Abington Community Bancorp, Inc. Announces 70.8% Increase in Net Income for the First Quarter of 2005.JENKINTOWN, Pa. -- Abington Abington, township (1990 pop. 59,084), Montgomery co., SE Pa., a residential suburb of Philadelphia; settled 1696, inc. 1906. The site of combat during the Revolutionary War, Abington has abrasives and other light manufacturing industries. Community Bancorp, Inc. (the "Company") (Nasdaq:ABBC ABBC Asbestos Bonded Bituminous Coated ), the recently formed "mid-tier" holding company for Abington Bank (the "Bank"), reported net income of $1.4 million for the quarter ended March 31, 2005, representing an increase of 70.8% over the comparable 2004 period. Earnings per share on the Company's 15,870,000 outstanding common shares (of which 7,141,500 shares were sold to the public in the Company's initial public offering in December December: see month. 2004) was $0.09 for the quarter ended March 31, 2005. Mr. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. W. White, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the Company, stated, "We successfully completed our first full calendar quarter as a public company, with our earnings significantly increasing from the first quarter of 2004. The capital that we raised in the initial public offering has been conservatively invested in instruments that yield a market rate until we can deploy it into loans. Our loan demand has been strong as we originated over $65 million in new loans during the first quarter of 2005, almost double the originations for the same period last year. As part of our 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. strategic plan to leverage our capital through retail deposit and loan growth, we anticipate opening a new branch in Warrington Warrington, city, England Warrington, city (1991 pop. 81,366) and borough, Chesire, NW England, on the Mersey River and on the Manchester Ship Canal. Manufactures include wire and other metal products, chemicals, soap, leather goods, and beer. , Bucks County, Pennsylvania Bucks County is a county located in the U.S. state of Pennsylvania. As of 2000, the population was 597,635. A 2004 U.S. Census estimate placed the population at 621,342, making it the fourth most populous county in Pennsylvania, after Philadelphia, Allegheny, and Montgomery in the second half of 2005. Planning is also under way for two additional branches which are projected to open within the next twelve months." Net interest income for the quarter ended March 31, 2005 increased $1.0 million or 25.1% to $5.0 million compared to $4.0 million for the quarter ended March 31, 2004. Interest income increased $1.6 million for the first quarter of 2005 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 Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. . The increases in these average balances were accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by increases in the average yields of all categories of interest-earning assets as well. The increase in interest income was somewhat offset by a $588,000 or 17.5% increase in interest expense. The increase in interest expense for the first quarter of 2005 when compared to the same period in the prior year resulted mainly from increases in the average balances of deposits and FHLB FHLB Federal Home Loan Bank advances as well as increases in the average rates paid on deposits and other borrowings. Our net interest margin increased to 2.78% at March 31, 2005 compared to 2.73% at March 31, 2004. We made no provision for loan losses in the first quarter of 2005 compared to a provision of $45,000 in the first quarter of 2004. The provision for loan losses is charged to expense as necessary to bring our allowance for loan losses to a sufficient level to cover known and inherent losses in the loan portfolio. At March 31, 2005 we had $281,000 of non-performing assets and our allowance for loan losses amounted to $1.4 million. Our non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. as a percentage of total loans receivable was 0.07% at March 31, 2005, 0.05% at December 31, 2004 and 0.10% at March 31, 2004. For the quarter ended March 31, 2005 our net loan charge-offs amounted to $15,000. For the quarter ended March 31, 2004 we had net recoveries of $2,000. Our total non-interest income amounted to $579,000 for the three-months ended March 31, 2005 compared to $272,000 for the three-months ended March 31, 2004. The increase was due primarily to a $14,000 gain on derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. for the first quarter of 2005 compared to a loss of $278,000 for the first quarter of 2004. Service charge income, 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 other non-interest income remained relatively consistent during the first quarter of 2005 when compared to the first quarter of 2004. Our total non-interest expense for the quarter ended March 31, 2005 amounted to $3.5 million, representing an increase of $535,000 or 18.1% from the quarter ended March 31, 2004. The overall increase was due to increases in all categories of non-interest expense with the exception of depreciation expense which decreased slightly. Salaries and employee benefits expense, the largest component of non-interest expense, increased $180,000 or 11.1% in the first quarter of 2005 when compared to the first quarter of 2004. This increase was due to additional expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc new employee benefit plans that began in 2005, as well as to normal merit increases in salaries. Our advertising and promotions expense increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $20,000 or 28.4% as a result of additional promotions related to our reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. to