Exhibit 99.1
UNION COMMUNITY BANCORP
P.O. Box 151, 221 E. Main Street
Crawfordsville, Indiana 47933
For Immediate Release
Date: July 22, 2003
Contact: Joseph E. Timmons, President
(765) 362-2400
UNION COMMUNITY BANCORP RELEASES EARNINGS
(Crawfordsville) - Union Community Bancorp (the "Company") (NASDAQ Symbol
"UCBC"), the holding company of Union Federal Savings and Loan Association (the
"Association"), announced earnings for the six and three months ended June 30,
2003. For the six months ended June 30, 2003, the Company had net income of
$1,196,000 compared to $1,540,000 the six months ended June 30, 2002. Basic and
diluted earnings per share were $0.59 and $0.58 respectively for the six months
ended June 30, 2003 compared to $0.69 for both basic and diluted for the 2002
period. For the three months ended June 30, 2003 net income was $551,000
compared to $893,000 for the 2002 three month period. Basic and diluted earnings
per share were $0.28 and $0.39 for the three months ended June 30, 2003 and
2002.
The decrease in net income for the six-month period was primarily attributable
to a decrease in net interest income that resulted primarily due to amortization
of purchase accounting adjustments which impacted interest expense during the
2002 and 2003 periods. Amortization of purchase accounting adjustments reduced
interest expense by $252,000 for the 2003 six-month period compared to $552,000
for the 2002 six-month period. Also contributing to the decrease in net interest
income was a decrease in interest rate spread from 3.37% for the six-month
period ending June 30, 2002 to 3.00% for the comparable 2003 six-month period.
The decrease in net income for the three-month period ending June 30, 2003
compared to the June 30, 2002 period was due to a decrease in net interest
income and an increase in non-interest expenses. Amortization of purchase
accounting adjustments reduced interest expense by $126,000 for the three-months
ended June 30, 2003 compared to a reduction of $276,000 for the 2002 three-month
period. Interest rate spread decreased from 3.50% for the three-month period in
2002 to 2.94% for the 2003 three-month period. The increase in non-interest
expense was primarily due to the cost of promoting and offering expanded deposit
and lending services at various branch locations and facilities improvements.
Among these expanded services and improvements are the preparation for
introduction of on-line banking services, the addition of a commercial loan
officer at the Lafayette Office, the addition of an ATM at the Williamsport
Office and an ATM and additional drive-up at the Main Office.
From December 31, 2002 to June 30, 2003, total assets increased $4.7 million to
$274.0 and net loans decreased $7.1 million to $209.6 million. During the same
time frame, deposits increased by $7.0 million to $197.2 million. Shareholders'
equity decreased $2.2 million to $34.9 million at June 30, 2003. During the
six-month period the Company repurchased 178,000 shares of common stock at a
total cost of $3.0 million for an average cost of $16.85 per share.
The Company and Association are headquartered in Crawfordsville, Indiana with
two branch offices in Crawfordsville and branch offices in Covington,
Williamsport and Lafayette, Indiana.
The statements contained in this press release contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, which involve a number of risks and uncertainties. A number of factors
could cause results to differ materially from the objectives and estimates
expressed in such forward-looking statements. These factors include, but are not
limited to, changes in the financial condition of issuers of the Company's
investments and borrowers, changes in economic conditions in the Company's
market area, changes in policies of regulatory agencies, fluctuations in
interest rates, demand for loans in the Company's market area, changes in the
position of banking regulators on the adequacy of our allowance for loan losses,
and competition, all or some of which could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected. These factors should be considered in evaluating any forward-looking
statements, and undue reliance should not be placed on such statements. The
Company does not undertake and specifically disclaims any obligation to update
any forward-looking statements to reflect occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.
SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY
(Unaudited)
Balance Sheet Data: June 30, December 31,
2003 2003
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Assets
Cash $ 670 $ 993
Interest-bearing demand deposits 37,295 35,593
Cash and cash equivalents 37,965 36,586
Interest-bearing deposits 145 145
Investment securities available for sale 5,006 ---
Investment securities held to maturity 759 1,637
Loans, net 209,646 216,703
Premises and equipment 4,628 3,239
Federal Home Loan Bank stock 3,469 3,424
Investment in limited partnership 847 837
Foreclosed assets and real estate held
for development, net 1,464 1,607
Goodwill 2,393 2,297
Other assets 7,683 2,841
Total assets $ 274,005 $ 269,316
========== ==========
Liabilities
Deposits $ 197,224 $ 190,191
Federal Home Loan Bank advances 39,514 39,752
Note payable 132 303
Other liabilities 2,186 1,881
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Total liabilities 239,056 232,127
Shareholders' equity 34,949 37,189
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Total liabilities and
shareholders' equity $ 274,005 $ 269,316
========== ==========
Book value per common share $16.64 $16.33
Shares outstanding 2,100,000 2,278,000
Average equity to average assets 13.31% 14.29%
Allowance for loan losses to total loans 0.52% 0.47%
Three Months Ended Three Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Operating Data:
Total interest and dividend income $3,952 $4,659 $8,179 $9,279
Total interest expense 1,785 2,105 3,706 4,212
------ ------ ------ ------
Net interest income 2,167 2,554 4,473 5,067
Provision for loan losses 30 20 60 60
------ ------ ------ ------
Net interest income after
provision for loan losses 2,137 2,534 4,413 5,007
------ ------ ------ ------
Other income:
Service charges on deposit
accounts 35 40 71 72
Equity in losses of limited
partnership -- (8) 10 (13)
Gain on sale of securities
available for sale -- 3 -- 9
Other 50 15 72 59
------ ------ ------ ------
Total other income 85 50 153 127
------ ------ ------ ------
Other expenses:
Salaries and employee benefits 759 716 1,479 1,426
Net occupancy expense 71 42 147 100
Equipment expense 78 80 158 152
Legal and professional fees 89 68 174 109
Data processing 103 69 204 549
Other 294 239 575 479
------ ------ ------ ------
Total other expenses 1,394 1,214 2,737 2,815
------ ------ ------ ------
Income before income taxes 828 1,370 1,829 2,319
Income taxes 277 477 633 779
------ ------ ------ ------
Net income $551 $893 $1,196 $1,540
====== ====== ====== ======
Other data:
Return on average assets 0.79% 1.32% 0.86% 1.13%
Return on average equity 6.02% 9.25% 6.46% 7.84%
Basic earnings per share $0.28 $0.39 $0.59 $0.69
Diluted earnings per share $0.28 $0.39 $0.58 $0.69
Cash dividends per common share $0.15 $0.12 $0.30 $0.23