AJS Bancorp, Inc. Announces Third Quarter Earnings, Increase to Stock Repurchase Program and an Initial Cash Dividend of $.10 Per Share.MIDLOTHIAN Midlothian (mĭdlō`thēən), council area (1993 est. pop. 79,910), 137 sq mi (356 sq km), and former county, SE Scotland. Under the Local Government Act of 1973, Midlothian was divided between the former Lothian and Borders regions in , Ill. -- AJS AJS American Journal of Sociology AJS American Judicature Society AJS American Journal of Surgery AJS Association for Jewish Studies AJS Americans for Job Security AJS Administration of Justice Studies AJS America-Japan Society AJS AJ Stevens Bancorp, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AJSB.OB), the holding company for A.J. Smith Federal Savings Bank Noun 1. federal savings bank - a federally chartered savings bank FSB savings bank - a thrift institution in the northeastern United States; since deregulation in the 1980s they offer services competitive with many commercial banks , Midlothian, Illinois Midlothian is a village in Cook County, Illinois, United States. The population was 14,315 at the 2000 census. Geography Midlothian is located at (41.626383, -87.721373)GR1. today reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net income of $253,000 for the quarter ended September September: see month. 30, 2005 as compared to $442,000 for the same quarter in 2004. Basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings were $0.12 per share for the quarter ended September 30, 2005 and $0.20 per share for the quarter ended September 30, 2004. The decrease in net income resulted from a decrease in net interest income and a decrease in non-interest income offset by a decrease in non-interest expense. The Company also announced today that its Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the Company to add an additional 50,000 shares to the current stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. The Company had previously authorized a repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of 217,000 shares of which 183,944 shares have already been repurchased. The repurchases generally would be effected through open market purchases, although the Company does not rule out the possibility of unsolicited un·so·lic·it·ed adj. Not looked for or requested; unsought: an unsolicited manuscript; unsolicited opinions. unsolicited Adjective negotiated transactions or other types of repurchases. Also, the Company's Board of Directors announced today that it has declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. an initial quarterly dividend of $0.10 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . The dividend is payable on November November: see month. 25, 2005, to stockholders of record on November 10, 2005. Subject to Office of Thrift Supervision The Office of Thrift Supervision (OTS) was established as a bureau of the Treasury Department in August 1989 as part of a major Reorganization Plan of the thrift regulatory structure mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C.A. approval, AJS Bancorp, MHC MHC major histocompatibility complex. MHC abbr. major histocompatibility complex MHC major histocompatibility complex. (the "MHC") intends to waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered. For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such 80% of the quarterly dividend due on its 1,227,554 shares. At September 30, 2005, the Company held cash totaling $12.6 million. At September 30, 2005 the Bank's tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. as well as its tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. capital ratio was 11.3%, and its risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. was 24.6%. Total assets as of September 30, 2005 were $261.8 million, a decrease of $9.1 million or 5.6% from $270.9 million at December December: see month. 31, 2004. The decrease was primarily due to decreases in cash and cash equivalents, loans, and Federal Home Loan Bank (FHLB FHLB Federal Home Loan Bank ) stock, partially offset by increases in securities. Cash and cash equivalents decreased $4.4 million or 26.1% to $12.6 million at September 30, 2005 from $17.0 million at December 31, 2004. Loans receivable decreased $9.2 million or 5.6% to $154.1 million at September 30, 2005 from $163.3 million at December 31, 2004. FHLB stock decreased $7.1 million to $5.4 million at September 30, 2005 from $12.5 million at December 31, 2004. The Company decreased its investment in FHLB stock due to uncertainty regarding the payment and level of the FHLB dividend. There was no gain or loss on the sale of the FHLB stock. Securities increased $12.1 million to $73.7 million at September 30, 2005 from $61.6 million at December 31, 2004. The increase was due to purchases of fixed-rate government-backed notes and bonds, an additional investment in the adjustable-rate ARM fund, and mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. . These investments provided slightly higher yields than overnight federal fund investments, without locking into longer-term investments. The notes and bonds mature in three years or less, the ARM fund can be redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. at any time and reprices on average every six months to a year, and the mortgage-backed securities are expected to mature in less than ten years, however prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. may cause them to pay down at a faster pace. Total deposits decreased $5.3 million or 2.7% to $192.8 million at September 30, 2005 from $198.1 million at December 31, 2004. FHLB advances decreased to $33.3 million at September 30, 2005 from $36.3 million at December 31, 2004. The Company had non-performing assets of $506,000 as of September 30, 2005 and $983,000 as of December 31, 2004. The allowance for loan losses was $1.7 million at September 30, 2005 and $1.8 million at December 31, 2004. The ratio of our allowance for loan losses to gross loans receivable was 1.09% at September 30, 2005 and 1.12% at December 31, 2004. