Harrington West Announces Results for the June 2004 Quarter and Declares Regular Quarterly Cash Dividend of 10 Cents Per Share.SOLVANG Solvang may refer to:
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Not to be confused with San Diego Padres. Bank, FSB (FrontSide Bus) See system bus. FSB - front side bus (LPB LPB Louisiana Public Broadcasting (Public Television) LPB Loopback LPB Low Ping Bastard (gaming) LPB Low Plasticity Burnishing (surface treatment) ) and its division, Harrington Bank, today announced that it earned $2.0 million or 35 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. on a fully 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. basis in the June June: see month. 2004 quarter compared to $1.8 million or 33 cents per share in the same quarter a year ago. Net income in the June 2004 quarter increased 9.3% over the net income of the June 2003 quarter. For the first 6 months of 2004, HWFG earned $4.0 million or 72 cents per share on a fully diluted basis, an 18.3% increase over the $3.4 million and 63 cents per share earned in the same period in 2003. Return on average equity was 16.1% and 16.7% in the June quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. periods compared to 16.3% and 15.6% in the same periods in 2003, respectively. Based on the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. earnings, the Board of Directors declared a regular quarterly dividend of 10 cents per share payable on August 10, 2004 to holders of record on July July: see month. 30, 2004. The diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the June 2004 quarter and year-to-date periods include after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. net gains on trading account assets Trading account assets refer to a separate account managed by banks that buy (underwriting) U.S. government securities and other securities for their own trading account or for resale at a profit to other banks and to the public, rather than for investment in the bank's own , other gains (losses), and debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. costs of 1 and 4 cents, respectively, compared to after-tax net gains per share of 4 and 5 cents in the same periods in 2003. Excluding these net gains, HWFG earned after-tax core operating net income in the June 2004 quarter and year-to-date periods of $1.9 million or 34 cents per share and $3.8 million or 68 cents per share, compared to $1.6 million or 29 cents per share and $3.1 million or 58 cents per share in the same periods for 2003, respectively. After-tax core operating net income per share increased 17.2% in both the June 2004 quarter and year-to-date periods over the same periods in 2003. Total assets were $1.1 billion at June 30, 2004, compared to $1.0 billion at March 31, 2004 and $864.1 million at June 30, 2003. The growth in assets of $45.5 million in the June quarter was largely attributed to net loans increasing by $32.3 million or 6.0%, and investments increasing by $4.1 million or 1.0%. For the year-to-date 2004, loans grew by $46.9 million or 9.0%, and investments have increased by $28.0 million or 7.0%. Book value per share was $9.29 at June 30, 2004 compared with $8.64 at June 30, 2003, reflecting the growth in earnings, the dividends paid of 78 cents, and changes in other comprehensive income during the period. Financial Performance Analysis Net revenue, which is comprised of net interest income after the provision for loan losses plus banking fee income, was $8.1 million in the June 2004 quarter, growing 12.6% over the June 2003 quarter. For the year-to-date 2004, net revenue was $15.8 million compared to $14.1 million in the same period last year, a 12.1% increase. The revenue growth has been driven by expansion in net interest income from the growth in average assets, while HWFG's net interest margin has remained relatively stable at approximately 3%. Net interest margin was 3.1% in the June 2004 quarter and 3.0% in the first 6 months of 2004, compared to 3.0% and 3.1% in the comparable periods in 2003. Net interest income after the provision for loan losses was $7.3 million in the June 2004 quarter and $14.2 million for the 2004 year-to-date compared to $6.0 million and $11.9 million in the same periods last year, respectively. Banking fee income includes mortgage brokerage fees from 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 of mortgage loans, prepayment penalty Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. fees on commercial and multifamily real estate loans, other loan fees, deposit and retail banking fees, and investment management and trust fees through Harrington Wealth Management Company (HWMC HWMC Hardware Motion Compensation (video cards) HWMC High Wycombe Music Centre (UK) HWMC Hoveton & Wroxham Medical Centre (UK) HWMC Helmut Wüst Mechanical Components ). Banking fee income declined in the comparable 2004 over 2003 periods due primarily to the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in mortgage brokerage and prepayment penalty income, as interest rates reached 40 year lows in the first 6 months of 2003, and refinancings of residential mortgages were at all time highs. Shown in the following chart are the fees generated from each of these segments for the June 2004 quarter compared to the March 2004 quarter and the first six months of 2004 compared to the same period in 2003.
