CONTACTS: Mary K. Talbot
(401) 245-8819
SLADE'S FERRY BANCORP REPORTS 43% INCREASE IN YEAR TO DATE EARNINGS
SOMERSET, Mass. (October 12, 2004) -- Slade's Ferry Bancorp, (NASDAQ small
cap: SFBC) parent company of Slade's Ferry Trust Company (the "Bank"),
announced that its net income for the quarter ended September 30, 2004 was
$1.07 million; an increase of 53.2% over net income for the quarter ended
September 30, 2003, which totaled $699,000. Diluted earnings per share
totaled $0.26 and $0.17 for the quarters ended September 30, 2004 and 2003,
respectively.
Net income for the nine months ended September 30, 2004 totaled $2.32
million, or $0.57 per share (diluted) as compared to $1.62 million or $0.41
per share (diluted) for the nine months ended September 30, 2003, an
increase in net income of 43.2%.
The primary reason for the increase in earnings is the Company's growth
during 2004, as consolidated total assets increased from $439.4 million at
December 31, 2003 to $543.1 million at September 30, 2004, an increase of
23.6%. The Bank instituted programs to attract significant levels of
deposits during the period of unprecedented low interest rates early in
2004. As a result, deposits increased from $333.1 million at December 31,
2003 to $403.5 million at September 30, 2004, or 21.1%. During the same
time period, net loans increased by $30.9 million, or 9.3% to $362.3
million while investment securities increased by $66.5 million, or 113.5%
to $124.9 million. Also, taking advantage of the low interest rate
environment, the Bank increased its level of Federal Home Loan Bank
advances from $60.5 million to $80.4 million during 2004. Those funds not
lent out are temporarily invested into the Bank's investment securities
portfolios for future deployment.
As a result of this growth, net interest and dividend income increased from
$3.62 million for the three months ended September 30, 2003, to $4.23
million for the three months ended September 30, 2004, an increase of
16.8%. Net interest and dividend income increased from $10.72 million for
the nine months ended September 30 2003, to 11.72 million for the nine
months ended September 30, 2004, an increase of 9.3%.
Additionally, the Bank recognized a loss on the sale of non-performing
loans of $116,000 in the third quarter of 2003, which adversely affected
earnings per share in 2003 by approximately $0.02. A gain on sales of non-
performing loans in the third quarter of 2004 resulted in a gain of
$196,000, which had the effect of increasing earnings per share by $0.03 in
2004.
"We're closely adhering to our strategic plan, which calls for significant
growth in 2004," said CEO Mary Lynn Lenz. "Our improved operating results
speak to the success of the plan and management's implementation."
Due to continued changes in the composition of the loan portfolio, stronger
underwriting guidelines, and the sale of loans previously deemed to be non-
performing, the overall credit risk profile of the loan portfolio has
improved. The ratio of impaired loans to total loans decreased from 1.4%
at December 31, 2003 to 0.03% at September 30, 2004.
Total stockholders' equity at September 30, 2004 was $45.4 million versus
$42.7 million at December 31, 2003, an increase of approximately 6.3%.
Both the Company and the Bank maintain capital levels sufficient to be
considered "well-capitalized" under applicable regulatory capital
guidelines and requirements.
The Company has declared a $0.09 dividend to common shareholders of record
on September 24, 2004, payable on October 15, 2004.
