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EXHIBIT 99.1
Friday, October 15, 2004
PRESS RELEASE
Lawrence Financial Holdings, Inc. Announces
Third Quarter 2004 Results
LAWRENCE FINANCIAL HOLDINGS, INC. - Ironton, Ohio (OTCBB:LWFH) reported third
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quarter and year to date 2004 results including a charge related to it's intent
to sell the indirect mobile home ("IDMH") loan portfolio, which included
classifying the portfolio held for sale and valuing the portfolio at the lower
of cost or market. Market value for the $11.9 million IDMH portfolio was
established at September 30, 2004 through negotiated sales contracts that were
executed with a third party on October 12, 2004 in connection with the Agreement
and Plan of Merger between Lawrence Financial (the "Company") and Oak Hill
Financial, Inc., Jackson, Ohio (Nasdaq NMS:OAKF). As a result of the intent to
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sell reached in October, effective September 30, 2004 the Company recognized
write-downs to the IDMH portfolio totaling $4.5 million. The after-tax impact to
equity was ($2.9) million reducing book value per share by ($4.48). Total equity
for the Company at September 30, 2004 was $11.3 million, or 9.50% of total
assets, with a book value per share of $17.37.
Lawrence Financial is reporting losses of ($4.67) per share, basic and
diluted, for the third quarter ended September 30, 2004 compared to basic
earnings per share of $0.16 and diluted earnings per share of $0.15 for the
third quarter of 2003. In the first nine months of 2004 the Company is reporting
basic and diluted losses per share of ($4.42) compared to $0.56 and $0.55 per
share (basic and diluted) for the same period in 2003. The net loss for the
third quarter of 2004 was ($2,847,000), a decrease of $2,941,000 when compared
to third quarter of 2003. During the first nine months of 2004 the net loss was
($2,684,000), a decrease of $3,029,000 when compared to the first nine months of
2003. Mr. Jack Blair, President and CEO of Lawrence Financial Holdings, Inc.
remarked:
"The sale of our indirect mobile home loan portfolio was a
condition of the Agreement and Plan of Merger with Oak Hill Financial"
During the third quarter of 2004, the Company experienced net
charge-offs to the allowance for loan losses ("ALL") of approximately $349,000,
of which $125,000 was related to the intended sale and valuing of the IDMH loan
portfolio, compared to $186,000 in the second quarter and $200,000 in the first
quarter of 2004. At September 30, 2004, the Company had a ratio of ALL to gross
loans of 1.10% compared to 1.24% at the end of 2003 and 1.20% at September 30,
2003. The Company expensed $180,000 in provision for loan losses during the
third quarter of 2004 and $540,000 during the first nine months of 2004.
Asset quality within our homogenous loan portfolios remained unchanged
in the third quarter of 2004, however one commercial real estate loan, which was
current at September, 30, 2004, has developed risk characteristics that give
management cause to establish a specific reserve. Non-performing assets totaled
$1.8 million at September 30, 2004, or 1.50% of total assets. Of this amount:
$989,000 million were loans classified as substandard or 90 days or more past
due and still accruing ("Accr") interest; $754,000 were loans in a non-accrual
("N-Acr") status; and the remaining balance of
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$45,000 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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09/30/04 $1,788 1.50% $ 989 0.83% $754 0.63% $ 45 0.04%
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%
* All dollar values are shown in thousands.
After the sale of the IDMH portfolio in mid-October the Company will
reallocate a portion of the Allowance for Loan Losses which was assigned to the
to IDMH portfolio among other homogeneous loan categories due to increased
outstanding balances and establish a specific reserve for a single commercial
real estate loan. Loan growth in our consumer and commercial loan portfolios and
increases in non-accrual loans lead management to believe that keeping the ALL
balance at current levels is necessary. Management will continue to monitor the
Company's ALL requirements and make adjustments as needed.
Lawrence Financial reported a loss for the third quarter and the nine
months ended September 30, 2004, of ($2,847,000) and ($2,684,000), respectively,
compared to $94,000 and $345,000, respectively, for the same periods in 2003.
