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 23, 2003
- --------------------------------------------------------------------------------
(Date of earliest event reported)
- --------------------------------------------------------------------------------
Progress Financial Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-14815 23-2413363
- --------------------------------------------------------------------------------
(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identified No.)
4 Sentry Parkway, Suite 200, Blue Bell, Pennsylvania 19422-0764
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(610)-825-8800
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)
- --------------------------------------------------------------------------------
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) The following exhibits are included with this Report:
Exhibit No. Description
----------- -----------
99.1 Press Release, dated April 23, 2003
99.2 Press Release, dated April 23, 2003
99.3 Press Release, dated April 23, 2003
Item 9. Regulation FD Disclosure (Results of Operations and Financial Condition)
------------------------------------------------------------------------
On April 23, 2003 Progress Financial Corporation reported first quarter net
income of $1.4 million, or diluted earnings of $.21 per share. A copy of the
press release is included as Exhibit 99.1 and is incorporated herein by
reference. This information, which is required by Item 12 of Form 8-K, is being
provided under Item 9 pursuant to Commission Release 34-47583.
On April 23, 2003 Progress Financial Corporation declared the quarterly
cash dividend. A copy of the press release is included as Exhibit 99.2 and is
incorporated herein by reference. This information, which is required by Item 12
of Form 8-K, is being provided under Item 9 pursuant to Commission Release
34-47583.
On April 23, 2003, Progress Financial Corporation distributed an earnings
package to analysts. For further information see the attached Exhibit 99.3 and
incorporated herein by reference. This information, which is required by Item 12
of Form 8-K, is being provided under Item 9 pursuant to Commission Release
34-47583.
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 23, 2003 By: /s/ Michael B. High
---------------------------------------
Michael B. High
Chief Operating Officer and
Chief Financial Officer
Exhibit 99.1
Press Release on First Quarter 2003 Earnings
FOR IMMEDIATE RELEASE Contacts:
April 23, 2003 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 75% Increase in
First Quarter 2003 Earnings Per Share
Blue Bell, PA, April 23, 2003 - Progress Financial Corporation (the
"Company" - Nasdaq: PFNC), reported first quarter 2003 net income of $1.4
million, or diluted earnings per share of $.21, compared to net income of
$750,000, or diluted earnings per share of $.12, for the first quarter of 2002.
Commenting on the first quarter results, W. Kirk Wycoff, President and CEO,
stated, "We are pleased with our earnings results for the first quarter, which
were driven by excellent loan and deposit growth and attention to cost control.
The opportunities in our markets for a community bank with broad products and an
outstanding sales and service team remain excellent. Now that geo political
concerns are clearing, we are optimistic about 2003."
Tax-equivalent net interest income for the quarter ended March 31, 2003
increased $973,000, or 15%, compared to the first quarter of 2002 and increased
$444,000, or 6%, compared to the fourth quarter of 2002. The net interest margin
for the first quarter of 2003 was 3.02% (FTE) compared to 3.25% (FTE) for the
first quarter of 2002 and 3.09% (FTE) for the fourth quarter of 2002.
The provision for loan and lease losses was $700,000 for the quarter ended
March 31, 2003, compared to $1.4 million for the same period in 2002. The higher
provision during 2002 was primarily due to charge-offs in the TechBanc portfolio
(which was subsequently sold) and the reserve additions to address credit and
economic concerns which have now been reduced as a result of the reduction in
the Company's classified assets.
Non-interest income for the quarter ended March 31, 2003 was $2.8 million
compared to $4.5 million for the same period in 2002. This decrease was the
result of a variety of factors. The quarter ended March 31, 2003 included client
warrant income of $197,000 compared to $1.4 million during the first quarter of
2002. Fee income for the quarter decreased $605,000 primarily due to a decrease
in mutual fund, annuity and insurance commissions from the Company's subsidiary,
Progress Financial Resources, Inc., and a reduction in consulting fees from the
Company's subsidiary, KMR Management, Inc. Gain on sale of securities was
$323,000 for the first quarter of 2003 compared to no gain or loss on sale of
securities during the same quarter in 2002.
Total non-interest expense was $7.3 million for the quarter ended March 31,
2003, a decrease of $1.1 million compared to $8.4 million for the first quarter
of 2002. Salaries and employee benefits decreased by $509,000 for the three
months ended March 31, 2003 from the comparable period in 2002, mainly due to
decreased commission volume for Progress Financial Resources, Inc. and lower
staffing levels at KMR Management, Inc. Other expenses decreased $575,000 in the
first quarter of 2003 compared to the first quarter of 2002 primarily due to
recoveries of real estate owned expenses during 2003, loan workout expenses
during 2002 and an uncollectible receivable from a client of KMR during 2002.
