AJS Bancorp, Inc. Announces Year End Earnings and a 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 $144,000 for the quarter ended December December: see month. 31, 2005 as compared to $431,000 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 $0.07 per share for the quarter ended December 31, 2005 compared to basic earnings of $0.20 per share, and diluted earnings of $0.19 per share for the quarter ended December 31, 2004. The decrease in net income primarily resulted from decreases in net interest income. Additionally, there was a slight decrease in non-interest income and a slight increase in non-interest expense. 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. a 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 February February: see month. 24, 2006, to stockholders of record on February 10, 2006. 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 100% of the quarterly dividend due on its 1,227,554 shares. At December 31, 2005, the Company held cash totaling $15.2 million. At December 31, 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 11.1%, 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 23.2%. Net income for the year ended December 31, 2005 was $1.1 million compared to net income of $1.6 million for the year ended December 31, 2004. Basic earnings were $0.51 per share; diluted earnings were $0.50 per share for the year ended December 31, 2005 compared to basic earnings of $0.70 per share and diluted earnings of $0.69 per share for the year ended December 31, 2004. As discussed in more detail below, the decrease in net income for the comparative twelve-month period primarily reflects a decrease in net interest income. Non-interest income and non-interest expense remained fairly stable during the year. All information except for the year ended December 31, 2004 is unaudited. Total assets as of December 31, 2005 were $257.9 million, a decrease of $13.0 million or 4.8% from $270.9 million at December 31, 2004. The decrease was primarily due to decreases in loans receivable, Federal Home Loan Bank (FHLB FHLB Federal Home Loan Bank ) stock, federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve sold, and certificates of deposit, offset by an increase in securities. Loans receivable decreased $11.5 million or 7.1% to $151.8 million at December 31, 2005 from $163.3 million at December 31, 2004. FHLB stock decreased $9.1 million to $3.4 million at December 31, 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. Federal funds sold decreased $2.9 million or 86.3% to $454,000 at December 31, 2005 from $3.3 million at December 31, 2004. The Company invests in federal funds sold in the event that there is no more profitable, highly liquid investment available or if the Company anticipates an increase in funding needs within the near future. Therefore, the balance in federal funds sold can and does fluctuate widely. Certificates of deposit decreased $1.2 million or 12.3% to $8.6 million at December 31, 2005 from $9.8 million at December 31, 2004. Securities increased $9.9 million to $71.5 million at December 31, 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. . 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 $7.7 million or 3.9% to $190.4 million at December 31, 2005 from $198.1 million at December 31, 2004. The decrease was primarily in passbook savings and money market accounts. FHLB advances decreased to $32.8 million at December 31, 2005 from $36.3 million at December 31, 2004. The Company had non-performing assets of $394,000 as of December 31, 2005 and $971,000 as of December 31, 2004. The allowance for loan losses was $1.7 million at December 31, 2005 and $1.8 million at December 31, 2004. This represents a ratio of allowance for loan losses to gross loans receivable of 1.11% at December 31, 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 $2.3 million to $28.3 million at December 31, 2005 from $30.5 million at December 31, 2004. The decrease in stockholders' equity during the past twelve months primarily resulted from the 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 shares of the Company's stock, as well as a decrease in other comprehensive income due to the decreased market value of the available for sale securities portfolio. These decreases were offset by net income of $1.1 million for the twelve months ended December 31, 2005. In addition, the Company declared an initial quarterly dividend of $0.10 cents per share, payable on November November: see month. 25, 2005, to stockholders of record on November 10, 2005. With the approval of the 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. ("OTS See Office of Thrift Supervision. ") AJS Bancorp, MHC (the "MHC") waived 80% of the quarterly dividend due on its 1,227,554 shares. INCOME INFORMATION -THREE MONTH PERIODS ENDED DECEMBER 31, 2005 AND 2004: Net interest income decreased by $222,000 or 11.9% to $1.6 million for the quarter ended December 31, 2005 when compared to the same quarter in 2004. The decrease in net interest income was primarily due to the cost of average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities increasing at a faster pace than the average interest-earning asset yield increased, 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. . 