EXHIBIT 99.1
First Financial Bancorp Reports Double Digit Growth in Assets, Loans
and Deposits and Results of Fourth Quarter and Year to Date Earnings
LODI, Calif.--(BUSINESS WIRE)--March 5, 2004--First Financial
Bancorp (OTCBB:FLLC) the parent company of Bank of Lodi, N.A., today
announced that as of December 31, 2003, the Company exceeded its
year-end goal of $300 million in assets. In addition, the Company
reported that it continues to achieve its growth objectives, realizing
double-digit growth in assets, loans and deposits. Total assets
reached $321 million, representing a $66 million, or 25.9% increase
over 2002. Furthermore, during 2003 total gross loans increased $17
million, or 10.3%, to total $183 million and deposits increased $67
million, or 32.0%, to total $278 million at December 31, 2003. Year to
date, net income for the Company totaled $1,177,000, or $0.68 per
diluted share representing a $178,000 or 13% decrease over 2002's net
income of $1,355,000. For the fourth quarter of 2003, net income
totaled $285,000, or $0.16 per diluted share as compared to $265,000
or $0.15 per diluted share for the same period in 2002.
During 2003, the Company incurred unanticipated costs totaling
$373,000 in response to disruptive actions initiated by three
dissident directors. On an after tax basis (using statutory tax rates)
these expenses totaled $220,000, representing a reduction of $.14 and
$.13 in basic and diluted earnings per share for 2003, respectively.
Excluding the expenses associated with the dissident directors, net
income would have increased $42,000, or 3.1% over 2002. Additionally,
in September 2003, the Company opened a branch office in downtown
Sacramento. While the performance of the new branch exceeded
management's budget projections, during 2003 the branch incurred an
after tax loss (using statutory tax rates) totaling $156,000.
Excluding the expenses associated with the dissident directors
combined with the startup costs associated with the new branch in
downtown Sacramento, net income increased $198,000 or 14.6% over 2002.
"Our plan for growth and expansion continues to succeed and the
results are enhancing shareholder value," reported Leon Zimmerman,
President and Chief Executive Officer, "We are achieving our
objectives and greatly appreciate the support of our many loyal
customers, employees and shareholders as we continue to implement our
strategic plan."
The growth trend for both average earning assets and deposits
continued in 2003, increasing 18.9% and 18.5%, respectively, over
2002. Net interest income in 2003 increased 5.9%, to $10,825,000 from
$10,218,000 in 2002. However, as a result of a lower interest rate
environment in 2003 when compared to 2002, the net interest margin
decreased to 4.56% for 2003 compared to 5.12% for 2002. Changes in the
balance sheet mix and the decrease in general interest rates as a
result of actions undertaken by the Federal Reserve, have resulted in
net interest margin compression over the past three years.
Net interest income totaled $2,878,000 during the fourth quarter
of 2003, representing an increase of $174,000 over the $2,704,000
earned during the same period in 2002. The increase resulted from the
net effect of an increase in interest income totaling $230,000
combined with an increase of $56,000 in interest expense. As a result
of a lower interest rate environment in 2003 when compared to 2002,
the Company experienced a decrease in the yield on average earning
assets, from 6.58% during the fourth quarter of 2002 to 5.51% during
the fourth quarter of 2003. In addition, the Company's average cost of
funds decreased from 1.25% during the fourth quarter of 2002 to 1.07%
during the fourth quarter of 2003.
The provision for loan losses totaled $312,000 and $625,000 for
the year ending December 31, 2003 and 2002, respectively. For the
three-month period ending December 31, 2003 and 2002 the provision for
loan losses was $0 and $87,000, respectively. Net charge-offs for the
year ending December 31, 2003 totaled $107,000 as compared to $236,000
for 2002. At December 31, 2003, nonperforming loans totaled $3,880,000
or 2.1% of gross loans as compared to $2,409,000, or 1.5% at December
31, 2002. The ratio of the allowance for loan losses to gross loans
was 1.79% and 1.85% at December 31, 2003 and 2002, respectively.
Noninterest income totaled $4,525,000 for the year ending December
31, 2003 representing a decrease of $178,000, or 3.8% when compared to
the prior year. Income from the servicing of loans increased by 15.5%
resulting in $492,000 of income for 2003 compared to $426,000 for
2002. Loan sales generated $1,082,000 of income, an increase of
$77,000 over 2002. Included in noninterest income at December 31, 2003
is the gain on the sale of investment securities of $396,000, which is
a decrease of $207,000 when compared to 2002. Also included is an
increase in the cash surrender value of life insurance of $524,000,
which decreased $125,000 when compared to last year. Excluding gains
realized on the sale of investment securities and the increase in the
cash surrender value of life insurance, total noninterest income
amounted to $3,605,000 in 2003 and $3,451,000 in 2002, representing an
increase of $154,000 or 4.5%.