(Dollars in thousands)
----------------------------------------------------------------------
June March June June
2004 2004 2004 2003
Banking Fee Type Quarter Quarter % Change YTD YTD % Change
----------------------------------------------------------------------
Mortgage Brokerage
Fees $335 $283 18.4% $618 $1,161 (46.7%)
----------------------------------------------------------------------
Prepayment Penalties
and other Loan Fees 165 146 13.0% 311 479 (35.1%)
----------------------------------------------------------------------
Deposit & Other
Retail Banking Fees 198 186 6.5% 384 354 8.5%
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HWMC Fees 150 145 3.4% 295 230 28.2%
----------------------------------------------------------------------
Total $848 $760 11.6% $1,608 $2,224 (27.7%)
----------------------------------------------------------------------
Although banking fee income did decline for the 2004 over 2003 comparisons, fee income is becoming more diversified diversified (di·verˑ·s and showed growth in the June 2004 quarter over the March 2004 quarter, as Los Padres Mortgage Company, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (LPMC LPMC Liberian Produce Marketing Corporation (Liberia) LPMC Low Pressure Molding Compound LPMC Low Priority Machine Check ), the joint venture with the largest RE/MAX RE/MAX Real Estate Maximums (Canada) franchise in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. residential and commercial real estate loans for fee income, showed improved results, and fee income from HWMC showed steady growth. HWFG's strategic goal is to further diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. and grow its banking fee income. In the September September: see month. quarter 2004, LPB will launch an overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers protection program for its retail customers and offer insurance and brokerage products on a limited basis. General and administrative expenses were $4.9 million in the June 2004 quarter and $9.6 million for the first six months of 2004 compared to $4.5 million and $8.8 million in the same periods of 2003, respectively. The growth in expenses has been primarily attributed to the opening of the new banking operation in Overland Park, Kansas Overland Park is the second most populous city in the U.S. state of Kansas. It is located in Johnson County, a satellite city of Kansas City, and is near Olathe, Lenexa, Prairie Village and Leawood. In 2006, the estimated population is 167,500. in December 2003 under the Harrington Bank division and the opening of LPB's new office in Ventura, California Incorporated in 1866, the city of San Buenaventura (usually referred to as Ventura) is the county seat of Ventura County, California. Ventura has a population of 106,744.[1] Ventura is accessible via U.S. in May 2004. Furthermore, the cost of compliance with new corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. regulations and the increasing cost of insurance for almost all coverages have contributed to the expense growth. Asset Quality Asset quality remained favorable with $5 thousand of 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. at June 30, 2004 compared to $154 thousand at March 31, 2004 and none at June 30, 2003. With the strong loan growth in the June 2004 quarter, $230 thousand was added to allowance for loan losses based on LPB's methodology for risk grading and adding reserves for these loans. The total allowance for loan losses was $4.9 million at June 30, 2004 or .87% of net loans. Community Banking Update Both net loans and deposits grew in the June 2004 quarter on a sequential and comparative basis. Net loans grew to $565.4 million at June 30, 2004 from $533.1 million at March 31, 2004 and $497.3 million at June 30, 2003. Total loan originations 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. and commitments were $151.7 million in the June 2004 quarter and $256.4 million for the 2004 year-to-date compared with $148.8 million and $267.5 million in the same periods a year ago. Approximately $202.1 million of the loan originations and commitments for the first six months of 2004 have been for LPB's portfolio with the remainder brokered for fee income. The loan portfolio mix and balances are shown in the following table:
Loans Receivable
(Dollars in millions)
----------------------------------------------------------------------
June 30, 2004 March 31, 2004 June 30, 2003
----------------------------------------------------------------------
% of % of % of
Loan Type Total Total Total Total Total Total
----------------------------------------------------------------------
Commercial Real Estate $264.0 46.1% $254.0 47.2% $241.1 48.1%
----------------------------------------------------------------------
Multi-family Real Estate 86.7 15.2% 83.6 15.5% 78.6 15.6%
----------------------------------------------------------------------
Construction (1) 20.0 3.5% 25.1 4.6% 30.6 6.1%
----------------------------------------------------------------------
Single-family Real Estate 98.2 17.2% 97.3 18.1% 93.7 18.6%
----------------------------------------------------------------------
Commercial and industrial
loans 68.0 11.9% 49.0 9.1% 33.4 6.6%
----------------------------------------------------------------------
Land acquisition and
development 12.7 2.2% 10.9 2.0% 6.6 1.3%
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Consumer loans 21.1 3.7% 18.1 3.3% 17.8 3.5%
----------------------------------------------------------------------
Other loans (2) 1.0 0.2% 1.0 0.2% 1.0 0.2%
----------------------------------------------------------------------
Allowance, Deferred Fees &
Discounts/Premiums (6.3) (5.9) (5.5)
----------------------------------------------------------------------
Net loans receivable $565.4 100.0% $533.1 100.0% $497.3 100.0%
----------------------------------------------------------------------
(1) Includes loans collateralized by residential, commercial and
land properties.
(2) Includes loans collateralized by deposits and consumer lines
of credit loans.
