SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 20, 2004
EverTrust Financial Group, Inc.
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(Exact name of registrant as specified in its charter)
Washington 0-26993 91-1613658
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State or other jurisdiction Commission (I.R.S. Employer
of incorporation File Number Identification No.)
2707 Colby Avenue, Suite 600, Everett, Washington 98201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (including area code) (425) 258-3645
Not Applicable
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(Former name or former address, if changed since last report)
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
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99.1 Press Release dated July 20, 2004.
Item 12. Results of Operations and Financial Condition
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On July 20, 2004, EverTrust Financial Group, Inc. issued its earnings
release for the quarter ended June 30, 2004. A copy of the earnings release
is attached hereto as Exhibit 99.1, which is incorporated herein by reference.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
EVERTRUST FINANCIAL GROUP, INC.
DATE: July 20, 2004 By: /s/ Jeffrey R. Mitchell
---------------------------------
Jeffrey R. Mitchell
Vice President and Chief Financial Officer
Exhibit 99.1
Press Release of EverTrust Financial Group, Inc. on July 20, 2004
FOR IMMEDIATE RELEASE Contact: Brad Ogura
EverTrust Financial Group Inc.
425/258-0380
EverTrust Financial Group Reports First Quarter Results
July 20, 2004 -- Everett, WA -- EverTrust Financial Group, Inc. (Nasdaq: EVRT)
today reported net income of $2.0 million, or $0.28 per diluted share for the
quarter ending June 30, 2004. Excluding merger-related costs, net income for
the quarter ending June 30, 2004 would have been $2.2 million, or $0.31 per
diluted share, which reflects an increase in net income from the year-earlier
period of $2.0 million, or $0.26 per diluted share.
As announced on June 25, 2004, KeyCorp (NYSE: KEY) and EverTrust Financial
Group have signed a definitive agreement that provides for the acquisition of
EverTrust by KeyCorp. The transaction, subject to approval by EverTrust
shareholders and by appropriate regulators, is expected to close in the
quarter ending December 31, 2004.
At June 30, 2004, EverTrust Financial Group's total assets were $769.0 million
as compared to $770.1 million at March 31, 2004. Total equity at June 30,
2004 was $91.2 million (book value of $13.23 per share) compared to total
equity of $90.6 million at March 31, 2004. At June 30, 2004, EverTrust
Financial had 6,892,660 shares outstanding. No shares of EverTrust were
repurchased during the quarter under the Company's current stock repurchase
plan.
Net interest income was $7.1 million for the quarter ended June 30, 2004 as
compared to $6.7 million for the year-earlier quarter. Loans receivable, net,
were $658.8 million at June 30, 2004, as compared to $661.8 million at March
31, 2004. Loan originations, primarily commercial real estate lending,
totaled $164.4 million for the quarter ended June 30, 2004.
The net interest margin for the quarter ended June 30, 2004 was 3.73% as
compared to 3.83% a year earlier, and 3.82% for the quarter ended March 31,
2004.
For the quarter ended June 30, 2004, the provision for loan losses was
$100,000 compared to $175,000 for the year-earlier quarter. Total
nonperforming assets at June 30, 2004 were $615,000 or 0.08% of total assets,
compared to $228,000 or 0.03% of total assets at June 30, 2003, and $4.4
million or 0.56% of total assets at March 31, 2004. The allowance for loan
losses as a percent of gross loans receivable was 1.37% at June 30, 2004, as
compared to 1.35% at March 31, 2004.
Page 1
Total deposits at June 30, 2004 were $553.9 million as compared to $546.4
million at March 31, 2004. At June 30, 2004 the deposit mix included 47%
fixed-rate certificates of deposit and 28% money market accounts, with the
remainder from noninterest bearing accounts, savings accounts and demand
deposit accounts. The Company continues to focus on generating core
deposits, and transaction account balances grew 4% from the prior quarter and
35% from the prior year as a result of this effort.
Noninterest income for the current quarter was $1.9 million as compared to
$1.6 million for the quarter one-year earlier.
Noninterest expenses for the quarter ended June 30, 2004 were $5.7 million as
compared to $5.2 million one-year earlier. Noninterest expenses in the
current quarter included merger-related costs of $323,000. The Company
expects to incur additional related expenses until the transaction is
completed. The efficiency ratio, including merger-related costs, was 63.5%
for the quarter (59.8% without these costs) compared to 57.9% in the prior
quarter and 62.3% in the year-earlier quarter.