Average earning assets for the first quarter of 2003 were $999.8 million
compared to $809.6 million for the first quarter of 2002. The increase in
earning assets during the three months ended March 31, 2003 from the comparable
period in 2002 was primarily due to higher levels of investments in
mortgage-backed securities. Tax-equivalent interest income for the first quarter
of 2003 increased $702,000, or 5%, over the same period in 2002 while interest
expense decreased $271,000, or 4%, for the same period.
Loans and leases outstanding increased $36.3 million to $502.1 million at
March 31, 2003 from $465.8 million at December 31, 2002. This increase was
primarily due to growth in commercial real estate loans, construction loans and
consumer loans. The Company reported non-performing assets of $5.4 million at
March 31, 2003, level with $5.4 million at December 31, 2002 and a decrease of
$8.2 million compared to $13.6 million at March 31, 2002. The decrease in
non-performing assets from March 31, 2002 was primarily the result of principal
payments, charge-offs and a net decrease in real estate owned of $4.2 million
from acquisitions and sales related to commercial real estate loans. The Company
reported net recoveries of $51 thousand for the period ended March 31, 2003
versus $2.6 million of net charge offs for the comparable period in 2002. As of
December 31, 2002, the Company had no real estate owned. The Company's
non-performing assets to total assets ratio at March 31, 2003 was .49% compared
to .54% at December 31, 2002 and 1.55% at March 31, 2002. The non-performing
loans to assets ratio was .49 % at March 31, 2003 compared to .54% at December
31, 2002 and 1.07% at March 31, 2002. The ratio of the allowance for loan and
lease losses to total loans and leases was 1.44% at March 31, 2003 compared to
1.39% at December 31, 2002 and 1.84% at March 31, 2002.
Total deposits increased $20.1 million to $711.6 million at March 31, 2003
from $691.5 million at December 31, 2002. Total assets increased to $1.11
billion at March 31, 2003 from $1.02 billion at December 31, 2002.
At March 31, 2003, Progress Bank's Tier 1 leverage and total risk-based
capital ratios were 7.31% and 14.39% as compared to 7.82% and 15.20% at December
31, 2002.
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-one full service offices.
The Company also offers financial planning services, life insurance, group
employee benefits, 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".
####
This release contains forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from
estimates. When used in filings by the Company with the Securities and Exchange
Commission, in the Company's press releases or other public or shareholder
communications, or in oral statements made with the approval of an authorized
executive officer, the words or phrases "will likely result", "are expected to",
"will continue", "is anticipated", "estimate", "project", or similar expressions
are intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are subject to
certain risks and uncertainties including changes in economic conditions in the
Company's market area, changes in policies by regulatory agencies, fluctuations
in interest rates, demand for loans in the Company's market area and competition
that could cause actual results to differ materially from historical earnings
and those presently anticipated or projected. The Company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. The Company wishes to advise readers that
the factors listed above could affect the Company's financial performance and
could cause the Company's actual results for future periods to differ materially
from any opinions or statements expressed with respect to future periods in any
current statements.