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. decreased $2.0 million to $28.6 million or 10.9% of assets at September 30, 2005 from $30.5 million or 11.3% of assets at December 31, 2004. The decrease in stockholders' equity during the past nine months primarily resulted from the repurchase of shares of the Company's stock and the decrease in other comprehensive income due to the lower fair market value of securities available for sale. This decrease was offset by net income of $953,000 for the nine months ended September 30, 2005. INCOME INFORMATION -THREE MONTH PERIODS ENDED SEPTEMBER 30, 2005 AND 2004: Net interest income decreased by $161,000 or 8.6% to $1.7 million for the quarter ended September 30, 2005 when compared to the same quarter in 2004. The decrease in net interest income was primarily due to the higher cost of average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities and the resulting decrease in the net interest rate spread. The higher cost of interest-bearing liabilities is primarily due to rising short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. . Our net interest rate spread decreased 32 basis points to 2.40% from 2.72% while our net interest margin decreased 25 basis points to 2.70% from 2.95%. The ratio of average interest-earning assets to average interest-bearing liabilities increased to 112.51% for the three months ended September 30, 2005 from 110.48% for the same period in 2004. There was a negative provision for loan losses of $37,000 during the three months ended September 30, 2005 compared to a negative provision for loan losses of $57,000 for the three months ended September 30, 2004. There were no loan loss recoveries during the three months ended September 30, 2005, and $57,000 in recoveries during the three months ended September 30, 2004. Any loan loss provisions made are to maintain the allowance to reflect management's estimate of losses inherent in our loan portfolio. Management concluded that no additional provisions were necessary during the three months ended September 30, 2005 or 2004. Management's evaluation of the losses inherent in our loan portfolio reflected a decrease risk of losses in the loan portfolio, which required a reduction of the provision of loan losses for the three months ended September 30, 2005. The decreased risk is reflected in the reduction of the non-performing assets referenced in the balance sheet information above. Should any unforeseen risks present themselves however, management may need to make a provision for loan losses in the future. Non-interest income decreased $72,000 to $228,000 for the quarter ended September 30, 2005 from $300,000 for the comparable quarter in 2004. The decrease in non-interest income is primarily the result of a $32,000 decrease in insurance commissions, and a $43,000 decrease in service charges on accounts. The decrease in insurance commissions is due to lower sales of variable and fixed-rate annuities. The decrease in service charges on accounts is primarily due to a reduction in prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. collected for the comparable quarter, and less late charges collected on loan accounts. Prepayment penalties are usually received when a commercial loan pays off within the first three years following origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real , and the decision to prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. the loan is usually
the customer's choice. Therefore, the income from prepayment
penalties is uncertain and is based on business decisions by our
commercial loan customers. Late fee charges have decreased reflecting
fewer delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. loans. Non-interest expense decreased by $32,000 to $1.5 million for the quarter ended September 30, 2005 when compared to expense for the same quarter in 2004. The decrease was primarily due to a decrease in salaries and employee benefit costs, offset by an increase in advertising and promotion costs. Salaries and employee benefits decreased primarily due to a reduction in the number of full time equivalent employees to 64 for the quarter ended September 30, 2005 when compared to 70 for the quarter ended September 30, 2004. Our federal and state taxes decreased $32,000 to $235,000 for the quarter ended September 30, 2005 from $267,000 in the same period of 2004. This is primarily the result of lower pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income, offset by an upward revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. to the tax accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. estimate during the quarter ended September 30, 2005 as compared to the same quarter in 2004. The Company increased its tax accrual based on revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to certain estimated deferred and permanent tax items from what had been estimated in previous 2005 quarters. INCOME INFORMATION - NINE MONTH PERIODS ENDED SEPTEMBER 30, 2005 AND 2004: Net interest income decreased by $412,000 or 7.2% to $5.3 million for the nine months ended September 30, 2005 from $5.7 million for the same period in 2004. The decrease in net interest income was due to the decreased yield on interest-earning assets and the increased cost of average interest-bearing liabilities and the resulting decrease in the net interest rate spread. Average interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin were $257.4 million and $245.0 million during the comparative 2005 and 2004 nine-month periods while the average yield was 5.04% and 5.14%, respectively. Average interest bearing liabilities were $229.1 million and $218.3 million during the comparative 2005 and 2004 nine-month periods while the average cost was 2.59% and 2.29%, respectively. Our net interest rate spread decreased 40 basis