CORRECTING and REPLACING Frontier Financial Corporation Announces Increased First Quarter 2004 Earnings.Business Editors CORRECTION...by Frontier Financial Corporation EVERETT Everett. 1 City (1990 pop. 35,701), Middlesex co., E Mass., an industrial suburb of Boston, on the Mystic River; settled c.1643, set off from Malden 1870, inc. as a city 1892. , Wash.--(BUSINESS WIRE)--April 20, 2004 In BW6093 issued April 20, 2004: On Consolidated Balance Sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. , these are the following changes: Other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. first dollar amount should read: 14,850 (sted: 14,450). Total liabilities first dollar amount should read: 1,923,671 (sted 1,923,271). Total Liabilities & Equity first dollar mount should read: 2,152,163 (sted:2,151,763) The corrected release reads: FRONTIER FINANCIAL CORPORATION ANNOUNCES INCREASED FIRST QUARTER 2004 EARNINGS Frontier Financial Corporation (Nasdaq:FTBK) today announced earnings for the first quarter ended March 31, 2004. Net income for the first quarter 2004 increased 4.9% to $10.1 million compared with net income of $9.7 million in 2003, primarily as a result of an increase in net interest income for 2004. On a 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. per share basis, first quarter net income for 2004 was $.54 per share compared with $.52 per share in 2003, an increase of 3.8%. Return on average assets and return on average equity were 1.93% and 18.21%, respectively, compared to 1.98% and 19.48%, respectively, for last year. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. Clementz, 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 Frontier Financial Corporation, said, "We are encouraged with our continued momentum for the first quarter of 2004. Loans increased by $56.7 million for the first quarter of 2004, the third consecutive quarter of loan growth greater than $50.0 million. This compares to last year's first quarter decrease in total loans of $4.0 million. We continue to be on track to meet our goal of loan growth in the 8% to 11% range for the year." John Dickson For the theologian and author, see . John Dickson (June 1, 1783 - February 22, 1852) was a U.S. Representative from New York. Born in Keene, New Hampshire, Dickson was graduated from Middlebury (Vermont) College in 1808. He studied law. , CEO of Frontier Bank added, "Our Seattle Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. Office opened for business on February February: see month. 2, 2004. As of March 31, 2004 it had a total of $27.0 million in deposits and $15.8 million in loans which has exceeded our goals and expectations. We are also pleased to announce the opening of a new Real Estate Office in Tacoma Tacoma (təkō`mə), city (1990 pop. 176,664), seat of Pierce co., W Wash., on Commencement Bay and Puget Sound at the mouth of the Puyallup River; inc. 1884. . The office opened Monday Monday: see week. , April 12, 2004 with a seasoned Frontier Bank staff headed by Jerry Jer·ry n. pl. Jer·ries Chiefly British Slang A German, especially a German soldier. [Alteration of German. Dean, Senior Vice President and Manager. We are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op with the potential growth of this office due to the fast growing Pierce Pierce may refer to: Places
Highlights For the first quarter 2004: -- First quarter earnings of $10.1 million, up 4.9% from the first quarter 2003 of $9.7 million. -- Fully diluted first quarter earnings per share increased 3.8% to $.54 from $.52. -- Efficiency ratio remains one of the industry's best at 43% for the first quarter. -- Return on average equity of 18.21% for the first quarter, compared to 19.48% for first quarter 2003. -- Return on average assets of 1.93% for the first quarter, compared to 1.98% for first quarter 2003. In addition, loan growth for the first quarter of the year was $56.7 million. Third and fourth quarter 2003 loan growth was $52.5 million and $52.4 million, respectively. During the first quarter, we originated $268.4 million in new loans, an increase of $78.6 million, or 41.6% over first quarter 2003. Asset Quality As of March 31, 2004 nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. were .50% of total assets, down from .80% a year ago, and down from .52% at December December: see month. 31, 2003. Nonaccruing loans increased to $10.5 million at March 31, 2004, up from $8.8 million at March 31, 2003, however nonperforming assets decreased from $16.0 million at March 31, 2003 to $10.7 million at March 31, 2004. Significant improvement has been made with reducing other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most from $7.3 million at March 31, 2003 to $222 thousand at March 31, 2004. "We continue to focus on improving credit quality. Progress continues to be made with nonperforming assets during the year and this ratio has improved 33% over March 31, 2003," said Lyle Lyle may refer to:
