EXHIBIT 99.2
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ABINGTON BANCORP, INC>
NEWS RELEASE
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FOR IMMEDIATE RELEASE
For: Abington Bancorp, Inc. Contact: James K. Hunt
97 Libbey Parkway Chief Financial Officer
Weymouth Woods Corporate Offices & Treasurer
P.O. Box 890237 (781) 682-6903
Weymouth, MA 02189-0237
www.AbingtonSavings.com
ABINGTON BANCORP ANNOUNCES FIRST QUARTER 2003 EARNINGS
ABINGTON, MA, May 15, 2003 --- Abington Bancorp, Inc. (NASDAQ:
ABBKE), the parent company of Abington Savings Bank (the "Bank"), today
reported net income of $1.20 million, or $0.30 per diluted share, for the
quarter ended March 31, 2003. This compares with restated net income of
$1.97 million, or $0.60 per diluted share for the quarter ended March 31,
2002.
First quarter 2003 results include the operations of the former
Massachusetts Fincorp, Inc. (MAFN), acquired by Abington in September 2002
under the purchase method of accounting. Under this method, the results of
MAFN are included only from the date of acquisition and, accordingly, are
excluded from the Company's balance sheet and operating results in the
first quarter of 2002. Net income for the first quarter of 2002 has been
restated
to reflect a number of previously announced accounting adjustments,
primarily related to the Bank's investment portfolio. Also included in
2002 first quarter results is a gain of $244,000, net of tax, or $0.07 per
diluted share, from the settlement of the Bank's defined benefit plan,
which was terminated effective December 31, 2001.
"Our core community banking operation and our mortgage banking
subsidiary, Old Colony Mortgage Corp., both performed well during the past
quarter," said James P. McDonough, president and chief executive officer.
"Like many other financial institutions, we are experiencing net interest
margin compression as higher yielding loans and investments are repricing,
maturing or prepaying. We intend to remain selective about the type of
loans and investments added to the Bank's balance sheet and we will
continue to purchase investment securities of shorter duration in order to
minimize interest rate risk in a rising rate environment."
"We expect to revise our financial forecasts for 2003 to incorporate
amended cash flow, prepayment and yield assumptions during the second
quarter and issue new guidance at a later date. As a result, we are not
comfortable in confirming our prior earnings guidance for 2003 at this
time," concluded Mr. McDonough.
Interest and dividend income declined by approximately $1.13 million,
or 9.6%, during the 2003 first quarter, compared to the prior year period,
due to the lower rate environment, partially offset by interest earned on a
higher volume of investment securities and loans. The higher earning asset
volume includes a combination of assets acquired in the MAFN acquisition
and the purchase of additional investment securities, coupled with a
combination of internal loan growth and loan purchases. The yield on
earning assets decreased to 5.24% for the three months ended March 31, 2003
as compared to 6.53% for
the same period of 2002, reflecting the lower available yields under the
current rate environment.
Interest expense decreased by $1.62 million, or 27.4%, in relation to
the first quarter of 2002, generally due to lower rates paid on deposits
and borrowed funds and a shift in deposit mix, as many consumers
transferred higher-cost maturing time deposits to more liquid, lower-cost
money market accounts. This was reflected in the Company's cost of funds,
which declined to 2.32% for the quarter ended March 31, 2003, compared with
3.70% in the comparable 2002 quarter.
The resulting net interest income for the first quarter of 2003 was
$6.31 million, compared with the restated $5.82 million for the first
quarter of 2002, an increase of $495,000, or 8.5%. The net interest margin
was 3.12% in 2003 compared to 3.24% in the first quarter of 2002.
