EXHIBIT 99.1
BLUE VALLEY BAN CORP NEWS RELEASE
11935 Riley
Overland Park, Kansas 66225-6128 CONTACT: Mark A. Fortino
Treasurer
(913) 338-1000
For Immediate Release Thursday, October 14, 2004
BLUE VALLEY BAN CORP REPORTS THIRD QUARTER 2004 EARNINGS
Overland Park, Kansas, October 14, 2004 - Blue Valley Ban Corp (OTCBB: BVBC)
("the Company") today announced net income of $533,000, or fully-diluted
earnings per share (EPS) of $0.23, for the third quarter of 2004, compared to
net income of $1.5 million, or $0.64 per share for the same period in 2003. Net
income for the nine months ended September 30, 2004 was $1.9 million or $0.82
per share, compared to $4.9 million or $2.12 per share for the same period in
2003.
"A decline in mortgage activity resulting from higher mortgage rates has
negatively impacted net interest income and non interest income revenue as
compared to 2003. However, increases in short term rates are beginning to have a
positive effect on our net interest margin" said Robert D. Regnier, Chairman and
CEO of Blue Valley Ban Corp.
OPERATING RESULTS
During the third quarter of 2004, net interest income decreased 6.3% to $4.3
million compared to $4.6 million for the same period in the prior year,
primarily due to compression in our net interest margin resulting from a decline
in the balance and change in the mix of average earning assets as well as the
impact of promotional rates offered on our time deposits. Noninterest income
decreased to $3.3 million during this period from $6.6 million in the prior
year, a decrease of 50.7%. The principal factor driving the decrease in
non-interest income was a decrease in Loans Held for Sale Income resulting from
lower mortgage origination volume. Noninterest expense decreased 26.2% to $6.4
million compared to $8.7 million in the prior year period. The decrease relates
primarily to lower incentive compensation costs associated with mortgage
originations.
For the nine-month period ending September 30, 2004, net interest income
decreased 7.0% to $12.5 million compared to $13.4 million for the same period in
2003, primarily due to compression in our net interest margin resulting from
changes in the mix of earning assets and funding sources. Noninterest income
decreased to $10.8 million during this period from $18.9 million in the prior
year, a decrease of 43.1%. Noninterest expense decreased by 16.6% to $19.5
million compared to $23.4 million in the prior year period. The decrease relates
primarily to lower incentive compensation costs associated with mortgage
originations.
Total assets, loans and deposits at September 30, 2004 were $669.9 million,
$477.8 million and $530.7 million, respectively, compared to $621.4 million,
$413.7 million and $465.0 million one year earlier, respectively, increases of
7.7%, 15.5%, and 14.1%, respectively.
MORTGAGE LOANS HELD FOR SALE CHARGE
In the third quarter of 2004, the Company recorded a reduction in its Loans Held
for Sale Income of $350,000 and also recorded an offsetting Other Liability to
account for the anticipated refund of fee income on residential mortgage loans
underwritten with documentation altered by a former employee of the Company.
Because the affected loans were sold to investors, it is probable that the
Company will either repurchase those loans, or indemnify the investor, and
refund the $350,000 fee income that was earned on those loans when they were
sold to investors. The anticipated repurchase of the affected loans, which will
then be held in the existing residential mortgage loan portfolio of the Company,
is expected to be made in the fourth quarter of 2004 with liquidity currently
available and is not expected to have a significant impact on the Company's
overall liquidity position. Although the exact amount is not currently
determinable, the Company will record an appropriate charge to the provision for
loan losses upon the repurchase of these mortgage loans. Almost all of the
affected mortgage loans are currently paying as agreed, and therefore the
Company expects minimal credit losses from these loans. The Company expects the
anticipated repurchase to have an immaterial impact on its earnings in the
fourth quarter of 2004.
Management of the Company, pursuant to an operational risk assessment of the
situation, has put procedures in place to prevent such documentation issues in
the future.
ABOUT BLUE VALLEY BAN CORP
Blue Valley Ban Corp is a bank holding company that, through its subsidiaries,
provides banking services to business, their owners, professionals and
individuals in Johnson County, Kansas. In addition, the Company originates
residential mortgages nationwide through its InternetMortgage.com website.
This release contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of those safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Company, can
generally be identified by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project," or similar expressions. The Company is
unable to predict the actual results of its future plans or strategies with
certainty. Factors which could have a material adverse effect on the operations
and future prospects of the Company include, but are not limited to,
fluctuations in market rates of interest and loan and deposit pricing; a
deterioration of general economic conditions or the demand for housing in the
Company's market areas; legislative or regulatory changes; adverse developments
in the Company's loan or investment portfolio; any inability to obtain funding
on favorable terms; the loss of key personnel; significant increases in
competition; and the possible dilutive effect of potential acquisitions or
expansions. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.
BLUE VALLEY BAN CORP
THIRD QUARTER 2004
CONSOLIDATED FINANCIAL HIGHLIGHTS
(all dollars in thousands, except per share data)
(unaudited)
Three Months Ended September 30 2004 2003
- ------------------------------- -------- --------
Net interest income $ 4,265 $ 4,552
Provision for loan losses 400 150
Non-interest income 3,270 6,637
Non-interest expense 6,428 8,713
Net income 533 1,495
Net income per share - Basic 0.23 0.66
Net income per share - Diluted 0.23 0.64
Return on average assets 0.32% 0.89%
Return on average equity 5.16% 15.31%
Nine Months Ended September 30
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Net interest income $ 12,454 $ 13,394
Provision for loan losses 1,050 1,350
Non-interest income 10,784 18,974
Non-interest expense 19,501 23,384
Net income 1,924 4,897
Net income per share - Basic 0.84 2.19
Net income per share - Diluted 0.82 2.12
Return on average assets 0.40% 1.05%
Return on average equity 6.27% 17.62%
At September 30
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Assets $669,892 $622,015
Loans 477,761 413,723
Deposits 530,698 464,970
Stockholders' Equity 42,028 39,628