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EXHIBIT 99.1
PRESS RELEASE
Lawrence Financial Holdings, Inc. Announces
Diluted Earnings Per Share of $0.76 for Fiscal Year 2003
IRONTON, Ohio--Feb. 12, 2004--LAWRENCE FINANCIAL HOLDINGS, INC. - Ironton, Ohio
(OTCBB:LWFH) reported basic earnings per share of $0.22 and diluted earnings per
share of $0.21 for the fourth quarter ended December 31, 2003. For the twelve
months ended December 31, 2003 the Company is reporting basic earnings per share
of $0.78 and diluted earnings per share of $0.76 compared to $0.91 and $0.90 per
share (basic and diluted) for the same period in 2002. Net income for the fourth
quarter of 2003 was $133,000, a decrease of $21,000, or 14%, when compared to
fourth quarter of 2002. For the twelve months ended December 31, 2003 net income
was $477,000, a decrease of $129,000, or 21%, when compared to fiscal year 2002.
Mr. Jack Blair, President and CEO of Lawrence Financial Holdings, Inc.,
remarked:
"Despite the set-back in earnings per share, 2003 has been a
year of accomplishment and progress for the Company. Our net interest
margin remains strong, averaging 4.03% in the fourth quarter, and
non-interest income generated from account service fees increased 11%
over 2002. The Company has successfully converted to a new core data
processor, generating access to new product lines and providing our
banking subsidiary with improved management systems. As a companion
project to the data processing ("DP") conversion, the Company
established a Wide-Area-Network providing access to needed information
at every terminal while simultaneously improving internal controls. The
projected savings from reduced, post conversion, data processing costs
is already starting to be realized and our deposit account service fee
revenue has increased as a direct result of the new DP system.
In addition to the one-time costs associated with the
conversion to a new core processor, non-performing assets ("NPA's") and
the related provision for loan loss expense have negatively impacted
the Company's earnings in 2003. During fiscal year 2003, the Company
experienced net charge-offs to the allowance for loan losses ("ALL") of
approximately $1,011,000, of which $234,000 occurred in the fourth
quarter, $295,000 in the third quarter, $272,000 in the second quarter
and $210,000 in the first quarter. At December 31, 2003, the Company
had a ratio of ALL to gross loans of 1.24% compared to 1.20% at the end
of the prior quarter and 1.14% at the end of 2002. The Company expensed
$915,000 in provision for loan losses in 2003. We expect to decrease
our monthly provision for loan losses in the first quarter of 2004 from
$75,000 per month to an estimated expense of $60,000 per month, or
$180,000 for the quarter. The Company experienced a seasonal increase
in NPA's during the month of December. However, resulting trends from
previous years lead us to conclude that by the end of the first quarter
of 2004 NPA's should improve.
At December 31, 2003 our NPA total included one commercial
real estate loan, with a balance of $574,000. The Company has a first
priority lien on the real estate which secures this loan and we have
the personal guarantees of the borrowers. In early February 2004 the
borrower made significant reductions to the past-due balances of this
loan and, due to improving conditions with the borrower, the Company
will likely remove it from the "Substandard" category before the end of
the first quarter of 2004. Removing the balance of this one loan from
our December 31, 2003 delinquency totals would reduce our NPA's at year
end down to $1.5 million, or 1.18% of assets.
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The Board of Directors and management of the Company are
focused on the continued improvement in NPA's and enhancing shareholder
value in 2004."
Non-performing assets increased in the fourth quarter of 2003. NPA's totaled
$2.07 million at December 31, 2003, or 1.63% of assets. The following table
provides a summary of non-performing asset balances for the current quarter and
the prior four quarters (Loan Accruing Interest "Accr"; Loan in Non-Accrual
status "N-Accr"; Other Real Estate Owned "OREO"):
---------------- ----------- ------------ ------------- ----------- ------------- ------------ ------------ ------------
NPA NPA Accr Accr N-Accr N-Accr OREO OREO
Quarter $* % $* % $* % $* %
Ended Assets Assets Assets Assets
---------------- ----------- ------------ ------------- ----------- ------------- ------------ ------------ ------------
12/31/03 $2,066 1.63% $1,492 1.18% $340 0.27% $234 0.19%
09/30/03 2,002 1.52% 1,316 1.01% 528 0.40% 158 0.12%
06/30/03 1,518 1.12% 672 0.50% 771 0.57% 75 0.06%
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%
* All dollar values are shown in thousands.
