Exhibit 20.1
CONTACT: Mary K. Talbot
(401) 245-8819
SLADE'S FERRY POSTS DOUBLE-DIGIT LOAN GROWTH
IN FIRST HALF OF 2003
SOMERSET, Mass. -- Slade's Ferry Bancorp (NASDAQ small cap: SFBC)
parent company of Slade's Ferry Trust Company, announced double-digit loan
growth in the first half of 2003 as it continued to aggressively market its
home equity and residential mortgage products.
Total loans increased $28.9 million, or 11.1 percent, reaching $288.7
million at the end of the second quarter. First mortgage outstandings grew
to $69.2 million by the end of the quarter, a 38 percent increase since
year-end as the bank works to increase the percentage of consumer loans in
its portfolio. Consumer loans now make up 30 percent of the bank's overall
loan mix, compared to 25 percent at year-end.
"This is part of our overall strategy to diversify our loan
portfolio," said President and Chief Executive Officer Mary Lynn Lenz. "This
enables us to help our customer take advantage of historically low interest
rates while reducing our portfolio's risk profile."
The bank also reported net income for the second quarter of $1.6
million or $0.40 per diluted share. Earnings were positively impacted by
several factors, including $402,000 in after-tax income associated with the
recovery of previously provided loan loss reserves, and $627,000 pertaining
to the settlement with the State of Massachusetts regarding the taxation of
the Real Estate Investment Trusts (REIT).
Income was up significantly from the second quarter of 2002 when the
company took a write-down of approximately $947,000 on its investment
securities. Reported income for the same period last year was $57,000, or
$0.01 per diluted share.
For the six months that ended June 30, earnings reached $917,516, an
increase of 9.4 percent over the same period last year. The six months
earnings were reduced by approximately $658,000, the net result of the REIT
taxation.
Total assets grew significantly in the first half of 2003, reaching
$421.5 million by June 30, up $23.1 million or 5.8 percent since year-end.
The growth was primarily the result of the overall increase in the loan
portfolio.
Total deposits climbed to $350.0 million by June 30, up $14.4 million
or 4.3 percent since year-end 2002. All of that growth occurred in core
deposits (checking & savings accounts). The Bank's campaign to promote money
market accounts helped drive the overall deposit growth, resulting in more
than $12.0 million in deposits.
Borrowings from the Federal Home Loan Bank increased by approximately
$8.0 million. The borrowings allowed the bank to take advantage of the
favorable interest rate environment and helped fund the consumer loan
growth.
Asset quality in both the loan and equity investment portfolios
continued to improve. Non-performing loans were $517,000 or 0.18 percent of
total loans at the end of the second quarter, compared
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to $643,000 or 0.24 percent at December 31. The allowance for loan losses
was $4.3 million (or 1.48 percent of loans) when compared to $4.9 million
(or 1.83 percent of loans) at year-end.
The company took a pre-tax loss of approximately $104,000 in the
second quarter as the result of a sale of a portion of loans deemed
impaired. This is part of the continuing efforts under CEO Lenz to reduce
problem loans and lower overall credit risk. The sale, in conjunction with
generally improving credit quality, enabled the bank to reduce its allowance
for loan losses, which the company believes is at an adequate level for the
overall credit risk of the loan portfolio.
Total stockholders' equity at June 30, was $42.0 million, an increase
of approximately $0.8 million. Both the company and the bank maintain
capital levels sufficient to be considered "well-capitalized" under
applicable regulatory capital guidelines and requirements.
The company also announced that the Board of Directors has declared a
second quarter dividend of $0.09 per share, payable on July 18th to
shareholders of record on June 20th.
Slade's Ferry Bancorp was founded to serve community-banking needs
with both personal and commercial products and services. With more than
$400 million in assets and 11 retail branches in Southeastern Massachusetts,
Slade's Ferry is a trusted community partner. Traded on the NASDAQ Small
Cap Market as SFBC, Slade's Ferry Bancorp can also be found on the web at
www.sladesferry.com and in six Massachusetts communities - Fairhaven, Fall
River, New Bedford, Seekonk, Somerset and Swansea.
