EXHIBIT 99.1
FALMOUTH BANCORP, INC.
NEWS
RELEASE
For further information contact:
Santo P. Pasqualucci
President & CEO
(508) 548-3500
FOR IMMEDIATE RELEASE
- ---------------------
April 30, 2004
FALMOUTH BANCORP, INC. EARNINGS RESULTS FOR THE
QUARTER AND SIX MONTHS ENDED MARCH 31, 2004
Falmouth, Massachusetts, April 30, 2004, - Falmouth Bancorp, Inc.
(AMEX: FCB) (the "Company"), a Delaware corporation, the holding company for
Falmouth Bank (the "Bank"), announced today the Company's results of
operations for the second quarter ended March 31, 2004. For the three months
ended March 31, 2004, the Company reported a net loss of $384,000 as
compared to a net loss of $572,000 for the three months ended March 31,
2003. For the six months ended March 31, 2004, the Company reported a net
loss of $383,000 as compared to a net loss of $196,000 for the six months
ended March 31, 2003. The Company's basic earnings per share for the three
months ended March 31, 2004 increased to a loss of $0.43 from a loss of
$0.66 for the three months ended March 31, 2003. Diluted earnings per share
for the three months ended March 31, 2004 increased to a loss of $0.40 from
a loss of $0.62 for the three months ended March 31, 2003. The Company's
basic earnings per share for the six months ended March 31, 2004 decreased
to a loss of $0.43 from a loss of $0.23 for the six months ended March 31,
2003. Diluted earnings per share for the six months ended March 31, 2004
decreased to a loss of $0.40 from a loss of $0.21 for the six months ended
March 31, 2003.
The Company's total assets decreased by $7.3 million or 4.39% for the
six months ended March 31, 2004, from $166.1 million at September 30, 2003
to $158.8 million at March 31, 2004, primarily due to decreases in
investment securities. Investment securities decreased $14.8 million or
21.0% due, in part, to meeting deposit withdrawals and funding loans held
for portfolio. The decrease in investment securities was partially offset by
a $7.0 million increase in net loans. Total net loans, including loans held-
for-sale, were $90.3 million or 65.2% of total deposits at March 31, 2004,
as compared to $83.3 million or 57.3% of total deposits at September 30,
2003, representing an increase of $7.0 million at March 31, 2004 as compared
to September 30, 2003. This increase was due, in part, to management's
decision to selectively retain 15 year 1-4 family mortgages originated by
the Bank and a decrease in loans paid off and refinanced. Investment
securities were $55.8 million or 35.1% of total assets at March 31, 2004, as
compared to $70.6 million or 42.5% of total assets at September 30, 2003.
Total deposits decreased $6.9 million or 4.74%, from $145.5 million at
September 30, 2003 to $138.6 million at March 31, 2004. This decrease was
due, in part to historically low rates offered on deposit accounts coupled
with the recovery of the equities market which made equities an attractive
investment alternative to bank deposits. The Bank does not believe that the
pending acquisition of the Company by Independent Bank Corp., a
Massachusetts Corporation, has had a significant effect on its deposit
activity.
20 DAVIS STRAITS * FALMOUTH, MA 02540
Net Income. The Company's net loss for the three months ended March
31, 2004 was $384,000, as compared to a net loss of $572,000 for the three
months ended March 31, 2003. The decrease in net loss of $188,000 was the
result of an increase in other income of $171,000, a decrease in income
taxes of $549,000, and an increase in other expenses of $472,000. There was
also a $60,000 increase in the provision for loan loss to reflect the growth
of the loan portfolio.
Net Interest and Dividend Income. Net interest and dividend income was
$1.061 million for the three-month period ended March 31, 2004 as compared
to $1.062 million for the three months ended March 31, 2003. The decrease
was the result of a $199,000 decrease in interest and dividend income,
offset in part by a $198,000 decrease in interest expense. Interest and
dividend income decreased primarily as the result of low interest rates. The
decrease in interest expense was primarily due to a reduction in the general
level of interest rates coupled with a decrease in total deposits. The net
interest margin for the three months ended March 31, 2004 was 2.82%, a
decrease of 3 basis points, as compared to 2.85% for the three months ended
March 31, 2003. The decrease in net interest margin was primarily the result
of a decrease in the yield on earning assets.
Other Income. Total other income for the three-month period ended
March 31, 2004 was $189,000, as compared to $18,000 for the three months
ended March 31, 2003. The $171,000 increase was primarily the result of a
decrease in realized losses on investment securities of $430,000 caused by
the combination of a $51,000 realized gain in the three month period ended
March 31, 2004 and a $379,000 loss in the three month period ended March 31,
2003. The change is attributable to recent recovery of the stock market in
general. The increase was offset in part by a decrease in net gains on
mortgages sold of $267,000 caused by a decrease in refinancing activity.
