SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
April 21, 1999
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(Date of earliest event reported)
Progress Financial Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-14815 25-2413363
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(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identified No.)
4 Sentry Parkway, Suite 200, Blue Bell, Pennsylvania 19422-0764
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(Address of principal executive offices) (Zip Code)
(610)-825-8800
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(Registrant's telephone number, including area code)
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Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Exhibit Index appears on page 4.
<PAGE>
Item 5. Other Events
On April 21, 1999, Progress Financial Corporation reported first
quarter net income of $1.3 million or diluted earnings per share of $.24
compared with net income of $996 thousand or diluted earnings per share of $.21
for the first quarter of 1998. For further information see the press release
attached as Exhibit 99(a) and incorporated herein by reference.
Also on April 21, 1999, Progress Financial Corporation announced the
declaration of its quarterly dividend of $.04 per share to stockholders of
record on April 30, 1999, which will be paid on May 14, 1999. For further
information, see the press release attached as Exhibit 99(b) and incorporated
herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROGRESS FINANCIAL CORPORATION
Dated: April 23, 1999 By: /s/ Michael B. High
------------------------------------
Michael B. High
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
99(a) Press Release on First Quarter 1999 earnings issued on
April 21, 1999
99(b) Press Release on dividend declaration issued on
April 21, 1999
<PAGE>
Exhibit 99(a)
Press Release on First Quarter 1999 earnings
issued on April 21, 1999
<PAGE>
NEWS RELEASE
Contact: Michael B. High, CFO/Senior Vice President
(610) 941-4804
Patricia Ellick, Director of Investor Relations
(610) 941-4838
Progress Financial Corporation Announces First Quarter Earnings of $1.3 Million,
a 32.8% Increase over First Quarter 1998
Blue Bell, PA, April 21, 1999 - Progress Financial Corporation (the
"Company" - Nasdaq: PFNC) today reported first quarter net income of $1.3
million or diluted earnings per share of $.24, an increase of 32.8% compared
with net income of $996 thousand or diluted earnings per share of $.21 for the
first quarter of 1998.
Commenting on the first quarter results, W. Kirk Wycoff, President and
CEO, stated, "We continue to focus on providing loans and deposit services to
small business and entrepreneurial clients. In addition, a decline in interest
rates emphasizes the need to continue to expand our fee based income. Consistent
with both of these objectives, recently established Progress Financial Resources
("PFR") generated insurance commissions of $480 thousand during the quarter.
Additionally, Progress Realty Advisors ("PRA") generated loan brokerage fees of
$523 thousand contributing to an increase in non-bank fees from $1.1 million to
$1.8 million, or 71.9%, over the comparable 1998 quarter."
The Company's higher operating earnings for the quarter are based on
increased earning assets and favorable deposit mix changes, largely due to
increasing commercial relationships. Average earning assets for the first
quarter of 1999 were $615.2 million compared to $451.5 million for the same
period in 1998. The growth in assets relates to a combination of higher loan and
lease production and an increase in mortgage-backed securities used to deploy
capital raised in the second quarter of 1998. Average loans and leases increased
$81.1 million to $428.8 million while average mortgage-backed securities
increased $48.5 million to $139.0 million compared to the same quarter of 1998.
Consequently, net interest income for the first quarter of 1999 increased $1.0
million or 19.7% over the same period in 1998. The net interest margin was,
however, compressed by lower yields on commercial business loans and lease
financing.
Loans and leases outstanding at March 31, 1999 included commercial
business loans of $98.7 million, which increased $33.3 million or 51.0%
from March 31, 1998. In addition, commercial real estate loans totaled $137.4
million an increase of $20.9 million or 17.9% from March 31, 1998. Of the total
commercial real estate loans 35% are related to business financings while 65%
are on income producing properties.
