NEWS RELEASE HCB Bancshares, Inc.
Contact: Scott A. Swain
Telephone: 870.836.6841
Facsimile: 870.836.2122
FOR IMMEDIATE RELEASE
---------------------
HCB BANCSHARES, INC. RELEASES 03-31-03 EARNINGS
CAMDEN, ARKANSAS (April 22, 2003) HCB Bancshares, Inc. (the "Company") reported
a net loss of approximately $17,000, or (1) cent per basic share and (1) cent
per diluted share, for the quarter ended March 31, 2003, according to Vida H.
Lampkin, Interim President and Chief Executive Officer. Net income for the same
quarter last year was $481,000, or 28 cents per basic share and 27 cents per
diluted share.
For the nine months ended March 31, 2003 the Company reported net income of
$894,000, or 66 cents per basic share and 62 cents per diluted share. Net income
for the same period last year was $1,020,000, or 59 cents per basic share and 57
cents per diluted share.
Lampkin said that a one time charge of $407,000 to write down land held for
investment was one primary factor having adverse effects on earnings for the
current year periods compared to the same periods the previous year. The expense
for the write down of land held for investment is land in Camden, Arkansas,
which previously was to be the site of a new home office facility. These two
parcels were purchased in 1996 and 1999 and significant costs were necessary to
make the land suitable to build upon. The Board of Directors recently decided
that in the near future it would not be in the best interests of the Company to
expend the resources necessary to build a new home office facility. Since the
land will not be utilized in the near future, appraisals were obtained in March
2003, and the land was written down to fair market value. While the Company does
not intend to build on this land in the near future, it currently does plan to
utilize this land at some undetermined future date.
In addition, primarily because of the decline in net interest margin, net
interest income decreased from $1,899,000 for the quarter ended March 31, 2002
to $1,403,000 for the quarter ended March 31, 2003, a reduction of $496,000.
Also, the general weakness in the economy was a factor in HCBB's increasing its
provision for loan losses by $60,000 during that period. Non-interest expense
for the quarter ended March 31, 2003 increased by $232,000 compared to the same
quarter the prior year. However, if the one time $407,000 land write down
expense is excluded, non-interest expense would have decreased by $176,000,
reflecting HCBB's successful efforts to reduce overhead on an ongoing basis.
"Reduced loan demand has contributed to our decline in earnings, but we are very
pleased with our core expense controls. In our current economy, continuous
attention to expenses is absolutely necessary," Lampkin added.
HCB Bancshares, Inc. is the parent company of HEARTLAND Community Bank,
headquartered in Camden, with HEARTLAND community banking offices in Bryant,
Camden, Fordyce, and Sheridan, Arkansas.
When used in this News Release, 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.
The Company does not undertake, and specifically disclaims any obligation, to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
HCB BANCSHARES, INC.
Summary of Financial Highlights
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands) March 31, June 30,
2003 2002
(Unaudited)
ASSETS
Cash and cash equivalents $ 9,998 $ 17,897
Investment securities 123,979 118,199
Loans and mortgage backed securities 104,546 124,177
Other assets 14,061 16,152
---------- ----------
Total Assets $ 252,584 $ 276,425
========== ==========
LIABILITIES
Deposits $ 153,285 $ 165,005
Borrowed money 69,870 82,264
Other liabilities 1,602 2,420
---------- ----------
Total Liabilities 224,757 249,689
---------- ----------
Total Stockholders' Equity 27,827 26,736
---------- ----------
Total Liabilities and
Stockholders' Equity $ 252,584 $ 276,425
========== ==========
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
(Dollars in thousands except March 31, March 31,
per share data) 2003 2002 2003 2002
Interest income $ 3,348 $ 4,458 $ 11,033 $ 13,668
Interest expense 1,945 2,559 6,337 8,394
------- ------ -------- --------
Net interest income 1,403 1,899 4,696 5,274
Provision for loan losses 120 60 413 219
------- ------ -------- --------
Net interest income after provision
for loan losses 1,283 1,839 4,283 5,055
Total noninterest income 386 402 1,917 1,206
Total noninterest expense 1,882 1,650 5,298 5,164
------- ----- -------- --------
Income before federal income tax
Provision (213) 591 902 1,097
Income tax provision (benefit) (196) 110 8 77
-------- ------ -------- --------
Net income (loss) $ (17) $ 481 $ 894 $ 1,020
Basic earnings (loss) per share $ (0.01) $ 0.28 $ 0.66 $ 0.59
Diluted earnings (loss) per share $ (0.01) $ 0.27 $ 0.62 $ 0.57