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EXHIBIT 99.1
Monday, April 14, 2003
PRESS RELEASE
Lawrence Financial Holdings, Inc. Announces
Earnings Per Share of $0.20 for First Quarter 2003
LAWRENCE FINANCIAL HOLDINGS, INC. (the "Company") - Ironton, Ohio (OTCBB:LWFH)
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reported basic and diluted earnings per share of $0.20 for the three months
ended March 31, 2003. Net income for the first quarter of 2003 was $127,000, a
decrease of $65,000, or 34%, when compared to reported first quarter, 2002
results. Mr. Jack Blair, President and CEO of Lawrence Financial Holdings, Inc.
remarked:
"In 2003 the Company will accomplish several strategic
objectives. One objective is the conversion, in July, from our current
data processor to a new core processing provider, CSI. Once
accomplished, the change to CSI will be a `Win-Win-Win'. Our customer
base will realize multiple benefits from a much improved set of
financial products and services which will be available through our
banking subsidiary, Lawrence Federal Savings Bank. Our management
systems will be improved over current levels. And finally, we project
the post conversion reduction to overall data processing costs incurred
by Company will be approximately $10,000 per month. Improved services,
products, management systems and earnings truly creates unique
opportunity for the Company to enhance customer service and shareholder
value.
Next, the Company announced on January 28, 2003 the approval
of our second stock repurchase program. This program has targeted the
repurchase of 55,000 shares, or approximately 8% of the Company's
outstanding common stock. To date, we have repurchased 27,500 shares at
a weighted average price of $17.91 per share. The Company will continue
the repurchase program in the second quarter of 2003.
Another strategic objective is one that has carried over from
2002, improving asset quality. As we discussed in prior press releases
and public filings, the Company is working through the issues
associated with elevated levels of delinquent loans, non-performing
assets ("NPAs") and net charge-offs. Our local economy has not improved
over the last quarter, nor has it deteriorated further. We believe that
many of the delinquency issues we are facing today are the result of
local and national economic conditions. However, we did see improvement
in asset quality in the first quarter. One quarter's improvement does
not constitute a trend, but the results were consistent with
management's expectations.
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At March 31, 2003 $936,000, or 51%, of our non-performing
assets ("NPA") were in the indirect mobile home loan portfolio which is
down from $1,127,000, or 53%, at December 31, 2002. Non-performing
assets related to our 1-4 family mortgage loan portfolio made up
$465,000, or 26%, of our total NPAs which is down from $667,000, or
32%, at December 31, 2002. Allowance for Loan Losses ("ALL") was 1.24%
of gross loans at March 31, 2003 compared to 1.14% at December 31,
2002. Net charge-offs for the first quarter of 2003 were $210,000.
I would also like to remind all shareholders that the Annual
Meeting for the Company will be held at 4:30 p.m. on May 12, 2003, in
our Ironton Office. We look forward to seeing you at the meeting. If
you are unable to attend in person I encourage you to vote your proxy
and mail it as soon as possible."
Asset quality improved in the first quarter of 2003 when compared to
the fourth quarter of 2002. Non-performing assets totaled $1.8 million at March
31, 2003, or 1.34% of assets. Of this amount: $1.1 million were loans 90 days or
more past due and still accruing ("Accr") interest; $656,000 were loans in a
non-accrual ("N-Acr") status; and the remaining balance of $111,000 were other
real estate properties owned ("OREO"). The following table provides a summary of
non-performing asset balances for the current quarter and the prior four
quarters:
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NPA NPA Accr Accr N-Accr N-Accr OREO OREO
Quarter $* % $* % $* % $* %
Ended Assets Assets Assets Assets
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03/31/03 $1,823 1.34% $1,056 0.78% $656 0.48% $111 0.08%
12/31/02 2,118 1.58% 1,436 1.07% 531 0.41% 151 0.10%
09/30/02 1,650 1.21% 980 0.72% 593 0.43% 77 0.06%
06/30/02 1,610 1.20% 820 0.61% 759 0.57% 31 0.02%
03/31/02 1,650 1.25% 620 0.47% 979 0.74% 51 0.04%
* All dollar values are shown in thousands.
Lawrence Financial reported earnings for the first quarter ended March
31, 2003, of $127,000 compared to $192,000 for the same period in 2002. Net
interest income was $1.3 million for the three months ended March 31, 2003, an
increase of $71,000, or 6%, compared to the three months ended March 31, 2002.
Net interest margin for the first quarter of 2003 averaged 4.11% compared to
3.95% for the same period in 2002. The increase in net interest margin of 16
basis points reflects an improvement of 4%. For the three months ending March
31, 2003, the average yield on earning assets was 6.27%, a decrease of 110 basis
points when compared to the same period in 2002. The reduction in the yield on
earning assets was more than offset by a reduction in the average cost of
funding for earning assets which was 2.16% for the first quarter of 2003, a
decrease of 126 basis points when compared to the same period in 2002. This
reduction in cost was generated by changes in both the mix of, and the rate paid
for, interest bearing deposits. The Company had no borrowed funds during the
quarter.