# # #
This new release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, including
statements regarding the strength of the company's capital and asset
quality. Other such statements may be identified by words such as
"believes," "will," "expects," "project," "may," "developments,"
"strategic," "launching," "opportunities," "anticipates," "estimates,"
"intends," "plans," "targets" and similar expressions. These statements are
based upon the current beliefs and expectations of Slade's Ferry Bancorp's
management and are subject to significant risks and uncertainties. Actual
results may differ materially from those set forth in the forward-looking
statements as a result of numerous factors.
The following factors, among others, could cause actual results to
differ materially from the anticipated results or other expectation
expressed in our forward-looking statements: (1) enactment of adverse
government regulations (2) competitive pressures among depository and other
financial institutions may increase significantly and have an effect on
pricing, spending, third-party relationships and revenues; (3) the strength
of the United States economy in general and specifically the strength of the
New England economics may be different than expected, resulting in, among
other things, a deterioration in overall credit quality and borrowers'
ability to service and repay loans, or a reduced demand for credit,
including the resultant effect on the Bank's loan portfolio, levels of
charge-offs and non-performing loans and allowance for loan losses; (4)
changes in the interest rate environment may reduce interest margins and
adversely impact net interest income and (5) changes in assumptions used in
making such forward-looking statements. Should one or more of these risks
materialize or should underlying beliefs or assumptions prove incorrect,
Slade's Ferry Bancorp's actual results could differ materially from those
discussed. All subsequent written and oral forward-looking statements
attributable to Slade's Ferry Bancorp or any person acting on its behalf are
expressly qualified in their entirety by the cautionary statements set forth
above. Slade's Ferry Bancorp does not intend or undertake any obligation to
update any forward-looking statement to reflect circumstances or events that
occur after the date of the forward-looking statements are made.
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SLADE'S FERRY BANCORP
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
AS OF
JUNE 30, DECEMBER 31,
ASSETS: 2003 2002
- -------------------------------------------------------------------------------
<s> <c> <c>
Cash and deposits with other banks $ 21,701,469 $ 14,993,969
Money market mutual funds 56,227 222,567
Federal funds sold 12,500,000 19,500,000
----------------------------
Cash and Cash Equivalents 34,257,696 34,716,536
Interest bearing time deposits with other banks 200,000 200,000
Securities held to maturity 16,712,669 13,696,254
Securities available for sale 56,339,271 65,907,926
Federal Home Loan Bank stock 1,352,400 1,013,400
Loans (net) - Note A 288,738,132 259,816,056
Premises & equipment 6,070,408 6,067,879
Accrued interest receivable 1,431,140 1,492,591
Goodwill 2,173,368 2,173,368
Cash surrender value of life insurance 10,637,502 9,750,661
Other assets 3,572,467 3,540,312
----------------------------
TOTAL ASSETS $421,485,053 $398,374,983
============================
LIABILITIES & STOCKHOLDERS' EQUITY:
Deposits $350,015,324 $335,632,532
Advances from Federal Home Loan Bank 27,046,549 19,185,338
Other liabilities 2,378,884 2,336,109
----------------------------
Total Liabilities 379,440,757 357,153,979
Preferred stockholders' equity in subsidiary 49,500 54,000
----------------------------
Stockholders' equity:
Common stock 39,674 39,378
Paid in capital 28,113,627 27,693,199
Retained earnings 13,649,992 13,445,335
Accum. other comprehensive income (loss) 191,503 (10,908)
----------------------------
Total Stockholders' Equity 41,994,796 41,167,004
----------------------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $421,485,053 $ 98,374,983
============================
Note: A-Loans net of:
Reserve for Loan Losses $ 4,342,967 $ 4,854,388
Unearned Income $ 333,654 $ 341,234
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CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
(UNAUDITED)
6 MONTHS ENDING JUNE 30,
2003 2002
- ---------------------------------------------------------------------------------