Subsequent to quarter end, a nonaccruing loan in the amount of $1.2 million was purchased by a third party at the foreclosure sale foreclosure sale n. the actual forced sale of real property at a public auction (often on the court house steps following public notice posted at the court house and published in a local newspaper) after foreclosure on that property as security under a mortgage or . Had this transaction taken place prior to quarter end, the total nonperforming assets would have been $9.5 million or .44% of total assets. During the first quarter, the Corporation provided $.5 million for loan losses as compared to $.85 million for the first quarter of 2003. The total allowance for loan losses stood at $30.1 million, or 1.65% of total loans outstanding compared to $28.9 million, or 1.75% of total loans outstanding for the same time period last year. Net loan charge offs amounted to a net recovery of $88 thousand and $116 thousand for March 31, 2004 and 2003, respectively. First Quarter 2004 Operating Results Operating Results Net interest income for the quarter was $24.8 million, an increase of $1.0 million, or 4.1%, compared to $23.8 million for the prior year first quarter. This increase was achieved primarily through a reduction in 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. in 2004. Frontier's tax equivalent net interest margin decreased to 5.02% in 2004 compared to 5.23% in 2003 and down from 5.12% at December 31, 2003. The decrease in the net interest margin was due to existing loans refinanced and new loans booked at lower rates. In addition, the tax equivalent investment portfolio yield has decreased due to maturities/calls being reinvested at lower rates and the majority of our 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 bond portfolio being called on December 1, 2003. "Despite the drop in the net interest margin, it is still well above our peer average of 3.73% at December 31, 2003," stated Dickson Dickson may refer to several placenames: Australia
Total noninterest income increased $126 thousand, up 4.1% to $3.2 million from $3.1 million, in 2003. Of this increase, service charge income increased $204 thousand, or 19.2%. The Trust Department's and Insurance and Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Department's revenues were up $79 thousand and $145 thousand, respectively. Offsetting these increases was a decline in the revenue related to the 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 sale of mortgages with servicing released, which was $282 thousand in 2004, down from $642 thousand in 2003. Total noninterest expense increased $1.1 million to $12.2 million, up 9.5%, for the quarter ending March 31, 2004, compared with the same period last year. Salaries and employee benefits increased $.8 million. During the past year, the number of employees increased by 7.6%. Performance Ratios The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets for the year was 1.93% compared to 1.98% in 2003. The annualized return on average shareowners' equity was 18.21% in 2004 and 19.48% in 2003. Frontier's efficiency ratio for 2004 was 43% compared to 41% for the prior year, continuing to be one of the lowest efficiency ratios in the industry. This is well below that of the peer average of 55% as of December 31, 2003. Balance Sheet and Capital Management At March 31, 2004 Frontier's total assets were $2.15 billion, and deposits totaled $1.72 billion, an increase of 7.4% and 6.3% respectively, compared to the prior year. Net loans of $1.80 billion and investments of $175.9 million reflected an increase of 10.6% and 28.2% respectively. The capital of the Corporation at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. was $228.5 million, up from $197.9 million a year ago, or an increase of 15.5%. Frontier began paying cash dividends to shareowners in 1999 and approved a stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. in 2000. Since March 31, 2003 cash dividends of $13.2 million have been paid to shareowners and the Corporation purchased $.4 million of common stock in the open market, representing 15,000 shares. There have been no shares repurchased since April 2003. Average year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. diluted shares totaled 18,708,087 for 2004 versus 18,749,355 for 2003. Clementz stated, "The previously announced second quarter 2004 cash dividend of $.19 per share, representing our 18th consecutive quarter of increased cash dividends, will be paid to shareowners on Monday, April 26, 2004." Frontier is a Washington-based financial holding company providing financial services through its commercial bank subsidiary, Frontier Bank. Frontier offers a wide range of financial services to businesses and individuals in its market area, including investment and insurance products. CERTAIN FORWARD-LOOKING for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. INFORMATION -- 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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 ("PSLRA PSLRA Private Securities Litigation Reform Act PSLRA Public Service Labour Relations Act (Canada) "). This statement is included for the express purpose of availing Frontier of the protections of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the PSLRA. The forward-looking statements contained herein are subject to factors, risks and uncertainties that may cause actual results to differ materially from those projected. The following items are among the factors that could cause actual results to differ materially from the forward-looking statements: general economic conditions, including their impact on capital expenditures; business conditions in the banking industry; recent world events and their impact on interest rates, businesses and customers; the regulatory environment; new legislation; vendor quality and efficiency; employee retention factors; rapidly changing technology and evolving banking industry standards; competitive standards; competitive factors, including increased competition with community, regional and national financial institutions; fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. interest rate environments; higher than expected loan delinquencies; and similar matters. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only at the date of this release. Frontier undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that arise after the date of this release. Readers should carefully review the risk factors described in this and other documents Frontier files from time to time with the Securities and Exchange Commission, including Frontier's 2003 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. .