Total deposits grew at a slower pace than loans with total deposits reaching $589.8 million at June 30, 2004 compared to $584.8 million at March 31, 2004 and $538.9 million at June 30, 2003. The new banking office in Overland Park, Kansas in the Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). metro and the successful opening of the Ventura, California office contributed $13.0 million of deposits in the quarter, while the more mature offices lost $8.5 million in deposits, as the Company continued to execute its strategy to modify its deposit mix and run-off some of the high cost and highly rate sensitive deposits in an effort to reduce its funding cost versus comparable market rates. Non-interest bearing deposits were $33.2 million at June 30, 2004, $29.0 at March 31, 2004 compared with $30.7 million at June 30, 2003. Competition remained very aggressive in LPB's north central coast markets as some of the larger institutions attempt to buy market share with high CD and money market rates. Management is pursuing the controlled growth of its franchise in its primary markets and expects the opening of two new offices every 12-15 months, with the Phoenix metro being the immediate priority target. LPB is currently in the final stages of negotiation to acquire an existing 3,500 square foot office building in the Scottsdale, Arizona Scottsdale (O'odham Vaṣai S-vaṣonĭ) is a city in Maricopa County, Arizona, United States, adjacent to Phoenix. Scottsdale has become internationally recognized as a premier and posh tourist destination, while maintaining its own identity and culture as " Airpark air·park n. A small airport typically located near a business area or industrial park. area, which will be converted to a full service banking office. Investment Portfolio Performance The investment portfolio was $426.9 million at June 30, 2004 compared to $422.8 million at March 31, 2004 and $320.8 million at June 30, 2003. This portfolio is comprised of primarily investment grade mortgage securities and is managed to a 3 to 6 month effective duration. During the first 6 months of 2004, the portfolio has returned an 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. total return (interest income plus the net gains and losses on investments and related hedges) over one month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). , the related funding benchmark, of 1.6% versus a goal of 1.25% to 1.5%. The Company's strategy is to deploy excess capital in a low-duration investment portfolio until the capital can be redeployed in the growth of the core community banking assets. Closing Comments In commenting on the June 2004 quarterly results, Chairman 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 Harrington West, Craig J. Cerny stated, "The financial results for the June 2004 quarter and the year- to-date continue to meet or exceed our expectations for our business segments in the current environment. We are very pleased with the growth of our loans and our favorable asset quality, while our net interest margin has remained stable. Our banking fee income, although below the record levels of 2003, continues to become more diversified. We are excited about our new fee-based businesses of overdraft protection and insurance and brokerage services coming on stream in the second half of the year. The performance of our investment portfolio, too, has been favorable despite the changing interest rate environment. We remain fully focused on building-out our community banking franchises (loans, deposits, and fee income producing businesses) in our main markets, with the Phoenix metro market providing the near-term expansion opportunity." Harrington West Financial Group, Inc, is a $1.1 billion, diversified, financial institution holding company for Los Padres Bank and its division Harrington Bank. It operates 13 full service banking operations on the central coast of California The Central Coast is an area of California, United States, roughly spanning the area between the Monterey Bay and Point Conception. It extends through Santa Cruz County, San Benito County, Monterey County, San Luis Obispo County, and Santa Barbara County. , Scottsdale Arizona, and the Kansas City metro. It also owns Harrington Wealth Management Company, a trust and investment management company with $124.0 million in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. or custody, and 51% of Los Padres Mortgage Company, LLC, a joint venture mortgage origination company, with Resource Marketing, Inc, the largest RE/MAX realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. franchise in Arizona, holding the remaining 49%. This Release includes "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 Section 27A of the Securities Act. All of the statements contained in the Release, other than statements of historical fact, should be considered forward-looking statements, including, but not limited to, those concerning (i) the Company's strategies, objectives and plans for expansion of its operations, products and services, and growth of its portfolio of loans, investments and deposits, (ii) the Company's beliefs and expectations regarding actions that may be taken by regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities having oversight
Oversight may refer to:
adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and are not intended to give any assurance as to future results. The Company undertakes no obligation to publicly release any revisions to 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 after the date hereof or to reflect the occurrence of unanticipated events.
Harrington West Financial Group, Inc.
