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Exhibit 99.1
Friday, April 16, 2004
PRESS RELEASE
Lawrence Financial Holdings, Inc. Announces
Diluted Earnings Per Share of $0.11 for First Quarter 2004
LAWRENCE FINANCIAL HOLDINGS, INC. (the "Company") - Ironton, Ohio (OTCBB:LWFH)
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reported basic earnings per share of $0.12 and diluted earnings per share of
$0.11 for the three months ended March 31, 2004. Net income for the first
quarter of 2004 was $72,000, a decrease of $55,000, or 44%, when compared to
reported first quarter, 2003 results. Mr. Jack Blair, President and CEO of
Lawrence Financial Holdings, Inc. remarked:
"The Company's net interest margin ("NIM") for the first
quarter of 2004 averaged 4.08%, a five basis point improvement over the
average NIM for the preceding quarter. The Company has been able to
consistently generate a better than average NIM when compared to peer.
Our ability to maintain a strong interest spread can be attributed to a
stable pool of lower cost, core funding sources. The Company's net
income has been reduced by a lack of quality loan volume and the
increased costs that we must incur to remain a publicly traded company.
The biggest threat to our future growth is the fact that we
already are second in market share within the area we serve. The market
area itself offers minimal growth opportunities which means that we
face an uphill battle to generate respectable earnings growth from
current locations. The Board of Directors and management are committed
to balancing risk with growth while staying focused on the best
interests of the shareholders. To this end we are actively pursuing
each of the following strategic options: increase interest income
through the purchase of blocks of shorter term consumer loans from
outside our market area; purchasing loan participations from local
commercial banks; and reducing overhead expenses by implementing a
variety of cost-saving actions. Several of these strategic options are
already underway and can be accomplished in a relatively short period
of time. However, some of these options will require a concentrated
effort over several months before results may be realized. The longer
term options are more complex and will require careful consideration on
the part of the Board and management prior to implementation.
At some point every business faces a crossroad that defines
the future direction of the Company. The key is to recognize the
crossroad and choose the path that leads to the most opportunities for
shareholders. The only strategic option that is not open for
consideration is the option of doing nothing."
During the first quarter of 2004, the Company experienced net
charge-offs to the allowance for loan losses ("ALL") of approximately $203,000,
compared to $234,000 in the fourth quarter of 2003. At March 31, 2004, the
Company had a ratio of ALL to gross loans of 1.24% compared to 1.24% at the end
of 2003 and 1.24% at March 31, 2003. The Company expensed $180,000 in provision
for loan losses during the first quarter of 2004. We expect to maintain our
monthly provision for loan losses in the second quarter of 2004 at $60,000 per
month, or $180,000 for the quarter.
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Asset quality deteriorated in the first quarter of 2004 when compared
to the fourth quarter of 2003. Non-performing assets totaled $2.3 million at
March 31, 2004, or 1.87% of assets. Of this amount: $1.9 million were loans 90
days or more past due and still accruing ("Accr") interest; $391,000 were loans
in a non-accrual ("N-Acr") status; and the remaining balance of $75,000 is other
real estate property 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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03/31/04 $2,326 1.87% $1,860 1.50% $391 0.31% $75 0.06%
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%
* All dollar values are shown in thousands.
At March 31, 2004 our NPA total included a commercial real estate loan
with a balance of $561,000. The Company has a first priority lien on the real
estate which secures this loan and we have the personal guarantees of the
borrowers. During the first quarter of 2004 the borrower made reductions to the
outstanding principal of this loan and paid the loan current. Due to improving
conditions with the borrower, the Company will likely remove it from the
"Substandard" category before the end of the second quarter of 2004. In addition
to this one loan there are four other loans where the Company holds first
priority liens on the real estate which total $423,000. At March 31, 2004,
$984,000 of total NPA's are represented by these five real estate loans. The
Company expects to remove all five of these loans from total NPA by June 30,
2004 without incurring any charges to ALL. Removing the balance represented by
these five loans from our March 31, 2004 delinquency totals would reduce our
NPA's at quarter end down to $1.3 million, or 1.08% of assets.
