Exhibit 99
Seacoast Financial Services Corporation Announces First Quarter 2004 Results,
Dividend; Receipt of Approvals for Abington Merger
NEW BEDFORD, Mass.--(BUSINESS WIRE)--April 22, 2004--Seacoast Financial
Services Corporation (NASDAQ: SCFS) holding company for Compass Bank and
Nantucket Bank, today announced net income of $6.7 million, or $0.26 per diluted
share, for the quarter ended March 31, 2004, compared to a net loss of $3.1
million, or $0.14 per diluted share, for the quarter ended March 31, 2003.
During the first quarter of 2004, the Company recorded a charge for expenses
incurred in connection with its pending merger with Sovereign Bancorp Inc.
(Sovereign) (NYSE: SOV) which reduced net income by $1.8 million, or $0.07 per
diluted share. Included in the first quarter 2003 results is an $11.2 million
charge to earnings, $0.50 per diluted share, due to a retroactive change to
Massachusetts tax law implemented on March 5, 2003.
Kevin G. Champagne, President and CEO stated, "I am pleased with our
operating results for the first quarter. We are on target with our previously
announced merger with Abington Bancorp, Inc. (Abington) (NASDAQ: ABBK) to close
on April 29, 2004 and are in receipt of all regulatory approvals. We are also
preparing for the merger with Sovereign that we announced in January 2004 which
is still expected to close in the third quarter of 2004."
Net interest income totaled $34.8 million for the quarter ended March 31,
2004 compared to $31.0 million in the same period in 2003, an increase of $3.8
million, or 12%. This increase was mainly attributable to solid loan and deposit
growth of over 19% during the past year aided by the acquisition of Bay State
Bancorp, in May 2003. Seacoast's net interest margin in the quarter ended March
31, 2004 was 3.41% compared to 3.50% in the same period in 2003 and 3.39% in the
fourth quarter of 2003.
Deposit, loan fees and other income totaled $4.2 million for the quarter
ended March 31, 2004 versus $3.3 million for the comparable quarter in 2003, an
improvement of $941,000 or 29%. Growth in banking fees was due in part to the
acquisition of Bay State Bancorp. Gains on sales of securities and loans totaled
$1.0 million for the quarter ended March 31, 2004 versus $304,000 for the
comparable quarter in 2003.
Noninterest expenses increased $5.3 million, or 26%, during the first
quarter of 2004 to $25.6 million compared to $20.4 million in the same period in
2003. Included in other noninterest expense in the first quarter of 2003 is an
interest charge of $1.6 million for the retroactive tax assessment by the
Commonwealth of Massachusetts pertaining to the disallowance of the dividend
received deductions for dividends from a REIT. Included in noninterest expenses
in the first quarter of 2004 are certain merger related expenses of $1.8 million
pertaining to the merger with Sovereign. Expenses related to the merger with
Abington will be included in the cost of that acquisition to be accounted for
upon consummation. For the first quarter of 2004, salaries and employee benefits
increased by $2.4 million, occupancy and equipment expenses increased by
$883,000, marketing expenses increased by $495,000 and professional services
expenses increased by $908,000. Such increases are generally attributable to
franchise expansion, including several new branches as well as the acquisition
of Bay State Bancorp.
Income tax provisions decreased by $9.1 million from the first quarter of
2003, which was materially impacted by the retroactive assessment of the
disallowance of the dividend received deduction on distributions from a REIT.
Exclusive of this retroactive assessment of $9.6 million, income tax provisions
in the first quarter of 2003 would have been $5.6 million for an effective tax
rate of 46.3%. The first quarter of 2004 tax provisions were impacted by the
non-deductibility of merger expenses, thereby increasing the effective tax rate
to 47.6% from 41.6%.
Total assets increased by $67.7 million from December 31, 2003 to a total
of $4.5 billion at March 31, 2004. Total loans increased by $62.8 million from
December 31, 2003 to a total of $3.7 billion at March 31, 2004. The increases
were mainly in residential real estate loans, indirect automobile loans,
construction loans and commercial real estate loans which increased $29.4
million, $15.1 million, $7.6 million, and $7.3 million, respectively. The
current low interest rate environment continues to fuel the housing and
automobile sector and has helped to sustain strong earning asset growth for the
quarter.
Total deposits of $2.9 billion at March 31, 2004 were up by $7.6 million
from the December 31, 2003 balances. Growth in NOW checking accounts and
certificates of deposit were partially offset by declines in savings and money
market balances. The reduction in savings balances was due primarily to a
decline in municipality balances. Wholesale borrowing increased $52.2 million
for the first quarter of 2004 as the Company took advantage of the favorable
rate environment to draw down some longer term funding.
Total stockholders' equity at March 31, 2004 was $396.7 million versus
$390.9 million at December 31, 2003. This represents a tangible book value per
share of $10.69 at March 31, 2004 versus $10.48 at December 31, 2003.
