Exhibit 99.1
Emclaire Financial Corp. Announces Second Quarter and Year to Date
2003 Earnings
EMLENTON, Pa.--(BUSINESS WIRE)--July 17, 2003--Emclaire Financial
Corp. (OTCBB:EMCF), the parent holding company of the Farmers National
Bank of Emlenton, reported consolidated net income of $625,000 or
$0.47 per share for the three months ended June 30, 2003. Net income
for the quarterly period increased $95,000 or 17.9%, as compared to
net income of $530,000 or $0.40 per share for the quarter ended June
30, 2002. The Corporation's annualized return on average assets and
equity were 1.00% and 10.69%, respectively, for the three months ended
June 30, 2003, versus 0.95% and 9.75%, respectively, for the same
period in the prior year.
Net income for the six-month period ended June 30, 2003 was
$1.2 million or $0.88 per share versus $1.0 million or $0.76 per share
for the same period in the prior year. This $155,000 or 15.3% increase
in earnings resulted in an annualized return on average assets and
equity of 0.96% and 10.16%, respectively, for the current year to date
period.
The Corporation's improved operating results for the quarterly and
year to date periods can be attributed to increased noninterest income
and a reduction in the provision for loan losses along with the
containment of noninterest expenses as balance sheet growth has
continued.
During the first half of 2003, total assets increased
$15.6 million or 6.6% to $254.2 million from $238.6 million. Loans
receivable and investment securities increased $7.3 million and
$7.6 million, respectively, between year-end 2002 and June 30, 2003,
while customer deposits increased $9.8 million or 4.8% during the
period to $214.2 million at June 30, 2003. The Corporation remains
well capitalized and is positioned for continued growth with total
stockholders' equity at June 30, 2003 of $22.8 million or
approximately 9.0% of total assets.
As market interest rates have declined and remained historically
low, the Corporation has maintained an interest rate spread in excess
of 3.70% on a taxable equivalent basis. Net interest income decreased
slightly between the first half of 2003 versus the first half of 2002
as a result of the collection of $93,000 of interest in the first
quarter of 2002 due to the payoff of a previously non-performing
commercial real estate loan. Excluding consideration of this payment,
net interest income would have increased $62,000 or 1.3% on a taxable
equivalent basis. In addition, in September 2002 the Corporation
deployed funds totaling $4.0 million in bank-owned life insurance
where resulting earnings are classified as noninterest income
attributing to the aforementioned increase in noninterest income. For
the second quarter of 2003, net interest income increased $8,000 on a
taxable equivalent basis versus the same quarter in the prior year.
David L. Cox, Chairman of the Board, President and Chief Executive
Officer, noted that the compression in the Corporation's interest rate
spread between the 2003 and 2002 periods has been effectively offset
by expansion of the balance sheet as the volume of earning assets,
fueled by continued deposit growth, has served to stabilize and
improve net interest income. Management has been employing and will
continue to explore asset liability management techniques to mitigate
this margin compression, which is being experienced industry wide.
Average interest earning assets increased $18.9 million or 9.0% to
$228.6 million for the six months ended June 30, 2003, compared to
$209.8 million for the same period in the prior year. Contributing to
the increase in average earning assets were increases in average loans
receivable and securities during the first half of 2003 versus the
same period last year. This increase can be attributed to continued
loan growth as a result of steady market demand, particularly with
consumer home equity and commercial loan products. Security portfolio
growth has been experienced as management seeks to deploy funds,
generated by deposit growth that outpaces loan demand, into safe,
sound marketable securities where optimal yields can be realized in
the current interest rate environment. During the first half of 2003,
the yield on interest earning assets decreased 75 basis points to
6.43% for 2003 versus 7.18% for the same period in 2002.
Increased customer deposits funded loan and security portfolio
growth as average deposits increased $16.6 million or 8.6% to
$209.4 million for the six months ended June 30, 2003 versus
$192.9 million for the same period in the prior year. The
Corporation's cost of funds decreased 40 basis points to 2.22% for the
first six months of 2003 versus 2.62% for the same period in 2002.
