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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 20, 2000
--------------------------------------------------------------------------------
(Date of earliest event reported)
Progress Financial Corporation
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------
Delaware 0-14815 25-2413363
--------------------------------------------------------------------------------
(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identified No.)
4 Sentry Parkway, Suite 230, Blue Bell, Pennsylvania 19422-0764
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(610)-825-8800
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------------------------------------------
Former name,former address and former fiscal year, if changed since last report)
--------------------------------------------------------------------------------
<PAGE>
Exhibit Index appears on page 4
Item 5. Other Events
On April 20, 2000, Progress Financial Corporation reported first quarter
net income of $1.5 million or diluted earnings per share of $.27 compared with
net income of $1.3 million or diluted earnings per share of $.23 for the first
quarter of 1999. For further information see the press release attached as
Exhibit 99(a) and incorporated herein by reference.
On April 20, 2000, Progress Financial Corporation distributed an earnings
package to analysts. For further information see the attached Exhibit 99(c) 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: June 13, 2000 By: /s/ Michael B. High
--------------------
Michael B. High
Executive Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- ------------
99(a) Press Release on First Quarter 2000 earnings
issued on June 20, 2000
99(c) Analyst package distributed on June 20, 2000
<PAGE>
Exhibit 99(a)
99(a)
Press Release on First Quarter 2000
earnings issued on June 20, 2000
<PAGE>
Exhibit 99 (a)
NEWS RELEASE
Contact: Michael B. High, CFO/Executive Vice President
(610) 941-4804
Dorothy Jaworski, Director of Investor Relations
(484) 322-4822
For immediate release:
Progress Financial Corporation Announces First Quarter Earnings of $1.5 Million,
a 16 % Increase Over First Quarter 1999
Blue Bell, PA, April 20, 2000 - Progress Financial Corporation (the
"Company" - Nasdaq: PFNC) today reported first quarter 2000 net income of $1.5
million, or diluted earnings per share of $.27, compared to net income of $1.3
million, or diluted earnings per share of $.23 for the first quarter of 1999.
Commenting on the first quarter results, W. Kirk Wycoff, President and CEO,
stated, "We are pleased to report another successful quarter of financial
results for the Company. In addition to a 16% increase in net income, our net
interest margin increased 15 basis points for the first quarter of 2000 over the
first quarter of 1999. The Company has effectively managed its increasing cost
of funds by deploying capital into higher yielding investments and variable rate
loans which resulted in a $1.4 million increase in net interest income.
Non-interest income increased $3.1 million primarily due to $2.6 million of
client warrant income which was recorded due to the expiration of restrictions
on client warrants. Those gains were partially offset by net unrealized losses
in the mezzanine and venture capital funds amounting to $955,000 during the
first quarter. These losses represent a partial reversal of unrealized gains
reported in the fourth quarter of 1999. Additionally, fee based income increased
$1.4 million, primarily due to teleservices fees and mutual fund, annuity and
insurance commissions. These increases were offset by a $609,000 increase in the
provision for loan and lease losses, primarily due to a commercial loan
charge-off and a more aggressive leasing charge-off policy, which was
implemented in the second quarter of 1999, and by a $3.6 million increase in
non-interest expense as a result of our objectives to diversify our business and
grow the Company."
<PAGE>
Average earning assets for the first quarter of 2000 were $721.9 million
compared to $615.2 million for the same period in 1999. The growth in assets
relates to higher loan and lease production. Average loans and leases increased
$92.8 million to $521.5 million compared to the same quarter of 1999.
Consequently, tax-equivalent net interest income for the first quarter of 2000
increased $1.4 million or 23% over the same period in 1999. The net interest
margin increased 15 basis points primarily due to a 14 basis point increase in
the Company's interest rate on earning assets over its cost of funds.
Loans and leases outstanding totaled $540.7 million at March 31, 2000
compared to $503.7 million at December 31, 1999. This increase was primarily due
to a $27.6 million increase in commercial business loans and a $6.8 million
increase in leases. The Company reported non-performing assets of $4.1 million
at March 31, 2000 down from $5.8 million at December 31, 1999. The decrease in
non-performing assets was primarily related to the charge-off of a portion of a
large commercial business loan. The Company's non-performing assets to total
assets ratio at March 31, 2000 was .50% compared to .75% at
December 31, 1999.
During the quarter ended March 31, 2000, the Company recorded a $1.1
million provision for loan and lease losses compared with $449,000 for the
comparable period in 1999. The increase of $609,000 was the result of a large
commercial business loan liquidation and partial charge-off and a more
aggressive charge-off policy implemented in the second quarter of 1999 for the
lease portfolio. The current level of delinquent and nonaccrual leases has
declined from $7.2 million at March 31, 1999 to $1.5 million at March 31, 2000.