EverTrust Financial Group is a diversified financial services holding company
(regulated by the Federal Reserve) that serves the Puget Sound region of
Washington state through its EverTrust Bank of Washington branches in Seattle,
Bellevue, and Snohomish County; Commercial Mortgage Banking Group office in
Tacoma, EverTrust Asset Management office in Seattle, and a commercial
mortgage loan production office in Portland, Oregon..
For additional information, visit EverTrust Financial Group at
www.EVRTonline.com.
Forward-looking Statements Certain matters discussed in this press release
may constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward looking statements
relate to, among other things, expectations of the business environment in
which the Company operates, projections of future performance, perceived
opportunities in the market, and statements regarding the Company's mission
and vision. These forward-looking statements are based upon current
management expectations, and may therefore involve risks and uncertainties.
The Company's actual results, performance, or achievements may differ
materially from these suggested, expressed, or implied by forward looking
statements due to a wide range of factors including, but not limited to,
interest rate fluctuations, changes in residential mortgage patterns, economic
conditions both nationally and in the Company's local market areas, success of
new products, non-bank financial services providers, regulatory changes, and
other risks detailed in the Company's reports, particularly the Form 10-K
filed with the Securities and Exchange Commission.
-financial tables follow-
Page 2
EVERTRUST FINANCIAL GROUP, INC. - Key Financial Ratios
Three Months
Ended June 30,
2004 2003
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KEY FINANCIAL RATIOS:
(Unaudited)
Performance Ratios:
Return on average assets (1) 1.06% 1.10%
Return on average equity (2) 8.89% 8.42%
Equity-to-assets ratio (3) 11.90% 13.09%
Interest rate spread (4) 3.40% 3.39%
Net interest margin (5) 3.73% 3.83%
Average interest-earning assets to average
interest-bearing liabilities 116.38% 117.62%
Other operating expenses as a percent of
average total assets 2.94% 2.92%
Efficiency ratio (6) 63.46% 62.25%
Non interest income as a percent of net revenue 20.96% 19.71%
Asset Quality Ratios:
Nonaccrual and 90 days or more past due
loans as a percent of total loans, net 0.09% 0.04%
Nonperforming assets as a percent of total assets 0.08% 0.03%
Allowance for losses as a percent of gross
loans receivable 1.37% 1.52%
Allowance for loan losses as a percent of
nonperforming loans 1487.23% 3980.83%
Net charge-offs (recoveries) to average
outstanding loans 0.00% 0.01%
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(1) Net earnings divided by average total assets.
(2) Net earnings divided by average equity.
(3) Average equity divided by average total assets.
(4) Difference between weighted average yield on interest-earning assets and
weighted average rate on interest-bearing liabilities.
(5) Net interest income as a percentage of average interest-earning assets.
(6) Total other operating expenses divided by total net interest income (on a
tax-equivalent basis) before provision for loan losses plus total other
operating income.
Allowance for Loan Losses:
Quarter Ended
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06/30/04 03/31/04 12/31/03 09/30/03 06/30/03
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Allowance at beginning
of period $ 9,046 $ 8,973 $ 8,747 $ 9,086 $ 8,979
Provision for loan losses 100 100 250 0 175
Charge-offs (2) (34) (69) (353) (73)
Recoveries 4 7 45 14 5
------- ------- ------- ------- -------
Balances at end of
period $ 9,148 $ 9,046 $ 8,973 $ 8,747 $ 9,086
======= ======= ======= ======= =======
EverTrust Financial Group, Inc.
Consolidated Statements of Financial Condition
June 30 and March 31, 2004
(Dollar amounts in thousands, except per share amounts)
June 30, March 31,
2004 2004
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ASSETS Unaudited
Cash and cash equivalents, including interest
bearing deposits of $555 and $1,000 $ 19,123 $ 14,995
Securities available for sale, amortized cost
of $67,619 and $66,914 66,889 67,567
Securities held to maturity, fair value of $2,305
and $2,419 2,229 2,311
Federal Home Loan Bank stock, at cost 6,716 6,650
Loans receivable, net of allowances of $9,148
and $9,046 658,780 661,756
Loans held for sale, fair value of $650 and $907 643 886
Accrued interest receivable 3,337 3,301
Premises and equipment, net 6,874 7,206
Other real estate owned - 375
Prepaid expenses and other assets 4,429 5,025
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Total Assets $769,020 $770,072
======================
LIABILITIES AND EQUITY
LIABILITIES:
Deposit accounts $553,852 $546,388
Federal Home Loan Bank advances and other
borrowings 120,117 128,531
Accounts payable and other liabilities 3,876 4,574
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Total Liabilities 677,845 679,493
COMMITMENTS AND CONTINGENCIES
EQUITY:
Common stock - no par value, 73,500,000 shares
authorized, 6,892,660 shares and 6,890,160
shares outstanding at June 30, and March 31,
2004, respectively 23,845 23,819
Retained earnings 68,017 66,738
Shares held in trust for stock-related
compensation plans (205) (409)
Accumulated other comprehensive income (482) 431
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Total Equity 91,175 90,579
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Total Liabilities and Equity $769,020 $770,072
======================
Book value per common share $ 13.23 $ 13.15
EverTrust Financial Group, Inc.
