PRESS RELEASE - APRIL 26, 2004 FOR IMMEDIATE RELEASE
1st STATE BANCORP, INC. FOR MORE INFORMATION CONTACT:
JAMES C. McGILL
(336) 227-8861
1st STATE BANCORP, INC. ANNOUNCES QUARTERLY EARNINGS
BURLINGTON, NORTH CAROLINA 1st STATE BANCORP, INC. (NASDAQ: FSBC)
1st State Bancorp, Inc. (Nasdaq: FSBC), the holding company for 1st State Bank,
has reported earnings for the quarter ended March 31, 2004. Net income for the
quarter ended March 31, 2004 decreased to $779,000 from net income of $997,000
earned in the quarter ended March 31, 2003. Basic and diluted earnings per share
were $0.28 and $0.26 per share, respectively, for the quarter ended March 31,
2004, compared with $0.35 and $0.34 per share, respectively, in the previous
year.
Net income for the six months ended March 31, 2004 decreased to $1,537,000, from
net income of $1,980,000 earned in the six months ended March 31, 2003. Basic
and diluted earnings per share were $0.55 and $0.52 per share, respectively, for
the six months ended March 31, 2004, compared with $0.70 and $0.67 per share,
respectively, for the six months ended March 31, 2003.
Net interest income decreased $200,000 to $2.8 million for the quarter ended
March 31, 2004 from the $3.0 million recorded in the quarter ended March 31,
2003. The Company's net interest income as a percentage of average interest
earning assets decreased to 3.24% for the quarter ended March 31, 2004 from the
3.62% reported in the quarter ended March 31, 2003. The decrease reflects the
effect that the prolonged low-rate environment is having on the Company's net
interest income.
Non-interest income for the quarter decreased $281,000 to $590,000 from the
$871,000 reported in the quarter ended March 31, 2003. Net mortgage banking
income for the quarter decreased $323,000 to $113,000 from $436,000 reported in
the quarter ended March 31, 2003. The decrease in mortgage banking income was
the result of decreased mortgage originations in the current quarter compared to
the previous year. The Company did recognize $87,000 in gains on sales of
investments during the quarter ended March 31, 2004 which were not present in
the prior year.
At March 31, 2004, 1st State Bancorp, Inc. had total assets of $363 million, net
loans receivable of $231 million, deposits of $264 million and stockholders'
equity of $64.3 million. The book value per share of common stock was $21.71 per
share at March 31, 2004.
1st State Bancorp, Inc., through its subsidiary 1st State Bank, currently
services its customers from seven full service banking offices in Alamance
County.
Statements contained in this release, which are not historical facts, are
forward-looking statements as defined in the Private Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and uncertainties
which could cause actual results to differ materially from those currently
anticipated due to a number of factors which include the effects of future
economic conditions, governmental fiscal and monetary policies, legislative and
regulatory changes, the risks of changes in interest rates, the effects of
competition, and including without limitation to other factors that could cause
actual results to differ materially as discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time.
1st State Bancorp, Inc. (Nasdaq: FSBC)
Summary of Financial Highlights
Selected Financial Data: March 31, September 30,
(in thousands - unaudited) 2004 2003
---- ----
Total assets $ 362,869 362,640
Loans receivable, net 230,584 225,725
Loans held for sale 1,244 645
Investment securities 107,192 110,541
Cash and cash equivalents 8,385 9,359
Deposit accounts 264,413 262,712
Advances from Federal Home Loan Bank 28,500 31,500
Total stockholders' equity 64,314 62,701
Selected Operating Data: Three months ended Six months ended
(in thousands - unaudited) 3/31/2004 3/31/2003 3/31/2004 3/31/2003
--------- --------- --------- ---------
Interest income $ 3,954 4,397 8,001 8,964
Interest expense 1,189 1,445 2,424 3,012
------ ------ ------ ------
Net interest income 2,765 2,952 5,577 5,952
Provision for loan losses 60 60 120 120
------ ------ ------ ------
Net interest income after
provision for loan losses 2,705 2,892 5,457 5,832
Non-interest income 590 871 1,116 1,632
Non-interest expense 2,056 2,181 4,159 4,328
------ ------ ------ ------
Income before taxes 1,239 1,582 2,414 3,136
Income tax expense 460 585 877 1,156
------ ------ ------ ------
Net income $ 779 997 1,537 1,980
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Per Share Data: Three months ended Six months ended
(unaudited) 3/31/2004 3/31/2003 3/31/2004 3/31/2003
--------- --------- --------- ---------
Basic earnings per share $0.28 $0.35 $0.55 $0.70
Diluted earnings per share 0.26 0.34 0.52 0.67
Average shares outstanding - basic 2,814,005 2,816,021 2,813,224 2,815,831
Average shares outstanding - diluted 2,971,283 2,938,298 2,966,119 2,940,269
Cash dividends per share $0.10 $0.10 $0.20 $0.18
Book value at March 31 $21.71 $20.96
Shares outstanding at March 31 2,962,323 2,977,789
Interest Margin Three months ended Six months ended
(% of average assets - unaudited) 3/31/2004 3/31/2003 3/31/2004 3/31/2003
--------- --------- --------- ---------
Yield on interest earning assets 4.64% 5.39% 4.70% 5.51%
Cost of interest bearing liabilities 1.71% 2.18% 1.75% 2.29%
----- ----- ----- -----
Interest rate spread 2.93% 3.21% 2.95% 3.22%
Net interest income as a percentage of average
interest earning assets 3.24% 3.62% 3.28% 3.66%
Asset Quality March 31, March 31,
( unaudited) 2004 2003
---- ----
Allowance for loan losses to gross loans 1.66% 1.69%
held for investment
Nonperforming assets to total assets 1.23% 1.32%