1st State Bancorp, Inc. Announces Increased Earnings
October 27 2003 - 12:03PM
PR Newswire (US)
1st State Bancorp, Inc. Announces Increased Earnings BURLINGTON,
N.C., Oct. 27 /PRNewswire-FirstCall/ -- 1st State Bancorp, Inc. ,
the parent holding company for 1st State Bank, has reported
earnings for the quarter and year ended September 30, 2003. Net
income for the year ended September 30, 2003 increased 3.1% to
$3,920,000, from net income of $3,802,000 earned in the year ended
September 30, 2002. Basic and diluted earnings per share increased
to $1.39 and $1.33 per share, respectively, for the current year,
from $1.25 and $1.21 per share, respectively, for the prior year.
The increase in the basic and diluted earnings per share was
favorably impacted by the Company's stock repurchase plan which was
approved in August 2002. Since that date, 317,630 shares have been
repurchased which represent 9.7% of shares issued. The improvement
in earnings for the year ended September 30, 2003 was attributable
to increased non-interest income which was offset partially by
decreased net interest income. Strong refinancing activity fueled
by low interest rates produced record volumes of mortgage loan
originations and sales during the current year. These loan sales
substantially boosted the Company's mortgage banking income to $1.9
million for the year ended September 30, 2003, an increase of
$800,000 over the $1.1 million reported in the prior year. The
Company's net interest income for the year ended September 30, 2003
was $11.6 million, a decrease of $700,000 from the $12.3 million
reported in the prior year. Earnings continue to be negatively
impacted by the historically low interest rates, which have
compressed the Company's net interest margin. The Company's net
interest margin has decreased 21 basis points to 3.54% for the
current year from 3.75% in the prior year. Net income for the
quarter ended September 30, 2003 was $952,000 or basic and diluted
earnings per share of $0.34 and $0.32, respectively. These results
compare with net income of $1,047,000 or basic and diluted earnings
per share of $0.34 and $0.33, respectively, for the prior year's
quarter. Basic and diluted earnings per share were favorably
impacted by the Company's stock repurchase plan, which was approved
in August 2002. The $95,000 decrease in net income resulted
primarily from decreased net interest income and increased
operating expenses, which were partially offset by increased
non-interest income. For the quarter ended September 30, 2003, the
Company's net interest margin was 3.40%, a decrease of 60 basis
points from the 4.00% for the prior year's quarter. This decrease
reflects the impact of a declining interest rate environment in
which interest-earning assets reprice faster than liabilities due
to the asset sensitive nature of the Company's balance sheet. The
increase in non-interest income resulted primarily from increased
mortgage banking income and increased loan originations and sales.
Operating expenses increased 5.4% over the prior year. At September
30, 2003, 1st State Bancorp, Inc. had total assets of $363 million,
deposits of $263 million and stockholders' equity of $62.7 million.
The book value per share of common stock was $21.10 per share at
September 30, 2003. 1st State Bancorp, Inc., through its subsidiary
1st State Bank, currently services its customers from seven full
service banking offices in Alamance County. This press release
contains statements that are forward-looking, as that term is
defined by the Private Securities Litigation Act of 1995 or the
Securities and Exchange Commission in its rules, regulations, and
releases. The Company intends that such forward-looking statements
are based on current expectations regarding important risk factors
including, but not limited to, the impact of interest rates on
financing issues. Accordingly, actual results may differ from those
expressed in the forward-looking statements, and the making of such
statements should not be regarded as a representation by the
Company or any other person that results expressed therein will be
achieved. 1st State Bancorp, Inc. (NASDAQ:FSBC) Summary of
Financial Highlights Selected Financial Data: Sep 30, Sep 30, (in
thousands - unaudited) 2003 2002 Total assets $362,640 $350,469
Loans receivable, net 225,725 220,047 Loans held for sale 645 6,798
Investment securities 111,171 89,686 Cash and cash equivalents
9,359 18,865 Deposit accounts 262,712 260,667 Advances from Federal
Home Loan Bank 31,500 20,000 Dividend payable 297 241 Total
stockholders' equity 62,701 61,569 Selected Operating Data: Three
months ended Year ended 9/30/2003 9/30/2002 9/30/2003 9/30/2002 (in
thousands - unaudited) Interest income $4,122 4,987 17,209 20,062
Interest expense 1,267 1,682 5,592 7,773 Net interest income 2,855
3,305 11,617 12,289 Provision for loan losses 60 60 240 240 Net
interest income after provision for loan losses 2,795 3,245 11,377
12,049 Non-interest income 958 534 3,588 2,753 Non-interest expense
2,276 2,160 8,802 8,846 Income before taxes 1,477 1,619 6,163 5,956
Income tax expense 525 572 2,243 2,154 Net income 952 1,047 3,920
3,802 Per Share Data: Three months ended Year ended (unaudited)
09/30/2003 09/30/2002 09/30/2003 09/30/2002 Basic earnings per
share $0.34 $0.34 $1.39 $1.25 Diluted earnings per share 0.32 0.33
1.33 1.21 Average shares outstanding - basic 2,808,409 3,051,947
2,811,200 3,034,415 Average shares outstanding - diluted 2,944,793
3,150,118 2,938,598 3,154,198 Cash dividends per share $0.10 $0.08
$0.38 $0.32 Book value at September 30 $21.10 $20.46 Shares
outstanding at September 30 2,971,977 3,008,682 Interest Margin
Three months ended Year ended 09/30/2003 9/30/2002 9/30/2003
9/30/2002 (% of average assets - unaudited) Yield on interest
earning assets 4.90% 6.04% 5.25% 6.12% Cost of interest bearing
liabilities 1.87% 2.53% 2.11% 2.92% Interest rate spread 3.03%
3.51% 3.14% 3.20% Net interest income as a percentage of average
interest earning assets 3.40% 4.00% 3.54% 3.75% Asset Quality Sep
30, Sep 30, (unaudited) 2003 2002 Allowance for loan losses to
gross loans held for investment 1.68% 1.67% Nonperforming assets to
total assets 1.17% 1.25% DATASOURCE: 1st State Bancorp, Inc.
CONTACT: James C. McGill of 1st State Bancorp, Inc.,
+1-336-227-8861
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