Operating Expenses. Total operating expenses for the three months
ended March 31, 2004 were $1.5 million, as compared to $1.0 million for the
three months ended March 31, 2003. The $500,000 increase was primarily due
to the combination of an increase in salaries and employee benefits of
$91,000, an increase in occupancy expense of $26,000, an increase in data
processing expense of $12,000, an increase in Directors' fees of $29,000,
and an increase in legal and professional costs of $405,000. This increase
was offset in part by a decrease in interest on State income taxes of
$49,000 following the settlement of a tax claim with the Commonwealth of
Massachusetts in connection with the Company's real estate investment trust
subsidiary and a decrease in writedowns of mortgage servicing rights of
$52,000 due to fewer mortgage loan prepayments. The increase in operating
expenses was primarily the result of additional legal, professional and
accounting fees, and directors' fees associated with the proposed
acquisition of the Company by Independent Bank Corp. and the additional
costs of operating the de novo Bourne, Massachusetts branch which opened in
November of 2003. The annualized ratio of operating expenses to average
total assets for the three months ended March 31, 2004 was 3.82% as compared
to 2.60% for the three-month period ended March 31, 2003, an increase of 122
basis points.
The Company's net loss for the six months ended March 31, 2004 was
$383,000 as compared to a net loss of $196,000 for the six months ended
March 31, 2003. This increase was primarily due to a $712,000 increase in
operating expenses, partially offset by a decrease in taxes of $675,000. The
decrease in tax expense was primarily due to the State tax liability
recognized during March 2003 due to a change in Massachusetts tax law.
During the six months ended March 31, 2004, the loan loss provision
was increased by $60,000 due to the growth in the Bank's loan portfolio. At
March 31, 2004, the Bank had no loans 30 days or more delinquent. The Bank's
allowance for loan losses was 0.90% of total loans at March 31, 2004. The
annualized return on average equity (ROE) for the six months ended March 31,
2004 was -4.35%, as compared to -2.29% for the six months ended March 31,
2003.
Falmouth Bancorp, Inc. is a publicly owned bank holding company and
the parent corporation of Falmouth Co-operative Bank, a Massachusetts
chartered stock co-operative bank offering traditional retail and commercial
financial products and services. At March 31, 2004, the Bank had total
assets of $158.8 million and deposits of $141.3 million. The Bank conducts
business through its main office located at 20 Davis Straits, Falmouth,
Massachusetts 02540, and branch locations in East Falmouth, Massachusetts,
North Falmouth, Massachusetts, and Bourne, Massachusetts. The telephone
number is (508) 548-3500.
Forward Looking Statements
--------------------------
This press release contains certain forward-looking statements
consisting of estimates with respect to the financial condition, results of
operations and business of the Company and the Bank that are subject to
various factors which could cause actual results to differ materially from
these estimates. These factors include, but are not limited to: general and
local economic conditions; changes in interest rates, deposit flows, demand
for mortgages and other loans, real estate values, and competition; changes
in accounting principles, policies, or guidelines; changes in legislation or
regulation; and other economic, competitive, governmental, regulatory, and
technological factors affecting our operations, pricing, products and
services. We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or
otherwise.
FALMOUTH BANCORP, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
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March 31, 2004 and September 30, 2003
-------------------------------------
March 31, September 30,
2004 2003
---- ----
(Unaudited) (Audited)
<s> <c> <c>
ASSETS
- ------
Cash, due from banks, and interest bearing deposits $ 4,842,252 $ 3,335,059
Federal funds sold 3,066,370 4,037,306
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Total cash and cash equivalents 7,908,622 7,372,365
Investments in available-for-sale securities (at fair value) 28,582,974 37,179,799
Investments in held-to-maturity securities (fair
values of $26,318,113 as of March 31, 2004
and $32,556,554 as of September 30, 2003) 26,295,422 32,549,241
Federal Home Loan Bank stock, at cost 878,000 878,000
Loans held-for-sale, fair value $840,474 as of September 30, 2003 - 825,677
Loans, net of allowance for loan losses of $820,877
as of March 31, 2004 and $760,552 as of September 30, 2003 90,348,915 82,493,801
Premises and equipment 2,254,605 1,911,894
Accrued interest receivable 1,119,426 1,333,910
Cooperative Central Bank Reserve Fund Deposit 395,395 395,395
Other assets 974,246 1,178,108
