Exhibit 99.1
Superior Financial Corp. Announces First Quarter Financial Results
LITTLE ROCK, Ark.--(BUSINESS WIRE)--May 5, 2003--Superior
Financial Corp. (NASDAQ: SUFI), holding company for Superior Bank,
today announced earnings for the first quarter ended March 31, 2003.
The Company reported net income of $3.8 million or $0.44 diluted
earnings per share, which amounted to an increase in net income of
$57,000 and an increase in diluted earnings per share of $0.01 above
the first quarter results of 2002. Return on average assets for the
Company for the quarter ended March 31, 2003 amounted to 0.89% while
the return on average equity was 11.63%. Bank results for return on
average assets and return on average equity amounted to 1.22% and
11.35%, respectively.
As previously announced on April 24, 2003, the Company reached an
agreement in principle to settle the consolidated federal class action
securities suits, a similar derivative suit pending in state court and
other related litigation involving the Company's former employees. The
settlement agreements, which are subject to final court approval and
call for the Company and its insurance carrier to pay sums well within
the Company's policy limits, are materially less than the Company's
estimate of the potential costs of litigation. The Company's
contribution to the settlement is approximately $475,000 pretax, or
$0.04 per diluted earnings per share, which has been recorded as a
non-recurring expense in the first quarter of 2003.
If the first quarter results were adjusted for the non-recurring
cost of the recently announced legal settlement of $475,000 pretax
($309,000 after tax and $0.04 diluted earnings per share), net income
for the Company would have been $4.2 million and diluted earnings per
share would have been $0.48. These adjusted first quarter "pro-forma
earnings" would have resulted in increases in net income of $366,000,
or 9.6%, and $0.05 in diluted earnings per share, or 11.6%, above the
first quarter of 2002 (See the income statement on page three for the
adjusted earnings calculation).
As previously announced on April 4, 2003, the Company retired its
$51.0 million of 8.65% Senior notes issued in connection with the
acquisition of Superior Bank by the Company. The average cost of the
combined new debt structure, which includes trust preferred securities
and a bank credit facility is approximately 5.0% at current interest
rates.
The Board of Directors authorized the repurchase of up to 405,000
shares of common stock under its fifth repurchase program, as
previously announced on May 1, 2003. The Company has repurchased a
total of 1,844,401 shares of common stock under the previous four
programs or approximately 18% of the outstanding shares over the past
three years.
The Company paid a dividend of $0.125 per share ($0.50 per share
annualized) on April 30, 2003 to shareholders of record on March 31,
2003, as previously announced.
Superior Financial Corp. is the holding company for Superior Bank,
which is a $1.7 billion federal savings bank operating 61 full service
branch and loan production offices in Arkansas and Oklahoma. The bank
has three active subsidiaries - Superior Financial Services, Inc.,
providing discount brokerage and full service investment advisory
services, Southwest Protective Life Insurance Company and Superior
Finance Company, a consumer finance operation. Superior Financial
Corp. stock is traded on the NASDAQ National Market under the symbol
SUFI.
Pursuant to the Safe Harbor provisions of Private Securities
Litigation Reform Act of 1995, the reader is cautioned that this
announcement contains "forward looking statements" regarding
Superior's future performance, which are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements. Any forward
looking statements speak only as of the date the statement was made or
as of such date that may be referenced within the statement. Superior
undertakes no obligation to update or revise any forward-looking
statements.
Superior Financial Corp.
Consolidated Balance Sheets
(Unaudited, dollars in thousands)
March 31, December 31, %
Assets 2003 2002 Change
---------- ----------- ---------
Cash and cash equivalents $ 114,594 $ 84,426 35.7%
Loans available for sale, net 9,332 12,970 (28.0%)
Loans receivable 1,046,571 1,086,310 (3.7%)
Less: allowance for loan losses 13,628 13,861 (1.7%)
---------- ----------- ---------
Loans receivable, net 1,032,943 1,072,449 (3.7%)
Investments available for sale, net 419,317 413,857 1.3%
Accrued interest receivable 12,179 12,575 (3.1%)
Federal Home Loan Bank stock 17,954 17,844 0.6%
Premises and equipment, net 46,460 45,806 1.4%
Mortgage servicing rights, net 8,627 6,565 31.4%
Goodwill 56,260 56,260 0.0%
Real estate acquired in settlement
of loans, net 634 845 (25.0%)
Other assets 28,869 9,794 194.8%
---------- ----------- ---------
Total assets $1,747,169 $ 1,733,391 0.8%
========== =========== =========
Liabilities and Stockholders' equity
Liabilities:
Demand & savings deposits $ 626,345 $ 601,550 4.1%
Time deposits 623,611 609,670 2.3%
---------- ----------- ---------
Total deposits 1,249,956 1,211,220 3.2%
---------- ----------- ---------
Federal Home Loan Bank borrowings 223,000 235,000 (5.1%)
Other borrowed funds 50,848 53,961 (5.8%)
Notes payable 20,000 500 3900.0%
Senior notes - 50,951 (100.0%)
Guaranteed preferred beneficial
interest in the Company's
subordinated debentures 40,000 25,000 60.0%
Custodial escrow balances 11,678 7,363 58.6%
Other liabilities 18,688 16,494 13.3%
---------- ----------- ---------
Total liabilities 1,614,170 1,600,489 0.9%
Stockholders' equity:
Common stock 101 101 -
Capital in excess of par value 94,764 94,764 -
Retained earnings 56,449 53,636 5.2%
Accumulated other comprehensive
income 5,348 5,498 (2.7%)
---------- ----------- ---------
156,662 153,999 1.7%
Treasury stock (at cost) (23,663) (21,097) 12.2%
---------- ----------- ---------
Total stockholders' equity 132,999 132,902 0.1%
---------- ----------- ---------
Total liabilities and
stockholders' equity $1,747,169 $ 1,733,391 0.8%
========== =========== =========
Superior Financial Corp.
