Exhibit 99.1
Emclaire Financial Corp. Announces Third Quarter and Year to Date 2004 Earnings
EMLENTON, Pa.--(BUSINESS WIRE)--Oct. 22, 2004--Emclaire Financial Corp.
(OTCBB:EMCF), the parent holding company of the Farmers National Bank of
Emlenton, reported consolidated net income of $685,000 or $0.54 per share for
the three months ended September 30, 2004. Net income for the quarterly period
increased $36,000 or 5.6%, as compared to net income of $649,000 or $0.51 per
share for the quarter ended September 30, 2003. The Corporation's annualized
return on average assets and equity were 1.01% and 11.83%, respectively, for the
three months ended September 30, 2004, versus 1.00% and 11.65%, respectively,
for the same period in the prior year.
Net income for the nine-month period ended September 30, 2004 was $1.77
million or $1.40 per share versus $1.8 million or $1.38 per share for the same
period in the prior year. This decrease of $45,000 or 2.5% in earnings resulted
in an annualized return on average assets and equity of 0.89% and 10.33%,
respectively, for the current year to date period.
The increase in the Corporation's operating results for the quarterly
period can be attributed to increases in customer service fees, commissions
earned from our investment advisory services (see comment below), gains on the
sale of securities and loans held for sale and other noninterest income.
Partially offsetting this increase was a decrease in net interest income and
increased compensation and benefits and premises and equipment expenses. During
the third quarter of 2004, Management elected to sell our student loan portfolio
as a result of the low yield as well as increasing servicing costs which
resulted in a gain on the sale.
The decrease in the Corporation's operating results for the year to date
periods can be attributed to increased noninterest expenses and a decrease in
net interest income partially offset by increased noninterest income.
Contributing to the decrease in earnings for the year to date periods were
increases in compensation and benefits, premises and equipment expense and other
noninterest expense. During the first nine months of 2004 versus the same period
in 2003, the Corporation realized increased depreciation expenses as a result of
the completion of the renovation of the main office headquarters and the
installation of a new mainframe and imaging system. Other noninterest expenses
that contributed to the variance were increases in telephone, Pennsylvania use
taxes and correspondent fees. Offsetting these increased expenses were increases
in customer service fees, commissions from our investment advisory services and
gains on the sale of securities and loans held for sale.
During the nine-month period ended September 30, 2004, total assets
increased $7.7 million or 2.9% to $270.2 million from $262.5 million. Investment
securities and cash equivalents increased $10.1 million and $4.0 million,
respectively, between year-end 2003 and September 30, 2004, while customer
deposits increased $13.0 million or 6.0% during the period to $230.1 million at
September 30, 2004. Loans receivable and borrowed funds decreased $6.7 million
and $5.7 million, respectively, to $183.7 million and $15.0 million,
respectively, at September 30, 2004. The Corporation remains well capitalized
and is positioned for continued growth with total stockholders' equity at
September 30, 2004 of $23.4 million or approximately 8.7% of total assets.
Average interest earning assets increased $13.9 million or 6.0% to $246.3
million for the nine months ended September 30, 2004, compared to $232.4 million
for the same period in the prior year. Contributing to the increase in average
earning assets were increases in average loans receivable, securities and cash
equivalents during the first nine months of 2004 versus the same period last
year. This increase can be attributed to the loan growth experienced in the
fourth quarter 2003 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 nine months of 2004, the yield on interest earning assets decreased 47
basis points to 5.82% for 2004 versus 6.29% for the same period in 2003.
Increased customer deposits funded loan and security portfolio growth as
average deposits increased $13.4 million or 6.3% to $224.6 million for the nine
months ended September 30, 2004 versus $211.2 million for the same period in the
prior year. The Corporation's cost of funds decreased 7 basis points to 2.11%
for the first nine months of 2004 versus 2.18% for the same period in 2003.
Dave Cox is pleased to announce the addition of Farmers National Financial
Services, an investment advisory service that is currently offered to our
customers. We have partnered with Blue Vase Securities LLC, which is a
nation-wide, full-service, independent broker/dealer. Our financial services
representative is available to help individuals with investments, wealth
management, retirement planning and other advisory services. The commissions of
$11,000 for the quarter added to the increase in noninterest income.
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,
2004 2003 2004 2003
--------- ---------- -------- -----------
Interest income $3,521 $3,534 $10,402 $10,618
Interest expense 1,287 1,227 3,797 3,651
--------- ---------- -------- -----------
Net interest income 2,234 2,307 6,605 6,967
Provision for loan losses 95 75 170 225
Noninterest income 576 467 1,577 1,318
Noninterest expense 1,949 1,841 5,907 5,658
--------- ---------- -------- -----------
Net income before
provision for
income taxes 766 858 2,105 2,402
Provision for income taxes 81 209 333 585
--------- ---------- -------- -----------
Net income $685 $649 $1,772 $1,817
========= ========== ======== ===========
Net income per share $0.54 $0.51 $1.40 $1.38
Dividends per share $0.23 $0.21 $0.69 $0.63
Return on annualized
average assets 1.01% 1.00% 0.89% 0.98%
Return on annualized
average equity 11.83% 11.65% 10.33% 10.65%
Yield on average interest-
earning assets 5.78% 6.02% 5.82% 6.29%
Cost of average interest-
bearing liabilities 2.50% 2.50% 2.51% 2.59%
Net interest margin 3.73% 3.99% 3.76% 4.19%
CONSOLIDATED FINANCIAL
CONDITION DATA:
As of As of
9/30/2004 12/31/2003
---------- -----------
Total assets $270,198 $262,512
Cash and equivalents 11,706 7,703
Securities 59,295 49,162
Loans 183,733 190,482
Deposits 230,131 217,110
Borrowed funds 15,000 20,700
Stockholders' equity 23,401 22,655
Book value per share $18.46 $17.87
Net loans to deposits 79.84% 87.74%
Allowance for loan losses
to total loans 0.93% 0.92%
Earning assets to total assets 92.58% 94.02%
Stockholders' equity to
total assets 8.66% 8.63%
Shares common stock
outstanding 1,267,835 1,267,835
CONTACT: Emclaire Financial Corp.
David L. Cox or Shelly L. Rhoades, 724-867-2311