Net interest income was $1.1 million for the three months ended September 30,
2004, and $3.4 million for the first nine months of 2004 reflecting decrease of
$127,000 when compared to the third quarter of 2003 and a decrease of $406,000
when compared to the first nine months in 2003. Net interest margin for the
third quarter of 2004 averaged 3.80% compared to 4.02% for the same period in
2003. Through the first nine months of 2004 net interest margin averaged 3.93%
compared to 4.07% for the same period in 2003. For the nine months ended
September 30, 2004, the average yield on earning assets was 5.53%, a decrease of
52 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 1.60% for the nine month ended September
30, 2004, a decrease of 38 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 ($4,640,000) for the nine-month period as
compared to the same period ended September 30, 2003. In 2004 the Company
recognized $222,000 in non-interest income in the first quarter, $155,000 in the
second quarter and a loss of ($4,276,000) in the third quarter of 2004. In the
first nine months of 2004, the Company recognized $75,000 in gains from the sale
of securities, a loss of ($4,406,000) from the charge related to the Company's
intent to sell the indirect mobile home loan portfolio at the lower of cost or
market and a loss of ($17,000) from the sale of other assets.
Non-interest expense decreased $296,000, or 9%, for the nine months
ended September 30, 2004, as compared to the same period in 2003. The Company
experienced a $26,000, or 2%, increase in salaries, wages and benefits paid
during the first nine months of 2004 compared to the same period in 2003, which
reflects : increased salaries and wages of $57,000, or 6%, due to the creation
of the
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operation and proof areas within the Company's banking subsidiary; medical
insurance costs increased by $2,000, or 2%; and all other expenses within this
category decreased a net of $33,000. The Company has frozen 2004 salaries and
wages at 2003 levels to help offset rising benefit costs. During the first nine
months of 2004 data processing expenses decreased $225,000, or 44%, when
compared to the same period in 2003, with $78,000 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 $540,000, a decrease of $150,000, or 22%,
for the nine month period ending September 30, 2004 when compared to the same
period in 2003. At September 30, 2004, the Company's allowance for loan losses
as a percentage of gross loans outstanding decreased by 10 basis points, from
1.20% to 1.10%, when compared to totals at September 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 September 30, 2004, was $11.3 million, or 9.5%
of total assets. This balance is a decrease of ($2,734,000) when compared to
stockholder's equity at December 31, 2003. The change in stockholder's equity
reflects a ($2,910,000) decrease to current earnings from the charge related to
the Company's intent to sell the indirect mobile home loan portfolio at the
lower of cost or market, offset in part by net income for the period. At
September 30, 2004 book value per share was $17.37 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 Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
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Operating Data:
Total interest income $ 1,560 $ 1,788 $ 4,761 $ 5,657
Total interest expense 455 556 1,374 1,864
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Net interest income 1,105 1,232 3,387 3,793
Provision for loan losses 180 195 540 690
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Net interest income after
provision for loan losses 925 1,037 2,847 3,103
Non-interest income (4,276) 230 (3,975) 546
Gain or (loss) on sale sec 0 9 75 194
Non-interest expense 1,016 1,160 3,092 3,389
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Income before income taxes (4,367) 116 (4,145) 454
Income taxes (1,520) 23 (1,461) 110
Net income $ (2,847) $ 93 $ (2,684) $ 344
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Per Common Share Data:
Basic:
Net Income $ (4.67) $ 0.16 $ (4.42) $ 0.56
Avg Shares Outstanding 609,911 599,042 607,212 611,244
Diluted:
Net Income $ (4.67) $ 0.15 $ (4.42) $ 0.55
Avg Shares Outstanding 609,911 621,128 607,212 628,690
Cash Dividends Per Common
Share Declared: $ 0.07 $ 0.07 $ 0.21 $ 0.21
Return on Average Equity: (81.88)% 2.66% (25.71)% 3.26%
Return on Average Assets: (9.14)% 0.28% (2.85)% 0.34%
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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 - 2004 Prior Year - 2003
Sep 30 Jun 30 Dec 31 Sep 30
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Total assets $ 118,916 $ 125,024 $ 125,462 $ 130,354
Cash and cash equivalents 6,231 8,285 10,643 14,758
Loans Held for Sale 7,360 -- -- --
Investment securities 24,773 26,142 26,886 24,462
Gross loans receivable 74,529 84,350 81,897 85,061
Allowance for loan losses 819 988 1,014 1,024
Loans receivable, net 81,070 83,362 80,883 84,037
Deposits 108,200 110,691 110,996 115,990
Federal Home Loan Bank advances -- -- -- --
Stockholders' equity 11,291 13,716 14,025 13,794
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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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