other 86 356
------- -------
Total interest income 13,012 17,298
Interest expense:
Deposits 4,021 6,666
Short-term borrowings 103 647
Long-term borrowings 1,948 1,866
------- -------
Total interest expense 6,072 9,179
Net interest income 6,940 8,119
Provision for loan and lease losses 1,439 1,047
------- -------
Net interest income after provision for loan and lease 5,501 7,072
losses
Non-interest income:
Service charges on deposits 854 585
Lease financing fees 63 277
Mutual fund, annuity and insurance commissions 940 800
Loan brokerage and advisory fees 273 223
Private equity fund management fees 52 614
Gain on sale of securities -- 1,258
Gain on sale of loans and lease receivables 132 302
Gain on sale of investments in unconsolidated entities 11 --
Client warrant income (loss) 1,426 (1,959)
Equity (loss) in unconsolidated entities 95 (27)
Fees and other 698 985
------- -------
Total non-interest income 4,544 3,058
------- -------
Non-interest expense:
Salaries and employee benefits 4,401 4,990
Occupancy 586 613
Data processing 257 215
Furniture, fixtures and equipment 546 546
Professional services 578 815
Capital securities expense 572 561
Other 1,988 1,780
------- -------
Total non-interest expense 8,928 9,520
------- -------
Income before income taxes 1,117 610
Income tax expense 367 185
------- -------
Net income $750 $425
======= =======
Basic earnings per common share $.12 $.07
==== ====
Diluted earnings per common share $.12 $.07
==== ====
Dividends per common share $.00 $.06
==== ====
Basic average common shares outstanding 6,206,177 5,684,940
========= =========
Diluted average common shares outstanding 6,342,450 5,829,134
========= =========
Progress Financial Corporation
Supplemental Data
Three Months Ended
March 31,
2002 2001
----------------------------
Profitability Measures:
Return on average assets 0.35% 0.20%
Return on average equity 5.33 3.31
Net interest spread (FTE) (1) 3.05 3.24
Net interest margin (FTE) (1) 3.53 4.03
Efficiency ratio 72.61 66.70
Diluted net income per common share $ .12 $ .07
Selected Loan Data:
Non-performing assets $13,585 $7,358
Ratio of non-performing assets to total assets 1.55% .81%
Ratio of allowance for loan and lease losses
to total loans and leases receivable 1.84 1.39
Ratio of allowance for loan and lease losses
to non-performing loans and leases receivable 93.93 128.42
Loan delinquency ratio 1.87 2.39
Ratio of loans and leases to deposits 77.24 93.50
Selected Equity Data:
Book value per share $8.76 $9.22
Tangible book value per share 8.49 8.76
Dividends per common share .00 .06
Average equity to average assets 6.64% 5.89%
Tier 1 risk-based capital ratio (Bank) 13.67 10.61
Total risk-based capital ratio (Bank) 14.93 11.86
Tier 1 leverage ratio (Bank) 8.28 6.95
Selected Average Balances:
Loans, gross $506,091 $546,195
Earning assets 809,647 829,546
Total assets 859,032 883,552
Deposits 614,417 610,972
Equity 57,034 52,027
(1) FTE represents a fully tax equivalent basis.
Progress Financial Corporation
Supplemental Balances
Period-End Balances At : March 31, 2002 December 31, 2001 % Change
----------------------------------------------------------------
Loans and Leases, Net:
Commercial business (2) $101,462 $146,844 (30.9%)
Commercial real estate (2) 189,937 197,394 (3.8)
Construction, net of loans in process 84,339 77,380 9.0
Single family residential real estate 24,981 26,518 (5.8)
Consumer 45,009 44,821 .4
Leases receivable 32,220 37,572 (14.2)
----------------------------------------------------------------
Total loans and leases 477,948 530,529 (9.9)
Allowance for loan and lease losses (8,775) (9,917) (11.5)
----------------------------------------------------------------
Loans and leases, net $469,173 $520,612 (9.9%)
================================================================
Deposits:
Non-interest bearing demand deposits $ 72,567 $ 84,783 (14.4)%
NOW and SuperNow 120,131 120,665 (.4)
Money Market 71,264 45,779 55.7
Passbook and Statement Savings 32,009 30,191 6.0
Time deposits 322,836 348,105 (7.3)
----------------------------------------------------------------
Total deposits $618,807 $629,523 (1.7%)
================================================================
2) Includes loans held for sale at December 31, 2001: commercial business
loans of $23,298 and commercial real estate loans of $2,289.
