Message #1 From:
Stock News Bot Date: April 26, 2005 09:55:51 AM
ABBC Abington Community Bancorp, Inc. Announces Record Earnings
Abington Community Bancorp, Inc. Announces Record Earnings
JENKINTOWN, Pa.
Abington Community Bancorp, Inc.
Robert W. White, 215-886-8280
Abington Community Bancorp, Inc. (the "Company") (Nasdaq:ABBC), the recently formed "mid-tier" holding company for Abington Bank (the "Bank"), reported net income of $1.4 million for the quarter ended December 31, 2004 and $4.6 million for the year ended December 31, 2004, representing increases of 8.8% and 11.4%, respectively, over the comparable 2003 periods. On December 16, 2004, the Bank completed its reorganization to the mutual holding company form and the related subscription offering for shares of the Company's common stock. The Company generated gross proceeds of $71.4 million through the initial public offering.
Mr. Robert W. White, Chairman, President and CEO of the Company, stated, "2004 truly was a memorable year for Abington Bank. We successfully completed our reorganization into a mutual holding company and the stock offering by Abington Community Bancorp, and today we are announcing the highest net income in our long history. In addition, the amount of our new loan originations reached historic levels in 2004. Our loan origination activity in 2004 was well diversified among the various types of loans we offer - mortgage loans, commercial loans, consumer loans and construction loans - reflecting our philosophy of growth as a true community bank. Abington Bank has rededicated itself to meeting the personal finance and business needs of our customers. We pledge to our customers and new stockholders to stay on course as we continue to build our franchise."
The Company's total assets increased $113.5 million, or 18.8%, to $718.0 million at December 31, 2004 compared to $604.4 million at December 31, 2003. During 2004, the largest increases in our assets were in the categories of net loans receivable, mortgage-backed securities and cash and cash equivalents. Our net loans receivable increased by $48.0 million, or 13.2%, to $412.7 million at December 31, 2004 compared to $364.6 million at December 31, 2003. Our growth in loans resulted from $181.2 million of diversified loan originations consisting of 37% construction loans, 26% mortgage loans, 17% consumer loans and 20% commercial loans. Our mortgage-backed securities, both held-to-maturity and available-for-sale, increased by an aggregate of $43.5 million, or 35.9% to an aggregate of $164.7 million at December 31, 2004 compared to an aggregate of $121.2 million at December 31, 2003. During 2004, purchases of $83.1 million in the aggregate more than offset $38.7 million in payments and repayments of our held-to-maturity and available-for-sale mortgage-backed securities. Given the relative efficiencies provided by mortgage-backed securities coupled with what we believe is good credit risk, we have continued to invest in mortgage-backed securities as part of our growth efforts. Our cash and cash equivalents increased by $13.6 million to $33.3 million at December 31, 2004 compared to $19.7 million at December 31, 2003. This was due primarily to $69.3 million in net proceeds from our stock issuance in December 2004 as well as a $42.6 million increase in our deposit base during 2004. These increases were partially offset by the previously described new loan originations (net of repayments) and purchases of mortgage-backed securities (net of payments and repayments), as well as approximately $8.0 million in aggregate purchases of both held-to-maturity and available-for-sale investment securities net of maturities.
The $42.6 million or 11.8% increase in deposits at December 31, 2004 compared to December 31, 2003 resulted from an increase in all categories of deposits. During 2004, demand deposits increased $13.2 million, savings accounts increased $13.1 million and certificates of deposit increased $16.3 million. The $4.2 million increase in other borrowed money to $12.9 million at December 31, 2004 compared to $8.7 million at December 31, 2003 reflects an increase in the amount of securities repurchase agreements entered into with certain commercial checking account customers.
Our stockholders' equity increased $69.8 million to $123.1 million at December 31, 2004 compared to $53.2 million at December 31, 2003. The primary reason for the increase was $69.3 million in net proceeds from the Company's initial public offering on December 16, 2004. The Company sold 7,141,500 shares of stock to eligible depositors for $10 per share representing 45% of the total outstanding shares of the Company. The remaining 55% or 8,728,500 outstanding shares are owned by the Company's parent mutual holding company, Abington Mutual Holding Company. As of December 31, 2004, approximately 153,000 shares of the Company's common stock had been purchased for $2.0 million by the Bank's Employee Stock Ownership Plan ("ESOP"). Subsequent to December 31, 2004, the ESOP has purchased an additional 247,000 shares of the Company's common stock towards its anticipated total purchases of approximately 571,000 shares. Retained earnings increased $4.5 million during 2004 primarily as a result of $4.6 million in net income, which was partially offset by a $770,000 increase in accumulated other comprehensive losses and the $100,000 capitalization of Abington Mutual Holding Company.