<TABLE>
Loans and Leases Outstanding *
(Dollars in Thousands) March 31,
1999 1998
- ------------------------------------------------------------------ -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
QTR Average QTR
Actual % of Total Actual % of Total Average
Commercial
Business $98,739 22.65% $95,429 $65,394 18.81% $ 68,313
Commercial
Real Estate 137,387 31.51 137,349 116,529 33.52 113,784
Lease
Financing 74,223 17.03 73,389 58,525 16.84 57,698
Residential
Mortgages 48,301 11.08 49,358 56,867 16.36 56,744
Construction 47,610 10.92 44,280 25,322 7.28 25,596
Consumer 29,707 6.81 28,956 25,006 7.19 25,535
----------- -------------- ----------- ----------- ---------- ----------
Total $435,967 100.00% $428,761 $347,643 100.00% $347,670
========== =========== ======== ======== ======== ==========
</TABLE>
* Includes loans held for sale
The Company reported non-performing assets of $4.4 million at March 31,
1999 up from $1.9 million at March 31, 1998. The increase in non-performing
assets was related entirely to the lease portfolio. Non-performing leases
increased from $415 thousand at March 31, 1998 to $3.0 million at March
31, 1999. The Company's non-performing assets to total assets at March 31, 1999
were .66% compared to .46% at March 31, 1998. During the quarter ended March 31,
1999, the Company recorded a $449 thousand provision for possible loan and lease
losses compared with $202 thousand for the comparable period in 1998. As of
March 31, 1999, the allowance for possible loan and lease losses increased to
$4.9 million from $4.1 million at March 31, 1998. The ratio of the allowance for
possible loan and lease losses to total loans and leases was 1.11% at March 31,
1999 compared to 1.19% at March 31, 1998. At March 31, 1999 after
allowing for cash escrows held for recourse against purchased leases and
deducting loans held for sale, the allowance for possible loan and lease losses
was 1.24% of total loans and leases.
Non-interest income for the quarter ended March 31, 1999 amounted to
$2.8 million, compared to $1.8 million for the same period in 1998. During the
1999 quarter, the Company recorded $480 thousand in insurance commissions earned
by PFR. Loan brokerage and advisory fees were $523 thousand compared to $445
thousand for the same period in the prior year. The increase in fees partially
resulted from expanded activities at PRA. The Company recognized other income
amounting to $375 thousand from an equity participation realized on a commercial
real estate loan. Losses on the sale of securities for the quarter amounted to
$160 thousand compared to a gain of $215 thousand for the comparable period in
1998.
Total non-interest expense was $6.4 million for the quarter ended March
31, 1999 compared to $5.2 million for the quarter ended March 31, 1998. The
increase in non-interest expense for the quarter ended March 31, 1999 over the
comparable quarter in 1998 was partially due to increases in salaries and
employee benefits of $886 thousand as a result of additional employees of
acquired and newly formed companies and new positions established within the
Company. Other expenses increased by $339 thousand mainly due to increases in
professional services, due to the outsourcing of the internal audit function;
and occupancy and furniture and equipment expenses, due to recent acquisitions.
Total assets increased to $666.8 million at March 31, 1999 from $484.3
million at March 31, 1998. Total deposits increased 26.1% to $433.1 million at
March 31, 1999 from $343.6 million at March 31, 1998.
Progress Financial Corporation is a unitary thrift holding company
headquartered in Blue Bell, Pennsylvania. The business of the Company consists
primarily of the operation of Progress Bank, which serves businesses and
consumers through eleven full service offices. The Company also offers a
diversified array of financial services including equipment leasing through
Progress Leasing Corporation, with offices in Blue Bell, Pennsylvania and
Timonium, Maryland, and insurance and financial planning services through
Progress Financial Resources, Inc., headquartered in Philadelphia, Pennsylvania.
In addition, the Company conducts commercial mortgage banking and brokerage
services through Progress Realty Advisors, Inc. with locations in Blue Bell,
Pennsylvania; Richmond and Chesapeake, Virginia; Woodbridge, New Jersey;
Wilmington, Delaware; and Raleigh, North Carolina. The Company also conducts
business-to-business telemarketing through Procall Teleservices, Inc. and
construction and development of assisted living communities through Progress
Development Corp. The Company's common stock is traded on the Nasdaq Stock
Market, National Market under the Symbol "PFNC".