FINANCIAL DATA ATTACHED
Progress Financial Corporation
Consolidated Statements of Financial Condition
(Dollars in thousands)
March 31, December 31,
2003 2002
---------------------------- --------------------
Assets
Cash and due from banks:
Non-interest earning $ 22,166 $ 20,650
Interest earning 6,650 17,570
Investments and mortgage-backed securities
Available for sale at fair value (amortized cost: $390,402 and $353,688) 395,603 359,290
Held to maturity at amortized cost (fair value: $145,380 and $121,968) 142,686 120,006
Loans and leases, net (net of reserve: $7,214 and $6,463) 494,914 459,350
Premises and equipment 26,352 26,726
Other assets 18,563 14,252
---------------------------- --------------------
Total assets $ 1,106,934 $ 1,017,844
============================ ====================
Liabilities and Shareholders' Equity
Liabilities:
Deposits $ 711,550 $ 691,538
Short-term borrowings 167,683 96,882
Other liabilities 12,674 12,132
Long-term debt:
Federal Home Loan Bank advances 120,500 120,500
Other debt 1,227 1,227
Capital securities 28,844 28,836
---------------------------- --------------------
Total liabilities 1,042,478 951,115
---------------------------- --------------------
Commitments and contingencies
Shareholders' Equity:
Common stock - $1 par value; 12,000,000 shares authorized;
7,121,000, and 7,058,000 shares issued and outstanding at 7,121 7,058
March 31, 2003 and December 31, 2002, respectively
Treasury stock (370,000 and 114,000 shares at March 31, 2003 and
December, 31, 2002, respectively) (4,370) (1,050)
Unearned Employee Stock Ownership Plan shares (169,000 shares
at March 31, 2003 and December 31, 2002) (1,341) (1,341)
Unearned compensation - restricted stock awards (51) (75)
Capital surplus 51,720 51,536
Retained earnings 7,973 6,936
Net accumulated other comprehensive income 3,404 3,665
---------------------------- --------------------
Total shareholders' equity 64,456 66,729
---------------------------- --------------------
Total liabilities and shareholders' equity $1,106,934 $ 1,017,844
============================ ====================
Progress Financial Corporation
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
2003 2002
-------------- -------------
Interest income:
Loans and leases, including fees $ 7,860 $ 8,950
Mortgage-backed securities 5,010 3,370
Investment securities 689 606
Other 21 86
-------------- --------------
Total interest income 13,580 13,012
Interest expense:
Deposits 3,564 4,021
Borrowings 2,219 2,051
Capital securities 590 572
-------------- --------------
Total interest expense 6,373 6,644
Net interest income 7,207 6,368
Provision for loan and lease losses 700 1,439
-------------- --------------
Net interest income after provision for loan and lease losses 6,507 4,929
Non-interest income:
Service charges on deposits 806 854
Mutual fund, annuity and insurance commissions 610 940
Loan brokerage and advisory fees 311 273
Private equity fund management fees 65 52
Gain on sale of securities 323 ---
Gain on sale of loans and lease receivables 164 132
Client warrant income 197 1,426
Fees and other 360 867
-------------- --------------
Total non-interest income 2,836 4,544
Non-interest Expense:
Salaries and employee benefits 3,892 4,401
Occupancy 716 586
Data processing 227 257
Furniture, fixtures and equipment 491 546
Professional services 647 578
Goodwill and other intangible assets impairment losses and amortization 44 109
Other 1,304 1,879
-------------- --------------
Total non-interest expense 7,321 8,356
-------------- --------------
Income before income taxes 2,022 1,117
Income tax expense 575 367
-------------- --------------
Net income $ 1,447 $ 750
============== ==============
Basic earnings per common share $0.22 $0.12
============== ==============
Diluted earnings per common share $0.21 $0.12
============== ==============
Dividends per common share $0.06 $0.00
============== ==============
Basic average common shares outstanding 6,710,508 6,206,177
============== ==============
Diluted average common shares outstanding 6,932,383 6,342,450
============== ==============
Progress Financial Corporation
Supplemental Data
(Dollars in Thousands, Except Per Share Data)
Three Months Ended
March 31,
2003 2002
--------------- --------------
Profitability Measures:
Return on average assets 0.56% 0.35%
Return on average equity 8.87 5.33
Net interest spread (FTE) 2.67 2.83
Net interest margin (FTE) 3.02 3.25
Efficiency ratio 71.82 76.18
Diluted net income per common share $0.21 $0.12
Selected Loan Data:
Non-performing assets $5,445 $13,585
Ratio of non-performing assets to total assets 0.49% 1.55%
Ratio of allowance for loan and lease losses
to total loans and leases receivable 1.44 1.84
Ratio of allowance for loan and lease losses
to non-performing loans and leases 132.49 93.93
Loan delinquency ratio 0.97 1.87
Ratio of loans and leases to deposits 70.57 77.24
Selected Equity Data:
Book value per share $ 9.79 $8.76
Tangible book value per share 9.62 8.49
Dividends per common share 0.06 0.00
Average equity to average assets 6.28% 6.64%
Tier 1 risk-based capital ratio (Bank) 13.24 13.58
Total risk-based capital ratio (Bank) 14.39 14.84
Tier 1 leverage capital ratio (Bank) 7.31 8.30
Selected Average Balances:
Loans, gross $ 483,560 $506,091
Earning assets 999,750 809,647
Total assets 1,053,227 859,032
Deposits 692,620 614,417
Equity 66,139 57,034
Progress Financial Corporation
Supplemental Balances
(Dollars in Thousands)
March 31, December 31, %
Period-End Balances At: 2003 2002 Change
--------------------------------------
Loans and Leases, Net:
Commercial business $ 84,818 $ 83,994 1.0 %
Commercial real estate 222,719 199,672 11.5
Construction, net of loans in process 96,377 87,728 9.9
Single family residential real estate 29,364 26,870 9.3
Consumer 54,599 50,105 9.0
Lease receivable 14,251 17,444 (18.3)
------------------------------------------------------
Total loans and leases 502,128 465,813 7.8
Allowance for loan and lease losses (7,214) (6,463) 11.6
------------------------------------------------------
Loans and leases, net $494,914 $459,350 7.7 %
======================================================
Deposits:
Non-interest-bearing demand $106,799 $100,075 6.7 %
NOW and SuperNow 89,147 93,182 (4.3)
Money Market 112,441 105,563 6.5
Passbook and Statement Savings 36,865 34,148 8.0
Time deposits 366,328 358,570 2.2
------------------------------------------------------
Total Deposits $711,550 $691,538 2.9 %
======================================================
####
Exhibit 99.2
Press Release on First Quarter Cash Dividend
FOR IMMEDIATE RELEASE Contacts:
April 23, 2003 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 Declares Cash Dividend
Blue Bell, PA, April 23, 2003 - The Board of Directors of Progress
Financial Corporation (the "Company" - Nasdaq: PFNC) declared its quarterly cash
dividend on its common stock, according to W. Kirk Wycoff, Chairman, President
and Chief Executive Officer. The quarterly cash dividend of $.06 will be paid on
May 16, 2003 to shareholders of record on March 31, 2003.