The allowance for loan losses was $43.3 million, or 1.18% of loans, at
March 31, 2004, compared with $43.3 million, or 1.21% of loans, at December 31,
2003. Non-performing loans were $17.4 million, or 0.48% of total loans at March
31, 2004, compared to $14.7 million, or 0.41% of total loans, at December 31,
2003. Non-performing assets were $18.2 million, or 0.41% of total assets at
March 31, 2004, compared to $14.9 million, or 0.34% of total assets, at December
31, 2003.
Today, the Board of Directors announced a quarterly cash dividend of $0.14
per share. The dividend is payable on May 21, 2004 to stockholders of record on
May 7, 2004. Abington shareholders who are entitled to receive shares of
Seacoast common stock in the merger will receive the quarterly cash dividend
declared by Seacoast on April 22, 2004 and payable on May 21, 2004 provided that
such shareholders continue to be record holders of Seacoast common stock on May
7, 2004, the record date for the dividend. As required by the agreement
governing the acquisition, Abington did not declare a dividend in April in order
to coordinate the timing of the payment of its quarterly dividend with
Seacoast's.
Seacoast Financial Services Corporation is the holding company for
CompassBank and Nantucket Bank and is headquartered in New Bedford,
Massachusetts. CompassBank is a $4 billion state chartered savings bank serving
Southeastern Massachusetts through a network of 49 full service branch offices
and 53 branch and remote ATMs, a customer call center and on-line banking at
www.compassbank.com. Nantucket Bank is a $500 million state chartered savings
bank serving Nantucket Island with 3 full service branch offices and 5 ATMs. The
banks provide a wide array of financial services including consumer banking,
mortgage lending, commercial lending, consumer finance, private banking and
alternative investments to retail and business customers.
The foregoing contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about management's confidence and
strategies and management's expectations about new and existing programs and
products, relationships, opportunities, technology and market conditions. Such
forward-looking statements involve certain risks and uncertainties. These
include, but are not limited to, the direction of movements in interest rates,
the possibility of disruption in credit markets, successful implementation and
integration of acquisitions, the effects of economic conditions and the impact
of legal and regulatory barriers and structures. Actual results may differ
materially from such forward-looking statements. Seacoast Financial assumes no
obligation for updating any such forward-looking statements at any time.
Seacoast Financial Services Corporation and Subsidiaries
Selected Consolidated Financial and Statistical Information
(Dollars in thousands, except per share amounts)
(Unaudited)
March 31, December 31, March 31,
2004 2003 2003
----------- ----------- -----------
At or for the quarter ended:
Number of common shares
outstanding 25,923,930 25,822,830 23,091,774
Book value per share 15.30 15.14 13.38
Tangible book value per share 10.69 10.48 11.85
Dividend payout ratio 52.47% 33.54% (88.27)%
Average equity to average total assets 9.06% 8.74% 8.93%
Total noninterest expense to
average assets 2.33% 2.17% 2.10%
Non-performing assets 18,151 14,946 20,179
Non-performing assets to total assets 0.41% 0.34% 0.53%
Non-performing loans 17,419 14,680 17,846
Non-performing loans to total loans 0.48% 0.41% 0.65%
Three Months Ended
-------------------------------
March 31, December 31,
--------------- ------------
Yields: 2004 2003 2003
------ -------- ------------
Loans 5.76% 6.34% 5.91%
Investments 3.79 4.21 3.40
Yield on earning assets 5.55 6.04 5.58
Non-time deposits 0.95 1.00 0.94
Time deposits 2.57 3.16 2.66
Borrowed funds 4.11 4.66 4.29
Cost of funds 2.35 2.82 2.41
Net interest spread 3.20 3.22 3.17
Net interest margin 3.41 3.50 3.39
Return (loss) on average assets
(annualized) 0.61 (0.33) 0.86
Return (loss) on average equity
(annualized) 6.70 (3.72) 9.67
Seacoast Financial Services Corporation and Subsidiaries
(Nasdaq: SCFS)
Selected Consolidated Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
March 31, December 31, March 31,
2004 2003 2003
----------- ----------- ----------
ASSETS:
Cash and due from banks $123,415 $134,326 $105,188
Federal funds sold 91,256 21,123 45,106
Short-term investment -- 10,000 --
----------- ----------- -----------
Total cash and cash
equivalents 214,671 165,449 150,294
Investment securities
Available for sale, at fair value 315,070 358,574 397,833
Held to maturity, at amortized
cost (fair value $18,520,
$18,552 and 19,161) 17,956 18,067 18,446
Restricted equity securities 55,623 55,623 46,136
----------- ----------- -----------
Total investment securities 388,649 432,264 462,415
Loans held-for-sale -- 2,624 9,587
Loans 3,654,180 3,591,405 3,058,271
Allowance for loan losses (43,257) (43,321) (34,709)