Net interest income for the three-months ended December 31, 2004 increased $652,000 or 16.4% to $4.6 million compared to $4.0 million for the three-months ended December 31, 2003. Interest income increased $1.0 million for the fourth quarter of 2004 when compared to the prior year comparable period due to increases in the average balances of all categories of interest-earning assets, with the largest increases occurring in the average balances of loans and mortgage-backed securities. The increases in these average balances were somewhat offset by decreases in the average yields on mortgage-backed securities, loans receivable and other interest-earning assets, as well as a $389,000 or 11.4% increase in interest expense. The increase in interest expense for the fourth quarter of 2004 when compared to the same period in the prior year resulted from increases in the average balances of all categories of interest-bearing liabilities as well as increases in the average rates paid on those liabilities.
Net interest income for the year ended December 31, 2004 increased $541,000 or 3.4% to $16.6 million compared to $16.1 million for the year ended December 31, 2003. Interest income increased $852,000 or 2.8% to $30.8 million for the year ended December 31, 2004 compared to $30.0 million for the prior year due to increases in interest income on investments and mortgage-backed securities. Both the average yield and average balance of investment securities increased while a slight decrease in the average yield of mortgage-backed securities was more than offset by a $44.8 million or 48.6% increase in the average balance. A decrease in the average yield on loans receivable to 5.93% in 2004 compared to 6.59% in 2003 offset a $23.4 million increase in the average balance of such assets. Interest expense increased $310,000 or 2.2% to $14.2 million for the year ended December 31, 2004 compared to $13.9 million for the prior year due primarily to increases in the average balances of FHLB advances and other borrowings.
We made no provision for loan losses in the fourth quarter of 2004 or 2003. For the year ended December 31, 2004 our provision for loan losses was $45,000 compared to $375,000 for the year ended December 31, 2003. At December 31, 2004 we had $227,000 of non-performing assets and our allowance for loan losses amounted to $1.4 million. Our non-performing loans as a percentage of total loans receivable was 0.05% at December 31, 2004 and 0.12% at December 31, 2003. For the year ended December 31, 2004 our net loan charge-offs amounted to $88,000. Net loan charge-offs amounted to $733,000 for the year ended December 31, 2003 of which $671,000 related to one borrower.
Our total non-interest income amounted to $639,000 for the three-months ended December 31, 2004 compared to $700,000 for the three-months ended December 31, 2003. The decrease was due primarily to a $92,000 decrease in the amount of gain recognized on derivative instruments which was partially offset by an increase in other non-interest income. Total non-interest income increased $383,000 or 20.6% to $2.2 million for the year ended December 31, 2004 compared to $1.9 million for the year ended December 31, 2003. Contributing to the increase was a $329,000 or 24.6% increase in service charge income, particularly fees earned on our overdraft protection program which we began offering in May 2003. Our loss on derivative instruments improved to $141,000 for the year ended December 31, 2004 compared to $407,000 for the year ended December 31, 2003. These changes were somewhat offset as $190,000 of combined gains on sales of loans and property that were recognized in 2003 did not recur in 2004.
Our total non-interest expense for the quarter and year ended December 31, 2004 amounted to $3.2 million and $12.0 million, respectively, representing increases of $414,000 and $543,000, respectively, from the quarter and year ended December 31, 2003. The increases for both the quarter and the year ended December 31, 2004 when compared to the same periods for the prior year were due primarily to increases in salaries and employee benefits expense, the largest component of non-interest expense, and data processing expense. The increase in salaries and employee benefits expense was due primarily to normal merit increases in salaries and an increase in staffing levels. Our data processing expense increased as a result of increased deposits and deposit activity, as data processing expense is dependent in part on the number of deposit transactions that are processed. These increases were partially offset by decreases in ATM expense and advertising and promotions expense. The decrease in ATM expense was due to certain savings negotiated during a contract renewal in 2004. The decrease in advertising and promotions was due to higher expenditures in 2003 to promote the opening of new branches.
Income tax expense for the quarter and year ended December 31, 2004 amounted to $657,000 and $2.3 million, respectively, compared to $595,000 and $2.0 million, respectively, for the quarter and year ended December 31, 2003. Our effective income tax rate remained relatively consistent at 31.8% and 31.5% for the quarters ended December 31, 2004 and 2003, respectively. Our effective income tax rate was also consistent from year to year at 33.2% and 33.1% for the years ended December 31, 2004 and 2003, respectively.
Abington Community Bancorp, Inc. is the "mid-tier" holding company for Abington Bank. Abington Bank is a Pennsylvania-chartered, FDIC-insured savings bank which was originally organized in 1867. Abington Bank conducts business from its headquarters and main office in Jenkintown, Pennsylvania as well as seven additional full service branch offices and four limited service banking offices located in Montgomery and Bucks Counties, Pennsylvania. As of December 31, 2004, Abington Community Bancorp had $718.0 million in total assets, $405.3 million in deposits and $123.1 million in stockholders' equity.