###
Exhibit 99(b)
Analyst Package Distributed January 23, 2002
Three months ended
March 31,
-----------------------------------
Percent
2002 2001 change
-----------------------------------
Per Common Share Data
- ---------------------
Net income:
Basic $0.12 $0.07 71.43%
Diluted $0.12 $0.07 71.43%
Cash dividends declared $0.00 $0.06 -100.00%
Book value $8.76 $9.22 -4.99%
Tangible book value $8.49 $8.76 -3.08%
Average shares outstanding:
Basic 6,206,177 5,684,940 9.17%
Diluted 6,342,450 5,829,134 8.81%
Financial Ratios
- ----------------
Return on average shareholders' equity 5.33% 3.31% 61.03%
Return on average total assets 0.35% 0.20% 75.00%
Average yield on earning assets 6.57% 8.51% -22.80%
Average rate on interest bearing liabilities 3.52% 5.27% -33.21%
Net interest spread 3.05% 3.24% -5.86%
Net interest margin (FTE) 3.53% 4.03% -12.41%
Efficiency ratio 72.61% 66.70% 8.86%
Risk-based capital - Tier 1 13.67% 10.61% 28.84%
- Total capital 14.93% 11.86% 25.89%
Tier 1 leverage ratio 8.28% 6.95% 19.14%
Average shareholders' equity/average total assets 6.64% 5.89% 12.73%
Asset Quality (dollars in thousands)
- ------------------------------------
Allowance for loan losses $ 8,775 $ 7,708 13.84%
Allowance for loan losses/Loans 1.84% 1.39% 32.37%
Net charge-offs (recoveries) $ 2,581 $ 746 245.98%
Net charge-offs/Average loans (annualized) 2.07% 0.55% 276.36%
Nonperforming assets $ 13,585 $ 7,358 84.63%
Nonperforming assets/Total loans plus OREO 2.87% 1.34% 114.18%
Nonperforming assets/Total assets 1.55% 0.81% 91.36%
Allowance for loan losses/Nonperforming loans 93.93% 128.42% -26.86%
Average Balances (in thousands)
- -------------------------------
Loans and leases (gross of reserves) $ 506,091 $ 546,195 -7.34%
Earning assets 809,647 829,546 -2.40%
Total assets 859,032 883,552 -2.78%
Deposits 614,417 610,972 0.56%
Interest bearing liabilities 700,327 706,405 -0.86%
Shareholders' equity 57,034 52,027 9.62%
Period End Balances (in thousands)
Loans and leases (gross of reserves) $ 477,948 $ 556,457 -14.11%
Total assets 874,979 904,907 -3.31%
Deposits 618,807 595,172 3.97%
Total liabilities 795,392 832,605 -4.47%
Shareholders' equity 59,320 52,063 13.94%
Three months ended
March 31,
------------------------------
Percent
2002 2001 change
------------------------------
TAX EQUIVALENT INCOME STATEMENT
- -------------------------------
($ in thousands, except per share data)
Net interest income(FTE) $ 7,051 $ 8,235 -14%
FTE adjustment (111) (116) 4%
----------------- ----
Net interest income 6,940 8,119 -15%
Provision for losses on loans 1,439 1,047 37%
Non-Interest Income:
Service charges on deposits 854 585 46%
Lease financing fees 63 277 -77%
Mutual fund, annuity and insurance commissions 940 800 18%
Loan brokerage and advisory fees 273 223 22%
Private equity fund management fees 52 614 -92%
Gain(loss) on securities - 1,258 -100%
Client warrant income (loss) 1,426 (1,959) 173%
Equity (loss) in unconsolidated entities 95 (27) 452%
Fees and other income 841 1,287 -35%
----------------- ----
Total non-interest income 4,544 3,058 49%
Non-Interest Expenses:
Salaries and employee benefits 4,401 4,990 -12%
Occupancy 586 613 -4%
Data processing 257 215 20%
Furniture, fixtures and equipment 546 546 -
Loan and real estate owned expenses, net 295 284 4%
Professional services 578 815 -29%
Capital securities expense 572 561 2%
Other 1,693 1,496 13%
----------------- ----
Total non-interest expenses 8,928 9,520 -6%
----------------- ----
Income from continuing operations
before income tax 1,117 610 83%
Provision for income tax expense 367 185 98%
----------------- ----
Income from Continuing Operations 750 425 76%
Gain on sale of discontinued operations, net of tax - - -