Lawrence Financial reported earnings for the fourth quarter and the fiscal year
ended December 31, 2003, of $133,000 and $477,000, respectively, compared to
$154,000 and $606,000, respectively, for the same periods in 2002. Net interest
income was $1.2 million for the three months ended December 31, 2003, and $5.0
million for fiscal year 2003 reflecting decreases of $36,000 and $36,000 over
the same two periods in 2002. Net interest margin for the fourth quarter of 2003
averaged 4.03% compared to 3.79% for the same period in 2002. For fiscal year
2003 net interest margin averaged 4.06% compared to 3.99% for the same period in
2002. For fiscal year 2003 the Company's average net interest margin increased 7
basis points, or 2%, when compared to the same period in 2002. For fiscal year
2003 the average yield on earning assets was 5.97%, a decrease of 101 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 1.91% for the twelve months ended December
31, 2003, a decrease of 108 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.
Non-interest income increased $167,000, or 22%, for the twelve month period
ended December 31, 2003 as compared to the same period in 2002. In 2003 the
Company recognized $300,000 in non-interest income in the first quarter,
$203,000 in the second quarter, $239,000 in the third quarter and $188,000 in
the fourth quarter of 2003 compared to $166,000, $173,000, $189,000, and
$234,000 respectively, for the same periods in 2002. For the twelve month period
ended December 31, 2003, the Company recognized $190,000 in gains from the sale
of securities.
Non-interest expense increased $409,000, or 10%, for the twelve months ended
December 31, 2003, as compared to the same period in 2002. The Company
experienced a $239,000, or 14%, increase in salaries, wages and benefits paid
during fiscal year 2003, which reflects the addition of employees in the
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loan collection, loan review, internal audit and operations departments within
the Company's banking subsidiary. In addition to increased salaries, wages and
benefits, fees related to data processing services have increased by $89,000, or
17%, with approximately $80,000 of the increase directly related to the July,
2003 deconversion from our previous data processor, and legal fees paid have
increased $26,000, or 16%, most of which is a result of actions taken in the
collection of delinquent loans.
Provision for loan losses was $915,000, a decrease of $12,000, or 1%, for the
twelve month period ending December 31, 2003 when compared to the same period in
2002. At December 31, 2003, the Company's allowance for loan losses as a
percentage of gross loans outstanding increased by 10 basis points, from 1.14%
to 1.24%, when compared to totals at December 31, 2002. Management considers the
Company to be adequately reserved at the end of the fourth quarter and will
assess the need for additional reserves on at least a quarterly basis.
Stockholders' equity at December 31, 2003, was $14.0 million, or 11% of total
assets. This balance is a decrease of $764,000, or 5%, when compared to
stockholder's equity at December 31, 2002. The decrease reflects additional
treasury stock purchases totaling $1.0 million and an increase in unrealized
losses in securities that are held as available for sale in the Company's
investment portfolio which were offset, in part, by net income for the period.
At December 31, 2003 book value per share was $21.55 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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
--------- --------- --------- --------
Operating Data:
Total interest income $ 1,665 $ 2,053 $ 7,322 $ 8,746
Total interest expense 496 848 2,360 3,748
---------- -------- --------- --------
Net interest income 1,169 1,205 4,962 4,998
Provision for loan losses 225 225 915 927
---------- -------- --------- --------
Net interest income after
provision for loan losses 944 980 4,047 4,071
Non-interest income 192 175 738 707
Gain or (loss) on sale (4) 59 190 54
Non-interest expense 976 991 4,366 3,957
---------- -------- --------- --------
Income before income taxes 156 223 609 876
Income taxes 23 69 132 270
Net income $ 133 $ 154 $ 477 $ 606
========== ======== ========= ========
Per Common Share Data:
Basic:
Net Income $ 0.22 $ 0.24 $ 0.78 $ 0.91
Avg Shares Outstanding 601,774 645,914 608,873 663,893
Diluted:
Net Income $ 0.21 $ 0.23 $ 0.76 $ 0.90
Avg Shares Outstanding 625,099 665,671 627,790 685,689
Cash Dividends Per Common
Share Declared: $ 0.07 $ 0.07 $ 0.28 $ 0.28
Return on Average Equity: 3.82% 4.17% 3.40% 4.06%
Return on Average Assets: 0.41% 0.45% 0.36% 0.45%
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Lawrence Financial Holdings, Inc.
Consolidated Financial Highlights - Continued
(Unaudited)
in thousands of dollars
Selected Financial Condition Data As Of:
Current Year - 2003 Prior Year - 2002
Dec 31 Sep 30 Dec 31
-------------- -------------- --------------------
Total assets $ 125,462 $ 130,354 $ 134,389
Cash and cash equivalents 10,643 14,758 16,321
Investment securities 26,886 24,462 14,807
Gross loans receivable 81,897 85,061 97,568
Allowance for loan losses 1,014 1,024 1,111
Loans receivable, net 80,883 84,037 96,457
Deposits 110,996 115,990 118,926
Federal Home Loan Bank advances -- -- --
Stockholders' equity 14,025 13,794 14,789
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CONTACT:
Lawrence Financial Holdings, Inc.
Jack Blair or RobRoy Walters, 740-532-0263
Fax: 740-532-1885