PRESS RELEASE
April 29, 2003
For more information, contact:
Walter G. Kelly, President
Skibo Financial Corp.
242 East Main Street
Carnegie, PA 15106
(412)276-2424
Skibo Financial Corp. Announces 4th Quarter and Fiscal Year Earnings
Carnegie, Pennsylvania - (Nasdaq "SKBO") - Walter G. Kelly, President of Skibo
Financial Corp. announced today earnings of $432,000 or $.13 per diluted share
for the year ended March 31, 2003, as compared to earnings of $550,000 or $.17
per diluted share for the year ended March 31, 2002. This represents a decrease
of $118,000 or 21.5% in earnings compared to the same period in 2002.
The decrease in earnings for the year ended March 31, 2003, as compared to the
prior fiscal year, can be attributed primarily to a decrease in net interest
income, offset by an increase in other income, and decreases in other expenses
and the provision for income taxes. Net interest income decreased $412,000 or
12.7% primarily due to a 20 basis point decrease in the net interest rate
spread, resulting from loan payoffs and refinancings at lower rates of interest,
and the proceeds from the call of government agency securities being reinvested
into mortgage-backed securities, which generally have lower yields. Total other
income increased $159,000 or 92.4% primarily due to increases in the cash
surrender values of insurance policies held on the participants of the
Supplemental Employee Retirement Plan ("SERP") and the proceeds of a nontaxable
death benefit from an insurance policy held on a director under the Director's
Retirement Plan ("DRP"), paid to the Bank upon the death of the director. Total
other expenses decreased $17,000 or 0.6% during the fiscal year ending March 31,
2003, as compared to the prior fiscal year. The decrease was attributable to
decreases of $5,000 in compensation and employee benefits expense, $14,000 in
premises and occupancy expense, due to the full amortization of furniture and
fixtures purchased seven years ago for the remodeling of the executive offices
at the Carnegie office and the relocation of the Kennedy office, and $1,000 in
federal insurance premiums, partially offset by an increase of $3,000 in other
operating expenses.
Earnings for the three months ended March 31, 2003 were $201,000 or $.06 per
diluted share as compared to $100,000 or $.03 per diluted share in the same
period in 2002. This represents a 101.0% increase in earnings. The increase in
earnings for the quarter ended March 31, 2003 was primarily due to the proceeds
of a nontaxable death benefit from an insurance policy held on a director under
the DRP, paid to the Bank upon the death of the director.
Skibo Financial Corp. had assets of $157.3 million and total stockholders'
equity of $23.5 million on March 31, 2003. Skibo Financial Corp. is listed on
the Nasdaq SmallCap market, traded under the symbol of "SKBO" and listed in The
Wall Street Journal as "SkiboFn".
SKIBO FINANCIAL CORP.
SELECTED FINANCIAL AND OTHER DATA
Financial Condition (In thousands) March 31, March 31,
2003(1) 2002(1)
----------- -----------
Assets $ 157,259 $ 155,118
Loans receivable, net 39,672 45,865
Mortgage-backed securities 95,305 78,064
Investment securities 8,356 17,421
Cash and cash equivalents 4,628 4,577
Savings deposits 81,842 78,520
Federal Home Loan Bank advances 48,000 48,000
Stockholders' equity 23,477 24,611
Summary of Operations (In thousands) Three months ended March 31, Fiscal year ended March 31,
---------------------------- ---------------------------
2003 2002 2003(1) 2002(1)
-------- --------- --------- -----------
Interest income $1,937 $2,184 $8,191 $9,160
Interest expense 1,285 1,408 5,360 5,917
------ ------ ------ ------
Net interest income 652 776 2,831 3,243
Provision for loan losses -- -- -- -
------ ------ ------ ------
Net interest income after provision
for loan losses
for loan losses 652 776 2,831 3,243
Total other income 183 60 331 172
Total other expense 650 690 2,628 2,645
------ ------ ------ ------
Income before income tax 185 146 534 770
of change in accounting principle
Provision for income taxes (16) 46 102 220
------ ------ ------ ------
Net income $ 201 $ 100 $ 432 $ 550
====== ====== ====== ======
Other Selected Data Three months ended Fiscal year ended
March 31, March 31,
-------------------- -------------------
(Annualized where appropriate) 2003 2002 2003(1) 2002(1)
-------- --------- -------- --------
Return on average assets .51% .26% .28% .36%
Return on average equity 3.43 1.62 1.81 2.21
Average equity to average assets 14.91 15.96 15.29 16.25
Stockholders' equity to
assets at period end 14.93 15.87 14.93 15.87
Net interest rate spread 1.18 1.43 1.28 1.48
Net yield on average interest earning
assets 1.74 2.11 1.90 2.22
Non-performing assets to total assets .05 .07 .05 .07
Loan loss allowance to total loans, net 1.06 .92 1.06 .92
(net)
Non-performing loans to total loans, net .12 .25 .12 .25
Stockholders' equity per share(2) $ 7.45 $ 7.84 $ 7.45 $ 7.84
Basic earnings per share(2) $ 0.06 $ 0.03 $ 0.14 $ 0.18
Diluted earnings per share(2) $ 0.06 $ 0.03 $ 0.13 $ 0.17
- -----------------
(1) Derived from March 31, 2003 and 2002 audited financial statements.
(2) Includes 1,897,500 shares owned by Skibo Bancshares, M.H.C., Skibo
Financial Corp.'s majority stockholder and mutual holding company.