Exhibit 99 (a)
HIGH COUNTRY FINANCIAL CORPORATION
For Immediate Release
High Country Financial Corporation Announces Second Quarter Earnings
BOONE, NC, August 6, 2003 - High Country Financial Corporation (NASDAQ: HGCF and
HGCFU) today reported continued improvements to year-over-year earnings for its
second quarter ended June 30, 2003 and its year-to-date results. Net income was
$252,531 for the quarter ended June 30, 2003 compared to $219,535 for the same
quarter in 2002, an increase of 15.0%. Fully diluted earnings per share were
$.17 for the quarter, compared to $.15 for the second quarter in 2002.
Net income was $503,635 for the six months ended June 30, 2003, compared to
$343,119 for the same period in 2002, an increase of 46.8%. Fully diluted
earnings per share were $.34 for the period, compared to $.23 for the same
period in 2002.
High Country Bank CEO and President, John Brubaker, stated, "I am pleased with
our continued robust loan growth and with the progress we are making in
improving our net interest margin. We continue to benefit from strong
contributions from non-interest income, especially mortgage origination. While
the recent reduction in short term rates by the Federal Reserve will add to our
challenges, we expect our trend of improvements to net interest margin to
continue as we plan to fund a significant portion of our expected loan growth
with a new credit facility from the Federal Home Loan Bank of Atlanta at
favorable rates, allowing us to be less dependent on deposit growth for
liquidity."
Deposits grew from $133.6 million to $156.7 million from June 30, 2002 to June
30, 2003, an increase of 17.3%. Loans grew by 22.5% for the same period,
increasing from $120.2 million to $147.3 million. A portion of the loan growth
was funded by absorbing Federal funds and principal prepayments from
mortgage-backed securities, resulting in a decrease in investments and
interest-bearing deposits with banks from $24.4 million to $18.4 million for the
period, or 24.4%. The Bank increased its provision for loan losses from 1.23% of
loans at June 30, 2002, to 1.30% of loans at June 30, 2003. Total assets
amounted to $177,710,099 at June 30, 2003 compared to $153,616,935 at June 30,
2002, an increase of 15.7%.
Total interest income for the three months ended June 30, 2003 increased 7.8%
compared to the same period in 2002 and for the six months ended June 30, 2003
increased by 9.7% compared to the same period in 2002. Interest expense declined
by 4.6% and 2.9%, for the three and six-month periods, respectively, compared to
the same periods in 2002.
High Country Financial Corporation is the parent of High Country Bank, a
community bank operating five branches in Watauga and Ashe Counties, North
Carolina. The Bank was created in 1998 by a group of local residents whose
purpose was to restore personal attention, quality
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service and innovative products to banking. High Country Financial Corporation,
the holding company, was formed on July 1, 2002. An estimated 1,600 stockholders
hold 1,419,809 shares outstanding at the end of the second quarter 2003.
Additional information about High Country Bank is available on its website at
www.highcountrybank.com.
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Please see "Financial Highlights" tables, which are attached.
For Further information, contact:
David H. Harman, Chief Financial Officer
E-mail: dharman@highcountrybank.com Voice: (828) 265-4333 or Fax (828) 265-2808
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High Country Financial Corporation, 149 Jefferson Road, Boone, NC 28607
This release contains certain forward-looking statements with respect to the
financial condition, results of operations and business of the Company. These
forward-looking statements involve risks and uncertainties and are based on the
beliefs and assumptions of management of the Company and on the information
available to management at the time that these disclosures were prepared. These
statements can be identified by the use of words like "expect," "anticipate,"
"estimate" and "believe," variations of these words and other similar
expressions. Readers should not place undue reliance on forward-looking
statements as a number of important factors could cause actual results to differ
materially from those in the forward-looking statements. Factors that could
cause actual results to differ materially include, but are not limited to (1)
competition in the Company's markets, (2) changes in the interest rate
environment, (3) general national, regional or local economic conditions may be
less favorable than expected, resulting in, among other things, a deterioration
in credit quality and the possible impairment of collectibility of loans, (4)
legislative or regulatory changes, including changes in accounting standards,
and (5) the impact of changes in monetary and fiscal policies, laws, rules and
regulations. The Company undertakes no obligation to update any forward-looking
statements.
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HIGH COUNTRY FINANCIAL CORPORATION
Financial Highlights
As of and for the quarter ended
June 30,
2003 2002 % Change
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Consolidated Balance Sheets
Assets
Investments and interest bearing deposits with banks $ 18,447,925 $ 24,408,333 -24.4%
Loans 147,318,520 120,249,363 22.5%
Allowance for Loan Loss (1,909,889) (1,474,081) 29.6%
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Net Loans 145,408,631 118,775,282 22.4%
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Total Earning Assets 163,856,556 143,183,615 14.4%
Non-interest earning assets 13,853,543 10,433,320 32.8%
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Total Assets $177,710,099 $153,616,935 15.7%
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Liabilities and Stockholders' Equity
Deposits $156,774,507 $133,644,741 17.3%
Other interest-bearing liabilities 4,504,157 4,712,733 -4.4%
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Total interest-bearing liabilities 161,278,664 138,357,474 16.6%
Non-interest bearing liabilities 474,777 247,694 91.7%
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Total liabilities 161,753,441 138,605,168 16.7%
Total Stockholders' equity 15,956,658 15,011,767 6.3%
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Total liabilities and stockholders' equity $177,710,099 $153,616,935 15.7%
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Consolidated Balance Sheet Ratios
Investments to assets 10.38% 15.89%
Loans to assets 82.90% 78.28%
Loans to deposits 93.97% 89.98%
Allowance for loan loss to loans 1.30% 1.23%
Earning assets to assets 92.20% 93.21%
Deposits to assets 88.22% 87.00%
Other interest-bearing liabilities to assets 2.53% 3.07%
Stockholders' equity to total assets 8.98% 9.77%
Quarter Ended June 30, Year-To-Date June 30,
2003 2002 2003 2002
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Consolidated Statements of Income
Interest on investments $ 166,014 $ 176,493 -5.9% $ 357,009 $ 289,851 23.2%
Interest on loans 2,270,172 2,084,245 8.9% 4,442,316 4,084,950 8.7%
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Total interest income 2,436,186 2,260,738 7.8% 4,799,325 4,374,801 9.7%
Interest on deposits 964,463 1,009,896 -4.5% 1,941,641 1,992,242 -2.5%
Interest on other interest-bearing liabilities 32,089 35,104 -8.6% 61,262 70,994 -13.7%
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Total interest expense 996,552 1,045,000 -4.6% 2,002,903 2,063,236 -2.9%
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Net interest margin before provision for loan loss 1,439,634 1,215,738 18.4% 2,796,422 2,311,565 21.0%
Provision for loan loss 211,000 128,000 64.8% 382,500 224,000 70.8%
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Net interest margin after provision for loan loss 1,228,634 1,087,738 13.0% 2,413,922 2,087,565 15.6%
Total non-interest income 805,990 472,274 70.7% 1,614,111 1,033,705 56.1%
Total non-interest expense 1,628,921 1,232,477 32.2% 3,206,739 2,595,151 23.6%
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Net Income before taxes 405,703 327,535 23.9% 821,294 526,119 56.1%
Income taxes 153,172 108,000 41.8% 317,659 183,000 73.6%
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Net Income after taxes $ 252,531 $ 219,535 15.0% $ 503,635 $ 343,119 46.8%
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