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-one full service offices. The Company also offers
financial planning services, life insurance, group employee benefits 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".
####
Exhibit 99.3
Analyst Package Distributed April 23, 2003
Three Months Ended
March 31,
-------------------------------
Percent
2003 2002 change
--------------------------------
Per Common Share Data
- ---------------------
Net income:
Basic $ 0.22 $ 0.12 83.33%
Diluted 0.21 0.12 75.00%
Cash dividends declared 0.06 - -
Book value 9.79 8.76 11.76%
Tangible book value 9.62 8.49 13.31%
Average shares outstanding:
Basic 6,710,508 6,206,177 8.13%
Diluted 6,932,383 6,342,450 9.30%
Financial Ratios
- ----------------
Return on average shareholders' equity 8.87% 5.33% 66.42%
Return on average total assets 0.56% 0.35% 60.00%
Average yield on earning assets 5.61% 6.57% -14.61%
Average rate on interest bearing liabilities 2.94% 3.74% -21.39%
Net interest spread 2.67% 2.83% -5.65%
Net interest margin (FTE) 3.02% 3.25% -7.08%
Efficiency ratio 71.82% 76.18% -5.72%
Risk-based capital - Tier 1 13.24% 13.58% -2.50%
- Total capital 14.39% 14.84% -3.03%
Tier 1 leverage ratio 7.31% 8.30% -11.93%
Average shareholders' equity/average total assets 6.28% 6.64% -5.42%
Asset Quality (dollars in thousands)
- ------------------------------------
Allowance for loan losses $ 7,214 $ 8,775 -17.79%
Allowance for loan losses/Loans 1.44% 1.84% -21.74%
Net charge-offs (recoveries) $ (51) $ 2,581 -101.98%
Net charge-offs/Average loans (annualized) -0.04% 2.07% -101.93%
Nonperforming assets $ 5,445 $ 13,585 -59.92%
Nonperforming assets/Total loans plus OREO 1.10% 2.87% -61.67%
Nonperforming assets/Total assets 0.49% 1.55% -68.39%
Allowance for loan losses/Nonperforming loans 132.49% 93.93% 41.05%
Average Balances (in thousands)
- -------------------------------
Loans and leases (gross of reserves) $ 483,560 $506,091 -4.45%
Earning assets 999,750 809,647 23.48%
Total assets 1,053,227 859,032 22.61%
Deposits 692,620 614,417 12.73%
Interest bearing liabilities 879,776 720,590 22.09%
Shareholders' equity 66,139 57,034 15.96%
Period End Balances (in thousands)
- ----------------------------------
Loans and leases (gross of reserves) $ 502,128 $ 477,948 5.06%
Total assets 1,106,934 874,979 26.51%
Deposits 711,550 618,807 14.99%
Total liabilities 1,042,478 815,659 27.81%
Shareholders' equity 64,456 59,320 8.66%
Three Months Ended
March 31,
-------------------------------
Percent
2003 2002 change
--------------------------------
TAX EQUIVALENT INCOME STATEMENT
- -------------------------------
($ in thousands, except per share data)
Net interest income(FTE) $ 7,452 $ 6,479 15%
FTE adjustment (245) (111) -121%
----------------- ----
Net interest income 7,207 6,368 13%
Provision for losses on loans 700 1,439 -51%
Non-Interest Income:
Service charges on deposits 806 854 -6%
Lease financing fees 37 63 -41%
Mutual fund, annuity and insurance commissions 610 940 -35%
Loan brokerage and advisory fees 311 273 14%
Private equity fund management fees 65 52 25%
Gain on securities 323 - -
Client warrant income 197 1,426 -86%
Equity (loss) in unconsolidated entities (12) 95 -113%
Fees and other income 499 841 -41%
----------------- ----
Total non-interest income 2,836 4,544 -38%
Non-Interest Expenses:
Salaries and employee benefits 3,892 4,401 -12%
Occupancy 716 586 22%
Data processing 227 257 -12%
Furniture, fixtures and equipment 491 546 -10%
Loan and real estate owned expenses, net (103) 295 -135%
Professional services 647 578 12%