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 $251.7 million and $262.9 million during the comparative 2005 and 2004 quarters while the average yield was 5.11% and 5.02%, respectively. Average interest-bearing liabilities were $223.1 million and $233.7 million during the comparative 2005 and 2004 quarters while the average cost was 2.81% and 2.45%, respectively. Our net interest rate spread decreased 27 basis points to 2.30% from 2.57% while our net interest margin decreased 22 basis points to 2.62% from 2.84%. The ratio of average interest-earning assets to average interest-bearing liabilities increased to 112.81% for the three months ended December 31, 2005 from 112.45% for the same period in 2004. There was a negative provision for loan losses of $1,000 during the three months ended December 31, 2005 compared to a negative provision for loan losses of $40,000 for the three months ended December 31, 2004. There were $1,000 in loan loss recoveries during the three months ended December 30, 2005, and $40,000 in recoveries during the three months ended December 31, 2004. Any loan loss provisions made are to maintain the allowance to reflect management's estimate of losses known and inherent in our loan portfolio. 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 for loan losses for the three months ended December 31, 2005 and 2004. 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 $21,000 to $230,000 for the quarter ended December 31, 2005 from $251,000 for the comparable quarter in 2004. Insurance commissions decreased $22,000 or 30.1% and other non-interest income items decreased $9,000 or 15.5% for the quarter ended December 31, 2005 when compared to other income for the same quarter in 2004. These decreases were offset by an increase in service charges on accounts of $10,000 or 8.3% for the comparable quarter. The decrease in insurance commissions is due to lower sales of variable and fixed-rate annuities. Other non-interest income decreased primarily due to decreases in rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time and correspondent A bank, Securities firm, or other financial institution that regularly renders services for another in an area or market to which the other party lacks direct access. A bank that functions as an agent for another bank and carries a deposit balance for a bank in another city. fees, offset by an increase in gain on loans designated for sale. Service charges on accounts increased due to an increase in prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. on commercial loans due to an early pay off of a loan and an increase in service charges on checking accounts. Non-interest expense increased $37,000 to $1.6 million for the quarter ended December 31, 2005 and 2004. The increase primarily reflects an increase in occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy expense offset by a decrease in advertising and promotion costs. Occupancy expense increased $65,000 or 31.7% for the quarter ended December 31, 2005 when compared the same quarter in 2004. The increase is primarily due to higher real estate taxes, increased repair and maintenance costs, and increased utility costs. Advertising and promotion costs decreased due to a reduction in the placement of newspaper ads. INCOME INFORMATION - YEAR ENDED DECEMBER 31, 2005 AND 2004: Net interest income decreased by $634,000 or 8.4% to $6.9 million for the year ended December 31, 2005 from $7.6 million for the same period in 2004. Average interest earning assets were $256.0 million and $249.5 million during the comparative 2005 and 2004 twelve-month periods while the average yield was 5.06% and 5.11%, respectively. Our net interest rate spread decreased 37 basis points to 2.41% from 2.78% while our net interest margin decreased 32 basis points to 2.71% from 3.03%. The ratio of average interest-earning assets to average interest-bearing liabilities increased to 112.45% for the year ended 2005 from 112.29% for the year ended December 31, 2004. The decrease in our net interest rate spread and net interest margin reflects a continual decrease in the yield on average interest-earning assets for the year, while average interest-bearing liabilities repriced upwards. There was a negative provision for loan losses of $130,000 for the twelve months ended December 31, 2005 compared to a negative loan loss provision of $112,000 for the twelve months ended December 31, 2004. There was $55,000 in loan loss recoveries during the twelve months ended December 31, 2005, and $112,000 in recoveries during the twelve months ended December 31, 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 twelve months ended December 31, 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 twelve months ended December 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 marginally mar·gin·al adj. 1. Of, relating to, located at, or constituting a margin, a border, or an edge: the marginal strip of beach; a marginal issue that had no bearing on the election results. 