----------- ----------- -----------
Net loans 3,610,923 3,548,084 3,023,562
----------- ----------- -----------
Banking premises and equipment, net 64,462 64,345 54,288
Goodwill 113,051 113,138 33,903
Intangible assets 6,569 7,037 1,400
Bank owned life insurance 13,554 13,396 3,905
Net deferred tax asset 9,860 9,920 10,377
Other real estate owned and
repossessed autos 732 266 332
Accrued interest receivable 17,157 17,469 16,509
Other assets 13,237 11,144 14,919
----------- ----------- -----------
Total assets $4,452,865 $4,385,136 $3,781,491
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits $2,925,002 $2,917,361 2,418,512
Short-term borrowings 38,173 45,727 31,843
Federal Home Loan Bank advances 986,970 927,162 908,463
Junior subordinated debentures 74,742 74,742 74,742
Other borrowings 1,678 1,697 1,754
Mortgagors' escrow payments 5,704 2,911 5,761
Accrued expenses and other
liabilities 23,910 24,679 31,438
----------- ----------- -----------
Total liabilities 4,056,179 3,994,279 3,472,513
----------- ----------- -----------
Stockholders' equity:
Preferred stock, par value $.01
per share; authorized 10,000,000
shares; none issued -- -- --
Common stock, par value $.01 per
share; authorized 100,000,000
shares; 30,227,555, 30,227,555
and 26,758,136 shares issued in
2004 and 2003, respectively 302 302 268
Additional paid-in capital 228,889 227,969 154,495
Retained earnings 237,443 234,275 210,884
Treasury stock, at cost,
4,305,625, 4,406,725 and
3,666,362 shares in 2004
and 2003, respectively (69,446) (70,516) (54,368)
Accumulated other comprehensive
income 8,301 8,072 8,320
Unearned compensation - ESOP and
restricted stock (8,486) (8,932) (10,314)
Shares held in employee trust (317) (313) (307)
----------- ----------- -----------
Total stockholders' equity 396,686 390,857 308,978
----------- ----------- -----------
Total liabilities and
stockholders' equity $4,452,865 $4,385,136 $3,781,491
=========== =========== ===========
Seacoast Financial Services Corporation and Subsidiaries
( Nasdaq: SCFS)
Selected Consolidated Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
-----------------------------------
March 31, December 31, March 31,
2004 2003 2003
----------- ----------- -----------
INTEREST AND DIVIDEND INCOME:
Interest on loans $52,304 $52,897 $48,247
Interest and dividends on
investment securities 4,154 4,444 5,233
Interest on federal funds sold and
short-term investments 64 240 54
----------- ----------- -----------
Total interest and dividend
income 56,522 57,581 53,534
----------- ----------- -----------
INTEREST EXPENSE:
Interest on deposits 10,723 11,004 10,961
Interest on borrowed funds 9,549 10,108 10,319
Interest on junior subordinated
debentures 1,498 1,497 1,257
----------- ----------- -----------
Total interest expense 21,770 22,609 22,537
----------- ----------- -----------
Net interest income 34,752 34,972 30,997
PROVISION FOR LOAN LOSSES 1,650 1,500 2,087
----------- ----------- -----------
Net interest income after
provision for loan losses 33,102 33,472 28,910
----------- ----------- -----------
NONINTEREST INCOME:
Deposit and other banking fees 2,842 3,085 2,498
Loan servicing fees, net 179 144 173
Merchant card fee income, net 121 50 50
Other loan fees 578 536 350
Gain on sales of investment
securities, net 991 1,793 259
Gain on sales of loans, net 29 48 45
Other income 501 473 209
----------- ----------- -----------
Total noninterest income 5,241 6,129 3,584
----------- ----------- -----------
NONINTEREST EXPENSE:
Salaries and employee benefits 12,332 11,778 9,973
Occupancy and equipment expenses 3,600 3,193 2,717
Data processing expenses 2,195 2,158 2,088
Marketing expenses 1,218 1,247 723
Professional services expenses 1,459 1,696 551
Amortization of intangibles 468 497 164
Merger expenses 1,843 -- --
Other operating expenses 2,508 2,877 4,144
----------- ----------- -----------
Total noninterest expense 25,623 23,446 20,360
----------- ----------- -----------
Income before provision for
income taxes 12,720 16,155 12,134
PROVISION FOR INCOME TAXES 6,055 6,524 15,187
----------- ----------- -----------
Net income (loss) $6,665 $9,631 $(3,053)
=========== =========== ===========
EARNINGS (LOSS) PER SHARE :
Basic $0.27 $0.39 $(0.14)
=========== =========== ===========
Diluted $0.26 $0.38 $(0.14)
=========== =========== ===========
Weighted average common shares
outstanding 25,638,144 25,584,135 23,334,436
Weighted average unallocated
ESOP shares and unvested
restricted stock (711,535) (808,954) (1,126,360)
----------- ----------- -----------
Weighted average common shares
outstanding - basic 24,926,609 24,775,181 22,208,076
Dilutive effect of common stock
equivalents 679,441 573,811 490,045
----------- ----------- -----------
Weighted average common and
common stock equivalent shares
outstanding - diluted 25,606,050 25,348,992 22,698,121
=========== =========== ===========
CONTACT: Seacoast Financial Services Corporation
James R. Rice, 508-984-6102