This news release contains certain forward-looking statements, including statements about the financial condition, results of operations and earnings outlook for Abington Community Bancorp, Inc. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors - many of which are beyond the Company's control - could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's reports filed from time-to-time with the Securities and Exchange Commission, describe some of these factors, including general economic conditions, changes in interest rates, deposit flows, the cost of funds, changes in credit quality and interest rate risks associated with the Company's business and operations. Other factors described include changes in our loan portfolio, changes in competition, fiscal and monetary policies and legislation and regulatory changes. Investors are encouraged to access the Company's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding the Company at www.abingtonbank.com under the Investor Relations menu. We undertake no obligation to update any forward-looking statements.
ABINGTON COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
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December 31, December 31,
2004 2003
-----------------------------
ASSETS
Cash and cash equivalents $ 33,295,832 $ 19,695,625
Investment securities held to maturity
(estimated fair value--2004,
$10,336,485) 10,219,764
Investment securities available for sale
(amortized cost--2004, $77,348,884;
2003, $79,579,757) 76,163,951 78,984,495
Mortgage-backed securities held to
maturity (estimated fair value--2004,
$81,322,041; 2003, $42,891,508) 81,703,737 43,009,221
Mortgage-backed securities available for
sale (amortized cost--2004,
$83,300,963; 2003, $77,908,514) 83,027,943 78,212,883
Loans receivable, net of allowance for
loan loss (2004, $1,412,697; 2003,
$1,455,889) 412,655,664 364,619,621
Accrued interest receivable 2,710,162 2,386,841
Federal Home Loan Bank stock--at cost 10,450,100 10,039,300
Property and equipment, net 5,533,085 5,800,068
Deferred tax asset 1,313,068 1,062,471
Prepaid expenses and other assets 905,074 628,431
-------------- --------------
TOTAL ASSETS $ 717,978,380 $ 604,438,956
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing $ 37,596,228 $ 37,855,415
Interest-bearing 367,693,829 324,810,757
-------------- --------------
Total deposits 405,290,057 362,666,172
Advances from Federal Home Loan Bank 170,666,374 173,731,623
Other borrowed money 12,865,521 8,680,916
Accrued interest payable 910,040 943,949
Advances from borrowers for taxes and
insurance 2,047,151 2,135,301
Accounts payable and accrued expenses 3,144,536 3,046,727
-------------- --------------
Total liabilities 594,923,679 551,204,688
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value,
10,000,000 shares authorized, none
issued
Common stock, $0.01 par value,
40,000,000 shares authorized, issued
and outstanding: 15,870,000 in 2004 158,700
Additional paid-in capital 69,096,936
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP) (2,046,137)
Deferred compensation plans trust (1,074,200)
Retained earnings 57,881,651 53,426,380
Accumulated other comprehensive loss (962,249) (192,112)
-------------- --------------
Total stockholders' equity 123,054,701 53,234,268
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 717,978,380 $ 604,438,956
============== ==============
ABINGTON COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
----------------------------------------------------------------------
Quarter Ended Year Ended
December 31, December 31,
-------------------------------------------------
2004 2003 2004 2003
-------------------------------------------------
INTEREST INCOME:
Interest on loans $6,112,011 $5,441,594 $22,820,635 $23,827,902
Interest and
dividends on
investment and
mortgage-backed
securities 2,314,147 1,943,841 8,027,992 6,168,838
----------- ----------- ------------ ------------
Total interest
income 8,426,158 7,385,435 30,848,627 29,996,740
INTEREST EXPENSE:
Interest on
deposits 1,781,391 1,532,902 6,561,036 6,822,294
Interest on Federal
Home Loan Bank
advances 1,960,650 1,867,332 7,531,886 7,008,352
Interest on other
borrowed money 60,881 13,505 115,618 67,494
----------- ----------- ------------ ------------
Total interest
expense 3,802,922 3,413,739 14,208,540 13,898,140
----------- ----------- ------------ ------------
NET INTEREST INCOME 4,623,236 3,971,696 16,640,087 16,098,600
PROVISION FOR LOAN
LOSSES 45,000 375,000
----------- ----------- ------------ ------------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 4,623,236 3,971,696 16,595,087 15,723,600
----------- ----------- ------------ ------------
NON-INTEREST INCOME
