Exhibit 20.1
CONTACT: Mary K. Talbot
(401) 245-8819
SLADE'S FERRY BANCORP REPORTS HEALTHY GROWTH
IN BUSINESS DURING Q3 2003
SOMERSET, Mass. -- Slade's Ferry Bancorp (NASDAQ small cap: SFBC) parent
company of Slade's Ferry Trust Company, announced a 20 percent increase in
total loans and a $10.6 million increase in deposits for the first nine
months of 2003. The second quarter of 2003 Real Estate Investment Trust
(REIT) tax settlement of $658,168 with the State of Massachusetts the
Bank's increased our effective tax rate. In addition expenses related to
investments in the bank's infrastructure have contributed to a decrease of
$472,812 in net income for the nine months ending September 30, 2003 when
compared to the same period in 2002.
Net income for the third quarter of 2003 totaled $699,345, or diluted
earnings per share of $0.17, as compared to $1,250,997 and diluted earnings
per share of $0.32 that were recorded for the same quarter in 2002. The
2002 period included a $585,358 pre-tax gain on securities, as well as a
$138,263 securities write-down charge on securities.
"We're closely adhering to our strategic plan and thus have been
reorganizing and reinvesting in bank infrastructure to remain competitive
which has resulted in some one-time expenses," said CEO Mary Lynn Lenz.
"However, we're achieving (and in some cases surpassing) our sales goals to
offset those organizational investments."
Net loans are up 20 percent over December 31, 2002, having increased from
$259.8 million to $311.7 million. The growth has been fueled by low
interest rates, combined with the bank's marketing efforts to increase its
portfolio of residential mortgages and home equity loans.
Total deposits were $346.2 million as of September 30, 2003, an increase of
$10.6 million (or 3.2 percent) over December 31, 2002 that is attributed to
a money market advertising campaign that has generated approximately $15
million in deposits. Borrowings from the Federal Home Loan Bank increased
by $22.9 million as the bank took advantage of a favorable low interest
rate environment to continue to draw down longer term, structured funding
opportunities.
A loss on sale of loans of $115,792 was recorded during 2003. No loan
sales were incurred during 2002. This loss on sale of loans is a result of
management's continued efforts to aggressively improve asset quality in the
bank's loan portfolio. Asset quality in both loan and investment portfolios
remain strong. Non-performing loans were $650,000 or 0.20 percent of total
gross loans at September 30, 2003, as compared to 0.24 percent of total
loans at December 31, 2002.
Due to continued changes in the composition of the loan portfolio, stronger
underwriting guidelines, and the sale of loans previously deemed impaired,
the overall credit risk of the loan portfolio has improved. Subsequent to
an analysis of the adequacy of loan loss reserves, management deemed it
prudent to recover $680,357 of previously provided loan loss provisions and
recorded this provision benefit during the second quarter of 2003 and is
reflected in the year to date September 30, 2003 benefit for loan losses.
No recoveries or benefits associated with
the provision for loan losses were recorded for the same period in 2002,
however an expense to earnings totaling $375,000 was made.
Total stockholders' equity at September 30, 2003 was $42.0 million versus
$41.2 million at December 31, 2002, an increase of approximately 2.1
percent, or $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 third quarter results also reflect a dividend of $0.09 per share that
was paid out on October 17 to stockholders of record as of September 19,
2003.
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 10 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.