Other 1,451 1,693 -14%
----------------- ----
Total non-interest expenses 7,321 8,356 -12%
----------------- ----
Income before income taxes 2,022 1,117 81%
Provision for income tax expense 575 367 57%
----------------- ----
Net income $ 1,447 $ 750 93%
================= ====
QUARTERLY INCOME STATEMENT
(Unaudited)
($ in thousands, except per share) First
2003 Quarter
- ------------------------------------------------------- ------------
FTE interest income $ 13,825
Interest expense 6,373
------------
FTE net interest income 7,452
Less: FTE adjustment (245)
------------
Net Interest Income 7,207
Provision for Losses on Loans 700
Non-Interest Income:
- -------------------
Service charges on deposits 806
Lease financing fees 37
Mutual fund, annuity and insurance commissions 610
Loan brokerage and advisory fees 311
Private equity fund management fees 65
Gain on securities 323
Client warrant income 197
Loss in unconsolidated entities (12)
Fees and other income 499
------------
Total non-interest income 2,836
Non-Interest Expenses:
- ----------------------
Salaries and employee benefits 3,892
Occupancy 716
Data processing 227
Furniture, fixtures and equipment 491
Loan and real estate owned expenses, net (103)
Professional services 647
Other 1,451
------------
Total non-interest expenses 7,321
Income Before Income Taxes 2,022
Provision for income tax expense 575
------------
Net Income $ 1,447
============
Other Data:
- -----------
EPS - Basic $ 0.22
EPS - Diluted $ 0.21
ROA 0.56%
ROE 8.87%
Net interest margin (FTE) 3.02%
Dividends declared on common stock $ 0.06
FTE employees 266
QUARTERLY INCOME STATEMENT
(Unaudited)
($ in thousands, except per share) Fourth Third Second First Year-
2002 Quarter Quarter Quarter Quarter to-date
- ------------------------------------------------------- ----------- ----------- ---------- ------------ ---------
FTE interest income $13,455 $13,618 $13,602 $13,123 $53,798
Interest expense 6,447 6,653 6,581 6,644 26,325
----------- ----------- ---------- ------------ ---------
FTE net interest income 7,008 6,965 7,021 6,479 27,473
Less: FTE adjustment (179) (145) (128) (111) (563)
----------- ----------- ---------- ------------ ---------
Net Interest Income 6,829 6,820 6,893 6,368 26,910
Provision for Losses on Loans 875 500 1,000 1,439 3,814
Non-Interest Income:
- --------------------
Service charges on deposits 937 916 978 854 3,685
Lease financing fees 42 50 63 63 218
Mutual fund, annuity and insurance commissions 685 478 678 940 2,781
Loan brokerage and advisory fees 489 78 302 273 1,142
Private equity fund management fees 65 65 65 52 247
Gain on securities 219 84 352 - 655
Gain on sale of real estate 76 1,570 - - 1,646
Client warrant income 20 466 35 1,426 1,947
Equity (loss) in unconsolidated entities (14) 1 6 95 88
Fees and other income 689 643 737 841 2,910
----------- ----------- ---------- ------------ ---------
Total non-interest income 3,208 4,351 3,216 4,544 15,319
Non-Interest Expenses:
- ----------------------
Salaries and employee benefits 3,814 3,906 3,904 4,401 16,025
Occupancy 624 720 661 586 2,591
Data processing 209 215 230 257 911
Furniture, fixtures and equipment 505 511 509 546 2,071
Loan and real estate owned expenses, net 231 226 243 295 995
Professional services 712 597 641 578 2,528
Other 1,642 2,115 1,579 1,693 7,029
----------- ----------- ---------- ------------ ---------
Total non-interest expenses 7,737 8,290 7,767 8,356 32,150
Income Before Income Taxes 1,425 2,381 1,342 1,117 6,265
Provision for income tax expense 401 1,066 435 367 2,269