the mutual holding company form. Other non-interest expense increased approximately $120,000 or 25.0% due in large part to increased audit and professional fees as the result of becoming a public reporting entity. Income tax expense for the quarter ended March 31, 2005 amounted to $638,000 compared to $410,000 for the quarter ended March 31, 2004. The increase in income tax expense was due to the increase in our pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income, partially offset by a decrease in our effective tax rate. Our effective tax rate decreased to 31.1% for the first quarter of 2005 from 33.2% for the first quarter of 2004, primarily as a result of increased investment in tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. municipal securities and bank owned life insurance. The Company's total assets increased $30.2 million, or 4.2%, to $748.1 million at March 31, 2005 compared to $718.0 million at December 31, 2004. During the first quarter of 2005, the Company purchased $15.0 million of bank owned life insurance ("BOLI BOLI Bank-Owned Life Insurance BOLI Bureau of Labor and Industries "), which is reflected in the Company's balance sheet at its cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. . The BOLI is intended to fund various benefit programs of the Company. Our mortgage-backed securities, both held-to-maturity and available-for-sale, increased by an aggregate of $11.6 million or 7.0% to an aggregate of $176.3 million at March 31, 2005 compared to an aggregate of $164.7 million at December 31, 2004. During the first quarter of 2005, purchases of $23.2 million in the aggregate were partially offset by $9.1 million in payments and repayments of our held-to-maturity and available-for-sale mortgage-backed securities. Our net loans receivable remained relatively consistent, increasing $2.7 million or 0.7% to $415.3 million at March 31, 2005 compared to $412.7 million at December 31, 2004. The $16.7 million or 4.1% increase in deposits from December 31, 2004 to March 31, 2005 resulted from a $31.5 million increase in checking accounts and a $20.7 million increase in certificates of deposit, which were partially offset by a $36.7 million decrease in savings and money market accounts. Our advances from the Federal Home Loan Bank ("FHLB") increased $9.7 million or 5.7% during the first quarter of 2005 to $180.4 million at March 31, 2005 compared to $170.7 million at December 31, 2004. We utilize advances from the FHLB as an alternative to retail deposits to fund operations and additional asset growth. The $5.9 million increase in other borrowed money to $18.8 million at March 31, 2005 compared to $12.9 million at December 31, 2004 reflects an increase in the amount of securities repurchase agreements Repurchase agreement An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. entered into with certain commercial checking account customers. Our 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 $4.0 million to $119.1 million at March 31, 2005 compared to $123.1 million at December 31, 2004. The decrease was primarily due to the purchase of 318,500 shares of the Company's common stock for an aggregate of $4.2 million by the Bank's Employee Stock Ownership Plan ("ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (ESOP). "), partially offset by a commitment to release approximately 9,500 unallocated ESOP shares for an aggregate cost of approximately $126,000. Additionally, accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. other comprehensive loss increased $1.4 million. These decreases to stockholders' equity were partially offset by a $1.4 million increase in retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. resulting from first quarter net income. Abington Community Bancorp, Inc. is the "mid-tier" holding company for Abington Bank. Abington Bank is a Pennsylvania-chartered, FDIC-insured savings bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. which was originally organized in 1867. Abington Bank conducts business from its headquarters and main office in Jenkintown, Pennsylvania Jenkintown is a borough in Montgomery County, Pennsylvania, ten miles (16 km) north of Philadelphia. The Jenkintown train station is one of SEPTA's major stops. The R1, R2, R3 and R5 all stop at the Jenkintown station. as well as seven additional full service branch offices and four limited service banking offices located in Montgomery Montgomery, city, United States Montgomery, city (1990 pop. 187,106), state capital and seat of Montgomery co., E central Ala., near the head of navigation on the Alabama River just below the confluence of the Coosa and Tallapoosa rivers, and in the rich and Bucks Bucks: see Buckinghamshire. Counties, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . As of March 31, 2005, Abington Community Bancorp had $748.1 million in total assets, $422.0 million in deposits and $118.9 million in stockholders' equity. This news 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. , 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 Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. 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 Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , 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 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. 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 Investor relations The process by which the corporation communicates with its investors. 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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March 31, December 31,
2005 2004
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ASSETS
Cash and due from banks $ 16,962,483 $ 24,867,784
Interest-bearing bank balances 13,135,718 8,428,048