Service charges 421,349 430,336 1,662,727 1,333,917
Rental income 13,050 14,395 52,327 55,667
Gain (loss) on
derivative
instruments, net 14,056 105,817 (140,813) (406,710)
Gain on sale of
property 146,268
Gain on sale of
loans 44,036
Other income 190,382 149,831 668,577 686,655
----------- ----------- ------------ ------------
Total non-interest
income 638,837 700,379 2,242,818 1,859,833
----------- ----------- ------------ ------------
NON-INTEREST
EXPENSES
Salaries and
employee benefits 1,737,945 1,346,505 6,431,433 5,971,415
Net occupancy 306,763 272,896 1,163,667 1,157,090
Depreciation 122,080 136,488 496,477 539,454
Data processing 366,007 346,650 1,268,339 1,166,936
ATM expense 84,501 105,043 291,962 422,463
Deposit insurance
premium 28,420 34,076 113,318 107,565
Advertising and
promotions 58,969 113,258 285,532 349,448
Other 491,898 427,458 1,964,477 1,757,848
----------- ----------- ------------ ------------
Total non-interest
expenses 3,196,583 2,782,374 12,015,205 11,472,219
----------- ----------- ------------ ------------
INCOME BEFORE INCOME
TAXES 2,065,490 1,889,701 6,822,700 6,111,214
----------- ----------- ------------ ------------
PROVISION FOR INCOME
TAXES 656,689 594,701 2,267,429 2,021,192
----------- ----------- ------------ ------------
NET INCOME $1,408,801 $1,295,000 $ 4,555,271 $ 4,090,022
=========== =========== ============ ============
BASIC EARNINGS PER
SHARE (1) n/a (1) n/a
DILUTED EARNINGS PER
SHARE (1) n/a (1) n/a
----------------------------------------------------------------------
(1) Due to the timing of the Bank's reorganization into the mutual
holding company form and the completion of the Company's initial
public offering on December 16, 2004, earnings per share for the
period from December 16, 2004 to December 31, 2004 is not considered
meaningful and is not shown.
ABINGTON COMMUNITY BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
----------------------------------------------------------------------
Quarter Ended Year Ended
December 31, December 31,
-------------------------------
2004 2003 2004 2003
-------------------------------
Selected Operating Ratios(1):
Average yield on interest-earning
assets 4.96% 5.08% 4.95% 5.36%
Average rate on interest-bearing
liabilities 2.74% 2.69% 2.65% 2.86%
Average interest rate spread(2) 2.22% 2.39% 2.30% 2.50%
Net interest margin(2) 2.72% 2.73% 2.67% 2.88%
Average interest-earning assets to
average interest-bearing liabilities 122.29% 114.70% 116.08% 115.11%
Net interest income after provision
for loan losses to non-interest
expense 144.60% 142.77% 138.12% 137.05%
Total non-interest expense to average
assets 1.79% 1.84% 1.85% 1.97%
Efficiency ratio(3) 60.76% 59.55% 63.63% 63.88%
Return on average assets 0.79% 0.86% 0.70% 0.70%
Return on average equity 7.15% 9.77% 7.52% 7.85%
Average equity to average assets 11.02% 8.75% 9.30% 8.94%
Asset Quality Ratios(4):
Non-performing loans as a percent of
total loans receivable(5) 0.05% 0.13% 0.05% 0.13%
Non-performing assets as a percent of
total assets(5) 0.03% 0.08% 0.03% 0.08%
Allowance for loan losses as a percent
of non-performing loans 622.03% 315.15% 622.03% 315.15%
Net charge-offs to average loans
receivable 0.00% 0.01% 0.02% 0.21%
Capital Ratios(6):
Tier 1 leverage ratio 12.73% 8.81% 12.73% 8.81%
Tier 1 risk-based capital ratio 21.24% 15.12% 21.24% 15.12%
Total risk-based capital ratio 21.57% 15.53% 21.57% 15.53%
----------------------------------------------------------------------
(1) With the exception of end of period ratios, all ratios are based
on average monthly balances during the indicated periods and, for the
three-month periods ended December 31, 2004 and 2003, are annualized
where appropriate.
(2) Average interest rate spread represents the difference between the
average yield on interest-earning assets and the average rate paid on
interest-bearing liabilities, and net interest margin represents net
interest income as a percentage of average interest-earning assets.
(3) The efficiency ratio represents the ratio of non-interest expense
divided by the sum of net interest income and non-interest income.
(4) Asset quality ratios are end of period ratios, except for net
charge-offs to average loans receivable.
(5) Non-performing assets consist of non-performing loans and real
estate owned. Non-performing loans consist of all accruing loans 90
days or more past due and all non-accruing loans. It is our policy to
cease accruing interest on all loans 90 days or more past due. Real
estate owned consists of real estate acquired through foreclosure and
real estate acquired by acceptance of a deed-in-lieu of foreclosure.
(6) Capital ratios are end of period ratios and are calculated for
Abington Bank per regulatory requirements.