----------- ----------- ---------- ------------ ---------
Net Income $ 1,024 $ 1,315 $ 907 $ 750 $ 3,996
=========== =========== ========== ============ =========
Other Data:
- -----------
EPS - Basic $0.15 $0.20 $0.13 $0.12 $0.60
EPS - Diluted $0.15 $0.19 $0.13 $0.12 $0.59
ROA 0.43% 0.57% 0.41% 0.35% 0.44%
ROE 6.09% 8.05% 5.90% 5.33% 6.38%
Net interest margin (FTE) 3.09% 3.24% 3.35% 3.25% 3.23%
Dividends declared on common stock $0.05 $0.05 $0.00 $0.00 $0.10
FTE employees 268 271 282 277 271
ASSET QUALITY
(Unaudited)
2003 2002
----------- --------------------------------------------------------
($ in thousands) First Year- Fourth Third Second First
Allowance for Loan Losses Quarter to-date Quarter Quarter Quarter Quarter
- ------------------------- ------------ --------------------------------------------------------
Balance at beginning of period $ 6,463 $ 9,917 $ 7,100 $ 8,024 $ 8,775 $ 9,917
Provision 700 3,814 875 500 1,000 1,439
Charge-offs 150 8,054 1,689 1,827 1,817 2,721
Recoveries (201) (786) (177) (403) (66) (140)
------- ------- ------- ------- ------- -------
Net loan charge-offs (recoveries) (51) 7,268 1,512 1,424 1,751 2,581
Balance at end of period $ 7,214 $ 6,463 $ 6,463 $ 7,100 $ 8,024 $ 8,775
======= ======= ======= ======= ======= =======
Allowance as percentage of loans 1.44% 1.39% 1.39% 1.55% 1.67% 1.84%
Net charge-offs/average loans -0.01% 1.52% 0.33% 0.30% 0.36% 0.51%
Allowance as percentage of
non-performing loans 132.49% 118.65% 118.65% 94.14% 91.83% 93.93%
Non-performing assets
- ---------------------
Non-accrual loans and leases $ 5,445 $ 5,447 $ 5,447 $ 7,542 $ 8,738 $ 9,342
Other real estate owned - - - 872 4,495 4,243
------- ------- ------- ------- ------- -------
Total non-performing assets $ 5,445 $ 5,447 $ 5,447 $ 8,414 $13,233 $13,585
======= ======= ======= ======= ======== =======
Non-performing assets to:
Loans and leases plus OREO 1.10% 1.19% 1.19% 1.86% 2.77% 2.87%
Total assets 0.49% 0.54% 0.54% 0.91% 1.46% 1.55%
Loans past due 90 days $ 2,213 $ 918 $ 918 $ 2,735 $ 1,766 $ 3,244
Total under-performing assets $ 7,658 $ 6,365 $ 6,365 $ 11,149 $ 14,999 $ 16,829
AVERAGE BALANCE SHEET DATA
(Unaudited)
2003 2002
-------- ---------------------------------------------------------------
($ in thousands) First Fourth Third Second First Year-
Average balances Quarter Quarter Quarter Quarter Quarter to-date
- ---------------- -------- ------- ------- ------- ------- -------
Cash and due from banks (Interest-earning) $ 8,241 $ 12,202 $ 14,743 $ 9,022 $ 22,496 $ 14,588
Loans,net of unearned discounts:
Commercial business 83,795 84,226 87,127 96,440 123,173 97,606
Commercial mortgage 210,014 199,731 193,867 196,331 193,250 195,807
Construction loans 92,886 82,566 84,863 86,253 83,831 84,376
Residential real estate 28,651 27,339 28,764 27,929 25,688 27,438
Consumer 51,826 49,179 47,547 45,416 44,437 46,660
Lease financing 16,388 20,322 24,954 30,080 35,712 27,717
----------- -------- -------- -------- -------- --------
Total loans 483,560 463,363 467,122 482,449 506,091 479,604
Investment securities(available for sale) 11,362 10,667 6,110 6,465 5,967 7,312
Investment securities(held to maturity) 51,555 37,113 40,600 40,977 38,224 39,229
Mortgage-backed securities 445,032 376,864 323,706 302,946 236,869 310,517
----------- -------- -------- -------- -------- --------
Earning assets 999,750 900,209 852,281 841,859 809,647 851,250
Cash and due from banks(non-interest bearing) 17,198 16,181 15,408 14,445 15,563 15,401