The ratio of the allowance for loan and lease losses to total loans and leases
was 1.04% at March 31, 2000 compared to 1.11% at March 31, 1999.
Non-interest income for the quarter ended March 31, 2000 amounted to $5.8
million, compared to $2.8 million for the same period in 1999. The Company
recognized $2.6 million of client warrant income during the period due to the
expiration of restrictions on the sale of warrants to acquire common stock of US
Interactive, Inc., RAVISENT Technologies, Inc. and EMAX Solutions Partners, Inc.
Teleservices fee income increased $701,000 over the first quarter of 1999 due to
revenue from new inbound clients. Mutual fund, annuity and insurance commissions
increased $399,000 over the first quarter of 1999. Service charges on deposits
increased $122,000 over the first quarter of 1999. These increases were
partially offset by net unrealized losses in the mezzanine and venture capital
funds amounting to $955,000 during the quarter.
Total non-interest expense was $10.0 million for the quarter ended March
31, 2000 compared to $6.4 million for the quarter ended March 31, 1999. The
increase in non-interest expense for the quarter ended March 31, 2000 over the
comparable quarter in 1999 was primarily due to increases in salaries and
employee benefits of $1.9 million as a result of additional employees to staff
three new bank branches, recent acquisitions, the staffing of Progress Capital
Management, Inc. to pursue our SBIC license, and from other new positions
established within the Company. Occupancy and furniture, fixtures and equipment
expenses increased $529,000 mainly due to a new operations center, new branch
openings and recent acquisitions. Professional services expense increased
$339,000 due to consulting and legal costs associated with recent acquisitions
and the increased usage of an interactive voice response system in handling new
inbound clients. The $679,000 increase in other non-interest expense included
nonrecurring system conversion related expenses of approximately $124,000. The
Company experienced increases in loan expense, advertising, state franchise
taxes, telephone and goodwill amortization as it expanded its non-banking
businesses, and opened three new bank branches and a new operations center since
the first quarter of 1999.
Total assets increased to $822.7 million at March 31, 2000 from $765.5
million at December 31, 1999. Total deposits increased to $547.6 million at
March 31, 2000 from $521.4 million at December 31, 1999. Deposit growth was
primarily the result of new commercial business customer relationships and
retail branch expansion.
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 fifteen full service offices. The Company also offers a
diversified array of financial services including equipment leasing through
Progress Leasing Company, with offices in Blue Bell, Pennsylvania and Timonium,
Maryland, and financial planning services and investments through Progress
Financial Resources, Inc., headquartered in Philadelphia, Pennsylvania; and
asset based lending through the Progress Business Credit. In addition, the
Company also 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; and Raleigh, North
Carolina. The Company also conducts business-to-business telemarketing through
Procall Teleservices, Inc.; construction and development of assisted living
communities through Progress Development Corporation; venture capital activities
managed by Progress Capital Management, Inc.; and financial and operational
management consulting services for commercial clients through KMR Management,
Inc. located in Willow Grove, Pennsylvania. 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
Consolidated Statements of Financial Condition
(Dollars in Thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- -------------
Assets: (Unaudited) (Audited)
Cash and due from banks:
<S> <C> <C>
Non-interest bearing $18,687 $15,648
Interest bearing 19,668 24,278
Trading securities - 3,267
Investments and mortgage-backed securities
Available for sale at fair value (amortized cost: $170,280 and $147,529) 167,329 149,518
Held to maturity at amortized cost (fair value: $33,151 and $32,914) 34,578 34,309
Loans and leases, net (net of reserve: $5,618 and $5,927) 535,084 497,738
Premises and equipment 18,083 16,443
Other assets 29,320 24,333
-------- --------
Total assets $822,749 $765,534
======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $547,640 $521,439
