EXHIBIT 99.1
HIGH COUNTRY FINANCIAL CORPORATION
For Immediate Release
High Country Financial Corporation Announces Third Quarter Earnings
BOONE, NC, November 10, 2003 - High Country Financial Corporation (NASDAQ: HGCF
and HGCFU) today reported continued improvements to year-over-year earnings for
its third quarter ended September 30, 2003 and its year-to-date results. Net
income was $345,562 for the quarter ended September 30, 2003, compared to
$46,891 for the same quarter in 2002, an increase of 636.9%. Fully diluted
earnings per share were $.19 for the quarter, compared to $.03 for the third
quarter in 2002.
Net income was $849,198 for the nine months ended September 30, 2003, compared
to $390,010 for the same period in 2002, an increase of 117.7%. Fully diluted
earnings per share were $.56 for the period, compared to $.27 for the same
period in 2002.
Deposits grew from $144.3 million to $162.2 million from September 30, 2002 to
September 30, 2003, an increase of 12.4%. Loans grew by 21.7% for the same
period, increasing from $127.7 million to $155.4 million. The Bank continued to
fund a portion of the loan growth by absorbing Federal funds and principal
prepayments from mortgage-backed securities, resulting in a decrease in
investments and interest-bearing deposits with banks from $28.1 million to $15.4
million for the period, or 45.2%. As part of its continuing evaluation of
economic and credit conditions, the Bank increased its provision for loan losses
from 1.25% of loans at September 30, 2002, to 1.30% of loans at September 30,
2003. Total assets amounted to $182.4 million at September 30, 2003 compared to
$164.8 million at September 30, 2002, an increase of 10.7%.
Total interest income for the three months ended September 30, 2003 increased
1.5% compared to the same period in 2002 and for the nine months ended September
30, 2003 increased by 6.8% compared to the same period in 2002. Interest expense
declined by 15.9% and 7.4%, for the three and nine-month periods, respectively,
compared to the same periods in 2002.
High Country Bank CEO and President, John Brubaker, stated, "Our third quarter
looked especially favorable compared to the same quarter last year because of
our continued loan growth, our increased ratio of loans to total assets, and
because of certain non-recurring charges in last year's third quarter.
Year-to-date, our numbers reflect much-improved results, and are our best first
three fiscal quarters since we opened the Bank. Our net interest margin
continues to improve with each passing month. We continue to benefit from strong
contributions from non-interest income, including mortgage origination fees
that, while slowing, are still ahead of last year. We continue to fund our loan
growth with deposits, Federal funds, and the orderly liquidation of our
mortgage-backed securities. We have yet to draw from our new credit facility
from the Federal Home Loan Bank of Atlanta with available lines amounting to
over $30 million.
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"We look eagerly ahead to our upcoming shareholders' meeting on December 18,
2003 to vote on our merger with Yadkin Valley Bank and Trust Company in Elkin,
North Carolina. Our Joint Proxy Statement has now been mailed to all
shareholders of record as of October 31, 2003. We encourage each shareholder to
read the Joint Proxy Statement carefully. We expect the merger, once approved,
to close on January 1, 2004."
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 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 1,420,649
shares outstanding at the end of the third 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
(Unaudited)
As of and for the quarter ended
September 30,
2003 2002 % Change
- ---------------------------------------------------------------------------------------------
Consolidated Balance Sheets
Assets
Investments and interest bearing deposits with banks $ 15,405,773 $ 28,101,261 -45.2%
- --------------------------------------------------------------------------------------------
Loans 155,415,244 127,747,258 21.7%
Allowance for Loan Loss (2,026,463) (1,597,078) 26.9%
- --------------------------------------------------------------------------------------------
Net Loans 153,388,781 126,150,180 21.6%
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Total Earning Assets 168,794,554 154,251,441 9.4%
Non-interest earning assets 13,639,156 10,545,709 29.3%
- -------------------------------------------------------------------------------------------
Total Assets $182,433,710 $164,797,150 10.7%
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Liabilities and Stockholders' Equity
Deposits $162,156,591 $144,308,990 12.4%
Other interest-bearing liabilities 3,457,319 4,832,956 -28.5%
- --------------------------------------------------------------------------------------------
Total interest-bearing liabilities 165,613,910 149,141,946 11.0%
Non-interest bearing liabilities 605,618 548,394 10.4%
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Total liabilities 166,219,528 149,690,340 11.0%
Total Stockholders' equity 16,214,182 15,106,810 7.3%
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Total liabilities and stockholders' equity $182,433,710 $164,797,150 10.7%
============================================================================================
Consolidated Balance Sheet Ratios
Investments to assets 8.44% 17.05%
Loans to assets 85.19% 77.52%
Loans to deposits 95.84% 88.52%
Allowance for loan loss to loans 1.30% 1.25%
Earning assets to assets 92.52% 93.60%
Deposits to assets 88.89% 87.57%
Other interest-bearing liabilities to assets 1.90% 2.93%
Stockholders' equity to total assets 8.89% 9.17%
Quarter Ended September 30, Year-To-Date September 30,
2003 2002 2003 2002
---------------------------- ---------------------------
Consolidated Statements of Income
Interest on investments $ 124,722 $ 250,840 -50.3% $ 481,731 $ 540,692 -10.9%
Interest on loans 2,376,904 2,213,572 7.4% 6,819,220 6,298,521 8.3%
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Total interest income 2,501,626 2,464,412 1.5% 7,300,951 6,839,213 6.8%
Interest on deposits 890,510 1,035,786 -14.0% 2,832,151 3,028,028 -6.5%
Interest on other interest-bearing liabilities 13,589 38,606 -64.8% 74,851 109,600 -31.7%
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Total interest expense 904,099 1,074,392 -15.9% 2,907,002 3,137,628 -7.4%
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Net interest margin before provision for loan loss 1,597,527 1,390,020 14.9% 4,393,949 3,701,585 18.7%
Provision for loan loss 220,000 198,000 11.1% 602,500 422,000 42.8%
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Net interest margin after provision for loan loss 1,377,527 1,192,020 15.6% 3,791,449 3,279,585 15.6%
Total non-interest income 856,090 561,329 52.5% 2,470,201 1,595,034 54.9%
Total non-interest expense 1,671,461 1,652,158 1.2% 4,878,199 4,247,309 14.9%
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Net Income before taxes 562,156 101,191 455.5% 1,383,451 627,310 120.5%
Income taxes 216,594 54,300 298.9% 534,253 237,300 125.1%
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Net Income after taxes $ 345,562 $ 46,891 636.9% $ 849,198 $ 390,010 117.7%
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Basic earnings per share $ 0.24 $ 0.03 $ 0.60 $ 0.28
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Diluted earnings per share $ 0.19 $ 0.03 $ 0.56 $ 0.27
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