Income from discontinued operations, net of tax - - -
----------------- ----
Income before extraordinary loss 750 425 76%
Extraordinary loss on extinguishment
of debt, net of tax - - -
Net income $ 750 $ 425 76%
==================== =========
QUARTERLY INCOME STATEMENT
(Unaudited)
($ in thousands, except per share) First
2002 Quarter
- ---------------------------------------------------------------------
FTE interest income $13,123
Interest expense 6,072
-------
FTE net interest income 7,051
Less: FTE adjustment (111)
-------
Net Interest Income 6,940
Provision for Losses on Loans 1,439
Non-Interest Income:
- -------------------
Service charges on deposits 854
Lease financing fees 63
Mutual fund, annuity and insurance commissions 940
Loan brokerage and advisory fees 273
Private equity fund management fees 52
Gain(loss) on securities -
Client warrant income (loss) 1,426
Equity (loss) in unconsolidated entities 95
Fees and other income 841
-------
Total non-interest income 4,544
Non-Interest Expenses:
- ---------------------
Salaries and employee benefits 4,401
Occupancy 586
Data processing 257
Furniture, fixtures and equipment 546
Loan and real estate owned expenses, net 295
Professional services 578
Capital securities expense 572
Other 1,693
-------
Total non-interest expenses 8,928
Income from Continuing Operations Before Income Taxes 1,117
Provision for income tax expense 367
-------
Income from Continuing Operations 750
Gain on sale of discontinued operations, net of tax -
Income from discontinued operations, net of tax -
-------
Net Income $750
=======
Other Data:
- ----------
EPS - Basic income from continuing operations $0.12
EPS - Diluted income from continuing operations $0.12
EPS - Basic $0.12
EPS - Diluted $0.12
ROA 0.35%
ROE 5.33%
Net interest margin (FTE) 3.53%
Dividends declared on common stock $0.00
FTE employees 277
FTE employees -- Continued Operations 277
QUARTERLY INCOME STATEMENT
(Unaudited)
($ in thousands, except per share) Fourth Third Second First Year-
2001 Quarter Quarter Quarter Quarter to-date
---- ----------------------------------------------- -----------
FTE interest income $ 14,565 $ 16,445 $ 17,024 $ 17,414 $ 65,448
Interest expense 7,046 8,235 8,912 9,179 33,372
-------- -------- -------------------- --------
FTE net interest income 7,519 8,210 8,112 8,235 32,076
Less: FTE adjustment (114) (115) (118) (116) (463)
-------- -------- -------------------- --------
Net Interest Income 7,405 8,095 7,994 8,119 31,613
Provision for Losses on Loans 972 1,543 3,554 1,047 7,116
Non-Interest Income:
Service charges on deposits 768 640 623 585 2,616
Lease financing fees 1 231 242 277 751
Mutual fund, annuity and insurance commissions 1,000 313 981 800 3,094
Loan brokerage and advisory fees 573 158 365 223 1,319
Private equity fund management fees 614 614 615 614 2,457
Gain(loss) on securities 509 1,073 (21) 1,258 2,819
Client warrant income 9 1 1 (1,959) (1,948)
Equity (loss) in unconsolidated entities 184 (240) (551) (27) (634)
Fees and other income 1,858 1,462 1,030 1,287 5,637
-------- -------- -------------------- --------
Total non-interest income 5,516 4,252 3,285 3,058 16,111
Non-Interest Expenses:
Salaries and employee benefits 4,961 4,225 4,983 4,990 19,159
Occupancy 648 647 633 613 2,541
Data processing 280 230 276 215 1,001
Furniture, fixtures and equipment 588 528 572 546 2,234
Loan and real estate owned expenses, net 402 557 151 284 1,394
Professional services 989 943 915 815 3,662
Capital securities expense 572 573 572 561 2,278
Other 2,370 1,705 1,723 1,496 7,294
-------- -------- -------------------- --------
Total non-interest expenses 10,810 9,408 9,825 9,520 39,563
Income from Continuing Operations
