EXHIBIT 99
PRESS RELEASE
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FOR IMMEDIATE RELEASE
DATE: April 11, 2003
COMPANY: Grand Central Financial Corp.
CONTACT: David C. Vernon
PHONE: 330-532-1517
FAX: 330-532-3875
WELLSVILLE, OHIO-April 11, 2003 - Grand Central Financial Corp. (Nasdaq: GCFC)
today announced financial results for the first quarter ended March 31, 2003.
Grand Central Financial Corp. (Grand Central), parent company of Central Federal
Savings and Loan (Association), reported 2003 first quarter net loss of
$1,123,000, after a pre-tax restructuring charge of $1,840,000, a decrease from
the 2002 first quarter net income of $210,000. Basic and diluted earnings (loss)
per share for the 2003 first quarter were ($.74) compared with $.13 for the same
period in 2002, a decrease of 669%.
"These are one time charges designed to eliminate, in the future, the cost of
the ESOP, the defined benefit pension plan and other costs associated with
existing contracts." said David C. Vernon, Chairman and Chief Executive Officer.
The company also reported that Kelley L. Nanna, CPA, joined Grand Central as
Treasurer on April 8, 2003. For the past eight years Ms. Nanna has been with
KPMG LLP.
Net interest income decreased 12% during the 2003 first quarter compared with
the first quarter of 2002. Decreases in the mortgage loan, consumer loan and
investment portfolios, although offset by a decrease in interest bearing
deposits and FHLB advances, contributed to the net interest income decrease.
Non-interest income remained relatively consistent with the first quarter of
2002, while non-interest expense increased by 236% in comparison to the first
quarter of 2002 primarily because of the pre-tax charge. The non-operating
pre-tax restructuring charge of $1,840,000 resulted from termination of the
Association's leveraged ESOP, pension plan, a supplemental Executive Retirement
Agreement in connection with the retirement of William R. Williams as President
effective April 23, 2003 and an agreement with John A. Rife, Executive Vice
President and Treasurer.
Grand Central reported that annualized return on average assets for the first
quarter of 2003 was (2.79%), compared with .48% for the first quarter of 2002.
The annualized return on average shareholders' equity for the first quarter of
2003 was (17.85%) compared with 3.06% for the first quarter of 2002.
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Consolidated assets decreased 13% to $105.8 million at March 31, 2003, down
$15.1 million from March 31, 2002. Net loans decreased 28% to $59.8 million from
$78.8 million as a result of the sale of single family mortgage loans.
Consolidated liabilities decreased 13% to $89.4 million at March 31, 2003, down
$13.3 million from March 31, 2002. Borrowings were $11.3 million at March 31,
2003, compared with $25.4 million one year ago, down 56%, attributable to
decreases in Federal Home Loan Bank advances of $7.1 million and loans payable
of $7 million.
At March 31, 2003, shareholders' equity was $16.4 million, down $1.8 million or
10% from one year ago; and book value per share declined to $6.61 versus $7.23
per share at March 31, 2002. The Association continues to exceed all applicable
regulatory capital requirements. Under Federal Deposit Insurance Corporation
(FDIC) guidelines, the Association is categorized as "well capitalized" which is
the highest rating category available.
On March 21, 2003, Grand Central's Board of Directors declared a first-quarter
cash dividend of $0.09 per share. The cash dividend was paid on April 7, 2003,
to shareholders of record on April 7, 2003.
Grand Central's Annual Meeting of Shareholders will be held at 10:00 a.m. (EST)
on April 23, 2003 at East Liverpool Motor Lodge, 2340 Dresden Avenue, East
Liverpool, Ohio. The Grand Central 2002 financial performance is included in its
2002 Annual Report, which was released in March 2003.
FINANCIAL HIGHLIGHTS
(In thousands, except per share data; unaudited)
Three months ended March 31,
--------------------------------------------------------
Percent
2003 2002 Change
---- ---- ------
Net interest income $867 $988 (12.25%)
Net income (loss) ($1,123) $210 (434.76%)
Earnings (loss) per share, basic ($.74) $.13 (669.23%)
Earnings (loss) per share, diluted ($.74) $.13 (669.23%)
Dividends per share declared $.09 $.09 --
Return on average assets (4.25%) .73% (482.19%)
Return on average equity (27.44%) 4.58% (499.13%)
Net interest margin 3.36% 3.50% (4.00%)
Total assets $105,794 $115,434 (8.35%)
Net loans $60,359 $66,399 (9.10%)
Total deposits $75,531 $77,004 (1.91%)
Borrowings $11,304 $19,025 (40.58%)
Total shareholder's equity $16,376 $18,298 (10.50%)
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ABOUT GRAND CENTRAL
Grand Central Financial Corp. was organized as a Delaware corporation in
September 1998 as the holding company for Central Federal Savings and Loan in
connection with its conversion from a mutual to stock organization. Central
Federal Savings and Loan is a community-oriented savings institution which was
originally organized in 1892.
This release contains certain forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. We intend these
forward-looking statements to be subject tot he safe harbor created by that
provision. These forward-looking statements involve risks and uncertainties and
include, but are not limited to, statements regarding future events and our
plans, goals and objectives. Our actual results may differ materially from these
statements. Although we believe the assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove to be inaccurate.
Therefore, we can give no assurance that the results contemplated in these
forward-looking statements will be realized. The inclusion of this
forward-looking information should not be regarded as a representation by our
company or by any person that the future events, plans or expectations
contemplated by our company will be achieved. Furthermore, past performance in
operations and share price is not necessarily predictive of future performance.
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