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Non-interest income increased $134,000, or 81%, for the three month
period as compared to the same period ended March 31, 2002. The increase was due
primarily to gains from the sale of securities. The Company recognized $300,000
in non-interest income in the first quarter of 2003 compared to $166,000 during
the same period in 2002. In the first quarter of 2003 the Company recognized
$153,000 in gains from the sale of securities and a loss of ($15,000) from the
sale of assets.
Non-interest expense increased $166,000, or 17%, for the three months
ended March 31, 2003, as compared to the same period in 2002. The Company
experienced a $53,000, or 12%, increase in salaries, wages and benefits paid
during the first quarter of 2003 compared to the same period in 2002, which
reflects the addition of employees in the loan collection, loan review, internal
audit and operations departments within Company's banking subsidiary. The
Company increase 2003 salaries and wages by an average of 3% and the cost of
employee health benefits has increased by 30% when compared to the same three
month period in 2002. In addition to increased salaries, wages and benefits:
fees related to data processing services have increased by $62,000, or 46%, with
$50,000 of the increase directly related to costs incurred in preparation for
the July, 2003 deconversion from our current data processor; legal fees paid
have increased $18,000, or 26%, most of which is a result of actions taken in
the collection of delinquent loans; and miscellaneous expenses related to the
repossession of indirect loans increased $24,000, compared to no expenses
recorded for this activity in the first three months of 2002.
Provision for loan loss was $300,000, an increase of $150,000, or 100%,
for the three month period ending March 31, 2003 when compared to the same
period in 2002. At March 31, 2003, the Company's allowance for loan losses as a
percentage of gross loans outstanding increased by 5 basis points, from 1.19% to
1.24%, when compared to totals at March 31, 2002. Management considers the
Company to be adequately reserved and will assess the need for additional
reserves on at least a quarterly basis.
Stockholders' equity at March 31, 2003, was $14.3 million, or 10% of
total assets. This balance is a decrease of $537,000, or 4%, when compared to
stockholder's equity at December 31, 2002. The decrease reflects treasury stock
purchases totaling $2.2 million, offset in part by net income for the period. At
March 31, 2003 book value per share was $21.03 compared to $20.97 at December
31, 2002.
Lawrence Financial Holdings, Inc. is the holding company for Lawrence
Federal Savings Bank, a federally chartered savings bank headquartered in
Ironton, Ohio. Lawrence Federal operates a total of five full-service banking
offices with locations in Ironton, Chesapeake, South Point, Rome and
Wheelersburg in southeastern Ohio.
This release contains "forward-looking statements" which may
describe future plans and strategies, including our expectations of
future financial results. Management's ability to predict results or
the effect of future plans or strategies is inherently uncertain.
Factors that could affect our actual results include market interest
rate trends, the general regional and national economic climate, our
ability to control costs and expenses, actions by our competitors and
federal and state regulation. As we have no control over these factors,
they should be considered in evaluating any forward-looking statements
and undue reliance should not be placed on such statements.
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LAWRENCE FINANCIAL HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(UNAUDITED)
IN THOUSANDS, EXCEPT FOR PER-SHARE AMOUNTS
Three Months Ended
March 31,
2003 2002
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Operating Data:
Total interest income $ 1,978 $ 2,275
Total interest expense 681 1,048
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Net interest income 1,297 1,227
Provision for loan losses 300 150
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Net interest income after
provision for loan losses $ 997 $ 1,077
Non-interest income 162 171
Gain or (Loss) on sale 138 (5)
Non-interest expense 1,126 961
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Income before income taxes $ 171 $ 280
Income taxes 44 88
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Net income $ 127 $ 192
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Per Common Share Data:
Basic:
Net Income $ 0.20 $ 0.27
Avg Shares Outstanding 633,122 715,669
Diluted:
Net Income $ 0.20 $ 0.26
Avg Shares Outstanding 644,535 739,638
Cash Dividends Per Common Share Declared: $ 0.07 $ 0.07
Return on Average Equity: 3.52% 4.98%
Return on Average Assets: 0.38% 0.58%
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LAWRENCE FINANCIAL HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - CONTINUED
(UNAUDITED)
IN THOUSANDS OF DOLLARS
March 31, December 31, March 31,
2003 2002 2002
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Selected Financial Condition Data:
Total assets $ 136,081 $ 134,389 $ 132,484
Cash and cash equivalents 14,992 16,141 11,541
Investment securities 18,599 14,192 11,823
Gross loans receivable 96,571 97,568 103,791
Allowance for loan losses 1,201 1,111 1,239
Loans receivable, net 95,370 96,457 102,552
Deposits 121,139 118,926 113,711
Federal Home Loan Bank advances -- -- 2,000
Stockholders' equity 14,252 14,789 15,181
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FOR MORE INFORMATION PLEASE CONTACT:
Lawrence Financial Holdings, Inc.
Jack Blair, President and CEO
or
RobRoy Walters, SVP and CFO
311 South Fifth Street
Ironton, Ohio 45638
Phone: (740) 532-0263
Fax: (740) 532-1885
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