FMS FINANCIAL CORPORATION
For Immediate Release
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February 13, 2006
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 2005
Burlington, New Jersey, (February 13, 2006) - FMS Financial Corporation, (NASDAQ
Symbol: "FMCO") today reported income of $6,718,232 or $1.03 diluted earnings
per share for the year ended December 31, 2005 compared to $8,768,229 or $1.34
diluted earnings per share for the same period in 2004.
Net interest income after provision for loan losses decreased to $35.9 million
in 2005 compared to $37.0 million in 2004. Total interest income increased to
$57.8 million in 2005 from $55.8 million in 2004. Total interest expense
increased to $21.5 million in 2005 from $18.4 million in 2004.
Total assets were $1.2 billion and deposits totaled $947.1 million at December
31, 2005. Non-performing loans at December 31, 2005 amounted to $2.0 million or
0.44% of total loans. The allowance for loan losses was $5.1 million at December
31, 2005 or 259% 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-two 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, 2005 2004
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ASSETS
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Cash and amounts due from depository institutions $ 54,544,693 $ 46,435,050
Interest-bearing deposits 27,874 30,950
Short-term funds 39,268,382 64,111,356
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Total cash and cash equivalents 93,840,949 110,577,356
Investment securities held to maturity 275,340,435 254,833,749
Investment securities available for sale 155,632,095 141,999,280
Loans, net 442,571,357 418,798,633
Mortgage-backed securities held to maturity 208,195,874 269,221,897
Accrued interest receivable 6,224,371 6,322,107
Federal Home Loan Bank stock 8,248,420 10,250,120
Office properties and equipment, net 34,801,087 30,747,227
Deferred income taxes 2,607,641 2,150,442
Core deposit intangible 1,875,822 2,592,030
Prepaid expenses and other assets 1,440,857 1,950,913
FMS Statutory Trust 1 issue costs, net 484,467 562,311
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TOTAL ASSETS $ 1,231,263,375 $ 1,250,006,065
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Liabilities:
Interest-bearing deposits $ 759,991,442 $ 765,459,098
Noninterest-bearing deposits 187,075,982 176,047,722
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Total deposits 947,067,424 941,506,820
Securities sold under agreements to repurchase 175,000,000 195,000,000
Advances from the Federal Home Loan Bank 0 10,000,000
FMS Statutory Trust 1 debentures 25,774,000 25,774,000
Advances by borrowers for taxes and insurance 2,132,320 2,200,357
Accrued interest payable 1,378,353 1,246,661
Dividends payable 195,486 195,029
Other liabilities 4,633,516 3,746,579
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Total liabilities 1,156,181,099 1,179,669,446
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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 8,006,392 and 7,991,292 and shares outstanding 6,515,110
and 6,502,110 as of December 31, 2005 and 2004, respectively 800,639 799,129
Paid-in capital in excess of par 8,767,381 8,555,506
Accumulated comprehensive income - net of deferred income taxes (1,099,630) 270,784
Retained earnings 77,583,683 71,646,199
Less: Treasury stock (1,491,282 and 1,489,182 shares, at cost, as of
December 31, 2005 and 2004 respectively) (10,969,797) (10,934,999)
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Total stockholders' equity 75,082,276 70,336,619
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,231,263,375 $ 1,250,006,065
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FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
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Years Ended December 31, 2005 2004 2003
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INTEREST INCOME:
Interest income on:
Loans $ 25,847,280 $ 24,576,705 $ 24,362,749
Mortgage-backed securities 14,629,526 17,388,728 16,805,015
Investments 17,370,287 13,796,220 9,646,233
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Total interest income 57,847,093 55,761,653 50,813,997
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INTEREST EXPENSE:
Interest expense on:
Deposits 11,418,289 7,754,391 8,585,202
Borrowings 8,293,015 9,290,862 9,480,985
Long-term debt 1,826,092 1,368,591 1,295,928
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Total interest expense 21,537,396 18,413,844 19,362,115
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NET INTEREST INCOME 36,309,697 37,347,809 31,451,882
PROVISION FOR LOAN LOSSES 360,000 330,000 270,000
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 35,949,697 37,017,809 31,181,882
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NONINTEREST INCOME:
Service charges on accounts 5,258,385 5,149,878 4,592,540
Other income 155,667 137,136 131,805
Loan service charges and other fees 75,167 105,828 85,759
(Loss) Gain on disposal/sale of fixed assets (6,769) 46,080 (115,658)
Gain on sale of loans and real estate owned 0 229 495,831
Gain on sale of investment securities 0 682,880 285,846
Gain on sale of real estate held for development 0 0 600,780
Real estate owned operations, net 0 (4,586) (20,365)
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Total noninterest income 5,482,450 6,117,445 6,056,538
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NONINTEREST EXPENSE:
Salaries and employee benefits 18,012,670 16,877,722 15,512,202
Occupancy and equipment 5,587,270 5,383,883 5,399,414
Purchased services 2,810,218 2,850,118 2,841,868
Professional fees 754,127 662,180 654,197
Amortization of core deposit intangible 716,208 716,208 272,802
Office supplies 669,130 573,447 673,356
Other expenses 632,481 588,887 802,241
Telecommunications 456,107 303,586 345,140
Advertising 429,263 429,093 469,070
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Total noninterest expense 30,067,474 28,385,124 26,970,290
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INCOME BEFORE INCOME TAXES 11,364,673 14,750,130 10,268,130
INCOME TAXES 4,646,441 5,981,901 4,066,716
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NET INCOME $ 6,718,232 $ 8,768,229 $ 6,201,414
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BASIC EARNINGS PER COMMON SHARE $ 1.03 $ 1.35 $ 0.96
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DILUTED EARNINGS PER COMMON SHARE $ 1.03 $ 1.34 $ 0.95
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DIVIDENDS DECLARED PER COMMON SHARE $ 0.12 $ 0.12 $ 0.12
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Weighted average common shares outstanding 6,504,143 6,495,218 6,476,938
Potential dilutive effect of the exercise of stock options 16,495 34,251 37,996
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Adjusted weighted average common shares outstanding 6,520,638 6,529,469 6,514,934
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