Short-term borrowings 71,111 50,767
Other liabilities 35,149 19,068
Long-term Debt:
Federal Home Loan Bank advances 85,000 85,000
Other debt 20,000 24,000
Subordinated Debt 3,000 3,000
-------- --------
Total liabilities 761,900 703,274
-------- --------
Corporation-obligated mandatorily redeemable capital securities of subsidiary
trust holding solely junior subordinated debentures of the Corporation 14,456 14,451
Commitments and contingencies
Shareholders' equity:
Serial preferred - 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; 5,692,000 and
5,680,000 shares issued; including treasury shares of 143,000 and 152,000;
and unallocated shares held by the Employee Stock Ownership Plan of 11,000 5,692 5,680
and 14,000
Other shareholders' equity, net 42,724 40,895
Net accumulated other comprehensive income (loss) (2,023) 1,234
--------- --------
Total shareholders' equity 46,393 47,809
--------- --------
Total liabilities, Corporation-obligated mandatorily redeemable capital
securities of subsidiary trust holding and shareholders' equity $822,749 $765,534
========= ========
</TABLE>
<PAGE>
Progress Financial Corporation
Consolidated Statements of Operations
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---------------- ---------------
<S> <C> <C>
(Unaudited) (Unaudited)
Interest income:
Loans and leases, including fees $11,945 $ 9,557
Mortgage-backed securities 2,064 2,125
Investment securities 963 422
Other 239 193
------- ------
Total interest income 15,211 12,297
Interest expense:
Deposits 5,209 3,768
Short-term borrowings 888 665
Long-term borrowings 1,518 1,649
------- ------
Total interest expense 7,615 6,082
Net interest income 7,596 6,215
Provision for loan and lease losses 1,058 449
Net interest income after provision for loan and lease losses 6,538 5,766
Non-interest income:
Service charges on deposits 542 420
Lease financing fees 387 387
Mutual fund, annuity and insurance commissions 879 480
Teleservices fee income 944 243
Loan brokerage and advisory fees 521 523
Loss from sale of securities (112) (160)
Client warrant income 2,600 --
Equity (loss) in unconsolidated entities (955) 56
Fees and other 1,018 813
------- ------
Total non-interest income 5,824 2,762
------- ------
Non-interest expense:
Salaries and employee benefits 5,370 3,504
Occupancy 639 345
Data processing 407 218
Furniture, fixtures and equipment 525 290
Professional services 706 367
Capital securities expense 399 398
Other 2,001 1,322
------- ------
Total non-interest expense 10,047 6,444
------- ------
Income before income taxes 2,315 2,084
Income tax expense 777 761
------- ------
Net income $ 1,538 $1,323
======= ======
Basic net income per common share $.28 $.25
======= ======
Diluted net income per common share $.27 $.23
======= ======
Dividends per common share $.05 $.04
======= ======
Basic average common shares outstanding 5,568,668 5,353,839
========= =========
Diluted average common shares outstanding 5,772,301 5,755,879
========= =========
</TABLE>
<PAGE>
Progress Financial Corporation
Supplemental Data
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
2000 1999
------------------------------
Profitability Measures:
<S> <C> <C>
Return on average assets .79% .82%
Return on average equity 12.81 12.88
Net interest spread (FTE) 3.65 3.51
Net interest margin (FTE) 4.28 4.13
Efficiency ratio 69.96 67.01
Diluted net income per common share (1) $ .27 $ .23
Selected Loan Data:
Non-performing assets $4,139 $4,407
Ratio of non-performing assets to total assets .50% .66%
Ratio of allowance for loan and lease losses
to total loan and leases receivable 1.04 1.11
Ratio of allowance for loan and lease losses
to non-performing loan and leases receivable 135.73 110.15
Loan delinquency ratio 2.04 2.93
Ratio of loans and leases to deposits 98.73 100.25
Selected Equity Data:
Book value per share (1) $8.67 $7.82
Tangible book value per share (1) 7.78 6.85
Dividends per common share (1) .05 .04
Average equity to average assets 6.20% 6.37%
Tier 1 risk-based capital ratio (Bank) 9.05 9.08
Total risk-based capital ratio (Bank) 10.06 10.13
Tier 1 leverage ratio (Bank) 6.22 6.37
Selected Average Balances:
Loans, gross $521,526 $428,761
Earning assets 721,929 615,234
Total assets 778,755 653,351
Deposits 526,196 417,524
Equity 48,298 41,658
</TABLE>
(1) Per share amounts have been restated to reflect the 5% stock dividend
distributed to shareholders on August 31, 1999.
