Exhibit 99.1
STATEFED FINANCIAL CORPORATION
13523 University Avenue
Clive, Iowa 50325
For Immediate Release
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StateFed Financial Corp. Reports Second-Quarter Earnings
DES MOINES, Iowa (February 14, 2003) -- StateFed Financial Corporation (NASDAQ:
"SFFC"), the parent company of State Federal Bank, today reported net loss of
$2,100 for the quarter ended December 31, 2002, the second quarter of the
company's fiscal-year 2003. The results total $0.00 basic earnings per share
compared to $0.34 cents per share for the same quarter a year earlier. For the
first six months of fiscal year 2003, the bank realized a net profit of $2,000.
Net interest income after provision for loans increased 24 percent for
the quarter to $788,200 and rose 11 percent for the first six months of the
fiscal year to $1.5 million. Non-interest income, excluding the impact of real
estate operations, jumped 228 percent as a result of increased fee income and
gains on the sale of loans to the secondary market. Sales of other financial
products and services, including insurance and investments, continued to produce
increases in fee and commission income.
Despite improvement in net interest income after provisions and
increased loan production, the company's earnings continued to be adversely
affected by non-performing credits, high occupancy costs and increased expenses
associated with new systems and the hiring of experienced lending and financial
staff. Non-interest expenses increased for the quarter and the first half of the
year 19 percent and 20 percent, respectively.
"Keeping with the strategic plan, we diversified our lending activities
to include originating for the secondary market. In addition, we made a
concerted effort to increase accounts and build fee income to the appropriate
level for a bank of our size," said Randall C. Bray, chairman of the board. "The
trend line for interest income and non-interest income is on the right track.
Going forward, containing expenses and exacting more productivity from every
resource remain our key objectives."
Loan production for the first half of fiscal year 2003 reached $16
million, more than double the activity for the first half of fiscal-year 2002,
which totaled $7.5 million. The pace of refinancings and the company's decision
to sell approximately 40 percent of its conforming mortgages to the secondary
market kept growth modest with net loans standing at $85.5 million at the end of
the second fiscal quarter compared to $84.8 million at June 30, 2002. In
addition the company held $1.8 million in loans for sale.
"We have the infrastructure, people and systems in place now to grow
our loan portfolio at a far more rigorous pace than we've been able to in the
past," Bray said. "Lending plays such a core role in
our performance, driving interest income and to a lesser extent fee income.
Appropriate investments in our lending program will be essential to future
growth."
According to plan, StateFed experienced double-digit deposit growth of
12 percent with footings totaling $75.1 million at December 31, 2002 compared to
$66.9 million at June 30, 2002. The company also continued to repay advance
balances with the Federal Home Loan Bank. On December 31, 2002, advances had
dropped to $9 million, down 36 percent, from $14 million at June 30, 2002.
Accordingly, StateFed decreased its interest expense associated with advances by
39 percent.
On December 31, 2002, StateFed reported total assets of $98.9 million
and stockholders' equity of $14.0 million. State Federal Bank remains "well
capitalized" under federal banking regulations.
The Corporation's stock is traded on the NASDAQ Small-Cap Market under
the symbol "SFFC". When used in this press release or other public shareholder
communications, or in oral statements made with the approval of an authorized
executive officer, the words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," "significantly" or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. The Company
wishes to caution readers not to place undue reliance on any forward-looking
statements, which speak only as of the date made, and to advise readers that
various factors including regional and national economic conditions, changes in
levels of market interest rates, credit risks of lending activities and
competitive and regulatory factors could affect the Bank's financial performance
and could cause the Company's actual results for future periods to differ
materially from those anticipated or projected.
The Company does not undertake, and specifically disclaims, any
obligations to publicly release the result of any revisions that may be made to
any forward-looking statements to reflect the occurrence of events or
circumstances after the date of such statements.
For information, contact: Randall C. Bray, chairman, president & CEO,
515-252-0813.
STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, 2002 and June 30, 2002
(Unaudited)
ASSETS
December 31, 2002 June 30, 2002
Cash and amounts due from depository institutions $ 2,981,700 $ 3,114,700
Investments in certificates of deposit 99,000 99,000
Investment securities available for sale 1,289,300 1,323,900
Loans held for sale 1,830,400 -
Loans receivable, net 85,533,300 84,771,500
Real estate held for sale, net 540,500 540,500
Property acquired in settlement of loans 419,300 364,600
Office property and equipment, net 3,443,500 3,405,700
Federal Home Loan Bank stock, at cost 1,762,200 1,762,200
Accrued interest receivable 535,900 572,400
Deferred income taxes 128,600 142,100
Other assets 325,500 308,600
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TOTAL ASSETS $ 98,889,200 $ 96,405,200
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 75,114,300 $ 66,901,100
Advances from Federal Home Loan Bank 9,000,000 14,000,000
Advances from borrowers for taxes and insurance 347,700 351,400
Accrued interest payable 2,500 174,900
Dividends payable 127,900 127,900
Income taxes payable 8,500 305,200
Other liabilities 291,000 349,100
----------------- -----------------
TOTAL LIABILITIES 84,891,900 82,209,600
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Stockholders' equity:
Common stock 17,800 17,800
Additional paid-in capital 8,559,900 8,527,900
Unearned compensation - Employee Stock Ownership Plan (57,800) (85,500)
Accumulated other comprehensive income - unrealized gains
on investment securities available for sale, net of deferred taxes 23,300 27,500
Treasury stock (5,172,500) (5,172,500)
Retained earnings - substantially restricted 10,626,600 10,880,400
----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 13,997,300 14,195,600
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 98,889,200 $ 96,405,200
================= =================
STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATION
For the Three and Six Month Periods Ended December 31, 2002
and December 31, 2001
(Unaudited)
Three Months Ended Six Months Ended
December 31 December 31
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2002 2001 2002 2001
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Interest Income:
Loans $ 1,614,500 $1,797,100 $ 3,263,000 $ 3,643,100
Investments & other 32,900 63,500 68,000 167,800
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Total interest income 1,647,400 1,860,600 3,331,000 3,810,900
Interest Expense:
Deposits 694,800 840,000 1,370,200 1,693,500
Borrowings 164,400 232,500 361,700 588,300
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Total interest expense 859,200 1,072,500 1,731,900 2,281,800
Net interest income 788,200 788,100 1,599,100 1,529,100
provision for loan losses - 154,000 103,100 178,000
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Net interest income
provision for loan losses 788,200 634,100 1,496,000 1,351,100
Non-interest Income:
Real estate operations 13,300 107,100 26,100 234,900
Gain on sales of loans 43,700 - 43,700 -
Gain on sale of real estate, net - 638,200 - 638,200
Other 66,500 33,600 124,600 62,200
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Total non-interest income 123,500 778,900 194,400 935,300
Noninterest Expense:
Salaries and benefits 435,800 339,800 809,700 665,500
Real estate operations - 60,100 - 141,100
Occupancy and equipment 127,300 99,400 297,300 174,000
FDIC premiums and OTS assessments 10,800 12,900 21,700 22,300
Data processing 42,200 31,400 84,800 64,400
Other 313,500 237,600 514,400 376,600
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Total non-interest expense 929,600 781,200 1,727,900 1,443,900
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Income (loss) before income taxes (17,900) 631,800 (37,500) 842,500
Income tax expense (benefit) (15,800) 202,200 (39,500) 269,500
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Net income (loss) $ (2,100) $ 429,600 $ 2,000 $ 573,000
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Basic earnings per share $ - $ 0.34 $ - $0.46
Diluted earnings per share - 0.33 - 0.45
Dividends declared per common share $ 0.10 $ 0.10 $ 0.10 $ 0.10