Consolidated Income Statements
(Unaudited, dollars in thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2003 2002
---------- ----------
Interest income:
Loans $ 18,962 $ 20,943
Investments 5,217 5,560
Interest-bearing deposits 183 288
Other 110 128
--------- ---------
Total interest income 24,472 26,919
Interest expense:
Deposits 5,660 7,547
FHLB borrowings 3,109 3,103
Other borrowings 2,242 2,306
--------- ---------
Total interest expense 11,011 12,956
--------- ---------
Net interest income 13,461 13,963
Provision for loan losses 1,050 1,250
--------- ---------
Net interest income after provision for loan
losses 12,411 12,713
Noninterest income:
Service charges on deposit accounts 6,382 6,576
Mortgage operations 1,090 674
Income from real estate operations, net 102 100
Other 2,080 850
--------- ---------
Total noninterest income 9,654 8,200
Noninterest expense:
Salaries and employee benefits 8,020 7,501
Occupancy expense 1,159 1,174
Data and item processing 1,983 1,909
Advertising and promotion 338 345
Postage and supplies 856 794
Equipment expense 997 840
Other 3,125 2,744
--------- ---------
Total noninterest expense 16,478 15,307
Income before income taxes 5,587 5,606
Income taxes 1,740 1,816
--------- ---------
Net income, as reported $ 3,847 $ 3,790
========= =========
Legal settlement ($475), net of tax of $166 $ 309 $ -
--------- ---------
Net income, as adjusted $ 4,156 $ 3,790
========= =========
Weighted average number of common shares -
basic 8,413 8,593
Dilutive potential common shares 299 228
Weighted average number of shares - assuming
dilution 8,712 8,821
Basic earnings per common share, as reported $ 0.46 $ 0.44
========= =========
Basic earnings per common share, as adjusted $ 0.50 $ 0.44
========= ========
Diluted earnings per common share, as reported $ 0.44 $ 0.43
========= =========
Diluted Earnings per common share, as adjusted $ 0.48 $ 0.43
========= =========
Superior Financial Corp.
Summary Financial Data
(Unaudited, dollars in thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2003 2002
------------- -------------
Selected Average Balances
Total assets $ 1,744,059 $ 1,712,507
Earning assets 1,563,733 1,545,722
Loans 1,073,364 1,058,746
Interest bearing liabilities 1,474,970 1,449,994
Stockholders' equity 134,132 120,995
Performance Ratios (Company)
Return on average assets 0.89% 0.90%
Return on average common equity 11.63% 12.71%
Net interest margin (FTE) 3.55% 3.82%
Efficiency ratio 72.59% 68.46%
Performance Ratios (Bank)
Return on average assets 1.22% 1.19%
Return on average common equity 11.35% 11.43%
Net interest margin (FTE) 3.96% 4.13%
Efficiency ratio 64.71% 62.29%
Tax-equivalent interest income adjustment $ 331 $ 412
Asset Quality
Nonaccrual loans $ 6,899 $ 10,369
ORE & repossessed assets 1,162 2,879
Net chargeoffs 1,283 1,184
Nonperforming assets to total loans and
other real estate 0.77% 1.26%
Nonperforming assets to total assets 0.46% 0.76%
Net chargeoffs to average loans 0.48% 0.45%
Allowance for loan losses to total loans 1.30% 1.16%
Allowance for loan losses to nonperforming
loans 198% 117%
Capital
End of period shares outstanding 8,279,209 8,600,626
Book value per share $ 16.06 $ 14.06
Average stockholders' equity to average
total assets 7.69% 7.07%
CONTACT: Superior Financial Corp., Little Rock
Robert A. Kuehl, 501/324-7255
www.superiorfinancialcorp.com