<PAGE>
Progress Financial Corporation
Supplemental Balances
<TABLE>
<CAPTION>
Period-End Balances At : March 31, 2000 December 31, 1999 % Change
------------------- ---------------------- ----------------------
Loans and Leases, Net:
<S> <C> <C> <C>
Commercial business $147,433 $119,807 23.1%
Commercial real estate 164,897 162,588 1.4
Construction, net of loans in process 57,597 58,813 (2.1)
Single family residential real estate 42,359 40,554 4.5
Consumer 34,663 34,918 (.7)
Leases receivable 93,753 86,985 7.8
------------------- ---------------------- ----------------------
Total loans and leases 540,702 503,665 7.4
Allowance for loan and lease losses (5,618) (5,927) (5.2)
------------------- ---------------------- ----------------------
Loans and leases, net $535,084 $497,738 7.5%
=================== ====================== ======================
Deposits:
Non-interest-bearing demand deposits $ 80,230 $ 65,305 22.9%
NOW and SuperNow 89,785 80,086 12.1
Money Market 37,932 35,015 8.3
Passbook and Statement Savings 30,903 31,517 (1.9)
Time deposits 308,790 309,516 (.2)
------------------- ---------------------- ----------------------
Total Deposits $547,640 $521,439 5.0%
=================== ====================== ======================
</TABLE>
###
<PAGE>
Progress Financial Corporation
Consolidated Statements of Operations
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
1999 1998 1999 1998
---- ---- ---- ----
Interest income:
<S> <C> <C> <C> <C>
Loans and leases, including fees $10,860 $ 9,414 $40,952 $35,468
Mortgage-backed securities 2,055 2,474 8,008 8,686
Investment securities 838 355 2,346 1,017
Other 223 110 868 158
------- ------- ------- -------
Total interest income 13,976 12,353 52,174 42,329
Interest expense:
Deposits 4,808 3,830 16,759 14,466
Short-term borrowings 432 633 2,199 3,164
Long-term borrowings 1,570 1,678 6,474 4,820
------- ------- ------- -------
Total interest expense 6,810 6,141 25,432 22,450
------- ------- ------- -------
Net interest income 7,166 6,212 26,742 22,879
Provision for possible loan and lease losses 1,225 300 3,548 959
------- ------- ------- -------
Net interest income after provision for possible loan and lease 5,941 5,912 23,194 21,920
losses
Non-interest income:
Service charges on deposits 584 432 2,097 1,663
Lease financing fees 333 350 1,531 1,414
Mutual fund, annuity and insurance commissions 902 - 2,669 -
Teleservices fee income 796 245 3,406 1,034
Loan brokerage and advisory fees 688 690 2,385 2,108
Gain (loss) from sale of securities (125) 96 (347) 533
Client warrant income 931 73 4,188 73
Fees and other 2,756 369 5,064 1,835
------- ------ ------- ------
Total non-interest income 6,865 2,255 20,993 8,660
------- ------ ------- ------
Non-interest expense:
Salaries and employee benefits 4,912 2,962 17,586 11,272
Occupancy 475 285 1,606 1,280
Data processing 354 275 1,175 1,073
Furniture, fixtures and equipment 479 282 1,623 1,085
Professional services 707 306 2,222 1,117
Capital securities expense 399 398 1,595 1,593
Other 2,529 1,292 8,166 5,256
------- ------ ------- -------
Total non-interest expense 9,855 5,800 33,973 22,676
------- ------ ------- -------
Income before income taxes and cumulative effect of accounting change 2,951 2,367 10,214 7,904
Income tax expense 990 850 3,543 2,878
------- ------ ------- -------
Income before cumulative effect of accounting change 1,961 1,517 6,671 5,026
Cumulative effect of accounting change (net of tax benefit of $26) - - - (46)
------- ------ ------- -------
Net Income $1,961 $1,517 $6,671 $4,980
======= ====== ======= =======
Basic income per common share before cumulative effect of accounting $.35 $.28 $1.21 $.98
change ==== ==== ===== ====
Diluted income per common share before cumulative effect of accounting $.34 $.26 $1.15 $.89
change ==== ==== ===== ====
Basic net income per common share $.35 $.28 $1.21 $.97
==== ==== ===== ====
Diluted net income per common share $.34 $.26 $1.15 $.88
==== ==== ===== ====
Dividends per common share $.05 $.04 $.18 $.14
==== ==== ===== ====
Basic average common shares outstanding 5,573,076 5,339,935 5,503,259 5,124,681
========= ========= ========= =========
Diluted average common shares outstanding 5,788,924 5,855,871 5,809,921 5,627,588
