FMS FINANCIAL CORPORATION
For Immediate Release
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July 26, 2004
For Further Information Contact: (609) 386-2400
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Craig W. Yates, President
Channing L. Smith, Vice President and Chief Financial Officer
FMS FINANCIAL REPORTS 2nd QUARTER EARNINGS
Burlington, New Jersey, (July 26, 2004) - FMS Financial Corporation, (NASDAQ
Symbol: "FMCO") today reported quarterly net income of $2,072,657 or $.32
diluted earnings per share for the quarter ended June 30, 2004 as compared to
net income of $1,299,972 or $.20 diluted earnings per share for the same period
in 2003. Earnings for the six months ended June 30, 2004 were $4,150,544 or $.64
diluted earnings per share as compared to net income of $3,139,895 or $.48
diluted earnings per share for the first six months of 2003.
Net interest income after provision for loan losses totaled to $18.1 million for
the six months ended June 30, 2004 compared to $15.5 million for the same period
in 2003. Total interest income increased to $27.2 million during the six months
ended June 30, 2004 from $25.9 million for the same period in 2003. Total
interest expense decreased to $8.9 million during the six months ended June 30,
2004 from $10.2 million for the same period in 2003.
Total assets were $1.2 billion and deposits totaled $907.5 million at June 30,
2004. Non-performing loans at June 30, 2004 amounted to $2.2 million or 0.53% of
total loans. The allowance for loan losses was $4.6 million at June 30, 2004 or
205% 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
that 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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June 30, 2004 December 31, 2003
(Unaudited)
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ASSETS
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Cash and amounts due from depository institutions $ 40,595,523 $ 41,022,232
Interest-bearing deposits 63,291 142,929
Short term funds 53,673,058 31,169,476
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Total cash and cash equivalents 94,331,872 72,334,637
Investment securities held to maturity 189,176,335 250,383,262
Investment securities available for sale 169,987,586 149,230,862
Loans, net 419,173,791 402,606,056
Mortgage-backed securities held to maturity 311,266,421 294,915,606
Accrued interest receivable 5,603,511 5,203,748
Federal Home Loan Bank stock 11,750,120 11,809,620
Real estate owned, net 0 48,294
Office properties and equipment, net 31,188,366 31,429,069
Deferred income taxes 2,034,218 2,043,909
Core deposit intangible 2,950,134 3,308,238
Prepaid expenses and other assets 2,103,730 1,603,294
FMS Statutory Trust 1 issue costs, net 601,233 640,154
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TOTAL ASSETS $ 1,240,167,317 $ 1,225,556,749
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Liabilities:
Deposits $ 907,516,125 $ 893,006,498
Securities sold under agreements to repurchase 225,000,000 225,000,000
Advances from the Federal Home Loan Bank 10,000,000 11,191,047
FMS Statutory Trust 1 debentures 25,774,000 25,774,000
Advances by borrowers for taxes and insurance 2,439,394 2,142,499
Accrued interest payable 1,279,011 1,319,501
Dividends payable 195,029 194,576
Other liabilities 2,605,180 4,098,885
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Total liabilities 1,174,808,739 1,162,727,006
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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 7,990,142 and 7,975,059 and shares outstanding 6,500,960
and 6,485,877 as of June 30, 2004 and December 31, 2003, respectively 799,014 797,506
Paid-in capital in excess of par 8,544,121 8,507,333
Accumulated other comprehensive income - net of deferred income taxes (468,130) 802,239
Retained earnings 67,418,572 63,657,664
Less: Treasury stock (1,489,182 and 1,489,182 shares, at cost, as of
June 30, 2004 and December 31, 2003, respectively) (10,934,999) (10,934,999)
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Total stockholders' equity 65,358,578 62,829,743
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,240,167,317 $ 1,225,556,749
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FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months ended Six Months ended
June 30, June 30,
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2004 2003 2004 2003
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(Unaudited) (Unaudited)
INTEREST INCOME:
Interest income on:
Loans $ 6,059,107 $ 6,058,727 $ 12,110,883 $ 12,284,453
Mortgage-backed securities 4,072,439 3,770,334 8,013,004 8,306,479
Investments 3,453,157 2,608,387 7,102,094 5,278,711
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Total interest income 13,584,703 12,437,448 27,225,981 25,869,643
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INTEREST EXPENSE:
Interest expense on:
Deposits 1,825,981 2,236,527 3,606,190 4,837,741
Borrowings 2,345,984 2,365,150 4,700,898 4,707,350
Long term debt 335,240 327,575 639,038 659,142
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Total interest expense 4,507,205 4,929,252 8,946,126 10,204,233
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NET INTEREST INCOME 9,077,498 7,508,196 18,279,855 15,665,410
PROVISION FOR LOAN LOSSES 75,000 60,000 150,000 120,000
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 9,002,498 7,448,196 18,129,855 15,545,410
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OTHER INCOME (EXPENSE):
Loan service charges and other fees 29,932 19,920 59,176 43,734
Gain on sale of real estate held for development, net 0 0 0 600,780
Gain on sale of loans 0 22 1 51
Gain on sale of investment securities 0 222,743 100,056 222,743
Gain on disposal of fixed assets 46,080 0 46,080 (141,151)
Real estate owned operations, net (3,284) 28,035 (4,547) 21,205
Service charges on accounts 1,322,312 1,184,345 2,526,552 2,256,242
Other income 35,180 46,112 64,315 69,465
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Total other income 1,430,220 1,501,177 2,791,633 3,073,069
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OPERATING EXPENSES:
Salaries and employee benefits 4,074,148 3,907,795 8,199,780 7,731,197
Occupancy and equipment 1,302,436 1,360,201 2,682,092 2,688,716
Purchased services 748,290 723,733 1,445,012 1,397,758
Federal deposit insurance premiums 33,282 31,386 65,547 63,582
Professional fees 167,895 163,703 333,678 341,419
Advertising 104,063 117,245 216,026 232,856
Amortization of core deposit intangible 179,052 65,757 358,104 65,757
Other 364,166 442,754 701,350 924,915
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Total operating expenses 6,973,332 6,812,574 14,001,589 13,446,200
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INCOME BEFORE INCOME TAXES 3,459,386 2,136,799 6,919,899 5,172,279
INCOME TAXES 1,386,729 836,827 2,769,355 2,032,384
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NET INCOME $ 2,072,657 $ 1,299,972 $ 4,150,544 $ 3,139,895
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BASIC EARNINGS PER COMMON SHARE $ 0.32 $ 0.20 $ 0.64 $ 0.49
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DILUTED EARNINGS PER COMMON SHARE $ 0.32 $ 0.20 $ 0.64 $ 0.48
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Dividends declared per common share $ 0.03 $ 0.03 $ 0.06 $ 0.06
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Weighted average common shares outstanding 6,492,516 6,473,606 6,489,421 6,468,706
Potential dilutive effect of the exercise of stock options 37,920 45,208 38,631 39,763
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Adjusted weighted average common shares outstanding 6,530,436 6,518,814 6,528,052 6,508,469
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