Non-interest income increased $987,000, or 29.6%, for the first
quarter of 2003 from the first quarter of 2002. Customer service fees,
consisting of deposit service charges, ATM and debit card fees, remained
relatively unchanged from the first quarter of 2002, while income from the
sale of mutual funds and annuities declined slightly. Gains on sales of
mortgage loans increased by $264,000 over the 2002 first quarter due to a
higher volume of loans originated during the fourth quarter of 2002, which
were sold in the first quarter of 2003. Realized gains of $641,000 were
recorded in the first quarter of 2003 from the sale of appreciated
investment securities, an increase of $606,000 over the $35,000 in realized
securities gains recorded in the first three months of 2002.
Non-interest expense for the quarter was $8.79 million, compared with
$6.06 million in the first quarter of 2002, an increase of $2.73 million,
or 45.1%. Salaries and employee
benefits increased by $1.35 million, or 41.8%, reflecting the additional
branch and operations personnel associated with the MAFN acquisition,
volume-related commissions paid to mortgage loan originators, and accruals
for other mortgage company incentives. Increased occupancy and equipment
costs of $382,000 in the first quarter of 2003 over 2002 reflect higher
overhead associated with the newly-acquired MAFN branches and costs
associated with the third quarter 2002 relocation of the Company's
corporate headquarters. Other non-interest expense for 2003 increased by
$996,000 , or 58.1%, over 2002 and includes volume-related data processing
costs, additional marketing and advertising expense, and approximately
$300,000 in legal and accounting fees associated with the restatement of
2002 and re-audit of 2001 financial statements.
At March 31, 2003, the allowance for loan losses was $4.19 million,
or 1.01% of total loans and loans held for sale, compared with $4.21
million, or 1.06% of total loans and loans held for sale at December 31,
2002. Nonperforming loans totaled $2.2 million, or 0.22% of total assets
at quarter end, compared with $2.0 million, or 0.22% of total assets at
year end 2002. Net charge-offs for the quarter ended March 31, 2003 were a
nominal $20,000. No provision for loan losses was recorded during the
quarter as asset quality remained stable.
Total assets at March 31, 2003 were $999.6 million, up $96.4 million,
or 10.7%, from $903.2 million at year-end 2002. This reflects an increase
in securities available-for-sale of $156.9 million and a $31.1 million
increase in loans. Loans and loans held for sale at March 31, 2003 were
$415.5 million, compared with $397.1 million at December 31, 2002, an
increase of 4.6%. Short-term investments and funds sold decreased by $77.4
million during the quarter and loans held for sale declined by $12.6
million, or 35.5%. The growth
in the loan and investment portfolios was funded by a combination of cash
provided from a reduction in funds sold and loans held for sale, and
borrowings from the Federal Home Loan Bank. The increase in portfolio
loans includes the purchase of residential mortgage loans from third
parties, plus the retention of mortgage loans originated by the Bank's
mortgage banking subsidiary and internal growth in commercial real estate
loans. Deposits totaled $664.6 million at quarter end, compared with
$646.6 million at year end 2002, an increase of $18.0 million, or 2.8%.
Transaction accounts (demand and NOW accounts) grew by approximately $11.1
million, or 5.7%, while savings and money market accounts increased by
$11.7 million, or 4.5%. Time deposits decreased by $4.8 million, or 2.5%.
Stockholders' equity was $59.4 million at March 31, 2003 compared with
$57.8 million at December 31, 2002. Stockholders' equity per share was
$15.70 at quarter end 2003 and $15.42 at year end 2002. The increase
resulted from a combination of net income, stock option exercises, unearned
compensation related to the Company's Employee Stock Ownership Plan, and
changes in the market value of investment securities, net of tax, during
the quarter.
At March 31, 2003, the Company had 3,785,000 shares of common stock
outstanding, compared with 3,746,000 shares at year end 2002, reflecting
the issuance of common stock in connection with the exercise of stock
options during the quarter. Fully diluted weighted average shares
outstanding were 3,955,000 and 3,276,000, respectively, during the quarters
ended March 31, 2003 and 2002, reflecting the issuance of stock in
connection with the MAFN acquisition in fall 2002.