========= ========= ========= =========
</TABLE>
###
<PAGE>
Exhibit 99(b)
Analyst package distributed on June 20, 2000
<PAGE>
<TABLE>
<CAPTION>
Three months ended
March 31,
Percent
2000 1999 change
---------------- ---------------- -----------------
Per Common Share Data
---------------------
Net income:
<S> <C> <C> <C>
Basic $0.28 $0.25 12.00%
Diluted $0.27 $0.23 17.39%
Cash dividends declared $0.05 0.04 25.00%
Book value $8.38 $7.72 8.55%
Tangible book value $7.32 $6.78 7.96%
Average shares outstanding:
Basic 5,568,668 5,353,839 4.01%
Diluted 5,772,301 5,755,879 0.29%
Financial Ratios
----------------
Return on average shareholders' equity 12.81% 12.88% -0.56%
Return on average total assets 0.79% 0.82% -3.28%
Average yield on earning assets 8.52% 8.14% 4.67%
Average rate on interest bearing liabilities 4.87% 4.63% 5.18%
Net interest spread 3.65% 3.51% 3.99%
Net interest margin (FTE) 4.28% 4.13% 3.63%
Efficiency ratio 69.96% 67.01% 4.39%
Risk-based capital - Tier 1 9.05% 9.08% -0.33%
- Total capital 10.06% 10.13% -0.69%
Tier 1 leverage ratio 6.22% 6.37% -2.35%
Average shareholders' equity/average total assets 6.20% 6.37% -2.65%
Asset Quality (dollars in thousands)
------------------------------------
Allowance for loan losses $5,618 $4,854 15.74%
Allowance for loan losses/Loans 1.04% 1.11% -6.31%
Net charge-offs(recoveries) $1,367 $85 1508.24%
Net charge-offs/Average loans (annualized) 1.05% 0.08% 1211.23%
Nonperforming assets $4,139 $4,407 -6.08%
Nonperforming assets/Total loans plus OREO 0.77% 1.02% -24.51%
Nonperforming assets/Total assets 0.50% 0.66% -24.24%
Allowance for loan losses/Nonperforming loans 135.73% 110.15% 23.23%
Average Balances (in thousands)
-------------------------------
Loans and leases(gross of reserves) $521,526 $428,761 21.64%
Earning assets 721,929 615,234 17.34%
Total assets 778,755 653,351 19.19%
Deposits 526,196 417,524 26.03%
Interest bearing liabilities 629,020 533,061 18.00%
Shareholders' equity 48,298 41,658 15.94%
Period End Balances (in thousands)
----------------------------------
Loans and leases(gross of reserves) $540,702 $435,967 24.02%
Total assets 822,749 666,184 23.50%
Deposits 547,640 434,870 25.93%
Total liabilities 761,900 610,096 24.88%
Shareholders' equity 46,393 41,677 11.32%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three months ended
March 31,
---------------------------------
Percent
2000 1999 change
------ ------ --------
TAX EQUIVALENT INCOME STATEMENT
-------------------------------
($ in thousands, except per share data)
<S> <C> <C> <C>
Net interest income(FTE) $7,684 $6,260 23%
FTE adjustment (88) (45) 96%
-----------------------------------
Net interest income 7,596 6,215 22%
Provision for losses on loans 1,058 449 136%
Non-Interest Income:
Service charges on deposits 542 420 29%
Lease financing fees 387 387 0%
Mutual fund, annuity and insurance commissions 879 480 83%
Teleservices fee income 944 243 288%
Loan brokerage and advisory fees 521 523 0%
Gain(loss) from sale of securities (112) (160) -30%
Client warrant income 2,600 - -
Fees and other income 63 869 -93%
-----------------------------------
Total non-interest income 5,824 2,762 111%
Non-Interest Expenses:
Salaries and employee benefits 5,370 3,504 53%
Occupancy 639 345 85%
Data processing 407 218 87%
Furniture, fixtures and equipment 525 290 81%
Loan and real estate owned expenses, net 231 127 82%
Professional services 706 367 92%
Capital securites expense 399 398 0%
Other 1,770 1,195 48%
----------------------------------
Total non-interest expenses 10,047 6,444 56%
Income Before Income Taxes 2,315 2,084 11%
Provision for income tax expense 777 761 2%
Net income $1,538 $1,323 16%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY INCOME STATEMENT
(Unaudited)
($ in thousands, except per share) Fourth Third Second First Year-
1999 Quarter Quarter Quarter Quarter to-date
----------------------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C>
FTE interest income $14,040 $13,216 $12,781 $12,342 $52,379
Interest expense 6,810 6,406 6,134 6,082 25,432
------- ------- ------- -------- -------
FTE net interest income 7,230 6,810 6,647 6,260 26,947
Less: FTE adjustment (64) (48) (48) (45) (205)
------- ------- ------- -------- -------
Net Interest Income 7,166 6,762 6,599 6,215 26,742
