Exhibit 99.1
First Financial Bancorp
P R E S S R E L E A S E
For Immediate Release July 25, 2003
Contact Person:
Leon Zimmerman
President and CEO
(209) 367-2000
First Financial Bancorp Reports
Second Quarter Growth and Year to Date 2003 Earnings
Lodi, Calif. (Business Wire) - July 25, 2003 - First Financial
Bancorp (OTCBB: FLLC) the parent company of Bank of Lodi, N.A., today
reported continued success in achieving its growth objectives for assets,
loans and demand deposits. When comparing June 30, 2003 to the same date
last year, total assets increased $39 million, or 16%, to total $281
million, gross loans increased $16 million, or 11%, to total $172 million
and total demand deposits increased $20 million, or 19% to total $127
million. Year to date, total assets increased $25 million, or 10%, gross
loans increased $7 million or 4% and total demand deposits increased $12
million, or 10%. Net income for the Company during the second quarter of
2003 totaled $359,000, or $0.21 per diluted share and represents an
increase of 82% over the same period last year. Year to date, net income
totaled $701,000, or $0.41 per diluted share which represents an increase
of 47% over the same period last year.
"We are very pleased with the progress we have made this quarter
and are determined to keep the momentum rolling," reported Leon Zimmerman,
President and Chief Executive Officer. "The results demonstrate that, given
time, our strategic plan for growth and expansion will produce the
shareholder value we all expect," he said. "Our significant improvement in
net income shows that, as we spread our expenses over a larger pool of
assets, we will make great strides in overall performance and the growth
strategy is working. For now, we are willing to let our progress speak for
itself."
Net interest income totaled $2,872,000 in the second quarter of
2003, compared to $2,625,000 for the same period last year, representing an
increase of $247,000. The increase is primarily attributable to a decrease
of $276,000 in interest expense. This decrease resulted primarily from a
decline in the Company's average cost of funds which decreased from 1.75%
in the second quarter of 2002 to 1.14% in the second quarter of 2003. While
the Company also experienced a decrease in the yield on average earning
assets, from 7.37% in 2002 to 6.34% in 2003, the reduction in interest
income resulting from the lower yield was offset by income generated from a
$30 million increase in average earning assets. Net interest income for the
six month period ended June 30, 2003 totaled $5,501,000, representing an
increase of $727,000 over the prior year period which totaled $4,774,000.
The increase in net interest income during the six month period is also
related primarily to a decrease of $629,000 in the Company's average cost
of funds, which decreased from 1.87% for the first six months of 2002 to
1.16% for the first six months of 2003. While average earning assets during
the first six months of 2003 increased $22 million as compared to the same
period in 2002, the average yield declined from 6.98% to 6.35%.
The provision for loan losses totaled $55,000 and $312,000 for the
three and six month period ending June 30, 2003. This compares to a
provision of $181,000 and $376,000 during the three and six month period
ending June 30, 2002. Net charge-offs for the six month period ending June
30, 2003 totaled $109,000 as compared to $64,000 for the same period last
year. The ratio of the allowance for loan losses to gross loans was 1.9% at
June 30, 2003 and 2002. The ratio at December 31, 2002 was 1.8%. At June
30, 2003 nonperforming loans totaled $2,350,000, or 1.4% of gross loans as
compared to and $2,409,000, or 1.5% at December 31, 2002 and $3,454,000, or
2.2% at June 30, 2002.
Noninterest income for the second quarter of 2003 increased
$177,000, or 19.3%, over the same period last year. For the first six
months of 2003, noninterest income increased $130,000, or 6.1% compared to
the first six months of 2002. In general, the increase in noninterest
income is attributable to increases in the gain on sale of mortgage and SBA
loans combined with increases in servicing fees and charges. Included in
noninterest income is $88,000 and $262,000 attributable to gains resulting
from the sale of investment securities during the first quarter of 2003 and
2002, respectively. The Company also realized gains from the sale of other
real estate totaling $5,000 during the second quarter of 2003 and $22,000
during the first quarter of 2002.