2. to $936,000 for the year ended December 31, 2005 from $933,000 for the year ended 2004. Insurance commission income decreased $37,000 for the year ended December 31, 2005 when compared to the year ended December 31, 2004, while other non-interest income increased $28,000 for the year ended December 31, 2005 when compared to the year ended December 31, 2004. The increase in other non-interest income is primarily due to an increase in the gain on loans designated for sale and a profit on the sale of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , offset by a decrease in miscellaneous operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . Gain on the sale of loans increased as the Company sold fixed-rate mortgage loans into the secondary market. The Company intends to continue to sell longer-term fixed-rate mortgage loans into the secondary market, but intends to retain the servicing on these loans. Profit on the sale of fixed assets is due to the sale of a Company automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of . Non-interest expense increased $9,000 to remain at $6.2 million for the year ended December 31, 2005 and 2004. The increase was primarily due to a $116,000 increase in 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 and, to a lesser extent, a $32,000 increase in advertising and promotion costs, offset by a $140,000 decrease in salaries and employee benefits. Salaries and employee benefits decreased primarily due to a reduction in the number of full time equivalent employees, as well as a reduction in the cost of the recognition and retention plan (RRP RRP n abbr (= recommended retail price) → PVP m ) expenses. RRP expenses declined for the twelve months ended 2005 due to the immediate vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of RRP stock and corresponding expense that took place due to the death of an officer in 2004. Occupancy costs increased primarily due to higher real estate taxes, increased repair and maintenance costs, and increased utility costs. 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
Dollars in thousands (except per share data)
(Unaudited)
31-Dec-05 31-Dec-04
ASSETS
Cash and due from financial Institutions $14,776 $13,717
Federal funds sold 454 3,314
----------------------------
TOTAL CASH AND CASH EQUIVALENTS 15,230 17,031
Certificates of deposit 8,584 9,783
Securities 71,534 61,615
Loans receivable net of allowance for
loan loss of $1,701 at December 31, 2005,
and $1,847 at December 31, 2004. 151,768 163,291
Federal Home Loan Bank Stock 3,416 12,459
Premises and equipment 4,541 4,760
Accrued interest receivable & other
assets 2,832 1,930
----------------------------
TOTAL ASSETS $257,905 $270,869
============================
LIABILITIES AND SHAREHOLDER'S EQUITY
Deposits $190,407 $198,056
Federal Home Loan Bank advances 32,750 36,250
Advance payments by borrowers for taxes
and insurance 1,746 1,795
Accrued expenses and other liabilities 4,750 4,238
----------------------------
TOTAL LIABILITIES 229,653 240,339
TOTAL EQUITY 28,252 30,530
----------------------------
TOTAL LIABILITIES AND EQUITY $257,905 $270,869
============================
31-Dec-05 31-Dec-04
INTEREST INCOME & DIVIDEND INCOME
Loans, including fees $9,127 $9,405
Securities 2,682 2,226
Interest earning deposits & other 1,075 1,037
Federal Funds Sold 64 69
----------------------------
TOTAL INTEREST INCOME 12,948 12,737
INTEREST EXPENSE ON DEPOSITS
Deposits 4,606 4,046
Federal Home Loan Bank & Other 1,417 1,132
----------------------------
Total Interest Expense 6,023 5,178
----------------------------
NET INTEREST INCOME 6,925 7,559
Provision (recovery) for loan losses (130) (112)
----------------------------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 7,055 7,671
NON-INTEREST INCOME
Insurance commissions 195 232
Service charges on accounts 514 502
Other 227 199
----------------------------
TOTAL NON-INTEREST INCOME 936 933
NON-INTEREST EXPENSE
Salaries and employee benefits 3,481 3,621
Occupancy 897 781
Advertising & promotion 404 372
Data processing 392 378
Other 1,026 1,039
----------------------------
TOTAL NON-INTEREST EXPENSE 6,200 6,191
INCOME BEFORE INCOME TAXES 1,791 2,413
Income Tax Expense 694 833
----------------------------
NET INCOME $1,097 $1,580
============================
Earnings per share, basic $0.51 $0.70
Earnings per share, diluted $0.50 $0.69
AJS BANCORP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
Dollars in thousands
For the Three months ended 12/31/05
For the Three For the Three
Months ended Months ended
12/31/2005 12/31/2004
INTEREST INCOME & DIVIDEND INCOME
Loans, including fees $2,236 $2,348
Securities 709 597
Interest earning deposits & other 244 330
Federal Funds Sold 27 26
----------------------------
TOTAL INTEREST INCOME 3,216 3,301
INTEREST EXPENSE ON DEPOSITS
Deposits 1,227 1,067
Federal Home Loan Bank & Other 342 365
----------------------------
Total Interest Expense 1,569 1,432
----------------------------
NET INTEREST INCOME 1,647 1,869
Provision (recovery) for loan losses (1) (40)
----------------------------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 1,648 1,909
NON-INTEREST INCOME
Insurance commissions 51 73
Service charges on accounts 130 120
Other 49 58
----------------------------
TOTAL NON-INTEREST INCOME 230 251
NON-INTEREST EXPENSE
Salaries and employee benefits 876 882
Occupancy 270 205
Advertising & promotion 87 109
Data processing 98 94
Other 278 282
----------------------------
TOTAL NON-INTEREST EXPENSE 1,609 1,572
INCOME BEFORE INCOME TAXES 269 588
Income Tax Expense 125 157
----------------------------
NET INCOME $144 $431
============================
AJS Bancorp, Inc.