Provision for Losses on Loans 1,225 658 1,216 449 3,548
Non-Interest Income:
Service charges on deposits 584 572 521 420 2,097
Lease financing fees 333 334 477 387 1,531
Mutual fund, annuity and insurance commissions 902 713 574 480 2,669
Teleservices fee income 796 1,377 990 243 3,406
Loan brokerage and advisory fees 688 522 652 523 2,385
Gain(loss) from sale of securities (125) (66) 4 (160) (347)
Client warrant income 931 2,775 482 - 4,188
Fees and other income 2,756 889 550 869 5,064
------- ------- ------- -------- -------
Total non-interest income 6,865 7,116 4,250 2,762 20,993
Non-Interest Expenses:
Salaries and employee benefits 4,912 4,895 4,275 3,504 17,586
Occupancy 475 470 316 345 1,606
Data processing 354 339 264 218 1,175
Furniture, fixtures and equipment 479 429 425 290 1,623
Loan and real estate owned expenses, net 275 188 130 127 720
Professional services 707 568 580 367 2,222
Capital securites expense 399 399 399 398 1,595
Other 2,254 2,465 1,532 1,195 7,446
------- ------- ------- -------- --------
Total non-interest expenses 9,855 9,753 7,921 6,444 33,973
Income Before Income Taxes 2,951 3,467 1,712 2,084 10,214
Provision for income tax expense 990 1,210 582 761 3,543
------- ------- ------- -------- --------
Net Income $1,961 $2,257 $1,130 $1,323 $6,671
======= ======= ======= ======== ========
Other Data:
EPS - Basic 0.35 0.40 0.21 0.25 1.21
EPS - Diluted 0.34 0.39 0.19 0.23 1.15
ROA 1.08% 1.31% 0.68% 0.82% 0.98%
ROE 17.33% 20.73% 10.60% 12.88% 15.47%
Net interest margin (FTE) 4.29% 4.24% 4.29% 4.13% 4.24%
Dividends declared on common stock 0.05 0.04 0.04 0.04 0.17
FTE employees 316 292 295 268 316
</TABLE>
<PAGE>
QUARTERLY INCOME STATEMENT
(Unaudited)
($ in thousands, except per share) First
2000 Quarter
---- ----------
FTE interest income $15,299
Interest expense 7,615
-------
FTE net interest income 7,684
Less: FTE adjustment (88)
-------
Net Interest Income 7,596
Provision for Losses on Loans 1,058
Non-Interest Income:
Service charges on deposits 542
Lease financing fees 387
Mutual fund, annuity and insurance commissions 879
Teleservices fee income 944
Loan brokerage and advisory fees 521
Gain(loss) from sale of securities (112)
Client warrant income 2,600
Fees and other income 63
-------
Total non-interest income 5,824
Non-Interest Expenses:
Salaries and employee benefits 5,370
Occupancy 639
Data processing 407
Furniture, fixtures and equipment 525
Loan and real estate owned expenses, net 231
Professional services 706
Capital securites expense 399
Other 1,770
-------
Total non-interest expenses 10,047
=======
Income Before Income Taxes 2,315
Provision for income tax expense 777
-------
Net Income $1,538
=======
Other Data:
EPS - Basic $0.28
EPS - Diluted $0.27
ROA 0.79%
ROE 12.81%
Net interest margin (FTE) 4.28%
Dividends declared on common stock $0.05
FTE employees 301
<PAGE>
<TABLE>
<CAPTION>
ASSET QUALITY
(Unaudited)
2000 1999
-------- --------------------------------------------------------------------
($ in thousands) First Year- Fourth Third Second First
Allowance for Loan Losses Quarter to-date Quarter Quarter Quarter Quarter
------------------------- -------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $5,927 $4,490 $5,184 $4,984 $4,854 $4,490
Provision 1,058 3,548 1,225 658 1,216 449
Charge-offs 1,533 2,554 638 572 1,184 160
Recoveries (166) (443) (156) (114) (98) (75)
Net loan charge-offs 1,367 2,111 482 458 1,086 85
Balance at end of period $5,618 $5,927 $5,927 $5,184 $4,984 $4,854
Allowance as percentage of loans 1.04% 1.18% 1.18% 1.11% 1.09% 1.11%
Net charge-offs/average loans 0.26% 0.46% 0.10% 0.10% 0.24% 0.02%
Allowance as percentage of
non-performing loans 135.73% 103.96% 103.96% 137.87% 104.36% 110.15%
Non-performing assets
---------------------
Non-accrual loans and leases 4,139 $5,701 $5,701 $3,760 $4,776 4,407
Other real estate owned - 66 66 - - -
Total non-performing assets $4,139 $5,767 $5,767 $3,760 $4,776 $4,407
Non-performing assets to:
Loans and leases plus OREO 0.77% 1.16% 1.16% 0.81% 1.06% 1.02%
Total assets 0.50% 0.75% 0.75% 0.53% 0.72% 0.66%
Loans past due 90 days $4,569 $2,336 $2,336 $7,282 $5,210 $2,123
Total under-performing loans $8,708 $8,103 $8,103 $11,042 $9,986 $6,530
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEET DATA