<s> <c> <c>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $ 8,509,284 $ 8,814,539
Interest and dividends on investments 1,586,281 2,358,874
Other interest 108,380 150,757
---------------------------
Total interest and dividend income 10,203,945 11,324,170
---------------------------
INTEREST EXPENSE:
Interest on deposits 2,447,944 3,666,473
Interest on other borrowed funds 651,206 559,189
---------------------------
Total interest expense 3,099,150 4,225,662
---------------------------
Net interest and dividend income 7,104,795 7,098,508
Provision (benefit) for loan losses (539,357) 375,000
---------------------------
Net interest and dividend income after
provision (benefit) for loan losses 7,644,152 6,723,508
---------------------------
OTHER INCOME:
Service charges on deposit accounts 541,320 412,034
Security gains (loss), net (40,918) (2,818)
Other income 509,393 507,019
---------------------------
Total other income 1,009,795 916,235
---------------------------
OTHER EXPENSE:
Salaries and employee benefits 3,738,029 3,559,419
Occupancy expense 485,013 418,445
Equipment expense 255,022 250,713
Writedown on securities 0 946,895
Loss on sale of loans 103,534 0
Other expenses 1,723,450 1,394,618
---------------------------
Total other expense 6,305,048 6,570,090
---------------------------
Income before income taxes and extraordinary item 2,348,899 1,069,653
Income taxes 773,215 230,977
---------------------------
Net Income before extraordinary item 1,575,684 838,676
Extraordinary item, net of income taxes (1) (658,168) 0
---------------------------
NET INCOME $ 917,516 $ 838,676
===========================
Basic earnings (loss) per share:
Income before extraordinary item $ 0.40 $ 0.22
Extraordinary item, net of income tax (0.17) 0.00
---------------------------
Net income $ 0.23 $ 0.22
===========================
Diluted earnings (loss) per share:
Income before extraordinary item $ 0.40 $ 0.21
Extraordinary item, net of income tax (0.17) 0.00
---------------------------
Net income $ 0.23 $ 0.21
===========================
<FN>
<F1> Reflects the final settlement from the MA Department of Revenue for
the interest and state excise tax assessed on the REIT, net of any
applicable tax benefits.
</FN>
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CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
(UNAUDITED)
3 MONTHS ENDING JUNE 30,
2003 2002
- ----------------------------------------------------------------------------------------
<s> <c> <c>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $4,342,772 $4,294,794
Interest and dividends on investments 737,332 1,157,692
Other interest 63,057 91,122
-------------------------
Total interest and dividend income 5,143,161 5,543,608
-------------------------
INTEREST EXPENSE:
Interest on deposits 1,220,151 1,717,491
Interest on other borrowed funds 333,713 295,917
-------------------------
Total interest expense 1,553,864 2,013,408
-------------------------
Net interest and dividend income 3,589,297 3,530,200
Provision (benefit) for loan losses (680,357) 187,500
-------------------------
Net interest and dividend income after
provision (benefit) for loan losses 4,269,654 3,342,700
-------------------------
OTHER INCOME:
Service charges on deposit accounts 285,883 210,394
Other income 249,246 236,611
-------------------------
Total other income 535,129 447,005
--------------------------
OTHER EXPENSE:
Salaries and employee benefits 1,948,592 1,768,918
Occupancy expense 222,032 207,252
Equipment expense 131,857 125,263
Writedown on securities 0 946,895
Loss on sale of loans 103,534 0
Other expenses 898,787 749,911
-------------------------
Total other expense 3,304,802 3,798,239
-------------------------
Income before income taxes (benefit) and extraordinary item 1,499,981 (8,534)
Income taxes (benefit) 517,183 (65,288)
-------------------------
Net Income before extraordinary item 982,798 56,754
Extraordinary item, net of income taxes 626,898 0
-------------------------
NET INCOME $1,609,696 $ 56,754
=========================
Basic earnings (loss) per share:
Income before extraordinary item $ 0.25 $ 0.01
Extraordinary item, net of income tax 0.16 0.00
-------------------------
Net income $ 0.41 $ 0.01
=========================
Diluted earnings (loss) per share:
Income before extraordinary item $ 0.24 $ 0.01
Extraordinary item, net of income tax 0.16 0.00
-------------------------
Net income $ 0.40 $ 0.01
=========================
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