SLADE'S FERRY BANCORP
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
AS OF
SEPTEMBER 30, DECEMBER 31,
ASSETS: 2003 2002
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<s> <c> <c>
Cash and deposits with other banks $ 18,887,821 $ 14,993,969
Money market mutual funds 41,851 222,567
Federal funds sold 11,000,000 19,500,000
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Cash and Cash Equivalents 29,929,672 34,716,536
Interest bearing time deposits with other banks 200,000 200,000
Securities held to maturity 12,148,328 13,696,254
Securities available for sale 52,502,490 65,907,926
Federal Home Loan Bank stock 2,105,400 1,013,400
Loans (net) - Note A 311,724,282 259,816,056
Premises & equipment 5,991,270 6,067,879
Accrued interest receivable 1,511,498 1,492,591
Goodwill 2,173,368 2,173,368
Cash surrender value of life insurance 11,019,566 9,750,661
Other assets 3,586,329 3,540,312
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TOTAL ASSETS $432,892,203 $398,374,983
==================================================================================
LIABILITIES & STOCKHOLDERS' EQUITY:
Deposits $346,229,006 $335,632,532
Advances from Federal Home Loan Bank 42,106,161 19,185,338
Other liabilities 2,477,628 2,336,109
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Total Liabilities 390,812,795 357,153,979
Preferred stockholders' equity in subsidiary 50,500 54,000
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Stockholders' equity:
Common stock 39,796 39,378
Paid in capital 28,316,556 27,693,199
Retained earnings 13,991,179 13,445,335
Accum. other comprehensive loss (318,623) (10,908)
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Total Stockholders' Equity 42,028,908 41,167,004
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $432,892,203 $398,374,983
==================================================================================
Note: A-Loans net of:
Reserve for Loan Losses $ 4,377,797 $ 4,854,388
Unearned Income $ 377,168 $ 341,234
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
(UNAUDITED)
9 MONTHS ENDING SEPTEMBER 30,
2003 2002
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<s> <c> <c>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $12,928,787 $13,088,783
Interest and dividends on investments 2,258,138 3,461,700
Other interest 135,253 258,593
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Total interest and dividend income 15,322,178 16,809,076
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INTEREST EXPENSE:
Interest on deposits 3,538,854 5,307,036
Interest on other borrowed funds 1,059,978 892,868
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Total interest expense 4,598,832 6,199,904
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Net interest and dividend income 10,723,346 10,609,172
Provision (benefit) for loan losses (539,357) 375,000
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Net interest and dividend income after
provision (benefit) for loan losses 11,262,703 10,234,172
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OTHER INCOME:
Service charges on deposit accounts 840,054 641,684
Security gains, net 1,944 582,540
Other income 749,221 741,389
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Total other income 1,591,219 1,965,613
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OTHER EXPENSE:
Salaries and employee benefits 5,743,711 5,367,058
Occupancy expense 710,580 637,618
Equipment expense 398,971 369,307
Writedown on securities 0 1,085,158
Loss on sale of loans 115,792 0
Other expenses 2,517,286 2,082,961
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Total other expense 9,486,340 9,542,102
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Income before income taxes and extraordinary item 3,367,582 2,657,683
Income taxes 1,092,553 568,010
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Net Income before extraordinary item 2,275,029 2,089,673
Extraordinary item, net of income taxes (1) (658,168) 0
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NET INCOME $ 1,616,861 $ 2,089,673
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Basic earnings (loss) per share:
Income before extraordinary item $ 0.57 $ 0.54
Extraordinary item, net of income tax (0.17) 0.00
----------- -----------
Net income $ 0.40 $ 0.54
=========== ===========
Diluted earnings (loss) per share:
Income before extraordinary item $ 0.57 $ 0.53
Extraordinary item, net of income tax (0.16) 0.00
----------- -----------
Net income $ 0.41 $ 0.53
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<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>
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
(UNAUDITED)
3 MONTHS ENDING SEPTEMBER 30,
2003 2002
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<s> <c> <c>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $4,419,503 $4,274,244
Interest and dividends on investments 671,857 1,102,826
Other interest 26,873 107,836
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Total interest and dividend income 5,118,233 5,484,906
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INTEREST EXPENSE:
Interest on deposits 1,090,910 1,640,563
Interest on other borrowed funds 408,772 333,679
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Total interest expense 1,499,682 1,974,242
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Net interest and dividend income 3,618,551 3,510,664
Provision (benefit) for loan losses 0 0
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Net interest and dividend income after
provision (benefit) for loan losses 3,618,551 3,510,664
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OTHER INCOME:
Service charges on deposit accounts 298,734 229,650
Security gains, net 42,862 585,358
Other income 239,828 234,370
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Total other income 581,424 1,049,378
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OTHER EXPENSE:
Salaries and employee benefits 2,005,682 1,807,639
Occupancy expense 225,567 219,173
Equipment expense 143,949 118,594
Writedown on securities 0 138,263
Loss on sale of loans 12,258 0
Other expenses 793,836 688,343
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Total other expense 3,181,292 2,972,012
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Income before income taxes and extraordinary item 1,018,683 1,588,030
Income taxes 319,338 337,033
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Net Income before extraordinary item 699,345 1,250,997
Extraordinary item, net of income taxes 0 0
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NET INCOME $ 699,345 $1,250,997
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Basic earnings (loss) per share:
Income before extraordinary item $ 0.18 $ 0.32
Extraordinary item, net of income tax 0.00 0.00
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Net income $ 0.18 $ 0.32
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Diluted earnings (loss) per share:
Income before extraordinary item $ 0.17 $ 0.32
Extraordinary item, net of income tax 0.00 0.00
-------------------------
Net income $ 0.17 $ 0.32
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