Lawrence Financial reported earnings for the first quarter ended March
31, 2004, of $72,000 compared to $127,000 for the same period in 2003. Net
interest income was $1.2 million for the three months ended March 31, 2004, a
decrease of $140,000, or 11%, compared to the three months ended March 31, 2003.
Net interest margin for the first quarter of 2004 averaged 4.08% compared to
4.11% for the same period in 2003. For the three months ending March 31, 2004,
the average yield on earning assets was 5.70%, a decrease of 57 basis points
when compared to the same period in 2003. The majority of the reduction in yield
was offset by a reduction in the average cost of funding for earning assets
which was 1.61% for the first quarter of 2004, a decrease of 54 basis points
when compared to the same period in 2003. 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 decreased $79,000, or 26%, for the three month
period as compared to the same period ended March 31, 2003. The Company
recognized $221,000 in non-interest income in the first quarter of 2004 compared
to $300,000 during the same period in 2003. The decrease was due primarily to
reduced gains from the sale of securities. In the first quarter of 2004 the
Company recognized $75,000 in gains from the sale of securities however, in the
first quarter of 2003,
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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 decreased $29,000, or 3%, for the three months
ended March 31, 2004, as compared to the same period in 2003. The Company
experienced a $55,000, or 11%, increase in salaries, wages and benefits paid
during the first quarter of 2004 compared to the same period in 2003 which
reflects: increased salaries and wages of $42,000, or 14%, due to the creation
of the operation and proof areas within the Company's banking subsidiary;
medical insurance costs increased by $8,000, or 23%; and all other expenses
within this category increased a net of $5,000. The Company froze 2004 salaries
and wages at 2003 levels to help offset rising benefit costs. First quarter 2004
data processing expenses decreased $103,000, or 53%, when compared to the same
period in 2003, with $50,000 of the decrease directly related to costs incurred
in 2003 as the Company prepared for the July, 2003 conversion to a new data
processing provider. In addition to increased salaries, wages and benefits, fees
related to outside professional services, audit and legal services, have
increased by $13,000, or 14%, in the first three months of 2004 when compared to
the same period in 2003.
Provision for loan loss was $180,000, a decrease of $120,000, or 40%,
for the three month period ending March 31, 2004 when compared to the same
period in 2003. At March 31, 2004, the Company's allowance for loan losses as a
percentage of gross loans outstanding remained unchanged at 1.24%, when compared
to totals at March 31, 2003. 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, 2004, was $14.2 million, or 11% of
total assets. This balance is an increase of $147,000, or 1%, when compared to
stockholder's equity at December 31, 2003. The increase reflects a reduction in
unrealized losses related to the Company's investment portfolio and current year
earnings for the period. At March 31, 2004 book value per share was $21.80
compared to $21.55 at December 31, 2003.
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,
2004 2003
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Operating Data:
Total interest income $ 1,614 $ 1,978
Total interest expense 457 681
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Net interest income 1,157 1,297
Provision for loan losses 180 300
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Net interest income after
provision for loan losses $ 977 $ 997
Non-interest income 146 147
Gain or (Loss) on sale 75 153
Non-interest expense 1,097 1,126
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Income before income taxes $ 101 $ 171
Income taxes 29 44
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Net income $ 72 $ 127
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Per Common Share Data:
Basic:
Net Income $ 0.12 $ 0.20
Avg Shares Outstanding 604,491 633,122
Diluted:
Net Income $ 0.11 $ 0.20
Avg Shares Outstanding 628,285 644,535
Cash Dividends Per Common Share Declared: $ 0.07 $ 0.07
Return on Average Equity: 2.05% 3.52%
Return on Average Assets: 0.23% 0.38%
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LAWRENCE FINANCIAL HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - CONTINUED
(UNAUDITED)
IN THOUSANDS OF DOLLARS
March 31, December 31, March 31,
2004 2003 2003
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Selected Financial Condition Data:
Total assets $ 124,251 $ 125,462 $ 136,081
Cash and cash equivalents 14,838 10,643 14,992
Investment securities 23,484 26,886 18,599
Gross loans receivable 80,056 81,897 96,571
Allowance for loan losses 991 1,014 1,201
Loans receivable, net 79,065 80,883 95,370
Deposits 109,620 110,996 121,139
Federal Home Loan Bank advances -- -- --
Stockholders' equity 14,172 14,025 14,252
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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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