(Unaudited)
2000 1999
-------- ------------------------------------------------------------
($ in thousands) First Fourth Third Second First Year-
Average balances Quarter Quarter Quarter Quarter Quarter to-date
---------------- --------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Cash and due from banks (Interest-earning) $ 16,945 $ 18,322 $ 21,726 $ 13,326 $ 16,294 $ 16,907
Trading securities 1,077 343 - - - 86
Loans,net of unearned discounts:
Commercial business 130,946 110,450 105,225 104,634 95,429 103,934
Commercial mortgage 166,847 154,760 143,340 133,390 114,799 136,572
Residential real estate 40,686 42,018 44,109 47,136 49,358 45,656
Construction loans 59,720 54,856 52,724 48,784 44,280 50,161
Consumer 34,853 33,872 31,274 30,229 28,956 31,083
Lease financing 88,474 82,579 77,263 74,213 73,389 76,861
Loans held for sale - - 9,121 9,175 22,550 10,212
-------- -------- -------- -------- -------- --------
Total loans 521,526 478,535 463,056 447,561 428,761 454,479
Investment securities(available for sale) 31,429 21,692 9,936 7,513 17,288 14,617
Investment securities(held to maturity) 34,418 31,488 28,685 28,297 13,843 25,578
Mortgage-backed securities 116,534 117,807 113,832 124,458 139,048 123,786
-------- -------- -------- -------- -------- --------
Earning assets 721,929 668,187 637,235 621,155 615,234 635,453
Cash and due from banks(non-interest bearing) 16,426 13,119 14,209 15,349 13,770 14,091
Other non-earning assets 40,400 38,876 34,329 27,618 24,347 31,313
-------- -------- -------- -------- -------- --------
Total assets $778,755 $720,182 $685,773 $664,122 $653,351 $680,857
======== ======== ======== ======== ======== ========
Deposits:
Demand $69,559 $66,247 $ 57,660 $ 54,101 $ 52,049 $ 57,514
Interest bearing:
NOW and Supernow accounts 83,141 79,772 79,027 79,942 78,084 79,206
Money Market Accounts 35,855 37,053 34,767 34,632 36,142 35,649
Passbook and Stmt Savings 31,452 31,282 31,857 32,161 31,753 31,763
Time deposits 306,189 287,853 256,916 231,197 219,496 248,866
-------- -------- -------- -------- -------- --------
Total interest bearing deposits 456,637 435,960 402,567 377,932 365,475 395,484
Federal Home Loan Bank borrowings 88,126 88,000 88,000 88,000 88,000 88,000
Other borrowings 84,257 54,794 61,940 74,642 79,586 67,740
-------- -------- -------- -------- -------- --------
Interest bearing liabilities 629,020 578,754 552,507 540,574 533,061 551,224
Non-interest bearing liabilities 17,425 15,834 17,973 12,234 12,150 14,547
Capital securities 14,453 14,448 14,443 14,438 14,433 14,441
Total shareholders' equity 48,298 44,899 43,190 42,775 41,658 43,131
-------- -------- -------- -------- -------- --------
Total Liabilities and Stockholders' Equity $778,755 $720,182 $685,773 $664,122 $653,351 $680,857
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEET DATA - continued
(Unaudited)
2000 1999
--------- -----------------------------------------------------------------
First Fourth Third Second First Year-
Average yields and rates Quarter Quarter Quarter Quarter Quarter to-date
------------------------ --------- -----------------------------------------------------------------
Interest - earning assets
<S> <C> <C> <C> <C> <C> <C>
Interest-earning deposits 5.67% 4.83% 5.20% 5.03% 4.80% 5.13%
Investment securities 6.37% 6.72% 6.25% 6.43% 6.08% 6.34%
Mortgage-backed securities 7.12% 6.92% 6.48% 6.35% 6.20% 6.47%
Single family residential loans 7.50% 7.22% 7.23% 7.34% 7.37% 7.29%
Commercial real estate loans 8.68% 8.61% 8.56% 8.62% 8.67% 8.62%
Construction loans 10.23% 10.18% 10.05% 10.09% 10.00% 10.09%
Commercial business loans 8.90% 8.51% 8.37% 8.47% 8.77% 8.53%
Lease financing 11.35% 11.01% 11.28% 11.44% 11.03% 11.19%
Consumer loans 7.81% 7.82% 7.87% 7.83% 8.00% 7.88%
------ ------ ------ ------ ------ ------
Total interest - earning assets 8.52% 8.34% 8.23% 8.25% 8.14% 8.24%
Interest - bearing liabilities
Interest - bearing deposits
NOW and SuperNOW 3.10% 2.91% 2.74% 2.66% 2.77% 2.77%
Money Market 2.98% 2.90% 2.81% 2.73% 2.69% 2.79%
Passbook and Statement Savings 1.78% 1.85% 1.87% 1.90% 1.98% 1.90%
Time deposits 5.47% 5.25% 5.19% 5.14% 5.25% 5.21%
------ ------ ------ ------ ------ ------
Total interest - bearing deposits 4.59% 4.38% 4.24% 4.12% 4.18% 4.24%