The Company experienced an increase in noninterest expense
totaling $1,022,000, or 8.2% for 2003. The leading factors
contributing to the increase in noninterest expense were reflected in
increases of $859,000, or 13.6% in salaries and employee benefits
combined with expenses totaling $373,000 associated with actions
initiated by three dissident directors. The actions initiated by the
dissidents represent 36.4% of the total increase in noninterest
expense during 2003. The increase in salaries during 2003 was due, in
part, to higher commissions paid to mortgage originators and staff
hired in connection with the opening of a new branch in Sacramento.
The average number of full-time equivalent employees was at 134 at the
end of 2003, compared to 121 at the end of 2002. The opening of the
new branch in Sacramento accounted for over 50% of the increase in
full-time equivalent employees during 2003.
In April 2002, the Board of Directors authorized a stock
repurchase program approving the repurchase of up to $2 million of the
Company's stock. During 2003, 9,207 shares were repurchased at an
average cost of $16.94 per share for a total of $156,000. During 2002,
32,649 shares were repurchased at an average cost of $11.96 per share
for a total of $391,000 under this program. The repurchase program
expired December 31, 2003.
First Financial Bancorp is the parent of Bank of Lodi, N.A., a
locally owned community bank formed in 1982. Bank of Lodi, N.A. offers
financial services via the web at www.bankoflodi.com, by phone at
888-265-8577, at any one of its nine branches located in the
communities of Lodi, Woodbridge, Lockeford, Galt, Plymouth, San
Andreas, Elk Grove, Folsom and Sacramento or its loan production
office located in Folsom, Calif.
This press release contains forward looking statements within the
meaning of "safe harbor" provisions of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and as such, may involve
risks and uncertainties. Forward-looking statements, which are based
on certain assumptions and describe future plans, strategies, and
expectations, are generally identifiable by the use of words such as
"believe," "expect," "intend," "anticipate," "estimate," "project," or
similar expressions. These forward-looking statements relate to, among
other things, expectations of the business environment in which the
Company operates, projections of future performance, potential future
performance, potential future credit experience, perceived
opportunities in the market, and statements regarding the Company's
mission and vision. The Company's actual results, performance, and
achievements may differ materially from the results, performance, and
achievements expressed or implied in such forward-looking statements
due to a wide range of factors which are set forth in our annual
report on Form 10-K on file with the SEC.
FIRST FINANCIAL BANCORP AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ---------------------
2003 2002 2003 2002
--------------------- ---------------------
Total interest income $3,629 $3,399 13,662 13,677
Total interest expense 751 695 2,837 3,459
---------- ---------- ---------- ----------
Net interest income 2,878 2,704 10,825 10,218
Provision for loan losses -- 87 312 625
Noninterest income 1,164 1,145 4,525 4,703
Noninterest expense 3,686 3,400 13,508 12,486
Provision for income taxes 71 97 353 455
---------- ---------- ---------- ----------
Net income $285 $265 1,177 1,355
========== ========== ========== ==========
Basic earnings per share:
Net income available
for common stock
shareholders $0.17 $0.16 0.72 0.82
Weighted average shares 1,621,174 1,636,756 1,623,660 1,646,314
Diluted earnings per
share:
Net income available
for common stock
shareholders $0.16 $0.15 0.68 0.79
Weighted average shares 1,732,809 1,699,070 1,720,579 1,709,558
Selected ratios:
Annualized return on
average total equity 5.44% 5.49% 6.00% 7.30%
Annualized return on
average total assets 0.35% 0.42% 0.41% 0.57%
Selected Balance Sheet Data
(in thousands)
(Unaudited)
--------------------------------------
December 31, 2003 December 31, 2002
----------------- ------------------
Total assets $321,260 $255,401
Securities, available for sale 90,270 33,125
Total loans, gross 182,565 165,519
Allowance for loan losses 3,262 3,057
Total deposits 278,155 210,679
Other borrowings 19,255 20,040
Total shareholders equity 19,967 19,270
Nonperforming loans 3,880 2,409
CONTACT: First Financial Bancorp
Leon Zimmerman, 209-367-2000