Also contributing to the improved earnings for the quarterly and
year to date periods were increases in noninterest income and the
containment of operating expenses. During the first six months of 2003
versus the same period in 2002, the Corporation realized increased
noninterest income due in part to increased service fee income of
$48,000 coupled with security and loan sale gains of $55,000 and
$18,000, respectively. Also contributing to increased noninterest
income was earnings on bank owned life insurance totaling $117,000 for
the first half of 2003. For the first six months of 2003 versus 2002,
noninterest expenses increased less than 1.0%, while the balance sheet
grew by more than 5.0%.
Mr. Cox stated that, "We continue to aggressively control
operating expenses while we manage the Corporation's asset/liability
mix, interest rate spread, credit quality and capital levels. During
2003 we have selectively realized security gains primarily to mitigate
risk in the Bank's investment portfolio and enhance earnings in this
difficult economic environment. In June 2003, we purchased $1.3
million of the Corporation's common stock. These purchases are part of
the Corporation's efforts to monitor equity levels while maintaining
sound credit quality and keeping operating expenses stable during this
period of continued growth for the Bank."
Emclaire Financial Corp. is the parent company of The Farmers
National Bank of Emlenton, an independent, nationally chartered,
FDIC-insured community bank headquartered in Emlenton, Pennsylvania,
operating ten full service offices in Venango, Butler, Clarion,
Clearfield, Elk and Jefferson counties, Pennsylvania. The
Corporation's common stock is quoted on and traded through the OTC
Electronic Bulletin Board under the symbol "EMCF". For more
information, visit the Corporation's website at
"www.emclairefinancial.com".
This news release may contain forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risk and uncertainties which
could cause actual results to differ materially from those currently
anticipated due to a number of factors. Such factors include, but are
not limited to, changes in interest rates which could effect net
interest margins and net interest income, the possibility that
increased demand or prices for the Corporation's financial services
and products may not occur, changing economic and competitive
conditions, technological and regulatory developments, and other risks
and uncertainties, including those detailed in the Corporation's
filings with the Securities and Exchange Commission. The Corporation
does not undertake, and specifically disclaims any obligation to
update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such
statements.
EMCLAIRE FINANCIAL CORP. AND SUBSIDIARY
Financial Highlights
(Unaudited - Dollar amounts in thousands, except share data)
CONSOLIDATED OPERATING RESULTS DATA:
Three month period Six month period
ended June 30, ended June 30,
2003 2002 2003 2002
--------- -------- -------- ---------
Interest income $3,539 $3,655 $7,084 $7,336
Interest expense 1,207 1,290 2,424 2,578
--------- -------- -------- ---------
Net interest income 2,332 2,365 4,660 4,758
Provision for loan losses 75 90 150 201
Noninterest income 469 342 852 639
Noninterest expense 1,898 1,868 3,817 3,783
--------- -------- -------- ---------
Net income before provision for
income taxes 828 749 1,545 1,413
Provision for income taxes 203 219 377 400
--------- -------- -------- ---------
Net income $625 $530 $1,168 $1,013
========= ======== ======== =========
Net income per share $0.47 $0.40 $0.88 $0.76
Dividends per share $0.21 $0.19 $0.42 $0.38
Return on annualized average assets 1.00% 0.95% 0.96% 0.92%
Return on annualized average equity 10.69% 9.75% 10.16% 9.45%
Yield on average interest-earning
assets 6.26% 7.02% 6.43% 7.18%
Cost of average interest-bearing
liabilities 2.57% 3.06% 2.63% 3.10%
Net interest margin 4.19% 4.59% 4.29% 4.70%
CONSOLIDATED FINANCIAL CONDITION DATA:
As of As of
06/30/03 12/31/02
---------- ----------
Total assets $254,206 $238,577
Cash and equivalents 7,049 7,716
Securities 56,316 48,748
Loans 176,843 169,557
Deposits 214,227 204,425
Borrowed funds 15,225 10,000
Stockholders' equity 22,835 22,680
Book value per share $17.80 $17.02
Net loans to deposits 82.55% 82.94%
Allowance for loan losses to total loans 0.95% 0.93%
Earning assets to total assets 94.25% 94.68%
Stockholders' equity to total assets 8.98% 9.51%
Shares common stock outstanding 1,282,835 1,332,835
CONTACT: Emclaire Financial Corp., Emlenton
David L. Cox or William C. Marsh, 724-867-2311