Other non-earning assets 36,279 36,925 40,436 35,854 33,822 36,778
----------- -------- -------- -------- -------- --------
Total assets $ 1,053,227 $953,315 $908,125 $892,158 $859,032 $903,429
=========== ======== ======== ======== ======== ========
Deposits:
Demand $ 98,498 $ 92,744 $ 74,920 $ 77,860 $ 73,734 $ 79,853
Interest bearing:
NOW and Supernow accounts 88,846 88,918 105,115 116,734 119,129 107,385
Money Market Accounts 109,209 98,823 89,022 75,009 61,776 81,281
Passbook and Stmt Savings 35,202 33,470 31,963 33,081 30,956 32,373
Time deposits 360,865 357,425 357,784 321,895 328,822 341,604
----------- --------- -------- -------- -------- --------
Total interest bearing deposits 594,122 578,636 583,884 546,719 540,683 562,643
Federal Home Loan Bank borrowings 145,539 133,438 120,500 117,609 120,333 122,999
Other borrowings 111,276 51,364 36,303 61,377 39,311 47,092
Capital securities 28,839 22,281 19,394 20,269 20,263 20,554
----------- --------- -------- -------- -------- --------
Interest bearing liabilities 879,776 785,719 760,081 745,974 720,590 753,288
Non-interest bearing liabilities 8,814 8,134 8,316 6,675 7,674 7,703
Total shareholders' equity 66,139 66,718 64,808 61,649 57,034 62,585
----------- --------- -------- -------- -------- --------
Total Liabilities and Shareholders' Equity $ 1,053,227 $953,315 $908,125 $892,158 $859,032 $903,429
=========== ======== ======== ======== ======== ========
AVERAGE BALANCE SHEET DATA - continued
(Unaudited)
2003 2002
--------- ---------------------------------------------------------------------
First Fourth Third Second First Year-
Average yields and rates Quarter Quarter Quarter Quarter Quarter to-date
- ------------------------ --------- ----------------------------------------------------------------------
Interest - earning assets
Interest-earning deposits 1.03% 1.24% 1.59% 1.60% 1.55% 1.50%
Investment securities 5.96% 5.91% 6.86% 6.29% 6.47% 6.38%
Mortgage-backed securities 4.57% 5.04% 5.50% 5.67% 5.77% 5.45%
Commercial business loans 5.11% 5.29% 5.76% 5.50% 6.55% 5.84%
Commercial real estate loans 7.35% 7.57% 7.72% 7.85% 7.48% 7.65%
Construction loans 6.17% 6.40% 6.40% 6.44% 6.47% 6.42%
Single family residential loans 6.53% 6.36% 6.94% 7.07% 7.44% 6.94%
Consumer loans 5.66% 5.64% 6.07% 6.44% 6.38% 6.12%
Lease financing 10.12% 10.13% 9.98% 10.21% 10.27% 10.16%
----- ----- ---- ----- ----- -----
Total interest - earning assets 5.61% 5.93% 6.34% 6.48% 6.57% 6.32%
----- ----- ---- ----- ----- -----
Interest - bearing liabilities
Interest - bearing deposits
NOW and SuperNOW 1.01% 1.14% 1.11% 1.20% 1.40% 1.22%
Money Market 1.85% 2.11% 2.26% 2.11% 1.91% 2.11%
Passbook and Statement Savings 0.74% 0.85% 0.98% 0.99% 1.02% 0.96%
Time deposits 3.13% 3.26% 3.47% 3.76% 4.00% 3.61%
----- ----- ---- ----- ----- -----
Total interest - bearing deposits 2.43% 2.60% 2.73% 2.82% 3.02% 2.78%
FHLB borrowings 4.50% 4.87% 5.47% 5.52% 5.43% 5.38%
Other borrowings 2.09% 3.48% 4.41% 3.39% 4.24% 3.84%
Capital securities 8.30% 9.56% 11.21% 11.34% 11.45% 10.85%
----- ----- ---- ----- ----- -----
Total interest - bearing liabilities 2.94% 3.26% 3.47% 3.54% 3.74% 3.49%
----- ----- ---- ----- ----- -----
Interest Rate Spread 2.67% 2.67% 2.87% 2.94% 2.83% 2.83%
Net Interest Margin 3.02% 3.09% 3.24% 3.35% 3.25% 3.23%
Avg Int-earning assets to int-bearing liabilities 113.64% 114.57% 112.13% 112.85% 112.36% 113.00%
PERIOD END BALANCE SHEET DATA
(Unaudited)
2003 2002
--------- -------------------------------------------------------------
First Fourth Third Second First
