Exhibit 99.1
Emclaire Financial Corp. Announces Third Quarter and Year to Date 2003
Earnings
EMLENTON, Pa.--(BUSINESS WIRE)--Oct. 17, 2003--Emclaire Financial
Corp. (OTCBB:EMCF), the parent holding company of the Farmers National
Bank of Emlenton, reported consolidated net income of $649,000 or
$0.51 per share for the three months ended September 30, 2003. Net
income for the quarterly period increased $68,000 or 11.7%, as
compared to net income of $581,000 or $0.44 per share for the quarter
ended September 30, 2002. The Corporation's annualized return on
average assets and equity were 1.00% and 11.65%, respectively, for the
three months ended September 30, 2003, versus 1.00% and 10.26%,
respectively, for the same period in the prior year.
Net income for the nine-month period ended September 30, 2003 was
$1.8 million or $1.38 per share versus $1.6 million or $1.20 per share
for the same period in the prior year. This $223,000 or 13.9% increase
in earnings resulted in an annualized return on average assets and
equity of 0.98% and 10.65%, 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 nine months of 2003, total assets increased
$19.4 million or 8.1% to $257.9 million from $238.6 million. Loans
receivable and investment securities increased $13.1 million and
$5.3 million, respectively, between year-end 2002 and September 30,
2003, while customer deposits increased $11.5 million or 5.6% during
the period to $215.9 million at September 30, 2003. The Corporation
remains well capitalized and is positioned for continued growth with
total stockholders' equity at September 30, 2003 of $22.5 million or
approximately 8.7% of total assets.
As market interest rates have declined and remained historically
low, the Corporation has maintained an interest rate spread in excess
of approximately 3.52% on a taxable equivalent basis for the quarterly
period. Net interest income decreased slightly between the nine-month
period of 2003 versus the nine-month period 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 $77,000 or 1.1% on a taxable equivalent basis. In
addition, in September 2002 the Corporation deployed funds totaling
$4.0 million in bank-owned life insurance whereby resulting earnings
are classified as noninterest income attributing to the aforementioned
increase in noninterest income. For the third quarter of 2003, net
interest income decreased $9,000 on a taxable equivalent basis versus
the same quarter in the prior year.
Average interest earning assets increased $19.4 million or 9.1% to
$232.4 million for the nine months ended September 30, 2003, compared
to $213.1 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 nine months 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 relatively low-risk marketable securities to optimize yields in
the current interest rate environment. During the first nine months of
2003, the yield on interest earning assets decreased 72 basis points
to 6.29% for 2003 versus 7.01% for the same period in 2002.
Increased customer deposits funded loan and security portfolio
growth as average deposits increased $11.3 million or 6.9% to $175.5
million for the nine months ended September 30, 2003 versus $164.3
million for the same period in the prior year. The Corporation's cost
of funds decreased 40 basis points to 2.18% for the first nine months
of 2003 versus 2.58% 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 nine months of
2003 versus the same period in 2002, the Corporation realized
increased noninterest income due in part to increased service fee
income of $73,000 coupled with security gains of $115,000. Also
contributing to increased noninterest income was earnings on bank
owned life insurance totaling $175,000 for the first nine months of
2003. For the first nine months of 2003 versus 2002, noninterest
expenses increased less than 2.0%, while the balance sheet grew by
more than 8.0%.
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 Nine month period
ended September 30, ended September 30,
2003 2002 2003 2002
------- ------- -------- --------
Interest income $3,534 $3,653 $10,618 $10,988
Interest expense 1,227 1,302 3,651 3,880
------- ------- -------- --------
Net interest income 2,307 2,351 6,967 7,108
Provision for loan losses 75 90 225 291
Noninterest income 467 357 1,318 995
Noninterest expense 1,841 1,773 5,658 5,555
------- ------- -------- --------
Net income before provision
for income taxes 858 845 2,402 2,257
Provision for income taxes 209 264 585 663
------- ------- -------- --------
Net income $649 $581 $1,817 $1,594
======= ======= ======== ========
Net income per share $0.51 $0.44 $1.38 $1.20
Dividends per share $0.21 $0.19 $0.63 $0.57
Return on annualized average
assets 1.00% 1.00% 0.98% 0.95%
Return on annualized average
equity 11.65% 10.26% 10.65% 9.73%
Yield on average interest-
earning assets 6.02% 6.79% 6.29% 7.01%
Cost of average interest-
bearing liabilities 2.50% 2.97% 2.59% 3.06%
Net interest margin 3.99% 4.42% 4.19% 4.58%
CONSOLIDATED FINANCIAL CONDITION DATA:
As of As of
9/30/2003 12/31/2002
--------- ----------
Total assets $257,936 $238,577
Cash and equivalents 6,475 7,716
Securities 54,086 48,748
Loans 182,720 169,557
Deposits 215,893 204,425
Borrowed funds 17,930 10,000
Stockholders' equity 22,450 22,680
Book value per share $17.71 $17.02
Net loans to deposits 84.63% 82.94%
Allowance for loan losses to total loans 0.92% 0.93%
Earning assets to total assets 94.63% 94.68%
Stockholders' equity to total assets 8.70% 9.51%
Shares common stock outstanding 1,267,835 1,332,835
CONTACT: Emclaire Financial Corp., Emlenton
David L. Cox, 724-867-2311