EXHIBIT 99.1
PRESS RELEASE
For Release February 17, 2004
Contact: Investor Relations
(800) 200-7032
Website: www.northcountrybank.com
NORTH COUNTRY FINANCIAL CORPORATION ANNOUNCES
ANNUAL RESULTS FOR 2003
(Manistique, Michigan) - North Country Financial Corporation (Nasdaq: NCFC),
the holding company for North Country Bank and Trust, has reported a net loss of
$9.6 million, or $1.37 per share, for the year ended December 31, 2003, compared
to a net loss of $26.7 million, or $3.81 per share, for 2002.
For the fourth quarter of 2003, the net loss was $2.5 million, or $.36 per
share, and for the quarter ended December 31, 2002 the net loss was $18.1
million or $2.59 per share.
The 2003 operational results, although disappointing, represent a loss reduction
of $17.1 million from that reported in 2002. "The challenges and difficulties
encountered by the Corporation in 2002 and 2003 have also spurred implementation
of essential cultural and business practice changes that will serve as a
foundation in moving the Corporation toward recovery in future periods,"
commented C. James Bess, President and C.E.O. "We have made adjustments that we
believe will have a positive impact on the Company's overall condition and
operating performance in 2004."
Total assets of the Corporation declined from $565.3 million at the end of 2002
to $422.5 million at 2003 year-end. The decrease in assets is largely due to a
combination of deposit runoff, as deposits decreased by $132 million, and loan
reductions of $137 million. The Corporation's shareholders' equity showed a $9.8
million decline, primarily as a result of the operating loss.
Bess stated "Management and the Board of Directors continue to work diligently
to address areas to improve the Corporation's financial condition and future
viability. During the year key management staff was added to implement improved
processes and provide leadership. We know that the right people providing good
leadership are key to a successful future."
Headquartered in Manistique, Michigan, North Country Financial Corporation is a
financial services company providing a full range of commercial, consumer, and
mortgage banking services to a client base throughout northern Michigan. North
Country Bank and Trust, its primary subsidiary, currently has 22 branch
locations conveniently located throughout Michigan's Upper Peninsula and
northern Lower Michigan.
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NORTH COUNTRY FINANCIAL CORPORATION
Consolidated Balance Sheets
(UNAUDITED)
December 31, December 31,
(In thousands) 2003 2002
- ------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 7,433 $ 17,542
Federal funds sold 15,600 26,250
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Total cash and cash equivalents 23,033 43,792
Interest-bearing deposits in other financial institutions 6,048 2,010
Securities available for sale 84,774 67,955
Federal Home Loan Bank stock 4,544 4,375
Total Loans 297,846 435,043
Allowance for loan losses (22,005) (24,908)
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Net loans 275,841 410,135
Premises and equipment 13,747 15,592
Other real estate held for sale 4,356 5,409
Other assets 10,196 16,038
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TOTAL ASSETS $ 422,539 $ 565,306
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing deposits $ 26,179 $ 40,797
Interest-bearing deposits 279,615 396,697
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Total deposits 305,794 437,494
Borrowings 87,026 87,815
Guaranteed preferred beneficial interests in the Corporation's
Subordinated debentures 12,450 12,450
Other liabilities 6,569 7,044
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Total Liabilities 411,839 544,803
SHAREHOLDERS' EQUITY
Preferred stock -- No par value:
Authorized 500,000 shares, no shares outstanding -0- -0-
Common stock -- No par value:
Authorized -- 18,000,000 shares
Issued and outstanding -- 7,019,152 16,175 16,175
Retained earnings (6,502) 3,086
Accumulated other comprehensive income 1,027 1,242
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TOTAL SHAREHOLDERS' EQUITY 10,700 20,503
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 422,539 $ 565,306
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NORTH COUNTRY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended Year to Date
December 31, December 31,
(In thousands, except per share information) 2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------
INTEREST INCOME:
Interest and fees on loans:
Taxable $ 3,900 $ 6,416 $ 18,999 $ 29,615
Tax-exempt 355 521 1,534 2,256
Interest on securities:
Taxable 678 579 2,277 3,360
Tax-exempt 43 66 230 266
Other interest income 128 328 601 472
------------- ------------- ------------- -------------
Total interest income 5,104 7,910 23,641 35,969
------------- ------------- ------------- -------------
INTEREST EXPENSE:
Deposits 1,916 2,918 8,695 12,444
Borrowings 1,221 1,269 4,832 5,100
Subordinated debentures 121 131 488 545
------------- ------------- ------------- -------------
Total interest expense 3,258 4,318 14,015 18,089
------------- ------------- ------------- -------------
NET INTEREST INCOME 1,846 3,592 9,626 17,880
Provision for loan losses -0- 9,607 -0- 26,658
------------- ------------- ------------- --------------
NET INTEREST INCOME (LOSS) AFTER
PROVISION FOR LOAN LOSSES 1,846 (6,015) 9,626 (8,778)
------------- -------------- ------------- --------------
OTHER INCOME:
Service fees 324 504 1,529 1,899
Net securities gains 192 77 58 746
Net gains on sale of loans 10 59 427 506
Gain on sale of branches -0- 464 136 464
Other loan and lease income 3 217 -0- 1,095
Other 203 31 1,081 548
------------- ------------- ------------- ----------
Total other income 732 1,352 3,231 5,258
------------- ------------- ------------- ----------
OTHER EXPENSES:
Salaries, commissions, and related
benefits 1,498 1,911 5,973 7,589
Occupancy and equipment expense 621 755 2,754 3,066
Impairment loss on intangible
and other real estate assets 259 6,065 822 6,065
Other 2,664 2,955 10,567 10,343
------------- ------------- ------------- --------------
Total other expense 5,042 11,686 20,116 27,063
------------- ------------- ------------- --------------
INCOME (LOSS) BEFORE INCOME TAX (2,464) (16,349) (7,259) (30,583)
Provision (credit) for income tax -0- 1,778 2,329 (3,870)
-------------- ------------- ------------- --------------
NET INCOME (LOSS) $ (2,464) $ (18,127) $ (9,588) $ (26,713)
============== ============== ============== ==============
EARNINGS (LOSS) PER SHARE:
BASIC $ ( 0.36) $ (2.59) $ 1.37 $ (3.81)
============== ============== ============== ==============
DILUTED $ ( 0.36) $ (2.59) $ 1.37 $ (3.81)
============== ============== ============== ==============
DIVIDENDS DECLARED PER COMMON SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.30
============= ============== ============== ==============
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