Conference Call
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Abington Bancorp will hold a conference call with investors to discuss
these results as well as its recently filed Annual Report on Form 10-K for
the year ended December 31, 2002,
which includes restated financial statements for the year ended December
31, 2001. The call has been scheduled for Monday, May 19, 2003, at 8:30 am
EDT. The call will also be available as a web cast and participants can
join by visiting the Abington Bancorp website (www.abingtonsavings.com) and
following the directions on the homepage. The call-in number for the call
is 800-299-9630, passcode 65547640. The call will be available as a web
cast for a week following the completion of the call, and can be accessed
through the Company's website.
About Abington Bancorp
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Abington Bancorp, Inc. is a one-bank holding company for Abington Savings
Bank. Abington Savings Bank is a Massachusetts-chartered savings bank with
offices in Abington, Boston (Dorchester), Brockton, Canton, Cohasset,
Halifax, Hanover, Hanson, Holbrook, Hull, Kingston, Milton, Pembroke,
Quincy, Randolph, Weymouth and Whitman. Its deposits are insured by the
Federal Deposit Insurance Corporation and Depositors Insurance Fund.
Certain statements herein constitute "forward-looking statements,
"within the meaning of the Private Securities Litigation Reform Act of
1995, that involve a number of risks and uncertainties that could cause
actual results to differ materially from those indicated, including the
changing of regional and national economic conditions, changes in the real
estate market, changes in levels of market interest rates, credit risks on
lending activities, and competitive and regulatory factors. All forward-
looking statements are necessarily speculative and undue reliance should
not be placed on any such statements, which are accurate only as of the
date made. The Company disclaims any duty to update such forward-looking
statements.
# # #
ABINGTON BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands) March 31, December 31,
2003 2002
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<s> <c> <c>
Assets
Cash and due from banks $ 30,879 $ 31,238
Short-term investments 512 77,878
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Total cash and cash equivalents 31,391 109,116
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Loans held for sale 22,992 35,629
Securities available for sale - at market value 509,190 352,339
Loans 392,555 361,434
Less: Allowance for possible loan loss (4,192) (4,212)
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Loans, net 388,363 357,222
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Federal Home Loan Bank stock, at cost 14,042 14,042
Banking premises and equipment, net 13,159 13,364
Other real estate owned, net - -
Goodwill 5,762 5,768
Intangible assets 4,466 4,615
Bank-owned life insurance - contract value 3,904 3,863
Other assets 6,311 7,262
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$999,580 $903,220
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Liabilities and Stockholders' Equity
Deposits $664,578 $646,628
Short-term borrowings 88,904 11,006
Long-term debt 166,971 167,009
Accrued taxes and expenses 5,488 6,789
Other liabilities 1,969 1,770
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Total liabilities 927,910 833,202
Guaranteed preferred beneficial interest in the
Company's junior subordinated debentures 12,257 12,238
Commitments and contingencies
Stockholders' equity:
Serial preferred stock, $.10 par value,
3,000,000 shares authorized; none issued - -
Common stock, $.10 par value, 12,000,000
shares authorized; 5,592,000 and 5,553,000
shares issued and 2003 and 2002, respectively 559 555
Additional paid-in capital 34,781 34,340
Retained earnings 36,308 35,106
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71,648 70,001
Treasury stock, 1,807,000 shares (17,584) (17,584)
Compensation plans (225) 120
Other accumulated comprehensive income - net
unrealized gain (loss) on available for sale
securities, net of taxes 5,574 5,243
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Total stockholders' equity 59,413 57,780
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$999,580 $903,220
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ABINGTON BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
(Dollar amounts in thousands, ----------------------------
except shares and per share data) 2003 2002
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(Restated)
