Exhibit 99.1
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UNION COMMUNITY BANCORP
P.O. Box 151, 221 E. Main Street
Crawfordsville, Indiana 47933
For Immediate Release
Date: October 20, 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 three and nine months ended September
30, 2003. For the three months ended September 30, 2003, the Company had net
income of $668,000 compared to $699,000 the three months ended September 30,
2002. Basic and diluted earnings per share increased to $0.35 and $0.34
respectively for the three months ended September 30, 2003 compared to $0.31 for
both basic and diluted for the 2002 period. The increase in earnings per share
for the three month period was primarily due to the decrease in the average
shares outstanding caused by the repurchase of common stock since the 2002 three
month period. For the nine months ended September 30, 2003 net income was
$1,864,000 compared to $2,239,000 for the 2002 nine month period. Basic and
diluted earnings per share were $0.93 and $0.92 for the nine months ended
September 30, 2003 compared to $1.00 for both basic and diluted for the 2002
nine- month period.
The decrease in net income for the three-month period ending September 30, 2003
compared to the September 30, 2002 period was due to a decrease in net interest
income partially offset by a decrease in non-interest expenses. Amortization of
purchase accounting adjustments reduced interest expense by $126,000 for the
three months ended September 30, 2003 compared to a reduction of $276,000 for
the 2002 three-month period. Interest rate spread decreased from 3.27% for the
three-month period in 2002 to 3.11% for the 2003 three-month period. Noninterest
income increased $65,000 to $132,000 for the three-month period ended September
30, 2003 compared to the three-months ended September 30, 2002 while noninterest
expense decreased $205,000 to $1,165,000 for the same comparable periods.
The decrease in net income for the nine-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 $377,000 for the 2003 nine-month period compared to $827,000
for the 2002 nine-month period. Also contributing to the decrease in net
interest income was a decrease in interest rate spread from 3.34% for the
nine-month period ending September 30, 2002 to 3.04% for the comparable 2003
nine-month period. Noninterest income increased from $192,000 for the nine-month
period ending September 30, 2002 to $286,000 for the comparable 2003 nine-month
period primarily due to the increase in cash value of bank owned life insurance.
Noninterest expense decreased $283,000 for the comparable nine-month periods
primarily due to a decrease in data processing expense of $379,000 partially
offset by an increase in advertising expense of $68,000. The decrease in data
processing expense was primarily due to a one-time $411,000 termination fee for
data processing service charged to expense during the 2002 comparative period in
connection with the acquisition of Montgomery Financial Corporation. Advertising
expense has increased due to the implementation of an advertising program to
promote the Association's products and services during 2003.
From December 31, 2002 to September 30, 2003, total assets decreased $1.7
million to $267.6 and net loans increased $5.4 million to $222.2 million. During
the same time frame, deposits increased by $1.5 million to $191.7 million.
Shareholders' equity decreased $1.9 million to $35.3 million at September 30,
2003. During the nine-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.
-END-
SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY
(Unaudited)
Balance Sheet Data: September 30, December 31,
2003 2002
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Assets
Cash $ 848 $ 993
Interest-bearing demand deposits 16,229 35,593
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Cash and cash equivalents 17,077 36,586
Interest-bearing deposits 145 145
Investment securities available for sale 5,945 ---
Investment securities held to maturity 574 1,637
Loans, net 222,152 216,703
Premises and equipment 4,502 3,239
Federal Home Loan Bank stock 3,512 3,424
Investment in limited partnership 2,247 837
Foreclosed assets and real estate held for development, net 1,320 1,607
Goodwill 2,393 2,297
Other assets 7,711 2,841
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Total assets $267,578 $269,316
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Liabilities
Deposits $191,681 $190,191
Federal Home Loan Bank advances 37,869 39,752
Note payable 132 303
Other liabilities 2,565 1,881
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Total liabilities 232,247 232,127
Shareholders' equity 35,331 37,189
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Total liabilities and shareholders' equity $267,578 $269,316
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Book value per common share $16.82 $16.33
Shares outstanding 2,100,000 2,278,000
Average equity to average assets 13.20% 14.29%
Allowance for loan losses to total loans 0.52% 0.47%
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
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Operating Data:
Total interest and dividend income $3,823 $4,465 $12,001 $13,744
Total interest expense 1,669 2,036 5,375 6,248
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Net interest income 2,154 2,429 6,626 7,496
Provision for loan losses 119 30 178 90
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Net interest income after provision for
loan losses 2,035 2,399 6,448 7,406
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Other income:
Service charges on deposit accounts 37 44 108 116
Equity in losses of limited partnership -- (8) 10 (20)
Gain on sale of securities available for sale -- -- -- 9
Other 95 29 168 87
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Total other income 132 65 286 192
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Other expenses:
Salaries and employee benefits 564 676 2,043 2,101
Net occupancy expense 73 148 220 248
Equipment expense 81 78 239 230
Legal and professional fees 67 73 241 182
Data processing 94 128 298 677
Other 286 267 861 747
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Total other expenses 1,165 1,370 3,902 4,185
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Income before income taxes 1,002 1,094 2,832 3,413
Income taxes 334 395 968 1,174
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Net income $ 668 $ 699 $ 1,864 $ 2,239
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Other Data:
Return on average assets 0.99% 1.03% 0.90% 1.10%
Return on average equity 7.59% 7.19% 6.83% 7.60%
Basic earnings per share $0.35 $0.31 $0.93 $1.00
Diluted earnings per share $0.34 $0.31 $0.92 $1.00
Cash dividends per common share $0.15 $0.14 $0.45 $0.37