Sunset Road o P.O. Box 397
FMS Burlington, NJ 08016-7249
FINANCIAL CORPORATION Telephone (609) 386-2400
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FMS FINANCIAL CORPORATION
For Immediate Release
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February 12, 2004
For Further Information Contact:
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Craig W. Yates, President
Channing L. Smith, Vice President and Chief Financial Officer
FMS FINANCIAL REPORTS EARNINGS FOR 2003
Burlington, New Jersey, (February 12, 2004) - FMS Financial Corporation, (NASDAQ
Symbol: "FMCO") today reported income of $6,201,414 or $.95 diluted earnings per
share for the year ended December 31, 2003 compared to $7,960,744 or $1.21
diluted earnings per share for the same period in 2002.
Net interest income after provision for loan losses decreased to $31.2 million
in 2003 compared to $32.8 million in 2002. Total interest income decreased to
$50.8 million in 2003 from $57.7 million in 2002. Total interest expense
decreased to $19.4 million in 2003 from $24.8 million in 2002. The decreases in
interest income and interest expense are due primarily to lower market interest
rates. During the year, interest income was significantly reduced by increased
prepayments on the investment portfolio, which required faster than normal
amortization of premiums previously paid on investments.
Total assets were $1.2 billion and deposits totaled $893.0 million at December
31, 2003. Non-performing loans at December 31, 2003 amounted to $2.7 million or
..67% of total loans. The reserve for loan losses was $4.4 million at December
31, 2003 or 162% of non-performing loans. Core, tangible and risk-based capital
continue to exceed all regulatory requirements.
FMS Financial Corporation is the holding company for Farmers & Mechanics Bank,
which operates forty banking offices in Burlington, Camden and Mercer Counties,
New Jersey.
FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
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December 31, 2003 2002
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ASSETS
Cash and amounts due from depository institutions $ 41,022,232 $ 41,497,691
Interest-bearing deposits 142,929 12,252
Short term funds 31,169,476 46,900,403
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Total cash and cash equivalents 72,334,637 88,410,346
Investment securities held to maturity 250,383,262 164,227,126
Investment securities available for sale 149,230,862 118,612,961
Loans, net 402,606,056 361,674,400
Mortgage-backed securities held to maturity 294,915,606 342,122,678
Accrued interest receivable 5,203,748 5,279,658
Federal Home Loan Bank stock 11,809,620 12,061,720
Real estate held for development, net 0 87,926
Real estate owned, net 48,294 291,200
Office properties and equipment, net 31,429,069 29,092,970
Deferred income taxes 2,043,909 2,972,572
Core deposit intangible 3,308,238 0
Prepaid expenses and other assets 829,294 1,005,822
FMS Statutory Trust 1 issue costs, net 640,154 717,999
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TOTAL ASSETS $ 1,224,782,749 $ 1,126,557,378
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Liabilities:
Deposits $ 893,006,498 $ 800,340,222
Securities sold under agreements to repurchase 225,000,000 225,000,000
Advances from the Federal Home Loan Bank 11,191,047 11,232,103
FMS Statutory Trust 1 debentures 25,000,000 25,000,000
Advances by borrowers for taxes and insurance 2,142,499 2,049,813
Accrued interest payable 1,319,501 1,383,054
Dividends payable 194,576 193,914
Other liabilities 4,098,885 3,720,453
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Total liabilities 1,161,953,006 1,068,919,559
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Commitments and contingencies
Stockholders' Equity:
Preferred stock - $.10 par value 5,000,000 shares authorized; none issued
Common stock - $.10 par value 10,000,000 shares authorized; shares
issued 7,975,059 and 7,949,809 and shares outstanding 6,485,877
and 6,463,811 as of December 31, 2003 and 2002, respectively 797,506 794,981
Paid-in capital in excess of par 8,507,333 8,279,525
Accumulated comprehensive income - net of deferred income taxes 802,239 1,216,053
Retained earnings 63,657,664 58,233,840
Less: Treasury stock (1,489,182 and 1,485,998 shares, at cost, as of
December 31, 2003 and 2002, respectively) (10,934,999) (10,886,580)
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Total stockholders' equity 62,829,743 57,637,819
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,224,782,749 $ 1,126,557,378
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FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
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Years Ended December 31, 2003 2002 2001
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INTEREST INCOME:
Interest income on:
Loans $ 24,362,749 $ 25,658,517 $ 23,919,782
Mortgage-backed securities 15,867,034 18,525,669 13,728,457
Investments 10,584,214 13,564,483 17,651,585
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Total interest income 50,813,997 57,748,669 55,299,824
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INTEREST EXPENSE:
Interest expense on:
Deposits 8,585,202 13,944,396 20,072,856
Borrowings 9,480,985 9,069,402 7,621,750
Long-term debt 1,295,928 1,742,660 1,057,348
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Total interest expense 19,362,115 24,756,458 28,751,954
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NET INTEREST INCOME 31,451,882 32,992,211 26,547,870
PROVISION FOR LOAN LOSSES 270,000 149,000 221,000
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 31,181,882 32,843,211 26,326,870
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OTHER INCOME (EXPENSE):
Loan service charges and other fees 85,759 125,806 114,774
Gain on sale of loans and real estate owned 495,831 18,261 418,939
Gain on sale/disposal of fixed assets (115,658) 100,767 50,799
Gain on sale of investment securities 285,846 0 35,916
Gain on sale of real estate held for development 600,780 0 0
Real estate owned operations, net (20,365) (40,156) (53,469)
Service charges on accounts 4,592,540 3,992,890 3,361,668
Other income 131,805 306,907 297,780
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Total other income 6,056,538 4,504,475 4,226,407
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OPERATING EXPENSES:
Salaries and employee benefits 15,512,202 14,161,356 12,481,771
Occupancy and equipment 5,399,414 4,599,750 4,545,863
Purchased services 2,841,868 2,589,186 2,158,833
Federal deposit insurance premiums 127,387 123,493 146,108
Professional fees 654,197 846,880 572,199
Advertising 469,070 459,183 340,270
Amortization of core deposit intangible 272,802 0 0
Other 1,693,350 1,800,868 1,872,190
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Total operating expenses 26,970,290 24,580,716 22,117,234
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INCOME BEFORE INCOME TAXES 10,268,130 12,766,970 8,436,043
INCOME TAXES 4,066,716 4,806,226 2,976,752
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NET INCOME $ 6,201,414 $ 7,960,744 $ 5,459,291
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BASIC EARNINGS PER COMMON SHARE $ 0.96 $ 1.22 $ 0.81
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DILUTED EARNINGS PER COMMON SHARE $ 0.95 $ 1.21 $ 0.81
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DIVIDENDS DECLARED PER COMMON SHARE $ 0.12 $ 0.12 $ 0.12
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Weighted average common shares outstanding 6,476,938 6,548,313 6,700,729
Potential dilutive effect of the exercise of stock options 37,996 28,956 13,498
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Adjusted weighted average common shares outstanding 6,514,934 6,577,269 6,714,227
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