FINANCIAL DATA ATTACHED
<PAGE>
Progress Financial Corporation
Financial Highlights
<TABLE>
Three Months Ended
March 31,
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1999 1998
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<S> <C> <C>
Reported Results:
Basic net income per common share (1) $ .26 $ .23
Diluted net income per common share (1) .24 .21
Dividends per common share (1) .04 .03
Book value per share(1) 8.10 6.07
Basic average common shares outstanding (1) 5,099,263 4,347,726
Diluted average common shares outstanding (1) 5,469,823 4,845,802
Net interest margin (FTE) 4.13% 4.66%
Return on average assets .82 .83
Return on average equity 12.88 15.60
Average equity to average assets 6.37 5.35
Ratio of allowance for possible loan and lease losses to total loan and leases
receivable 1.11 1.19
Ratio of non-performing assets to total assets .66 .46
Ratio of allowance for possible loan and lease losses to non-performing loans
and leases 110.14 215.14
(1) Per share amounts have been restated to reflect the 5% stock dividend distributed to shareholders on August
31, 1998.
</TABLE>
<PAGE>
Progress Financial Corporation
Consolidated Statements of Financial Condition
(Dollars in Thousands)
<TABLE>
Average Balance
Ending Balance For the Three Months
March 31, Ended
March 31,
----------- ----------- ------------- ------------
1999 1998 1999 1998
----------- ----------- ------------- ------------
Assets:
<S> <C> <C> <C> <C>
Cash and due from banks:
Interest bearing $22,248 $ 2,644 $ 16,294 $ 2,187
Non-interest bearing 15,663 8,247 13,770 9,310
Investments:
Available for sale at fair value (amortized cost: $17,801 in 1999 and 17,366 4,304 17,288 5,823
$3,985 in 1998)
Held to maturity at amortized cost (fair value: $18,926 in 1999 and 18,747 7,700 13,843 5,276
$7,733 in 1998)
Mortgage-backed securities:
Available for sale at fair value (amortized cost: $131,016 in 1999 and 130,132 46,482 139,048 43,045
$46,393 in 1998)
Held to maturity at amortized cost (fair value: $45,250 in 1998) -- 45,636 -- 47,473
Loans and leases receivable, net (net of reserve: $4,854 in 1999 and 410,839 343,523 401,613 343,605
$4,120 in 1998)
Loans held for sale (fair value: $20,393 in 1999) 20,274 -- 22,550 --
Premises and equipment 10,955 9,623 10,861 9,422
Accrued interest receivable 3,418 2,982 2,707 2,672
Other assets 17,131 13,116 15,944 14,961
------- -------- -------- --------
Total assets $666,773 $484,257 $653,918 $483,774
======== ========= ======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $433,098 $343,580 $417,524 $335,167
Federal Home Loan Bank borrowings 88,000 45,900 88,000 47,942
Other borrowings 77,344 41,957 79,586 47,116
Advance payments from borrowers 1,772 1,994 1,839 2,704
Accrued interest payable 2,803 2,418 2,685 2,577
Other liabilities 7,079 6,773 7,626 7,383
------- ------- ------- -------
Total liabilities 610,096 442,622 597,260 442,889
------- ------- ------- -------
Corporation-obligated mandatorily redeemable capital securities of
subsidiary trust holding solely junior subordinated debentures of the 15,000 15,000 15,000 15,000
Corporation
Stockholders' equity:
Serial preferred, $.01 par value;
1,000,000 shares authorized and unissued -- -- -- --
Junior participating preferred stock - $.01 par value -
1,010 shares authorized but unissued -- -- -- --
Common stock, $1 par value; 12,000,000 shares authorized; 5,271,000 and
4,201,000 shares issued at March 31, 1999 and 1998, respectively 5,271 4,201 5,271 4,137
Treasury shares - 107,000 and 0 shares at March 31, 1999 and 1998, (1,440) -- (1,937) --
respectively
Unearned Employee Stock Ownership Plan - 21,000 and 30,000 shares at March
31, 1999 and 1998, respectively (127) (161) (128) (168)
Unearned compensation - restricted stock (1,094) -- (495) --
Capital surplus 39,217 21,459 39,328 21,104
Retained earnings 721 864 270 453
Net accumulated other comprehensive income (loss) (871) 272 (651) 359
--------- -------- --------- -------
Total stockholders' equity 41,677 26,635 41,658 25,885
-------- -------- -------- -------