Noninterest expense for the second quarter of 2003 increased
$242,000, or 7.7%, over the same period last year. For the first six months
of 2003, noninterest expense increased $483,000 or 8.0%, compared to the
first six months of 2002. Included in noninterest expense during the second
quarter of 2003 are costs totaling $94,000 associated with responding to
the disruptive actions initiated by three dissident directors. Without this
unanticipated expense, the increase in noninterest expense would have been
4.7% and 6.5% for the second quarter and six month period during 2003,
respectively, primarily associated with increases in salary and benefits
and occupancy expenses. "We are very disappointed that three directors who
uniformly have voted in favor of our strategic initiatives now are
determined to undermine our progress and, in the process, have directly
cost our shareholders approximately $0.03 per diluted share this quarter.
Without the expenses caused by the three dissident directors, net income
for the quarter and year to date would have increased 110% and 58%,
respectively, over the same three and six month periods last year. We
question their motives and their compliance with their fiduciary duties,"
said Zimmerman.
As a result of increases in taxable income combined with a
reduction in tax exempt income, the Company's provision for income taxes
during the second quarter of 2003 totaled $145,000 compared to a benefit of
$1,000 during the second quarter of 2002. For the first six months of 2003,
the provision for income taxes totaled $269,000 as compared to $54,000
during the same period last year.
First Financial Bancorp is the parent of Bank of Lodi, N.A., a
locally owned community bank formed in 1982. Bank of Lodi, N.A. offers
financial services via the web at www.bankoflodi.com, by phone at
888-265-8577 or at any one of its eight branches located in the communities
of Lodi, Woodbridge, Lockeford, Galt, Plymouth, San Andreas, Elk Grove, and
Folsom. Bank of Lodi also offers investment services through its
affiliation with Investment Centers of America.
This press release contains forward looking statements within the
meaning of "safe harbor" provisions of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and as such, may involve risks and
uncertainties. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies, and expectations, are
generally identifiable by the use of words such as "believe", "expect",
"intend", "anticipate", "estimate", "project", or similar expressions.
These forward-looking statements relate to, among other things,
expectations of the business environment in which the Company operates,
projections of future performance, potential future performance, potential
future credit experience, perceived opportunities in the market, and
statements regarding the Company's mission and vision. The Company's actual
results, performance, and achievements may differ materially from the
results, performance, and achievements expressed or implied in such
forward-looking statements due to a wide range of factors which are set
forth in our annual report on Form 10-K on file with the SEC.
(Tables to Follow)
FIRST FINANCIAL BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
Total interest income $ 3,561 3,590 6,837 6,739
Total interest expense 689 965 1,336 1,965
------------- ------------- ------------- -------------
Net interest income 2,872 2,625 5,501 4,774
Provision for loan losses 55 181 312 376
Noninterest income 1,092 915 2,270 2,140
Noninterest expense 3,405 3,163 6,489 6,006
Provision for income taxes 145 (1) 269 54
------------- ------------- ------------- -------------
Net income $ 359 197 701 478
============= ============= ============= =============
Basic earnings per share:
Net income available for common stock
shareholders $0.22 0.12 0.43 0.29
Weighted average shares 1,629,872 1,624,308 1,629,930 1,625,949
Diluted earnings per share:
Net income available for common stock
shareholders $0.21 0.12 0.41 0.28
Weighted average shares 1,725,308 1,690,867 1,709,470 1,689,008
Selected ratios:
Annualized return on average total equity 7.29% 4.34% 7.17% 5.11%
Annualized return on average total assets 0.53% 0.33% 0.52% 0.42%
Average equity to average assets 7.29% 7.70% 6.56% 5.11%
Net interest margin 5.11% 5.39% 5.11% 4.94%
Selected Balance Sheet Data
(in thousands)
(Unaudited)
-----------------------------------------------------
June 30, December 31, June 30,
2003 2002 2002
--------------- ----------------- -----------------
Total assets $280,512 255,246 241,063
Securities, available for sale 47,971 33,125 47,080
Total loans, gross 172,218 165,519 155,765
Allowance for loan losses 3,260 3,057 2,980
Total demand deposits 127,426 115,503 107,356
Total deposits 246,539 210,679 202,720
Short term borrowings 5,339 14,885 12,360
Trust preferred debt 5,000 5,000 5,000
Total shareholders equity 19,817 19,270 18,377
Nonperforming loans 2,350 2,409 3,454