Before Income Taxes 1,139 1,396 (2,100) 610 1,045
Provision for income tax expense 385 463 (731) 185 302
-------- -------- -------------------- --------
Income from Continuing Operations 754 933 (1,369) 425 743
Gain on sale of discontinued operations, net of tax - - - - -
Income from discontinued operations, net of tax - - - - -
-------- ------- -------------------- --------
Income before extraordinary loss 754 933 (1,369) 425 743
Extraordinary loss on extinguishment
of debt, net of tax (199) - - - (199)
-------- ------- -------------------- --------
Net Income $ 555 $ 933 $ (1,369) $ 425 $ 544
======== ======= ==================== ========
Other Data:
- ----------
EPS - Basic income from continuing operations $0.13 $0.17 ($0.24) $0.07 $0.13
EPS - Diluted income from continuing operations $0.13 $0.17 ($0.24) $0.07 $0.13
EPS - Basic $0.10 $0.17 ($0.24) $0.07 $0.10
EPS - Diluted $0.10 $0.17 ($0.24) $0.07 $0.10
ROA 0.25% 0.41% -0.61% 0.20% 0.06%
ROE 4.12% 7.25% -10.57% 3.31% 1.04%
Net interest margin (FTE) 3.58% 3.78% 3.79% 4.03% 3.79%
Dividends declared on common stock $0.00 $0.00 $0.06 $0.06 $0.12
FTE employees 306 302 318 298 306
FTE employees--Continued Operations 306 302 318 298 306
ASSET QUALITY
(Unaudited)
2002 2001
------- ------------------------------------------------------
($ in thousands) First Year- Fourth Third Second First
Allowance for Loan Losses Quarter to-date Quarter Quarter Quarter Quarter
------- ------- ------- ------- ------- -------
Balance at beginning of period $ 9,917 $ 7,407 $ 10,560 $ 10,309 $ 7,708 $ 7,407
Provision 1,439 7,116 972 1,543 3,554 1,047
Charge-offs 2,721 5,299 2,124 1,344 1,049 782
Recoveries (140) (693) (509) (52) (96) (36)
------- ------- -------- -------- ------- -------
Net loan charge-offs 2,581 4,606 1,615 1,292 953 746
------- ------- -------- -------- ------- -------
Balance at end of period $ 8,775 $ 9,917 $ 9,917 $ 10,560 $10,309 $ 7,708
======= ======= ======== ======== ======= =======
Allowance as percentage of loans 1.84% 1.87% 1.87% 1.92% 1.82% 1.39%
Net charge-offs/average loans 0.51% 0.83% 0.30% 0.23% 0.17% 0.14%
Allowance as percentage of
non-performing loans 93.93% 106.28% 106.28% 221.15% 203.21% 128.42%
Non-performing assets
- ---------------------
Non-accrual loans and leases $ 9,342 $ 9,331 $ 9,331 $ 4,775 $ 5,073 $ 6,002
Other real estate owned 4,243 1,533 1,533 1,498 3,340 1,356
------- ------- -------- -------- ------- -------
Total non-performing assets $13,585 $10,864 $ 10,864 $ 6,273 $ 8,413 $ 7,358
======= ======= ======== ======== ======= =======
Non-performing assets to:
Loans and leases plus OREO 2.87% 2.08% 2.08% 1.16% 1.50% 1.34%
Total assets 1.55% 1.28% 1.28% 0.72% 0.92% 0.81%
Loans past due 90 days $3,244 $1,125 $1,125 $2,540 $2,473 $2,971
Total under-performing assets $16,829 $11,989 $11,989 $8,813 $10,886 $10,329
AVERAGE BALANCE SHEET DATA
(Unaudited)
2002 2001
------- ----------------------------------------------------------------
($ in thousands) First Fourth Third Second First Year-
Average balances Quarter Quarter Quarter Quarter Quarter to-date
- ---------------- -------- -------- -------- -------- -------- --------
Cash and due from banks (Interest-earning) $ 22,496 $ 27,686 $ 26,971 $ 21,353 $ 26,385 $ 25,606
Trading securities - - - - - -
Loans,net of unearned discounts:
Commercial business 123,173 158,298 182,187 186,230 177,260 175,959
Commercial mortgage 193,250 200,495 195,209 185,864 179,400 190,313
Residential real estate 25,688 28,123 30,887 32,436 33,870 31,312
Construction loans 83,831 76,503 68,694 70,094 64,141 69,889
Consumer 44,437 45,008 41,612 38,742 37,401 40,714
Lease financing 35,712 38,660 43,962 45,513 54,123 45,518