Total liabilities, Corporation-obligated mandatorily redeemable capital
securities of subsidiary trust holding solely junior subordinated
debentures of the Corporation and stockholders' equity $666,773 $484,257 $653,918 $483,774
======== ======== ======== ========
</TABLE>
<PAGE>
Progress Financial Corporation
Consolidated Statements of Income
(Dollars in Thousands)
<TABLE>
Three Months Ended
March 31,
---------- -----------
1999 1998
---------- -----------
Interest income:
<S> <C> <C>
Loans and leases, including fees $ 9,557 $8,293
Mortgage-backed securities 2,125 1,475
Investment securities 422 141
Other 193 23
--------- --------
Total interest income 12,297 9,932
Interest expense:
Deposits 3,768 3,350
Federal Home Loan Bank borrowings 1,156 682
Other borrowings 1,158 709
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Total interest expense 6,082 4,741
----- -----
Net interest income 6,215 5,191
Provision for possible loan and lease losses 449 202
------ -----
Net interest income after provision for possible loan and lease 5,766 4,989
----- -----
losses
Non-interest income:
Service charges on deposits 420 367
Lease financing fees 387 365
Insurance commissions 480 --
Teleservices fee income 243 174
Loan brokerage and advisory fees 523 445
Gain (loss) from sale of securities (160) 215
Fees and other 869 239
----- -----
Total non-interest income 2,762 1,805
----- -----
Non-interest expense:
Salaries and employee benefits 3,504 2,618
Occupancy 345 305
Data processing 218 249
Furniture, fixtures and equipment 290 254
Loan and real estate owned expenses, net 127 117
Capital securities expense 398 398
Professional services 367 191
Other 1,195 1,087
----- -----
Total non-interest expense 6,444 5,219
----- -----
Income before income taxes 2,084 1,575
Income tax expense 761 579
------ -----
Net Income $1,323 $ 996
====== =====
Basic net income per common share $0.26 $0.23
===== =====
Diluted net income per common share $0.24 $0.21
===== =====
Dividends per common share $0.04 $0.03
===== =====
Basic average common shares outstanding 5,099,263 4,347,726
========= =========
Diluted average common shares outstanding 5,469,823 4,845,802
========= =========
</TABLE>
<PAGE>
Exhibit 99(b)
Press Release on dividend declaration
issued on April 21, 1999
<PAGE>
Exhibit 99(b)
NEWS RELEASE
Contact: Michael B. High -- (610) 941-4804
Chief Financial Officer
Progress Financial Corporation
4 Sentry Parkway - Suite 200
Blue Bell, PA 19422
For immediate release:
Progress Financial Corporation Declares Cash Dividend
Blue Bell, PA, April 21, 1999 -- Progress Financial Corporation's Board
of Directors has declared its regular quarterly cash dividend on its common
stock according to W. Kirk Wycoff, Chairman, President and Chief Executive
Officer. The $.04 per share cash dividend will be paid on May 14, 1999 to
shareholders of record on April 30, 1999.
Progress Financial Corporation is a unitary thrift holding company
headquartered in Blue Bell, Pennsylvania. The business of the Company consists
primarily of the operation of Progress Bank, which serves businesses and
consumers through eleven full service offices. The Company also offers a
diversified array of financial services including equipment leasing through
Progress Leasing Corporation, with offices in Blue Bell, Pennsylvania and
Timonium, Maryland, and insurance and financial planning services through
Progress Financial Resources, Inc., headquartered in Philadelphia, Pennsylvania.
In addition, the Company conducts commercial mortgage banking and brokerage
services through Progress Realty Advisors, Inc. with locations in Blue Bell,
Pennsylvania; Richmond and Chesapeake, Virginia; Woodbridge, New Jersey;
Wilmington, Delaware; and Raleigh, North Carolina. The Company also conducts
business to business telemarketing through Procall Teleservices, Inc. and
construction and development of assisted living communities through Progress
Development Corp. The Company's common stock is traded on the Nasdaq Stock
Market, National Market under the Symbol "PFNC."