Slade's Ferry Bancorp was founded to serve community-banking needs with
both personal and commercial products and services. With more than $540
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 news 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: 2004 2003
- ---------------------------------------------------------------------------
<s> <c> <c>
Cash and deposits with other banks $ 20,507,497 $ 18,642,370
Money market mutual funds 0 63,539
Federal funds sold 6,000,000 4,000,000
- ---------------------------------------------------------------------------
Cash and Cash Equivalents 26,507,497 22,705,909
Interest bearing time deposits with
other banks 100,000 200,000
Securities held to maturity 40,631,411 11,300,402
Securities available for sale 84,329,600 47,162,852
Federal Home Loan Bank stock 4,204,300 3,023,800
Loans (net) - Note A 362,389,567 331,496,525
Premises & equipment 5,844,940 5,894,736
Accrued interest receivable 2,037,264 1,497,104
Goodwill 2,173,368 2,173,368
Cash surrender value of life insurance 11,473,825 10,980,879
Other assets 3,494,716 3,012,966
- ---------------------------------------------------------------------------
TOTAL ASSETS $ 543,186,489 $ 439,448,541
===========================================================================
LIABILITIES & STOCKHOLDERS' EQUITY:
Deposits $ 403,454,662 $ 333,144,817
Advances from Federal Home Loan Bank 80,388,352 60,474,864
Other liabilities 13,931,338 3,086,719
- ---------------------------------------------------------------------------
Total Liabilities 497,774,352 396,706,400
Stockholders' equity:
Common stock 40,601 39,959
Paid in capital 29,816,333 28,609,206
Retained earnings 15,925,480 14,698,595
Accum. other comprehensive loss (370,277) (605,619)
- ---------------------------------------------------------------------------
Total Stockholders' Equity 45,412,137 42,742,141
- ---------------------------------------------------------------------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 543,186,489 $ 439,448,541
===========================================================================
Note: A-Loans net of:
Reserve for Loan Losses $ 4,102,567 $ 4,154,394
Unearned Income $ 613,431 $ 443,393
SLADE'S FERRY BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
(UNAUDITED)
9 MONTHS ENDING SEPTEMBER 30,
2004 2003
-----------------------------
<s> <c> <c>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $15,061,034 $ 12,928,787
Interest and dividends on investments 2,206,021 2,258,138
Other interest 220,044 135,253
-----------------------------
Total interest and dividend income 17,487,099 15,322,178
-----------------------------
INTEREST EXPENSE:
Interest on deposits 3,726,333 3,538,854
Interest on other borrowed funds 1,800,220 1,059,978
Interest on subordinated debentures 236,126 0
-----------------------------
Total interest expense 5,762,679 4,598,832
-----------------------------
Net interest and dividend income 11,724,420 10,723,346
Provision (benefit) for loan losses 376,215 (539,357)
-----------------------------
Net interest and dividend income after
provision (benefit) for loan losses 11,348,205 11,262,703
-----------------------------
OTHER INCOME:
Service charges on deposit accounts 807,731 840,054
Security gains, net 46,298 1,944
Gain (loss) on sale of loans 195,817 (115,792)
Other income 926,301 749,221
-----------------------------
Total other income 1,976,147 1,475,427
-----------------------------
OTHER EXPENSE:
Salaries and employee benefits 5,972,717 5,743,711
Occupancy expense 599,518 710,580
Equipment expense 417,887 398,971
Writedown on securities 0 0
Other expenses 2,849,810 2,646,263(1)
-----------------------------
Total other expense 9,839,932 9,499,525
-----------------------------
Income before income taxes 3,484,420 3,238,605
Income taxes 1,165,490 1,621,744(1)
-----------------------------
NET INCOME 2,318,930 1,616,861
=============================
Basic earnings per share $ 0.57 $ 0.40
=============================
Diluted earnings per share $ 0.57 $ 0.41
=============================
<FN>
<F1> The year to date results of operations for the period ended September
30, 2003 have been revised from that previously reported to remove
the extraordinary item. The extraordinary item treatment previously
presented was revised, and its individual components were presented
as part of income tax expense, in the amount of $529,191 and included
in other expense is interest of $128,977. See Footnote 20 to the
Company's audited consolidated financial statements included in the
Company's annual report on Form 10-K for the year ended December 31,
2003 filed with the U.S. Securities and Exchange Commission.
</FN>
SLADE'S FERRY BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE
(UNAUDITED)
3 MONTHS ENDING SEPTEMBER 30,
2004 2003
----------------------------
<s> <c> <c>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $ 5,194,000 $ 4,419,503
Interest and dividends on investments 998,496 671,857
Other interest 57,509 26,873
----------------------------
Total interest and dividend income 6,250,005 5,118,233
----------------------------
INTEREST EXPENSE:
Interest on deposits 1,279,272 1,090,910
Interest on other borrowed funds 627,084 408,772
Interest on subordinated debentures 118,203 0
----------------------------
Total interest expense 2,024,559 1,499,682
----------------------------
Net interest and dividend income 4,225,446 3,618,551
Provision for loan losses 0 0
----------------------------
Net interest and dividend income after
provision for loan losses 4,225,446 3,618,551
----------------------------
OTHER INCOME:
Service charges on deposit accounts 281,110 298,734
Security gains, net 6,994 42,862
Gain on sale of loans 195,817 0
Other income 328,811 239,828
----------------------------
Total other income 812,732 581,424
----------------------------
OTHER EXPENSE:
Salaries and employee benefits 1,953,849 2,005,682
Occupancy expense 179,326 225,567
Equipment expense 138,190 143,949
Loss on sale of loans 0 12,258
Other expenses 1,199,075 793,836
----------------------------
Total other expense 3,470,440 3,181,292
----------------------------
Income before income taxes 1,567,738 1,018,683
Income taxes 496,525 319,338
----------------------------
NET INCOME $ 1,071,213 $ 699,345
============================
Basic earnings per share $ 0.26 $ 0.18
============================
Diluted earnings per share $ 0.26 $ 0.17
============================