Consolidated Statements of Operations
For the Three Months ended June 30, 2004 and 2003
(Dollar amounts in thousands, except per share amounts)
Three Months Ended June 30,
2004 2003
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(Unaudited)
INTEREST INCOME:
Loans receivable $ 10,261 $ 10,505
Investment securities:
Taxable interest income 521 442
Tax-exempt interest income 19 43
Dividend income 66 86
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Total investment security income 606 571
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Total interest income 10,867 11,076
INTEREST EXPENSE:
Deposit accounts 2,639 3,097
Federal Home Loan Bank advances
and other borrowings 1,178 1,284
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Total interest expense 3,817 4,381
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Net interest income 7,050 6,695
PROVISION FOR LOAN LOSSES 100 175
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Net interest income after
provision for loan losses 6,950 6,520
NONINTEREST INCOME:
Loan service fees 753 695
Gain on sale of securities - 2
Gain on sale of loans 337 301
Other, net 780 646
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Total noninterest income 1,870 1,644
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NONINTEREST EXPENSES:
Salaries and employee benefits 3,002 3,152
Occupancy and equipment 742 710
Information processing costs 369 376
KeyCorp merger costs 323 -
Other, net 1,231 967
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Total noninterest expenses 5,667 5,205
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Earnings before federal income taxes 3,153 2,959
FEDERAL INCOME TAXES 1,116 994
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NET INCOME $ 2,037 $ 1,965
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Net income per common share - basic $ 0.30 $ 0.28
=========================
Net income per common share - diluted $ 0.28 $ 0.26
=========================
Weighted average shares outstanding -
basic 6,782,740 6,990,670
Weighted average shares outstanding -
diluted 7,258,185 7,498,660
Dividends paid per share $ 0.110 $ 0.080
EverTrust Financial Group, Inc.
Yield and Margin Calculations (dollar amounts in thousands)
For the Three Months Ended June 30, 2004 and 2003
(Unaudited)
Three Months Ended June 30,
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2004 2003
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Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost Balance Dividends Cost
------- --------- ------ ------- --------- ------
(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1) $678,080 $10,261 6.05% $617,336 $10,505 6.81%
Investment securities 70,150 539 3.07% 44,335 398 3.59%
Federal Home Loan
Bank stock 6,650 66 3.97% 6,335 83 5.24%
Cash and cash
equivalent 455 1 0.88% 30,976 90 1.16%
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Total interest-
earning assets 755,335 10,867 5.75% 698,982 11,076 6.34%
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Noninterest-earning
assets 15,401 14,146
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Total average
assets $770,736 $713,128
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Interest-bearing
liabilities:
Savings accounts $ 12,996 $ 18 0.55% $ 12,736 $ 26 0.82%
Checking accounts 97,458 237 0.97% 70,293 195 1.11%
Money market deposit
accounts 154,639 462 1.20% 132,855 491 1.48%
Time deposits 259,257 1,922 2.97% 279,343 2,385 3.42%
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Total deposits 524,350 2,639 2.01% 495,227 3,097 2.50%
Borrowings 124,697 1,178 3.78% 99,067 1,284 5.18%
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Total interest-
bearing
liabilities 649,047 3,817 2.35% 594,294 4,381 2.95%
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Noninterest-bearing
liabilities 29,997 25,504
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Total average
liabilities 679,044 619,798
Average equity 91,692 93,330
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Total liabilities
and equity $770,736 $713,128
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Net interest income $ 7,050 $ 6,695
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Interest rate spread 3.40% 3.39%
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Net interest margin 3.73% 3.83%
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Ratio of average
interest-earning
assets to average
interest-bearing
liabilities 116.38% 117.62%
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