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands,
except for For the Three Months Ended
number of ------------------------------------- For the year
shares and per Ended
share amounts) March 31, December 31, March 31, Dec 31,
2004 2003 2003 2003
------------ ------------ ------------ ------------
Interest Income:
Interest & fees
on loans $ 31,376 $ 31,254 $ 32,048 $ 126,555
Interest & fees
on investments 2,009 2,397 2,023 8,646
----------- ----------- ----------- -----------
Total Interest
Income 33,385 33,651 34,071 135,201
Interest Expense:
Interest on
Deposits 6,442 6,639 8,273 29,907
Interest on
borrowed funds 2,115 2,058 1,956 7,922
----------- ----------- ----------- -----------
Total Interest
Expense 8,557 8,697 10,229 37,829
Net Interest
Income 24,828 24,954 23,842 97,372
Provision for
Loan Losses (500) (1,650) (850) (4,250)
Net Interest
Income after
Provision 24,328 23,304 22,992 93,122
Noninterest Income:
Securities gains/
(losses) - - 91 190
Service Charges 1,268 1,241 1,064 4,595
Other noninterest
income 1,912 1,783 1,899 7,972
----------- ----------- ----------- -----------
Total Noninterest
Income 3,180 3,024 3,054 12,757
Noninterest Expense:
Salaries & benefits 7,752 7,879 6,966 28,795
Occupancy expense 1,834 1,571 1,616 6,255
Other noninterest
expenses 2,635 3,068 2,578 11,169
----------- ----------- ----------- -----------
Total Noninterest
Expense 12,221 12,518 11,160 46,219
Income Before
Taxes 15,287 13,810 14,886 59,660
Applicable
Income Taxes (5,150) (4,489) (5,225) (20,053)
----------- ----------- ----------- -----------
NET INCOME/
(Loss) $ 10,137 $ 9,321 $ 9,661 $ 39,607
=========== =========== =========== ===========
Basic average
shares
outstanding
for the period 18,596,961 18,530,345 18,688,364 18,553,294
Basic earnings
per share $ 0.55 $ 0.50 $ 0.52 $ 2.13
=========== =========== =========== ===========
Diluted shares 18,708,087 18,667,501 18,749,355 18,654,706
Diluted earnings
per share $ 0.54 $ 0.50 $ 0.52 $ 2.12
=========== =========== =========== ===========
Efficiency ratio 43% 44% 41% 41%
Return on average
assets 1.93% 1.79% 1.98% 1.96%
Return on average
equity 18.21% 17.15% 19.48% 19.23%
Net interest margin 4.99% 5.07% 5.18% 5.11%
Taxable equivalent
effect on margin 0.03% 0.05% 0.05% 0.05%
(A)TE Net interest
margin 5.02% 5.12% 5.23% 5.16%
(A) Tax equivalent is a non-GAAP performance measurement used by
management in operating the business, which management believes
provides investors with a more accurate picture of the net interest
margin for comparative purposes. (more)
FRONTIER FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except for
number of shares) March 31, December 31, March 31,
2004 2003 2003
------------ ------------ ------------
ASSETS
Cash & due from banks $ 72,548 $ 74,552 $ 70,167
Securities:
Available for Sale-Fair
value 163,812 175,726 106,605
Held to maturity-
amortized cost 12,087 12,189 30,552
----------- ----------- -----------
Total securities 175,899 187,915 137,157
Federal funds sold 38,085 8 98,869
Loans:
Loans, net of unearned
income 1,828,418 1,771,716 1,654,635
Less: Allowance for
losses (30,144) (29,556) (28,910)
----------- ----------- -----------
Net loans 1,798,274 1,742,160 1,625,725
Premises & equipment, net 29,529 28,756 26,531
Other real estate owned 222 4,162 7,263
Intangible assets 6,476 6,476 6,476
Bank owned life insurance 16,848 16,653 16,040
Other assets 14,282 14,711 15,752
----------- ----------- -----------
Total Assets $ 2,152,163 $ 2,075,393 $ 2,003,980
=========== =========== ===========
LIABILITIES
Deposits:
Noninterest bearing $ 280,801 $ 271,389 $ 241,180
Interest bearing 1,439,105 1,395,628 1,377,454
----------- ----------- -----------
Total deposits 1,719,906 1,667,017 1,618,634
Federal funds purchased and
securities sold under
repurchase agreements 8,815 10,015 12,549
Federal Home Loan Bank
advances 180,100 170,104 160,116
Other liabilities 14,850 8,851 14,819
----------- ----------- -----------
Total Liabilities 1,923,671 1,855,987 1,806,118
SHAREOWNER'S EQUITY
Common stock 120,248 118,693 117,475
Unrealized gains/(losses) on
AFS securities, net of tax
effect 4,426 3,492 2,742
Retained earnings 103,818 97,221 77,645
----------- ----------- -----------
Total Capital 228,492 219,406 197,862
----------- ----------- -----------
TOTAL LIABILITIES & EQUITY $ 2,152,163 $ 2,075,393 $ 2,003,980
=========== =========== ===========
Shares outstanding at end of
period 18,612,769 18,550,060 18,502,734
Book Value $ 12.28 $ 11.83 $ 10.69
Tangible book value $ 11.93 $ 11.48 $ 10.34
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