points to 2.45% from 2.85% while our net interest margin decreased 37 basis points to 2.73% from 3.10%. The ratio of average interest-earning assets to average interest-bearing liabilities increased to 112.34% for the nine months ended September 30, 2005 from 112.23% for the same period in 2004. The decrease in our net interest rate spread and net interest margin reflects the flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. yield curve, in which short-term interest rates are rising faster than long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. interest rates. There was a negative provision for loan losses of $129,000 for the nine months ended September 30, 2005 compared to a negative loan loss provision of $72,000 for the nine months ended September 30, 2004. There was $54,000 in loan loss recoveries during the nine months ended September 30, 2005, and $72,000 in recoveries during the nine months ended September 30, 2004. Any loan loss provisions made are to maintain the allowance to reflect management's estimate of losses inherent in our loan portfolio. Management concluded that no additional provisions were necessary during the nine months ended September 30, 2005 or 2004. Management's evaluation of the losses inherent in our loan portfolio reflected a decrease risk of loss in the loan portfolio, which required a reduction of the provision of loan losses for the nine months ended September 30, 2005. Should any unforeseen risks present themselves however, management may need to make a provision for loan losses in the future. Non-interest income increased to $706,000 for the nine months ended September 30, 2005 from $682,000 for the comparable period in 2004. The $24,000 increase was the result of an increase in other non-interest income offset by a decrease in insurance commission income at September 30, 2005 when compared to the nine months ended September 30, 2004. Non-interest expense decreased by $28,000 to $4.6 million for both the nine month periods ended September 30, 2005 and 2004. The decrease was due to a $133,000 decrease in salaries and employee benefits offset by a $54,000 increase in advertising and promotion costs and $51,000 increase occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal . Salaries and employee benefits decreased primarily due to a reduction in the number of full time equivalent employees to 64 for the nine months ended September 30, 2005 when compared to 70 for the comparable period in 2004. Our federal and state taxes decreased $107,000 to $569,000 for the nine months ended September 30, 2005 from $676,000 in the same period of 2004. This is primarily the result of lower pre-tax income that occurred during the nine months ended September 30, 2005. Other financial information is included in the tables that follow. This press release contains certain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " which may be identified by the use of such words as "believe", "expect", "intend", "anticipate", "should", "planned", "estimated" and "potential". Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates and most other statements that are not historical in nature. These factors include, but are not limited to, general and local economic condition, changes in interest rates, deposit flows, demand for mortgage and other loans, real estate values, and competition; changes in accounting principles, policies or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. ; changes in legislation or regulation; and other economic, competitive, governmental, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , and technological factors affecting our operations, pricing, products and services.
AJS BANCORP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS & INCOME STATEMENTS
Dollars in thousands (except per share data)
(Unaudited)
30-Sep-05 31-Dec-04
ASSETS
Cash and due from financial Institutions $11,963 $13,717
Federal funds Sold 620 3,314
----------------------------
TOTAL CASH AND CASH EQUIVALENTS 12,583 17,031
Certificates of Deposit 8,984 9,783
Securities 73,719 61,615
Loans receivable net of allowance for loan
loss of $1,701 at September 30, 2005, and
$1,847 at December 31, 2004. 154,127 163,291
Federal Home Loan Bank Stock 5,356 12,459
Premises and equipment 4,590 4,760
Accrued interest receivable & other assets 2,414 1,930
----------------------------
TOTAL ASSETS $261,773 $270,869
============================
LIABILITIES AND SHAREHOLDER'S EQUITY
Deposits 192,764 $198,056
Federal Home Loan Bank advances 33,250 36,250
Advance payments by borrowers for taxes
and insurance 2,515 1,795
Accrued expenses and other liabilities 4,671 4,238
----------------------------
TOTAL LIABILITIES 233,200 240,339
TOTAL EQUITY 28,573 30,530
----------------------------
TOTAL LIABILITIES AND EQUITY $261,773 $270,869
============================
30-Sep-05 30-Sep-04
INTEREST INCOME & DIVIDEND INCOME
Loans, including fees $6,891 $7,057
Securities 1,973 1,629
Interest earning deposits & other 831 707
Federal Funds Sold 37 43
----------------------------
TOTAL INTEREST INCOME 9,732 9,436
INTEREST EXPENSE ON DEPOSITS
Deposits 3,379 2,979
Federal Home Loan Bank & Other 1,075 767
----------------------------
Total Interest Expense 4,454 3,746
----------------------------
NET INTEREST INCOME 5,278 5,690
Provision for loan losses (129) (72)
----------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,407 5,762
NON-INTEREST INCOME
Insurance commissions 144 159
Service charges on accounts 384 382
Other 178 141
----------------------------
TOTAL NON-INTEREST INCOME 706 682
NON-INTEREST EXPENSE
Salaries and employee benefits 2,606 2,739
Occupancy 627 576
Advertising & promotion 317 263
Data processing 294 284
Other 747 757
----------------------------
TOTAL NON-INTEREST EXPENSE 4,591 4,619
INCOME BEFORE INCOME TAXES 1,522 1,825
Income Tax Expense 569 676
----------------------------
NET INCOME $953 $1,149
============================
AJS BANCORP, INC.