FHLB borrowings 5.50% 5.62% 5.48% 5.57% 5.33% 5.56%
Other borrowings 5.73% 5.47% 5.68% 5.53% 5.90% 5.58%
------ ------ ------ ------ ------ ------
Total interest - bearing liabilities 4.87% 4.67% 4.60% 4.55% 4.63% 4.61%
Interest Rate Spread 3.65% 3.67% 3.63% 3.70% 3.51% 3.63%
Net Interest Margin 4.28% 4.29% 4.24% 4.29% 4.13% 4.24%
Avg Int-earning assets to int-bearing liabilities 114.77% 115.45% 115.34% 114.91% 115.42% 115.28%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERIOD END BALANCE SHEET DATA
(Unaudited)
2000 1999
--------- -------------------------------------------------------------
First Fourth Third Second First
($ in thousands) Quarter Quarter Quarter Quarter Quarter
--------- -------------------------------------------------------------
Assets
------
<S> <C> <C> <C> <C> <C>
Cash and due from bank(interest bearing) $ 19,668 $ 27,545 $ 16,460 $ 11,743 $ 22,248
Loans and lease(net) 535,084 497,738 461,601 451,967 431,113
Investment securities:
Held-to-maturity:
Book 34,578 34,309 28,721 28,459 18,747
Market 33,151 32,914 27,660 27,963 18,926
Available-for-sale 32,167 30,632 24,493 7,165 17,366
Mortgage backed securities 135,162 118,886 119,926 117,629 130,132
-------- -------- -------- -------- --------
Earning assets 756,659 709,110 651,201 616,963 619,606
Cash and due from bank(non-interest bearing) 18,687 15,648 13,356 14,113 15,663
Other non earning assets 47,403 40,776 39,526 34,731 30,915
-------- -------- -------- -------- --------
Total assets $822,749 $765,534 $704,083 $665,807 $666,184
======== ======== ======== ======== ========
Liabilities and shareholders' equity
------------------------------------
Deposits:
Demand $ 80,230 $ 65,305 $ 56,516 $ 57,201 $ 57,226
Interest bearing 467,410 456,134 435,040 387,927 377,644
-------- -------- -------- -------- --------
Total deposits 547,640 521,439 491,556 445,128 434,870
Federal Home Loan Bank borrowings 88,000 88,000 88,000 88,000 88,000
Other borrowings 91,111 74,767 53,349 66,160 77,344
-------- -------- -------- -------- --------
Interest bearing liabilities 726,751 684,206 632,905 599,288 600,214
Other Liabilities 35,149 19,068 12,427 9,337 9,882
-------- --------- -------- -------- --------
Total liabilities 761,900 703,274 645,332 608,625 610,096
Capital Securities 14,456 14,451 14,446 14,436 14,411
Total shareholders' equity 46,393 47,809 44,305 42,746 41,677
-------- -------- -------- -------- --------
Total Liabilities, cap sec, and equity $822,749 $765,534 $704,083 $665,807 $666,184
======== ======== ======== ======== ========
Other selected balances
-----------------------
Total intangible assets
Goodwill only 5,832 4,914 5,090 5,190 5,053
Amount included in shareholders' equity
for net unrealized gains on investments
available-for-sale (2,023) 1,234 (1,557) (1,896) (871)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Data
(Unaudited)
2000 1999
---------- -------------------------------------------------------------------------
First Fourth Third Second First Year-
Quarter Quarter Quarter Quarter Quarter to-date
---------- -------------------------------------------------------------------------
Per common share
----------------
Shares outstanding:
<S> <C> <C> <C> <C> <C> <C>
Average-basic 5,568,668 5,573,076 5,624,857 5,457,518 5,353,839 5,503,259
Average-diluted 5,772,301 5,789,096 5,856,032 5,834,733 5,755,879 5,810,089
Period-end 5,537,525 5,513,345 5,591,692 5,647,096 5,398,933 5,513,345
Book value $8.38 $8.67 $7.54 $7.57 $7.72 $8.67
Tangible Book Value $7.32 $7.78 $6.63 $6.65 $6.78 $7.78
Price:
High 12 7/8 13 1/4 15 1/16 16 27/64 15 1/8 16 27/64
Low 10 15/16 12 1/8 12 5/8 13 37/64 11 27/64 11 27/64
Close 10 15/16 12 5/8 13 1/8 13 59/64 13 13/16 12 5/8
Capital ratios
--------------
($ in thousands)
Risk-based capital:
Tier 1 capital $50,282 $47,112 $44,414 $42,798 $41,467 $47,112
% risk adjusted assets 9.05% 8.90% 9.10% 8.96% 9.08% 8.90%
Total capital $55,873 $53,006 $49,584 $47,767 $46,279 $53,006
% risk adjusted assets 10.06% 10.01% 10.15% 10.00% 10.13% 10.01%
Tier 1 leverage ratio 6.22% 6.30% 6.44% 6.58% 6.37% 6.30%
Average shareholders' equity to
total average assets 6.20% 6.23% 6.30% 6.44% 6.37% 6.33%
</TABLE>
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