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Exhibit 99.1
Press Release
LAWRENCE FINANCIAL HOLDINGS, INC. ANNOUNCES DILUTED EARNINGS PER SHARE OF $0.15
FOR SECOND QUARTER 2004
Wednesday July 21, 2007
IRONTON, Ohio--July 21, 2004-- Lawrence Financial Holdings, Inc. (OTCBB:LWFH)
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reported basic and diluted earnings per share of $0.15 for the second quarter
ended June 30, 2004 compared to basic earnings per share of $0.21 and diluted
earnings per share of $0.20 for the second quarter of 2003. In the first six
months of 2004, the Company reported basic earnings per share of $0.27 and
diluted earnings per share of $0.26 compared to basic earnings per share of
$0.41 and diluted earnings per share of $0.40 for the same period in 2003. Net
income for the second quarter of 2004 was $92,000, an increase of $20,000, or
28%, when compared to the first quarter of 2004. During the first six months of
2004 net income for the Company was $163,000, a decrease of $88,000, or 35%,
when compared to the first six months of 2003. Mr. Jack Blair, President and CEO
of Lawrence Financial Holdings, Inc. remarked:
"In the second quarter the Company's diluted earnings per
share increased $0.04 over the first quarter of 2004; our net interest
margin averaged 3.90% for the quarter; non-interest expenses decreased
11%; and we reduced non performing assets ("NPA's") by about $110,000
from March 31st to June 30th, 2004. The Company expected to report a
larger decrease in NPA's at the end of the second quarter but the
lengthy legal processes surrounding the foreclosure and re-sale of
three mortgage loans (discussed below) have delayed the removal of
these loan balances. The Company expects these legal processes to be
completed by year-end without any significant losses.
During the first six months of 2004, the Company has
experienced net charge-offs to the allowance for loan losses of
approximately $386,000, of which $186,000 occurred in the second
quarter. Comparing the first six months of 2004 to the same period in
2003, net charge-offs are down $96,000, or 20%. We believe that current
levels of charge-off activity will likely continue through the third
quarter of 2004.
As we disclosed in our first quarter 2004 earnings release,
the Company was, and is, actively pursuing several strategic options
designed to increase interest income. One of those options was the
purchase of blocks of consumer loans from outside our traditional
market area. In late May and early June 2004 the Company completed the
purchase of $4.9 million of these loans. Additional loan volume,
through these purchases and some recent mortgage loan participations,
will help the Company increase earning asset volumes and result in
additional interest income. The Company's Board and management continue
to evaluate and implement strategic objectives designed to enhance
shareholder value."
During the second quarter of 2004, the Company experienced net
charge-offs to the allowance for loan losses ("ALL") of approximately $186,000,
compared to $200,000 in the first quarter of 2004. At June 30, 2004, the Company
had a ratio of ALL to gross loans of 1.17% compared to 1.24% at the end of 2003
and 1.22% at June 30, 2003. The Company expensed $180,000 in provision for loan
losses during the second quarter of 2004 and $360,000 during the first six
months of 2004.
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Asset quality improved in the second quarter of 2004 when compared to
the first quarter of 2004. Non-performing assets totaled $2.2 million at June
30, 2004, or 1.77% of assets. Of this amount: $1.8 million were loans 90 days or
more past due and still accruing ("Accr") interest; $370,000 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:
NPA NPA Accr Accr N-Accr N-Accr OREO OREO
Quarter $* % $* % $* % $* %
Ended Assets Assets Assets Assets
----------------- ------------ ------------- ------------ ------------ ------------- ------------ ------------ -------------
06/30/04 $2,210 1.77% $1,765 1.41% $370 0.30% $75 0.06%
03/31/04 2,326 1.86% 1,860 1.49% 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%
* All dollar values are shown in thousands.
At June 30, 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 and second quarters of 2004 the borrower made
reductions to the outstanding principal of this loan but the loan has returned
to a delinquent status. It was 29 days delinquent at June 30, 2004. The Company
continues to consider this loan to be "Substandard" in accordance with our Loan
Review Policy. In addition to this one loan there are three other loans, which
total $386,000, where the Company holds first priority liens on the real estate.
The Company had expected to remove all three of these loans from total NPA by
June 30, 2004 through the completion of the foreclosure process and subsequent
sale. However, the length of time needed to move these properties through the
necessary legal proceedings has taken longer than anticipated. The Company has
no cause to anticipate a loss resulting from the sale of these three properties.
Removing the balance represented by these three loans from our June 30, 2004
delinquency totals would reduce our NPA's at quarter end down to $1.8 million,
or 1.46% of assets.