CONSOLIDATED CONDENSED INCOME STATEMENTS
Dollars in thousands
For the Three months ended 9/30/05
For the Three For the Three
Months ended Months ended
9/30/2005 9/30/2004
INTEREST INCOME & DIVIDEND INCOME
Loans, including fees $2,266 $2,362
Securities 721 601
Interest earning deposits & other 246 256
Federal Funds Sold 4 17
----------------------------
TOTAL INTEREST INCOME 3,237 3,236
INTEREST EXPENSE ON DEPOSITS
Deposits 1,174 1,036
Federal Home Loan Bank & Other 346 322
----------------------------
Total Interest Expense 1,520 1,358
----------------------------
NET INTEREST INCOME 1,717 1,878
Provision for loan losses (37) (57)
----------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,754 1,935
NON-INTEREST INCOME
Insurance commissions 38 70
Service charges on accounts 121 164
Other 69 66
----------------------------
TOTAL NON-INTEREST INCOME 228 300
NON-INTEREST EXPENSE
Salaries and employee benefits 862 919
Occupancy 211 206
Advertising & promotion 94 85
Data processing 95 89
Other 232 227
----------------------------
TOTAL NON-INTEREST EXPENSE 1,494 1,526
INCOME BEFORE INCOME TAXES 488 709
Income Tax Expense 235 267
----------------------------
NET INCOME $253 $442
============================
AJS Bancorp, Inc.
Financial Highlights
(unaudited) September 30, 2005 December 31, 2004
(In thousands)
Selected Financial Highlights:
------------------------------
Total assets $261,773 $270,869
Loans receivable, net 154,127 163,291
Securities 73,719 61,615
Deposits 192,764 198,056
Federal Home Loan Bank
advances 33,250 36,250
Stockholders' equity 28,573 30,530
Book value per share (1) 13.25 13.58
Number of shares outstanding (2) 2,156,734 2,248,238
Three months ended Three months ended
September 30, 2005 September 30, 2004
(In thousands except per share information)
Selected Operations Data:
-------------------------
Total interest income $3,237 $3,236
Total interest expense 1,520 1,358
----------------------------------------
Net interest income 1,717 1,878
Provision for loan losses (37) (57)
----------------------------------------
Net interest income after
provision for loan losses 1,754 1,935
Noninterest income 228 300
Noninterest expense 1,494 1,526
----------------------------------------
Income before taxes 488 709
Income tax provision 235 267
----------------------------------------
Net income 253 442
========================================
Earnings per share, basic and
diluted $0.12 $0.20
Three months ended Three months ended
September 30, 2005 September 30, 2004
Selected Operating Ratios:
--------------------------
Return on average assets 0.38% 0.66%
Return on average equity 3.51% 5.90%
Interest rate spread during
the period 2.40% 2.72%
Net interest margin 2.70% 2.95%
Average interest-earning
assets to average
interest-bearing liabilities 112.51% 110.48%
Efficiency ratio (3) 76.81% 70.06%
Nine months ended Nine months ended
September 30, 2005 September 30, 2004
(In thousands except per share information)
Selected Operations Data:
-------------------------
Total interest income $9,732 $9,436
Total interest expense 4,454 3,746
----------------------------------------
Net interest income 5,278 5,690
Provision for loan losses (129) (72)
----------------------------------------
Net interest income after
provision
for loan losses 5,407 5,762
Noninterest income 706 682
Noninterest expense 4,591 4,619
----------------------------------------
Income before taxes 1,522 1,825
Income tax provision 569 676
----------------------------------------
Net income 953 1,149
========================================
Earnings per share, basic $0.44 $0.51
Earnings per share, diluted $0.43 $0.50
Nine months ended Nine months ended
September 30, 2005 September 30, 2004
Selected Operating Ratios:
--------------------------
Return on average assets 0.48% 0.60%
Return on average equity 4.29% 4.88%
Interest rate spread during
the period 2.45% 2.85%
Net interest margin 2.73% 3.10%
Average interest-earning
assets to average
interest-bearing liabilities 112.34% 112.23%
Efficiency ratio (3) 76.72% 72.49%
As of As of
September 30, 2005 December 31, 2004
--------------------- ------------------
Asset Quality Ratios:
---------------------
Non-performing assets to total
assets 0.19% 0.36%
Allowance for loan losses to
non-performing loans 335.50% 187.89%
Allowance for loan losses to
loans receivable, gross 1.09% 1.12%
(1) Shareholders' equity divided by number of shares outstanding.
(2) Total shares issued, less unearned ESOP shares, and treasury
shares.
(3) Non-interest expense divided by the sum of net interest income and
non-interest income.
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