(Dollars in thousands, except share and per share data)
At At At
June 30, March 31, June 30,
2004 2004 2003
----------- ----------- ----------
Selected Financial Condition Data:
Total assets $1,050,420 $1,004,930 $864,121
Loans receivable, net 565,369 533,118 497,254
Securities available for sale 426,738 422,599 318,479
Securities held to maturity 163 215 2,312
Trading account assets 1,915 1,950 2,127
Deposits 589,789 584,765 538,877
Federal Home Loan Bank advances 295,000 256,500 224,000
Securities sold under repurchase
agreements 79,510 65,699 16,076
Note payable - - 12,000
Other debt 15,464 15,464 -
Stockholders' equity 48,971 49,261 44,892
Number of shares outstanding 5,269,184 5,257,484 5,193,541
At or for the For the
Three Months Ended Six Months Ended
-------------------------------- ---------------------
June 30, March 31, June 30, June 30, June 30,
2004 2004 2003 2004 2003
---------- ---------- ---------- ---------- ----------
Selected Income
Statement Data:
Interest income $12,727 $12,247 $11,306 $24,974 $22,664
Interest expense 5,232 5,208 5,049 10,440 10,170
---------- ---------- ---------- ---------- ----------
Net interest
income 7,495 7,039 6,257 14,534 12,494
Provision for
loan losses 230 90 250 320 610
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision for
loan losses 7,265 6,949 6,007 14,214 11,884
Other income:
Income from
trading
account assets 273 338 1,294 611 1,870
Loss on
extinguishment
of debt (189) - (892) (189) (1,423)
Other gain
(loss) (2) (10) (40) (12) 50
Banking fee
income (1) 848 760 1,200 1,608 2,224
---------- ---------- ---------- ---------- ----------
Total other
income 930 1,088 1,562 2,018 2,721
Other expenses:
Salaries and
employee
benefits 2,704 2,683 2,555 5,387 5,024
Premises and
equipment 741 724 671 1,465 1,324
Other expenses(2) 1,425 1,332 1,246 2,757 2,418
---------- ---------- ---------- ---------- ----------
Total other
expenses 4,870 4,739 4,472 9,609 8,766
Income before
income taxes 3,325 3,298 3,097 6,623 5,839
Income taxes 1,345 1,239 1,286 2,584 2,424
---------- ---------- ---------- ---------- ----------
Net income $1,980 $2,059 $1,811 $4,039 $3,415
========== ========== ========== ========== ==========
Common Stock
Summary:
Diluted earnings
per share $0.35 $0.37 $0.33 $0.72 $0.63
Dividends per
share (7) 0.60 0.08 0.03 0.68 0.07
Stockholders'
equity per
share (8) 9.29 9.37 8.64 9.29 8.64
Diluted weighted
average shares
outstanding 5,613,093 5,545,816 5,411,472 5,576,272 5,398,831
At or for the For the
Three Months Ended Six Months Ended
-------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2004 2004 2003 2004 2003
------- --------- --------- -------- --------
Selected Operating Data (3):
Performance Ratios and
Other Data:
Return on average assets 0.77% 0.83% 0.85% 0.78% 0.81%
Return on average equity 16.12 16.92 16.31 16.65 15.63
Equity to assets 4.66 4.90 5.20 4.66 5.20
Interest rate spread (4) 2.90 2.79 2.87 2.84 2.90
Net interest margin (4) 3.05 2.95 3.04 3.00 3.06
Average interest-earning
assets to average
interest-bearing
liabilities 107.12 107.27 106.83 107.20 106.60
Total noninterest expenses
to average total assets 1.93 1.94 2.11 1.93 2.09
Efficiency ratio (5) 58.37 60.76 59.97 59.53 59.56
Asset Quality Ratios (6):
Non-performing assets and
troubled debt restructurings
to total assets 0.00 0.02 0.00 0.00 0.02
Non-performing loans and
troubled debt restructurings
to total loans 0.00 0.03 0.00 0.00 0.03
Allowance for loan
losses to total loans 0.87 0.88 0.89 0.87 0.88
Net charge-offs to average
loans outstanding 0.00 0.00 0.00 0.00 0.00
(1) Consists of service charges, wholesale mortgage banking
income, trust income, other commissions and fees and other
miscellaneous noninterest income.
(2) Consists of computer services, consulting fees, marketing and
other miscellaneous noninterest expenses.
(3) With the exception of return on average assets and return on
average equity (which are based on month-end balances), all ratios are
based on average daily balances. All ratios are annualized where
appropriate.
(4) Interest rate spread represents the difference between the
weighted average yield on interest-earning assets and the weighted
average rate on interest-bearing liabilities. Net interest margin
represents net interest income as a percentage of average
interest-earning assets.
(5) Efficiency ratio represents noninterest expenses as a
percentage of the aggregate of net interest income and noninterest
income, excluding gains and losses on securities, deposits, borrowings
and loans.
(6) Non-performing loans generally consist of non-accrual loans
and non-performing assets generally consist of non-performing loans
and real estate acquired by foreclosure or deed-in-lieu thereof.
(7) A six for five stock split in the form of a stock dividend
occurred on March 11, 2004, and a special dividend of 50 cents a share
was declared on June 16, 2004 payable on July 12, 2004.
(8) Calculation is based on number of outstanding shares at the
end of each period.
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