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Total cash and cash equivalents 30,098,201 33,295,832
Investment securities held to maturity
(estimated fair value--2005, $10,182,007;
2004, $10,336,485) 10,219,050 10,219,764
Investment securities available for sale
(amortized cost--2005, $80,869,352; 2004,
$77,348,884) 78,792,326 76,163,951
Mortgage-backed securities held to
maturity (estimated fair value--2005,
$82,653,560; 2004, $81,322,041) 83,929,985 81,703,737
Mortgage-backed securities available for
sale (amortized cost--2005, $93,841,656;
2004, $83,300,963) 92,405,793 83,027,943
Loans receivable, net of allowance for
loan loss (2005, $1,397,411; 2004,
$1,412,697) 415,342,202 412,655,664
Accrued interest receivable 3,006,552 2,710,162
Federal Home Loan Bank stock--at cost 10,090,300 10,450,100
Cash surrender value - bank owned life
insurance 15,002,465 -
Property and equipment, net 5,457,986 5,533,085
Deferred tax asset 2,088,388 1,313,068
Prepaid expenses and other assets 1,696,877 905,074
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TOTAL ASSETS $748,130,125 $717,978,380
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing $ 38,735,552 $ 37,596,228
Interest-bearing 383,252,143 367,693,829
------------- -------------
Total deposits 421,987,695 405,290,057
Advances from Federal Home Loan Bank 180,367,480 170,666,374
Other borrowed money 18,763,558 12,865,521
Accrued interest payable 1,759,249 910,040
Advances from borrowers for taxes and
insurance 2,260,644 2,047,151
Accounts payable and accrued expenses 3,925,405 3,144,536
------------- -------------
Total liabilities 629,064,031 594,923,679
------------- -------------
COMMITMENTS AND CONTINGENCIES
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 2005 and
2004 158,700 158,700
Additional paid-in capital 69,096,866 69,096,936
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP) (6,089,299) (2,046,137)
Deferred compensation plans trust (1,074,200) (1,074,200)
Retained earnings 59,292,535 57,881,651
Accumulated other comprehensive loss (2,318,508) (962,249)
------------- -------------
Total stockholders' equity 119,066,094 123,054,701
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $748,130,125 $717,978,380
============= =============
ABINGTON COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
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Quarter Ended March 31,
-------------------------
2005 2004
-------------------------
INTEREST INCOME:
Interest on loans $ 6,278,624 $ 5,444,626
Interest and dividends on investment and
mortgage-backed securities:
Taxable 2,516,589 1,876,702
Tax-exempt 111,345 1,755
Total Interest and dividends on
investment and mortgage-backed
securities 2,627,934 1,878,457
------------ ------------
Total interest income 8,906,558 7,323,083
INTEREST EXPENSE:
Interest on deposits 1,969,324 1,524,017
Interest on Federal Home Loan Bank advances 1,904,501 1,829,276
Interest on other borrowed money 77,995 10,736
------------ ------------
Total interest expense 3,951,820 3,364,029
------------ ------------
NET INTEREST INCOME 4,954,738 3,959,054
PROVISION FOR LOAN LOSSES - 45,000
------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,954,738 3,914,054
------------ ------------
NON-INTEREST INCOME
Service charges 436,035 433,791
Rental income 15,451 13,195
Gain (loss) on derivative instruments, net 14,175 (278,342)
Other income 113,828 103,309
------------ ------------
Total non-interest income 579,489 271,953
------------ ------------
NON-INTEREST EXPENSES
Salaries and employee benefits 1,800,435 1,620,339
Net occupancy 405,745 293,750
Depreciation 123,269 127,791
Data processing 348,702 300,189
ATM expense 85,837 28,229
Deposit insurance premium 29,096 28,128
Advertising and promotions 92,084 71,697
Other 600,175 480,249
------------ ------------
Total non-interest expenses 3,485,343 2,950,372
------------ ------------
INCOME BEFORE INCOME TAXES 2,048,884 1,235,635
------------ ------------
PROVISION FOR INCOME TAXES 638,000 409,675
------------ ------------
NET INCOME $ 1,410,884 $ 825,960
============ ============
BASIC EARNINGS PER COMMON SHARE $ 0.09 n/a
DILUTED EARNINGS PER COMMON SHARE $ 0.09 n/a
AVERAGE COMMON SHARES OUTSTANDING 15,504,360 n/a
ABINGTON COMMUNITY BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
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Quarter Ended March 31,
-----------------------
2005 2004
-----------------------
Selected Operating Ratios(1):
Average yield on interest-earning assets 5.00% 5.05%
Average rate on interest-bearing liabilities 2.74% 2.65%
Average interest rate spread(2) 2.26% 2.40%
Net interest margin(2) 2.78% 2.73%
Average interest-earning assets to average
interest-bearing liabilities 123.61% 114.36%
Net interest income after provision
for loan losses to non-interest expense 142.18% 132.68%
Total non-interest expense to average assets 1.87% 1.96%
Efficiency ratio(3) 62.97% 69.72%
Return on average assets 0.76% 0.55%
Return on average equity 4.62% 6.12%
Average equity to average assets 16.41% 8.95%
Asset Quality Ratios(4):
Non-performing loans as a percent of
total loans receivable(5) 0.07% 0.10%
Non-performing assets as a percent of
total assets(5) 0.04% 0.06%
Allowance for loan losses as a percent of
non-performing loans 497.15% 424.58%
Net charge-offs (recoveries) to average
loans receivable 0.00% 0.00%
Capital Ratios(6):
Tier 1 leverage ratio 11.75% 9.05%
Tier 1 risk-based capital ratio 19.83% 15.21%
Total risk-based capital ratio 20.15% 15.63%
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(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 March 31, 2005 and 2004, 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.
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