($ in thousands) Quarter Quarter Quarter Quarter Quarter
--------- -------------------------------------------------------------
Assets
- ------
Cash and due from bank(interest bearing) $ 6,650 $ 17,570 $ 3,506 $ 5,603 $ 12,130
Loans and lease(net) 494,914 459,350 451,237 473,435 469,173
Investment securities:
Held-to-maturity:
Book 60,257 46,536 29,778 43,912 39,570
Market 61,472 47,134 30,787 44,532 38,660
Available-for-sale 9,385 20,193 5,419 5,962 5,941
Mortgage-backed securities:
Held-to-maturity:
Book 82,429 73,470 59,440 44,870 25,304
Market 83,908 74,834 60,736 45,262 24,952
Available-for-sale 386,218 339,097 298,888 265,056 263,908
---------- ---------- -------- -------- --------
Earning assets 1,039,853 956,216 848,268 838,838 816,026
Cash and due from bank(non-interest bearing) 22,166 20,650 20,434 17,030 11,906
Other non-earning assets 44,915 40,978 58,993 48,134 47,047
---------- ---------- -------- -------- --------
Total assets $1,106,934 $1,017,844 $927,695 $904,002 $874,979
========== ========== ======== ======== ========
Liabilities and shareholders' equity
- ------------------------------------
Deposits:
Demand $ 106,799 $ 100,075 $ 74,261 $ 83,538 $ 72,567
Interest bearing 604,751 591,463 588,721 548,084 546,240
---------- ---------- -------- -------- --------
Total deposits 711,550 691,538 662,982 631,622 618,807
Federal Home Loan Bank borrowings 150,500 120,500 120,500 120,500 117,000
Other borrowings 138,910 98,109 41,062 55,012 46,087
Capital Securities 28,844 28,836 18,824 20,274 20,267
---------- ---------- -------- -------- --------
Interest bearing liabilities 1,029,804 938,983 843,368 827,408 802,161
Other Liabilities 12,674 12,132 17,815 13,178 13,498
---------- ---------- -------- -------- --------
Total liabilities 1,042,478 951,115 861,183 840,586 815,659
Total shareholders' equity 64,456 66,729 66,512 63,416 59,320
---------- ---------- -------- -------- --------
Total liabilities and equity $1,106,934 $1,017,844 $927,695 $904,002 $874,979
========== ========== ======== ======== ========
Other selected balances
- -----------------------
Intangible assets -- Goodwill $ 1,121 $ 1,164 $ 1,155 $ 1,757 $ 1,865
Amount included in shareholders' equity
for net unrealized gains on investments
available-for-sale $ 3,404 $ 3,665 $ 3,634 $ 1,643 $ (1,269)
Capital Data
(Unaudited)
2003 2002
------------ -----------------------------------------------------------------
First Fourth Third Second First Year-
Quarter Quarter Quarter Quarter Quarter to-date
-------------- -----------------------------------------------------------------
Per common share
- ----------------
Shares outstanding:
Average-basic 6,710,508 6,809,902 6,815,956 6,795,122 6,206,177 6,658,880
Average-diluted 6,932,383 7,015,172 6,967,686 6,962,428 6,342,450 6,827,539
Period-end 6,582,321 6,774,919 6,816,494 6,800,380 6,768,458 6,774,919
Book value $ 9.79 $ 9.85 $ 9.76 $ 9.33 $ 8.76 $ 9.85
Tangible Book Value 9.62 9.68 9.59 9.07 8.49 9.68
Price:
High $ 13.20 $ 11.61 $ 10.15 $ 10.40 $ 9.65 $ 11.61
Low 11.42 9.90 7.46 8.61 7.44 7.44
Close 12.92 11.61 9.40 9.74 8.94 11.61
Capital ratios
- --------------
($ in thousands)
Risk-based capital:
Tier 1 capital $79,988 $77,879 $76,071 $73,567 $71,957 $77,879
% risk adjusted assets 13.24% 14.09% 14.76% 13.97% 13.58% 14.09%
Total capital $86,902 $84,028 $82,519 $80,167 $78,606 $84,028
% risk adjusted assets 14.39% 15.20% 16.01% 15.22% 14.84% 15.20%
Tier 1 leverage ratio 7.31% 7.82% 8.31% 8.23% 8.30% 7.82%
Average shareholders' equity to
total average assets 6.28% 7.00% 7.14% 6.91% 6.64% 6.93%