Exhibit 99.1
November 25, 2003
To Our Valued Shareholders:
As we enter into this holiday season, we wish to bring greetings to you and your
loved ones. We hope this season finds you well in health and spirit.
Enclosed with this letter is our recent press release announcing our third
quarter and year to date performance as of September 30, 2003. Let us share with
you some key facts regarding our performance in 2003:
o As of September 30, 2003 our total assets grew by 18% over the past year to
$290 million putting us in line to beat our announced goal of reaching $300
million by year end. Moreover, total loans, earning assets and total
deposits similarly experienced important growth justifying our optimism
that the Company is well positioned for increased profitability. This is
not a meaningless achievement; as we spread our costs over more assets, the
benefits will drop straight to the bottom line. As shareholders you should
be the winners.
o On September 2, 2003, we opened a new branch in Downtown Sacramento. By the
end of October, the Branch had already exceeded its year end deposit goals.
o Bank of Lodi's deposit growth rate during the past 12 months exceeded the
market growth rate in each and every one of the markets in which it
operates as reflected in the FDIC Summary of Deposits Report reports as of
June 30, 2003.
o While net income for the nine months ending September 30, 2003 totaled
$892,000 (a decline of $198,000 from the prior year), our income from
continuing operations has increased. Net interest income for the period
grew by $433,000 but non-recurring items detailed in the press release
(such as gains from sales of securities and expenses related to dissident
directors) have resulted in an unfavorable comparison. The enclosed release
provides the details of these figures.
All of this has been achieved in the face of the drumbeat of bad publicity
intentionally generated by three dissident directors who have used their
falsehoods, half-truths and innuendo to create a series of negative articles in
the press, including one in the Sacramento Bee at the very moment Bank of Lodi
launched our new branch there. This is the very branch that they voted in favor
of as Board members. As shareholders you should consider the following: how do
they think that they are helping to create shareholder value by attacking the
Bank's good name in the Sacramento press as it invests capital in the vital
strategic market which they voted to support? Just think of where our Company
could be without their interference.
Thus, we are compelled to express our thoughts and feelings about the harm being
caused by these three dissident directors who recently sent you a letter full of
misrepresentations:
o The dissidents claim the Company's Strategic Plan is not working; we
adamantly disagree. The Plan is moving us closer to the profitability
and value that we all expect from the Company. But we hasten to remind
you that this Strategic Plan was fully considered and adopted by the
full Board, including the three dissident directors. Now, after voting
in favor of the Plan, they are harming Bank of Lodi with their
deliberate misrepresentations.
o They falsely claim that an independent compensation study has not been
done since early 2002 or if one has been done, it was not communicated
to the full Board of Directors. How deceitful is this? Well, the most
recent independent study was presented to the Bank of Lodi Compensation
Committee (comprised of independent directors) at its meeting held on
February 19, 2003 at which dissident director Kevin Van Steenberge was
present (and it was Van Steenberge who later made the motion for the
full Board to approve the minutes of that Committee meeting).
o They grossly distort Leon Zimmerman's annual compensation using the
figure of $1 million to inflame shareholders. Leon's salary, stock
option and other benefits are disclosed in the Company's annual proxy
in conformity with the SEC's rules and regulations for all to see (just
click on the link to 1st Financial Bancorp at www.bankoflodi.com).
Again, the level of deceit in their letter is well known to director
Van Steenberge who attended the Board's Compensation Committee meeting
and reviewed the independent report prepared by a highly regarded
independent community bank compensation consulting firm which was
presented to the Committee.
o The dissidents disagree with the granting of options to the Bank's
Board and some newly hired Bank officers. In fact these options were
granted in accordance with a Board approved compensation program that
was voted on by the Board in February 2000 (including dissident
directors Anagnos and Coldani). Under the Plan, outside directors
receive option grants every three years, the first grant occurring in
May 2000 when dissident director Coldani made the initial motion to
grant options to himself and the other outside directors. The
dissidents continue their lies by saying that options were granted to
Executive Management which simply is not true (and they were all three
in attendance at the meeting).
While we can sympathize with the confusion that you may feel based on the
barrage of falsehoods from these dissidents, we only ask that you regard them
for what they are: troublemakers with a hidden agenda and no regard for good
corporate governance or for the truth. We are convinced that you will see
through all of this as you examine the facts (and not the hysteria that they
produce). We welcome your questions and feedback.
First Financial Bancorp and Bank of Lodi are continuing to succeed in achieving
their objectives. We are dedicated to making this Company more profitable and
the Bank "Simply A Better Bank."
Sincerely,
/s/ Leon Zimmerman /s/ Benjamin R. Goehring
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Leon Zimmerman Benjamin R. Goehring
President and CEO Chairman of the Board
leon.z@bankoflodi.com ben.g@bankoflodi.com
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In addition to historical information, this letter includes certain
forward-looking statements regarding events and trends which may affect the
Company's future results. We accept no obligation to update these statements.
Many factors could affect the future results and cause results to differ
materially. The statements in this release are not guarantees of future
performance. Such risks and uncertainties include those related to the economic
environment, particularly in the areas where Bank of Lodi operates, competitive
products and pricing, general interest rate changes and the fiscal and monetary
policies of the US Government, credit risk management, regulatory actions, and
other risks and uncertainties discussed from time to time in First Financial
Bancorp's public securities filing.
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