<s> <c> <c>
Interest and dividend income:
Interest and fees on loans $ 6,165 $ 6,434
Interest on mortgage-backed securities 3,669 4,450
Interest on bonds and obligations 384 575
Dividend income 236 157
Interest on short-term investments 156 120
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Total interest and dividend income 10,610 11,736
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Interese expense:
Interest on deposits 2,331 2,987
Interest on short-term borrowings 73 36
Interest on long-term debt 1,893 2,895
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Total interest expense 4,297 5,918
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Net interest income 6,313 5,818
Provision for loan losses - -
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Net interest income after provision for loan losses 6,313 5,818
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Noninterest income
Loan servicing fees 31 44
Customer service fees 2,105 2,030
Gain (loss) on sales of securities, net 641 35
Gain on sales of mortgage loans, net 1,388 1,124
Net gain on sales of other real estate owned 33 -
Other 118 96
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Total noninterest income 4,316 3,329
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Noninterest expense:
Salaries and employee benefits 4,581 3,230
Occupancy and equipment expenses 1,215 833
Trust preferred securities expense 280 280
Other noninterest expense 2,709 1,713
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Total noninterest expense 8,785 6,056
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Income before income taxes 1,844 3,091
Provision for income taxes 642 1,125
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Net income $ 1,202 $ 1,966
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Basic earnings per share $ 0.32 $ 0.62
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Diluted earnings per share $ 0.30 $ 0.60
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Dividend declared per common share $ - $ 0.10
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Weighted average common shares (Basic) 3,763,000 3,182,000
Common stock equivalents 192,000 94,000
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Weighted average common shares (Diluted) 3,955,000 3,276,000
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ABINGTON BANCORP, INC.
SELECTED FINANCIAL DATA
(Unaudited)
March 31, December 31, March 31,
(In thousands, except per share data) 2003 2002 2002
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(Revised) (Restated)
<s> <c> <c> <c>
Period End:
Short-term investments $ 512 $ 77,878 $ 38,909
Securities available for sale, at market 509,190 352,339 375,645
Loans held for sale 22,992 35,629 7,473
Portfolio loans 392,555 361,434 364,955
Allowance for loan losses 4,192 4,212 5,472
Total assets 999,580 903,220 847,524
Deposits 664,578 646,628 526,455
Borrowed funds 255,875 178,015 231,321
Preferred beneficial interest in
junior subordinated debt 12,257 12,238 12,181
Stockholders' equity 59,413 57,780 37,565
Book value per share $ 15.70 $ 15.42 $ 12.05
Common shares outstanding 3,785 3,746 3,118
Three Months Ended:
Net interest income $ 6,313 $ 6,229 $ 5,818
Provision for loan losses - 150 -
Non-interest income 4,316 4,670 3,329
Non-interest expense 8,785 8,828 6,056
Provision for income tax 642 793 1,125
Net income 1,202 1,128 1,966
Weighted average common shares (Basic) 3,763 3,736 3,182
Weighted average dulitive options 192 182 94
Fully diluted weighted average shares 3,955 3,918 3,276
Basic earnings per share $ 0.32 $ 0.30 $ 0.62
Fully diluted earnings per share $ 0.30 $ 0.29 $ 0.60
Dividends declared (a) $ - $ 0.11 $ 0.10
<FN>
(a) A regular quarterly dividend in the amount of $0.11 per share was
declared on April 4, 2003, payable on May 1, 2003, to shareholders
of record on April 17, 2003.
</FN>
Ratios:
Net interest margin 3.12% 3.19% 3.24%
Efficiency ratio 82.65% 73.25% 66.21%
Return on average assets 0.50% 0.73% 0.98%
Return on average equity 8.11% 12.99% 19.81%
Tier 1 leverage capital 5.59% 6.00% 5.81%
Total risk-based capital 14.29% 13.73% 13.08%
Quarter Ended Year ended December 31,
March 31, -----------------------
Loan Originations - Mortgage Banking: 2003 2002 2001
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<s> <c> <c> <c>
Applications:
Quarter 1 $195,000 $ 66,600 $ 76,800
Quarter 2 69,300 61,900
Quarter 3 133,700 65,900
Quarter 4 156,300 90,900
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Cumulative $195,000 $425,900 $295,500