EXHIBIT 99.1
Emclaire Financial Corp Reports Lower 2006 Earnings and Announces Annual
Stockholder Meeting Date
EMLENTON, Pa.--(BUSINESS WIRE)--Feb. 21, 2007--Emclaire Financial
Corp. (OTCBB:EMCF), the parent holding company of the Farmers National
Bank of Emlenton, reported consolidated net income of $2.0 million or
$1.55 per share for 2006, compared to net income of $2.6 million or
$2.03 per share for 2005. Net income for the fourth quarter ended
December 31, 2006 was $86,000 or $0.07 per share versus $689,000 or
$0.54 per share during the same quarter in the prior year.
The reduction in net income of $607,000 or 23.6% and $603,000 or
87.5% for the year and quarter ended December 31, 2006, respectively,
compared to the same periods in 2005, was primarily due to certain
charges associated with strategic reorganization initiatives
undertaken in 2006. In addition, net income was adversely impacted in
both 2006 periods by an increase in the provision for loan losses and
a decrease in noninterest income, partially offset by a decrease in
the provision for income taxes. The increase in the provision for loan
losses for both periods in 2006 compared to the same periods in 2005
was primarily due to growth in the loan portfolio, particularly with
respect to commercial loans. The decrease in noninterest income for
both periods in 2006 relative to the same periods in 2005 was
primarily due to a reduction in gains on sales of securities. The
decrease in provision for income taxes in both 2006 periods was due to
lower pre-tax income.
During the year ended December 31, 2006, total assets increased
$25.0 million or 9.1% to $300.6 million at year end from $275.5
million at December 31, 2005. This significant asset growth was driven
by total loan portfolio growth of $20.8 million or 10.8% funded by
increases in customer deposits of $14.0 million or 6.1% and borrowed
funds of $10.5 million or 53.8%.
Stockholders' equity increased $302,000 or 1.3% to $23.9 million
at December 31, 2006 compared to $23.6 million at December 31, 2005.
The Corporation remains well capitalized and is positioned for further
growth with total stockholders' equity at 8.0% of total assets. At
December 31, 2006, book value per share amounted to $18.86.
EMCLAIRE FINANCIAL CORP.
David L. Cox, Chairman of the Board, President and Chief Executive
Officer noted, "Although it is contrary to our ongoing goal to provide
increasing operating results, the fourth quarter charges were realized
as part of our strategic objectives to improve long-term
profitability. Through these recent efforts we have enhanced the
efficiency of our operations while reducing operating expenses,
leveraged available technology, and improved core profitability all as
part of our focus on providing continued sound returns to our
shareholders and providing superior customer service."
The reorganization charges, all of which were realized in the
fourth quarter of 2006, were the result of an ongoing strategic review
of all aspects of the Bank's operations that was initiated by the
Board of Directors and executive management in June 2006. This review
resulted in certain changes in personnel and a streamlining of back
room operations to better utilize technology investments and to
improve operating controls. During the fourth quarter of 2006, the
Bank offered a voluntary early retirement program to eligible
employees resulting in a pension expense charge of $375,000. In
addition to these retirement costs, severance and other costs
associated with the reorganization totaled $184,000.
During 2006, the Corporation's loan portfolio increased $20.8
million or 10.8% to $213.3 million at December 31, 2006 from $192.5
million at December 1, 2005, primarily due to growth in the commercial
loan portfolio of $15.0 million or 18.6% during the year. The
Corporation's asset quality remained strong as nonperforming loans
were $1.8 million or 0.85% of total loans, at December 31, 2006,
compared to $1.5 million or 0.75% of total loans, at December 31,
2005. Mr. Cox stated, "The Board of Directors and management continue
to be pleased with the Bank's steady balance sheet growth, sound
lending culture and loan production base. We continue to increase our
quality loan portfolio and deposit base through prudent community
banking practices."
The Bank continued its strategy of steady growth with the opening
of a new full-service office in the Township of Cranberry in Venango
County, PA in November 2006.
In addition to reporting earnings, the Corporation announced that
the annual meeting of stockholders will be held on Wednesday, April
25, 2007 at 9:00 AM at the main office of Farmers National Bank of
Emlenton, in Emlenton, Pennsylvania. The voting record date for the
purpose of determining stockholders eligible to vote on proposals
presented at the annual meeting is March 2, 2007.
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 eleven 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 Year ended
ended December 31, December 31,
2006 2005 2006 2005
------- ----------- -------- -----------
Interest income $4,344 $3,818 $16,259 $14,877
Interest expense 2,017 1,472 6,968 5,573
------- ----------- -------- -----------
Net interest income 2,327 2,346 9,291 9,304
Provision for loan losses 190 60 358 205
Noninterest income 644 985 2,934 3,317
Noninterest expense 2,677 2,343 9,409 9,146
------- ----------- -------- -----------
Net income before provision
for income taxes 104 928 2,458 3,270
Provision for income taxes 18 239 492 697
------- ----------- -------- -----------
Net income $86 $689 $1,966 $2,573
======= =========== ======== ===========
Net income per share $0.07 $0.54 $1.55 $2.03
Dividends per share $0.29 $0.27 $1.10 $1.02
Return on annualized average
assets 0.11% 1.00% 0.69% 0.94%
Return on annualized average
equity 1.44% 11.67% 8.28% 10.69%
Yield on average interest-
earning assets 6.42% 6.17% 6.30% 6.00%
Cost of average interest-
bearing liabilities 3.53% 2.79% 3.23% 2.70%
Net interest margin 3.52% 3.92% 3.68% 3.82%
----------------------------
(1) Returns are annualized for the three month periods ended December
31, 2006 and 2005.
CONSOLIDATED FINANCIAL CONDITION DATA:
As of As of
12/31/2006 12/31/2005
----------- -----------
Total assets $300,560 $275,517
Cash and equivalents 16,717 10,367
Securities 51,774 56,304
Loans 213,344 192,526
Deposits 244,492 230,503
Borrowed funds 30,000 19,500
Stockholders' equity 23,917 23,615
Book value per share $18.86 $18.63
Net loans to deposits 87.26% 83.52%
Allowance for loan losses to
total loans 0.94% 0.96%
Earning assets to total
assets 92.89% 92.82%
Stockholders' equity to
total assets 7.96% 8.57%
Shares of common stock
outstanding 1,267,835 1,267,835
CONTACT: Emclaire Financial Corp.
David L. Cox
Chairman of the Board, President and
Chief Executive Officer
or
William C. Marsh
Executive Vice President
Phone: 724-867-2311