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Total Assets $158,757,605 $166,118,190
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Deposits:
Non-interest bearing $ 20,651,173 $ 20,425,557
Interest-bearing 117,979,017 125,109,413
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Total deposits 138,630,190 145,534,970
Federal Home Loan Bank advances 2,532,982 2,582,885
Other liabilities 146,012 256,956
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Total Liabilities 141,309,184 148,374,811
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Stockholders' equity:
Preferred stock, par value $.01 per share,
authorized 500,000 shares; none issued
Common stock, par value $.01 per share,
authorized 2,500,000 shares; issued 1,454,750 shares 14,547 14,547
Paid-in capital 14,113,728 14,093,713
Retained earnings 13,237,078 13,858,343
Unallocated Employee Stock Ownership Plan shares (169,021) (213,114)
Treasury stock (537,523 shares as of March 31, 2004;
541,023 shares as of September 30, 2003) (9,516,683) (9,578,649)
Unearned compensation (227,072) (340,994)
Accumulated other comprehensive loss (4,156) (90,467)
------------ ------------
Total stockholders' equity 17,448,421 17,743,379
------------ ------------
Total liabilities and stockholders' equity $158,757,605 $166,118,190
============ ============
FALMOUTH BANCORP, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited)
Three Months Ended Six Months Ended
----------------------- ------------------------
March 31, March 31, March 31, March 31,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
Interest and dividend income:
Interest and fees on loans $1,287,633 $1,321,836 $2,540,264 $2,816,705
Interest and dividends on securities:
Taxable 180,054 311,522 465,264 649,634
Dividends on marketable equity securities 16,053 20,843 34,961 41,290
Dividends on Cooperative Bank Investment
and Liquidity Funds - - - -
Other interest 5,111 33,501 16,636 63,921
---------- ---------- ---------- ----------
Total interest and dividend income 1,488,851 1,687,702 3,057,125 3,571,550
---------- ---------- ---------- ----------
Interest expense:
Interest on deposits 394,853 561,113 824,423 1,214,464
Interest on securities sold under agreements
to repurchase - 3,226 - 5,209
Interest on Federal Home Loan Bank advances 32,848 61,644 65,696 124,097
---------- ---------- ---------- ----------
Total interest expense 427,701 625,983 890,119 1,343,770
---------- ---------- ---------- ----------
Net interest and dividend income 1,061,150 1,061,719 2,167,006 2,227,780
Provision for loan losses 60,000 - 60,000 -
---------- ---------- ---------- ----------
Net interest income after provision for
for loan losses 1,001,150 1,061,719 2,107,006 2,227,780
---------- ---------- ---------- ----------
Other income:
Service charges on deposit accounts 50,178 43,279 110,923 93,644
Securities gains (losses), net 51,393 (378,905) 68,195 (455,492)
Net gains on sales of loans 19,202 286,462 59,634 611,773
Loan servicing fees 14,745 7,774 29,857 14,374
Other income 53,609 59,644 114,133 147,444
---------- ---------- ---------- ----------
Total other income 189,127 18,254 382,742 411,743
---------- ---------- ---------- ----------
Other expense:
Salaries and employee benefits 598,085 506,807 1,163,419 994,486
Occupancy expense 70,808 44,433 129,947 85,414
Equipment expense 45,828 44,869 98,041 89,693
Data processing expense 121,321 109,053 250,926 197,758
Directors' fees 47,840 18,675 67,205 37,285
Legal and professional fees 461,974 56,868 613,868 134,663
Interest on income taxes claimed by Massachusetts - 49,281 - 49,281
Advertising expense 18,387 16,052 53,357 39,421
Printing and stationary expense 23,767 14,831 47,063 33,349
Postage and express expense 15,926 16,657 34,595 26,841
Write-downs of mortgage servicing assets 10,070 62,285 26,131 116,140
Other expenses 94,350 96,301 225,690 193,363
---------- ---------- ---------- ----------
Total other expenses 1,508,356 1,036,112 2,710,242 1,997,694
---------- ---------- ---------- ----------
Income (loss) before income taxes (318,079) 43,861 (220,494) 641,829
Income taxes 66,163 615,387 162,604 838,237
---------- ---------- ---------- ----------
Net loss $ (384,242) $ (571,526) $ (383,098) $ (196,408)
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FALMOUTH BANCORP, INC. AND SUBSIDIARIES
---------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Continued)
(Unaudited)
Three Months Ended Six Months Ended
----------------------- ------------------------
March 31, March 31, March 31, March 31,
2004 2003 2004 2003
---- ---- ---- ----
<s> <c> <c> <c> <c>
Comprehensive income (loss) $ (398,731) $ (174,494) $ (296,787) $ 363,193
========== ========== ========== ==========
Loss per common share $ (0.43) $ (0.66) $ (0.43) $ (0.23)
========== ========== ========== ==========
Loss per common share
assuming dilution $ (0.40) $ (0.62) $ (0.40) $ (0.21)
========== ========== ========== ==========