Exhibit 99.1
UNION COMMUNITY BANCORP
P.O. Box 151, 221 E. Main Street
Crawfordsville, Indiana 47933
For Immediate Release
Date: January 23, 2004
Contact: J. Lee Walden, Chief Financial Officer
(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 months and the year ended
December 31, 2003. For the three months ended December 31, 2003, the Company had
net income of $468,000 compared to $563,000 the three months ended December 31,
2002. Basic and diluted earnings per share decreased from $0.26 for the three
months ended December 31, 2002 compared to $0.24 for both basic and diluted
earnings per share for the 2003 period. For the year ended December 31, 2003 net
income was $2,332,000 compared to $2,802,000 for the 2002 twelve month period.
Basic and diluted earnings per share were $1.18 and $1.16 for the year ended
December 31, 2003 compared to $1.25 and $1.24, respectively, for basic and
diluted earnings per share for the 2002 twelve-month period.
The decrease in net income for the three-month period ending December 31, 2003
compared to the December 31, 2002 period was primarily due to a decrease in net
interest income. Amortization of purchase accounting adjustments reduced
interest expense by $126,000 for the three months ended December 31, 2003
compared to a reduction of $276,000 for the 2002 three-month period. Interest
rate spread decreased from 3.21% for the three-month period in 2002 to 2.98% for
the 2003 three-month period. Noninterest income increased $37,000 to $194,000
for the three-month period ended December 31, 2003 compared to the three-months
ended December 31, 2002 and noninterest expense increased $57,000 to $1,390,000
for the same comparable periods.
The decrease in net income for the twelve-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 $503,000 for the 2003 twelve-month
period compared to $1,103,000 for the 2002 twelve-month period. Also
contributing to the decrease in net interest income was a decrease in interest
rate spread from 3.29% for the twelve-month period ending December 31, 2002 to
2.98% for the comparable 2003 twelve-month period. Noninterest income increased
from $349,000 for the twelve-month period ending December 31, 2002 to $480,000
for the comparable 2003 twelve-month period primarily due to the increase in
cash value of bank owned life insurance. Noninterest expense decreased $228,000
for the comparable twelve-month periods primarily due to a decrease in data
processing expense of $419,000 partially offset by an increase in advertising
expense of $67,000 and an increase in salaries and employee benefits of $50,000.
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 December 31, 2003, total assets decreased $7.7 million
to $261.6 and net loans increased $4.5 million to $221.2 million. During the
same time frame, deposits remained relatively the same at $190.2 million.
Shareholders' equity decreased $1.7 million to $35.5 million at December 31,
2003. During the twelve-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: December 31, December 31,
2003 2002
------------ -----------
Assets
Cash $ 785 $ 993
Interest-bearing demand deposits 11,104 35,593
------------ ------------
Cash and cash equivalents 11,889 36,586
Interest-bearing deposits 150 145
Investment securities available for sale 5,908 ----
Investment securities held to maturity 494 1,637
Loans, net 221,230 216,703
Premises and equipment 4,628 3,239
Federal Home Loan Bank stock 3,556 3,424
Investment in limited partnership 2,215 837
Foreclosed assets and real estate held for development, net 1,348 1,607
Goodwill 2,393 2,297
Other assets 7,766 2,841
------------ ------------
Total assets $261,577 $269,316
============ ============
Liabilities
Deposits $190,192 $190,191
Federal Home Loan Bank advances 33,814 39,752
Note payable 132 303
Other liabilities 1,909 1,881
------------ ------------
Total liabilities 226,047 232,127
Shareholders' equity 35,530 37,189
------------ ------------
Total liabilities and shareholders' equity $261,577 $269,316
============ ============
Book value per common share $16.92 $16.33
Shares outstanding 2,100,000 2,278,000
Average equity to average assets 13.26 % 14.29 %
Allowance for loan losses to total loans 0.55 % 0.47 %
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
------------- ------------ ------------ -----------
Operating Data:
Total interest and dividend income $3,480 $4,242 $15,481 $17,986
Total interest expense 1,552 1,914 6,927 8,162
------------- ------------ ------------ -----------
Net interest income 1,928 2,328 8,554 9,824
Provision for loan losses 60 282 238 372
------------- ------------ ------------ -----------
Net interest income after provision
or loan losses 1,868 2,046 8,316 9,452
------------- ------------ ------------ -----------
Other income:
Service charges on deposit accounts 35 40 143 155
Equity in losses of limited partnership (31) -- (21) (20)
Gain on sale of securities available for sale -- -- -- 9
Other 190 117 358 205
------------- ------------ ------------ -----------
Total other income 194 157 480 349
------------- ------------ ------------ -----------
Other expenses:
Salaries and employee benefits 816 707 2,859 2,809
Net occupancy expense 72 63 292 311
Equipment expense 81 81 320 312
Data processing 95 135 393 812
Other 326 347 1,428 1,276
------------- ------------ ------------ -----------
Total other expenses 1,390 1,333 5,292 5,520
------------- ------------ ------------ -----------
Income before income taxes 672 870 3,504 4,281
Income taxes 204 305 1,172 1,479
------------- ------------ ------------ -----------
Net income $ 468 $ 563 $ 2,332 $ 2,802
============= ============ ============ ============
Other Data:
Return on average assets 0.71 % 0.82 % 0.85 % 1.03 %
Return on average equity 5.27 % 5.85 % 6.45 % 7.19 %
Basic earnings per share $0.24 $0.26 $1.18 $1.25
Diluted earnings per share $0.24 $0.26 $1.16 $1.24
Cash dividends per common share $0.15 $0.15 $0.60 $0.52