Financial Highlights
(unaudited) December 31, December 31,
2005 2004
(In thousands)
Selected Financial Highlights:
------------------------------
Total assets $257,905 $270,869
Loans receivable, net 151,768 163,291
Securities 71,534 61,615
Deposits 190,407 198,056
Federal Home Loan Bank advances 32,750 36,250
Stockholders' equity 28,252 30,530
Book value per share (1) 13.15 13.58
Number of shares outstanding (2) 2,147,807 2,248,238
Three months Three months
ended ended
December 31, December 31,
2005 2004
(In thousands except per
share information)
Selected Operations Data:
-------------------------
Total interest income $3,216 $3,301
Total interest expense 1,569 1,432
----------------------------
Net interest income 1,647 1,869
Provision for loan losses (1) (40)
----------------------------
Net interest income after provision
for loan losses 1,648 1,909
Noninterest income 230 251
Noninterest expense 1,609 1,572
----------------------------
Income before taxes 269 588
Income tax provision 125 157
----------------------------
Net income 144 431
============================
Earnings per share, basic $0.07 $0.20
Earnings per share, diluted $0.07 $0.19
Three months Three months
ended ended
December 31, December 31,
2005 2004
Selected Operating Ratios:
--------------------------
Return on average assets 0.22% 0.63%
Return on average equity 2.03% 5.67%
Interest rate spread during the period 2.30% 2.57%
Net interest margin 2.62% 2.84%
Average interest-earning assets to
average interest-bearing liabilities 112.81% 112.45%
Efficiency ratio (3) 85.72% 74.15%
Twelve months Twelve months
ended ended
December 31, December 31,
2005 2004
(In thousands except per
share information)
Selected Operations Data:
-------------------------
Total interest income $12,948 $12,737
Total interest expense 6,023 5,178
----------------------------
Net interest income 6,925 7,559
Provision for loan losses (130) (112)
----------------------------
Net interest income after provision
for loan losses 7,055 7,671
Noninterest income 936 933
Noninterest expense 6,200 6,191
----------------------------
Income before taxes 1,791 2,413
Income tax provision 694 833
----------------------------
Net income 1,097 1,580
============================
Earnings per share, basic $0.51 $0.70
Earnings per share, diluted $0.50 $0.69
Twelve months Nine months
ended ended
December 31, September 30,
2005 2004
Selected Operating Ratios:
--------------------------
Return on average assets 0.42% 0.61%
Return on average equity 3.75% 5.07%
Interest rate spread during the period 2.41% 2.78%
Net interest margin 2.71% 3.03%
Average interest-earning assets to average
interest-bearing liabilities 112.45% 112.29%
Efficiency ratio (3) 78.87% 72.90%
As of As of
December 31, December 31,
2005 2004
----------------------------
Asset Quality Ratios:
---------------------
Non-performing assets to total assets 0.15% 0.36%
Allowance for loan losses to non-
performing loans 431.73% 187.89%
Allowance for loan losses to loans
receivable, gross 1.11% 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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