-------- -------- -------- -------- -------- --------
Total loans 506,091 547,087 562,551 558,879 546,195 553,705
Investment securities(available for sale) 5,967 5,608 4,719 5,873 23,269 10,798
Investment securities(held to maturity) 38,224 37,970 37,675 37,381 38,261 37,821
Mortgage-backed securities 236,869 214,914 230,158 235,432 195,436 218,012
-------- -------- -------- -------- -------- --------
Earning assets 809,647 833,265 862,074 858,918 829,546 845,942
Cash and due from banks(non-interest bearing) 15,563 16,788 16,663 16,206 16,612 16,568
Other non-earning assets 33,822 33,485 30,158 32,054 37,394 33,317
-------- -------- -------- -------- -------- --------
Total assets $859,032 $883,538 $908,895 $907,178 $883,552 $895,827
======== ======== ======== ======== ======== ========
Demand $ 73,734 $ 81,334 $ 77,796 $ 69,629 $ 80,637 $ 77,352
Interest bearing:
NOW and Supernow accounts 119,129 118,912 116,900 113,218 104,396 113,406
Money Market Accounts 61,776 45,471 40,946 37,282 45,848 42,382
Passbook and Stmt Savings 30,956 30,036 29,086 28,614 27,804 28,892
Time deposits 328,822 370,709 373,851 362,414 352,287 364,891
-------- -------- -------- -------- -------- --------
Total interest bearing deposits 540,683 565,128 560,783 541,528 530,335 549,571
Federal Home Loan Bank borrowings 120,333 126,891 127,000 126,999 121,366 125,584
Other borrowings 39,311 27,803 62,632 81,071 54,704 56,495
-------- -------- -------- -------- -------- --------
Interest bearing liabilities 700,327 719,822 750,415 749,598 706,405 731,650
Non-interest bearing liabilities 7,674 8,645 9,352 15,747 24,248 14,440
Capital securities 20,263 20,254 20,250 20,241 20,235 20,245
Total shareholders' equity 57,034 53,483 51,082 51,963 52,027 52,140
-------- -------- -------- -------- -------- --------
Total Liabilities and Shareholders' Equity $859,032 $883,538 $908,895 $907,178 $883,552 $895,827
======== ======== ======== ======== ======== ========
AVERAGE BALANCE SHEET DATA - continued
(Unaudited)
2002 2001
-------- ----------------------------------------------------------------
First Fourth Third Second First Year-
Average yields and rates Quarter Quarter Quarter Quarter Quarter to-date
- ------------------------ -------- ----------------------------------------------------------------
Interest - earning assets
Interest-earning deposits 1.55% 2.03% 3.28% 4.21% 5.47% 3.69%
Investment securities 6.47% 6.55% 6.90% 6.84% 7.17% 6.75%
Mortgage-backed securities 5.77% 5.86% 6.29% 6.53% 6.80% 6.39%
Single family residential loans 7.44% 7.42% 7.89% 8.36% 9.78% 8.41%
Commercial real estate loans 7.48% 8.15% 8.39% 8.60% 8.95% 8.51%
Construction loans 6.47% 7.08% 8.43% 9.20% 10.38% 8.69%
Commercial business loans 6.55% 6.81% 8.18% 8.61% 9.54% 8.32%
Lease financing 10.27% 10.66% 10.06% 10.73% 10.33% 10.44%
Consumer loans 6.38% 6.71% 7.31% 7.67% 7.86% 7.35%
------- ------- ------ ------ ------ ------
Total interest - earning assets 6.57% 6.93% 7.57% 7.95% 8.51% 7.74%
------- ------- ------ ------ ------ ------
Interest - bearing liabilities
Interest - bearing deposits
NOW and SuperNOW 1.40% 1.68% 2.27% 2.81% 3.41% 2.51%
Money Market 1.91% 1.88% 2.48% 2.63% 3.50% 2.62%
Passbook and Statement Savings 1.02% 1.14% 1.47% 1.60% 1.71% 1.47%
Time deposits 4.00% 4.36% 4.97% 5.52% 6.07% 5.21%
------- ------- ------ ------ ------ ------
Total interest - bearing deposits 3.02% 3.43% 4.04% 4.54% 5.10% 4.26%
FHLB borrowings 5.43% 5.50% 5.59% 5.49% 5.65% 5.60%
Other borrowings 4.24% 5.37% 4.68% 4.95% 5.93% 5.20%
------- ------- ------ ------ ------ ------
Total interest - bearing liabilities 3.52% 3.88% 4.35% 4.77% 5.27% 4.56%
------- ------- ------ ------ ------ ------
