NEWS RELEASE
HCB BANCSHARES, INC.
CONTACT: CHARLES T. BLACK
TELEPHONE: 870.836.6841
FACSIMILE: 870.836.2122
FOR IMMEDIATE RELEASE
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HCB BANCSHARES, INC. RELEASES 06-30-03 EARNINGS
CAMDEN, ARKANSAS (August 12, 2003) HCB Bancshares, Inc. (the "Company") reported
net income of approximately $167,000, or 11 cents per basic share and 10 cents
per diluted share, for the quarter ended June 30, 2003, according to Charles T.
Black, President and Chief Executive Officer. Net income for the same quarter
last year was $146,000, or 12 cents per basic share and 12 cents per diluted
share.
For the fiscal year ended June 30, 2003 the Company reported net income of
$1,061,000, or 78 cents per basic share and 73 cents per diluted share. Net
income for the same period last year was $1,166,000, or 71 cents per basic share
and 68 cents per diluted share.
In addition, primarily because of the decline in net interest margin, net
interest income decreased from $7,092,000 for the year ended June 30, 2002 to
$6,187,000 for the year ended June 30, 2003, a reduction of $905,000. Also, the
general weakness in the economy was a factor in HCBB's increasing its provision
for loan losses by $174,000 during that period. Non-interest income for the year
ended June 30, 2003 increased by $780,000 compared to the prior year and
non-interest expense for the year ended June 30, 2003 decreased by $222,000
compared to the prior year.
Black said that a one time pretax charge of $407,000 to write down land held for
investment was one factor having adverse effects on earnings for the current
year period compared to the previous year. He added that a one time pretax gain
of $743,000 on the sale of the Bank's Monticello branch helped offset the land
write down and the reduction in net interest income. In addition, Black stated
that in its efforts to reduce overhead, the Company has reduced its full time
equivalent employees from 93 to 79 during the fiscal year excluding those
employees at the Monticello branch.
The Board of Directors of HCB Bancshares, Inc. continually seeks to maximize
value for all its stockholders. In conjunction with that goal, the Board of
Directors has recently engaged in strategic planning meetings to consider
available strategies for maximizing stockholder value including a sale of the
Company. The Board will continue to explore available alternatives and has
retained the services of the consulting firm of Gerrish & McCreary PC to assist
in these matters.
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
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands) June 30, June 30,
2003 2002
(Unaudited)
ASSETS
Cash and cash equivalents $ 7,207 $ 17,897
Investment securities 129,960 118,199
Loans, net 100,780 124,177
Other assets 13,078 16,152
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Total Assets $ 251,025 $ 276,425
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LIABILITIES
Deposits $ 151,957 $ 165,005
Borrowed money 69,068 82,264
Other liabilities 1,545 2,420
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Total Liabilities 222,570 249,689
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Total Stockholders' Equity 28,455 26,736
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Total Liabilities and
Stockholders' Equity $ 251,025 $ 276,425
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THREE MONTHS
AND YEARS ENDED JUNE 30, 2003 (UNAUDITED) AND 2002
(Dollars in thousands except Three Months Ended Years Ended
per share data) June 30, June 30,
2003 2002 2003 2002
(Unaudited) (Unaudited)
Interest income $ 3,383 $ 4,248 $ 14,416 $ 17,916
Interest expense 1,892 2,430 8,229 10,824
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Net interest income 1,491 1,818 6,187 7,092
Provision for loan losses 120 140 533 359
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Net interest income after provision
for loan losses 1,371 1,678 5,654 6,733
Total noninterest income 469 401 2,387 1,607
Total noninterest expense 1,592 1,949 6,891 7,113
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Income before federal income tax
provision 248 130 1,150 1,227
Income tax provision (benefit) 81 (16) 89 61
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Net income $ 167 $ 146 $ 1,061 $ 1,166
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Basic earnings per share $ 0.11 $ 0.12 $ 0.78 $ 0.71
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Diluted earnings per share $ 0.10 $ 0.12 $ 0.73 $ 0.68
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