PHSB Financial Corporation Contact: James P. Wetzel, Jr.
Beaver Falls, Pennsylvania President and Chief Executive Officer
Richard E. Canonge
Chief Financial Officer
(724) 846-7300
FOR IMMEDIATE RELEASE
February 10, 2005
PHSB FINANCIAL CORPORATION
ANNOUNCES DECEMBER 31, 2004 OPERATING RESULTS
Beaver Falls, Pennsylvania (Nasdaq National Market - "PHSB") PHSB Financial
Corporation (the "Company"), announced today operating results for the year
ended December 31, 2004. Net income for the year ended December 31, 2004 was
$2,485,000, or $.92 basic and $.88 diluted earnings per share, compared to
$2,723,000 or $1.01 basic and $.98 diluted earnings per share, for the year
ended December 31, 2003. Net interest income decreased by $235,000 or 2.7%. The
provision for loan losses decreased by $230,000 or 37.1%. This decrease was due
to a decrease in loans coupled with a decrease in non-performing loans.
Noninterest income increased by $497,000 or 18.4%. This increase was primarily
due to an increase in gains on sales of securities of $556,000 or 34.6%.
Noninterest expense increased by $567,000 or 7.7%. This increase was primarily
due to merger related expenses.
Total assets at December 31, 2004 of $331.4 million represented a
decrease of $8.6 million or 2.5% from December 31, 2003. This decrease was
primarily due to a decrease in loans of $8.0 million.
The Company's wholly owned subsidiary, Peoples Home Savings Bank,
operates through its administrative office and ten full service offices in
Beaver and Lawrence Counties, Pennsylvania.
We are also pleased to announce that our pending merger with ESB
Financial Corporation has been approved by all required regulatory agencies and
the stockholders of ESBF and PHSB. The upcoming merger is tentatively scheduled
to close on Friday, February 11, 2005. We are very excited about the
opportunities and increased market exposure that this merger will bring to the
Company"
Statements contained in this news release, which are not historical
facts, are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time.
PHSB FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET (UNAUDITED)
December 31, December 31,
2004 2003
------------- -------------
ASSETS
Cash and amounts due from other institutions $ 7,802,377 $ 6,795,068
Interest-bearing deposits with other institutions 9,331,221 753,727
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Cash and cash equivalents 17,133,598 7,548,795
Investment securities:
Available for sale 9,541,480 28,718,832
Held to maturity (market value $ 5,162,032
and $8,203,053) 5,040,102 7,952,211
Mortgage - backed securities:
Available for sale 109,480,015 75,910,915
Held to maturity (market value $ 32,318,072
and $56,194,217) 32,633,451 55,843,363
Loans (net of allowance for loan losses of $1,453,751
and $1,647,886) 145,619,102 153,584,123
Accrued interest receivable 1,593,924 1,573,295
Premises and equipment 3,884,098 4,227,498
Federal Home Loan Bank stock 3,543,800 3,606,600
Other assets 2,886,292 1,003,979
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TOTAL ASSETS $ 331,355,862 $ 339,969,611
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 229,651,252 $ 231,519,432
Advances from Federal Home Loan Bank 52,630,000 58,880,000
Accrued interest payable and other liabilities 2,469,756 2,920,291
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Total liabilities 284,751,008 293,319,723
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Preferred stock, 20,000,000 shares authorized, none issued - -
Common stock, $.10 par value 80,000,000 shares authorized,
3,519,711 shares issued 351,971 351,971
Additional paid in capital 33,194,283 32,750,510
Retained earnings - substantially restricted 24,171,925 23,857,117
Accumulated other comprehensive income (336,668) 1,540,849
Unallocated ESOP shares (166,907 and 190,751 shares) (1,770,263) (2,023,187)
Unallocated RSP shares (17,160 and 33,440 shares) (266,152) (518,654)
Treasury stock, at cost ( 575,634 and 616,358 shares) (8,740,242) (9,308,718)
------------- -------------
Total stockholders' equity 46,604,854 46,649,888
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 331,355,862 $ 339,969,611
============= =============
December 31, December 31,
2004 2003
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Other Financial Condition Data:
Stockholders' equity to total assets 14.06% 13.72%
Book value per share $ 15.83 $ 16.07
Non-performing assets $ 351,212 $ 401,874
Non-performing loans to total loans 0.24% 0.26%
PHSB FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Three Months Ended December 31, Year Ended December 31,
2004 2003 2004 2003
----------- ----------- ----------- -----------
INTEREST AND DIVIDEND INCOME
Loans:
Taxable $ 2,034,374 $ 2,306,541 $ 8,349,685 $ 9,788,932
Exempt from federal income tax 255,422 231,791 933,955 1,046,888
Investment securities:
Taxable 161,910 204,414 832,367 861,030
Exempt from federal income tax 22,514 94,944 187,225 561,851
Mortgage - backed securities 1,564,565 1,398,260 5,906,104 5,278,467
Interest - bearing deposits with other institutions 21,946 11,802 64,264 47,892
----------- ----------- ----------- -----------
Total interest and dividend income 4,060,731 4,247,752 16,273,600 17,585,060
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 1,179,825 1,308,894 4,817,737 5,793,852
Advances from Federal Home Loan Bank 698,202 751,400 2,848,774 2,949,286
----------- ----------- ----------- -----------
Total interest expense 1,878,027 2,060,294 7,666,511 8,743,138
----------- ----------- ----------- -----------
Net interest income 2,182,704 2,187,458 8,607,089 8,841,922
PROVISION FOR LOAN LOSSES 90,000 120,000 390,000 620,000
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,092,704 2,067,458 8,217,089 8,221,922
----------- ----------- ----------- -----------
NONINTEREST INCOME
Service charges on deposit accounts 192,521 188,053 756,543 717,957
Investment securities gains, net 389,437 594,611 2,161,084 1,605,389
Rental income, net 10,570 25,650 67,960 103,050
Other income 63,098 71,297 217,983 280,978
----------- ----------- ----------- -----------
Total noninterest income 655,626 879,611 3,203,570 2,707,374
----------- ----------- ----------- -----------
NONINTEREST EXPENSE
Compensation and employee benefits 1,104,372 1,107,991 4,359,455 4,263,367
Occupancy and equipment costs 292,877 277,264 1,245,934 1,247,362
Data processing costs 64,269 50,711 202,720 195,428
Other expenses 785,908 386,106 2,081,739 1,617,073
----------- ----------- ----------- -----------
Total noninterest expense 2,247,426 1,822,072 7,889,848 7,323,230
----------- ----------- ----------- -----------
Income before income taxes 500,904 1,124,997 3,530,811 3,606,066
Income taxes 221,777 307,268 1,045,322 883,211
----------- ----------- ----------- -----------
NET INCOME $ 279,127 $ 817,729 $ 2,485,489 $ 2,722,855
=========== =========== =========== ===========
Earnings Per Share
Basic $ 0.10 $ 0.31 $ 0.92 $ 1.01
Diluted $ 0.10 $ 0.29 $ 0.88 $ 0.98
Weighted average number of shares outstanding
Basic 2,717,563 2,674,790 2,698,927 2,691,995
Diluted 2,864,525 2,778,993 2,828,966 2,783,124
Financial ratios (annualized)
Return on average assets 0.33% 0.96% 0.73% 0.80%
Return on average equity 2.43% 7.04% 5.39% 5.78%
Net interest margin 2.83% 2.77% 2.64% 2.70%