Interest Rate Spread 3.05% 3.05% 3.22% 3.18% 3.24% 3.18%
Net Interest Margin 3.53% 3.58% 3.78% 3.79% 4.03% 3.79%
Avg Int-earning assets to int-bearing liabilities 115.61% 115.76% 114.88% 114.58% 117.43% 115.62%
PERIOD END BALANCE SHEET DATA
(Unaudited)
2002 2001
------- ------------------------------------------------------
First Fourth Third Second First
($ in thousands) Quarter Quarter Quarter Quarter Quarter
------- ------------------------------------------------------
Assets
- ------
Cash and due from bank(interest bearing) $ 12,130 $ 11,276 $ 15,545 $ 11,342 $ 16,548
Loans and lease(net) 469,173 520,612 538,741 555,981 548,749
Investment securities:
Held-to-maturity:
Book 39,570 38,173 37,869 37,570 37,278
Market 38,660 38,020 38,077 37,330 37,350
Available-for-sale 5,941 6,682 5,217 5,965 5,826
Mortgage-backed securities:
Held-to-maturity:
Book 25,304 - - - -
Market 24,952 - - - -
Available-for-sale 263,908 205,146 191,714 239,829 241,431
-------- -------- -------- -------- --------
Earning assets 816,026 781,889 789,086 850,687 849,832
Cash and due from bank(non-interest bearing) 11,906 21,250 30,126 16,631 14,009
Other non-earning assets 47,047 48,241 56,587 47,052 41,066
Net assets of discontinued operations - - - - -
-------- -------- -------- -------- --------
Total assets $874,979 $851,380 $875,799 $914,370 $904,907
======== ======== ======== ======== ========
Liabilities and shareholders' equity
- ------------------------------------
Deposits:
Demand $ 72,567 $ 84,783 $ 79,318 $ 76,588 $ 67,105
Interest bearing 546,240 544,740 550,417 556,283 528,067
-------- -------- -------- -------- --------
Total deposits 618,807 629,523 629,735 632,871 595,172
Federal Home Loan Bank borrowings 117,000 117,000 127,000 127,000 127,000
Other borrowings 46,087 23,568 34,147 72,549 89,738
-------- -------- -------- -------- --------
Interest bearing liabilities 781,894 770,091 790,882 832,420 811,910
Other Liabilities 13,498 10,430 12,157 12,073 20,695
Total liabilities 795,392 780,521 803,039 844,493 832,605
Capital Securities 20,267 20,260 20,253 20,246 20,239
Total shareholders' equity 59,320 50,599 52,507 49,631 52,063
-------- -------- -------- -------- --------
Total Liabilities, cap sec, and equity $874,979 $851,380 $875,799 $914,370 $904,907
======== ======== ======== ======== ========
Other selected balances
Intangible assets -- Goodwill 1,865 1,974 2,478 2,541 2,605
Amount included in shareholders' equity
for net unrealized gains on investments
available-for-sale (1,269) (685) 1,848 48 130
Capital Data
(Unaudited)
2002 2001
------- ----------------------------------------------------------------
First Fourth Third Second First Year-
Quarter Quarter Quarter Quarter Quarter to-date
------- --------- --------- ------- ------- --------
Per common share
Shares outstanding:
Average-basic 6,206,177 5,545,478 5,584,133 5,584,582 5,684,940 5,599,358
Average-diluted 6,342,450 5,642,897 5,680,014 5,715,918 5,829,134 5,717,568
Period-end 6,768,458 5,551,535 5,584,361 5,563,378 5,648,895 5,551,535
Book value $8.76 $9.11 $9.40 $8.92 $9.22 $9.11
Tangible Book Value $8.49 $8.76 $8.96 $8.46 $8.76 $8.76
Price:
High 9.65 7.60 7.94 8.40 9.63 9.63
Low 7.44 5.90 5.60 6.88 7.06 5.60
Close 8.94 7.50 6.40 7.95 7.38 7.50
Capital ratios
($ in thousands)
Risk-based capital:
Tier 1 capital $71,957 $66,395 $65,343 $61,449 $61,935 $66,395
% risk adjusted assets 13.67% 11.60% 11.34% 10.32% 10.61% 11.60%
Total capital $78,562 $73,582 $72,583 $68,929 $69,236 $73,582
% risk adjusted assets 14.93% 12.85% 12.59% 11.57% 11.86% 12.85%
Tier 1 leverage ratio 8.28% 7.90% 7.58% 6.83% 6.95% 7.90%
Average shareholders' equity to
total average assets 6.64% 6.05% 5.62% 5.73% 5.89% 5.82%