Lawrence Financial reported earnings for the second quarter and the six
months ended June 30, 2004, of $92,000 and $163,000, respectively, compared to
$125,000 and $251,000, respectively, for the same periods in 2003. Net interest
income was $1.1 million for the three months ended June 30, 2004, and $2.3
million for the first six months of 2004 reflecting a decrease of $138,000 when
compared to the same quarter in 2003 and a decrease of $279,000 over the first
six months in 2003. Net interest margin for the second quarter of 2004 averaged
3.90% compared to 4.05% for the same period in 2003. Through the first six
months of 2004 net interest margin averaged 3.99% compared to 4.08% for the same
period in 2003. For the six months ended June 30, 2004, the average yield on
earning assets was 5.60%, a decrease of 57 basis points when compared to the
same period in 2003. The reduction in the yield on earning assets was partially
offset by a reduction in the average cost of funding for earning assets which
was 1.61% for the six months ended June 30, 2004, a decrease of 47 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 $126,000, or 25%, for the six-month
period as compared to the same period ended June 30, 2003. The Company
recognized $222,000 in non-interest income in the first quarter of 2004 and
$155,000 in the second quarter of 2004 compared to $300,000 and $203,000,
respectively, for the same periods in 2003. In the first six months of 2004, the
Company recognized $75,000 in gains from the sale of securities compared to
$185,000 in gains from the sale of securities and a loss of ($17,000) from the
sale of assets during the first six months of 2003.
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Non-interest expense decreased $154,000, or 7%, for the six months
ended June 30, 2004, as compared to the same period in 2003. The Company
experienced a $42,000, or 4%, increase in salaries, wages and benefits paid
during the first six months of 2004 compared to the same period in 2003, which
reflects: increased salaries and wages of $53,000, or 9%, due to the creation of
the operation and proof areas within the Company's banking subsidiary; medical
insurance costs increased by $7,000, or 9%; and all other expenses within this
category decreased a net of $18,000. The Company has frozen 2004 salaries and
wages at 2003 levels to help offset rising benefit costs. During the first six
months of 2004 data processing expenses decreased $168,000, or 47%, when
compared to the same period in 2003, with $69,000 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.
Provision for loan losses was $360,000, a decrease of $135,000, or 27%,
for the six month period ending June 30, 2004 when compared to the same period
in 2003. At June 30, 2004, the Company's allowance for loan losses as a
percentage of gross loans outstanding decreased by 5 basis points, from 1.22% to
1.17%, when compared to totals at June 30, 2003. Management considers the
Company to be adequately reserved and will assess the need for additional
provision on a monthly basis.
Stockholders' equity at June 30, 2004, was $13.7 million, or 11.0% of
total assets. This balance is a decrease of $304,000, or 2%, when compared to
stockholder's equity at December 31, 2003. The change in stockholder's equity
reflects a $455,000 increase in the unrealized loss on securities classified as
available for sale, offset in part by net income for the period. At June 30,
2004 book value per share was $21.11 compared to $21.57 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 Six Months Ended
June 30, June 30,
2004 2003 2004 2003
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Operating Data:
Total interest income $ 1,587 $ 1,891 $ 3,200 $ 3,869
Total interest expense 462 628 919 1,309
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Net interest income 1,125 1,263 2,281 2,560
Provision for loan losses 180 195 360 495
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Net interest income after
provision for loan losses $ 945 $ 1,068 $ 1,921 $ 2,065
Non-interest income 155 203 377 503
Non-interest expense 978 1,103 2,075 2,230
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Income before income taxes $ 122 $ 168 $ 223 $ 338
Income taxes 30 43 60 87
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Net income $ 92 $ 125 $ 163 $ 251
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Per Common Share Data:
Basic:
Net Income $ 0.15 $ 0.21 $ 0.27 $ 0.41
Avg Shares Outstanding 607,206 601,941 605,848 617,446
Diluted:
Net Income $ 0.15 $ 0.20 $ 0.26 $ 0.40
Avg Shares Outstanding 626,435 613,354 627,360 632,784
Cash Dividends Per Common
Share Declared: $ 0.07 $ 0.07 $ 0.14 $ 0.14
Return on Average Equity: 2.65% 3.58% 2.35% 3.55%
Return on Average Assets: 0.29% 0.37% 0.26% 0.37%
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LAWRENCE FINANCIAL HOLDINGS, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - CONTINUED
(UNAUDITED)
IN THOUSANDS
Selected Financial Condition Data As Of:
Current Year - 2004 Prior Year - 2003
Jun 30 Mar 31 Dec 31 Jun 30
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Total assets $125,024 $124,251 $125,462 $135,313
Cash and cash equivalents 8,285 14,838 10,643 11,250
Investment securities 26,142 23,484 26,886 25,629
Gross loans receivable 84,350 80,056 81,897 92,423
Allowance for loan losses 988 991 1,014 1,124
Loans receivable, net 83,362 79,065 80,883 91,299
Deposits 110,691 109,620 110,996 120,644
Stockholders' equity 13,716 14,172 14,025 13,888
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Contact:
Lawrence Financial Holdings, Inc.
Jack Blair or RobRoy Walters, 740-532-0263
Fax: 740-532-1885