Harris Financial, Inc. Releases Second Quarter Earnings.Business Editors HARRISBURG Harrisburg, city (1990 pop. 52,376), state capital and seat of Dauphin co., SE Pa., on the Susquehanna River; settled c.1710 by John Harris, who established a trading post and operated a ferry there; inc. 1791. , Pa.--(BUSINESS WIRE)--July 20, 2000 President and Chief Executive Officer Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by C. Pearson Pear·son , Lester Bowles 1897-1972. Canadian politician who served as prime minister (1963-1968). He won the 1957 Nobel Peace Prize for his role in the negotiation of a solution to the Suez crisis (1956). , Jr. of Harris Harris, Scotland: see Lewis and Harris. Financial, Inc. (Nasdaq/NM:HARS HARS Historical Aircraft Restoration Society HARS HIV/AIDS Reporting System HARS Historic Area Remediation Site HARS Highway Advisory Radio System (public service announcements) HARS High Altitude Route System ) today announced net income of $4.6 million for the quarter ended June June: see month. 30, 2000. This compares to net income of $4.7 million for the quarter ended June 30, 1999. Fully-diluted earnings per share was $.14 for each of the quarters ended June 30, 2000 and June 30, 1999. Mr. Pearson noted that recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. earnings improved in the quarter ended June 30, 2000 to $4.6 million, or $.14 per share, from recurring earnings of $4.3 million, or $.13 per share, recorded during the quarter ended June 30, 1999. Prior period earnings included $.4 million after taxes from a partial recovery of $.7 million on a fraud loss related to the 1996 acquisition of First Harrisburg Bancor. P. Mr. Pearson attributed the improvement in recurring earnings primarily to net interest income, which grew $1.1 million, or 7.6%, to $15.5 million for the quarter ended June 30, 2000, from $14.4 million recorded in the prior year period. This increase in net interest income resulted mostly from growth in the Corporation's commercial and consumer loans and commercial and retail deposits. Net interest income from average balance growth exceeded the effect of interest rate spread compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. from rising short term market interest rates experienced during the last four quarters. Net interest margin increased 5 basis points to 2.51% versus the quarter ended March 31, 2000 and declined 11 basis points from the quarter ended June 30, 1999. During the June 2000 quarter, average commercial and consumer loans totaled $812.6 million, up $224.3 million, or 38.1%, from the June 1999 quarter average of $588.3 million. Noninterest income (excluding securities gains and the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. fraud recovery) decreased to $2.6 million from $2.8 million a year ago. Revenue from service charges on deposits increased $.2 million, or 12%, to $1.7 million in the quarter ended June 30, 2000 as compared to the prior period. This revenue was offset by a decline in mortgage banking revenue of $.4 million, or 57%, to $.3 million in the quarter ended June 30, 2000 as compared to the prior period. Mortgage banking revenue declined in the current period primarily because of weaker demand for mortgages and the winding up of operations at the Corporation's mortgage banking subsidiary late in the quarter ended June 30, 1999. The Corporation's noninterest expense increased 4.4% during the quarter over the prior year period due to continued staffing enhancements in commercial and retail lines of business as well as continued investments in the Corporation's branch network. P. Mr. Pearson also noted that the Harris Bankers have continued to maintain excellent credit quality in the Corporation's asset portfolios. Non-accrual loans and loans 90 days past due but still accruing decreased from $16.1 million at year end 1999 to $9.8 million at June 30, 2000 (or 0.71% of total loans). Harris Financial experienced strong asset growth during the quarter ended June 30, 2000. At June 30, 2000, net loans totaled $1.389 billion, up $74 million, or 5.6%, from $1.315 billion at March 31, 2000. This loan growth was generated primarily in commercial and consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. , reflecting HFI's strong performance in its community banking business lines. Total deposits excluding brokered certificates grew $23 million, or 1.7%, during the quarter to $1.379 billion at June 30, 2000, up from $1.356 billion at March 31, 2000. P. Harris Financial also reported excellent growth for the twelve months ended June 30, 2000. Assets at June 30, 2000 were $2.851 billion, up $186 million, or 7.0%, from $2.665 billion at June 30, 1999. Net loans were up $124 million, or 9.8%, from $1.265 billion at June 30, 1999, with growth of $208 million in commercial and consumer loans offsetting a reduction of $84 million in mortgage loans. Total deposits excluding brokered certificates grew $126 million, or 10.1%, from $1.253 billion at June 30, 1999. In closing, Mr. Pearson stated "We are pleased that despite intense competition from all financial service sectors we are continuing to increase our deposits and loans at a strong pace while maintaining our credit quality. Intense interest spread pressure has limited a corresponding increase in current earnings but we continue to believe that we are building a strong base for the future. Our service oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. strategies will enable us to retain these customers and add to our earnings in the future." P. On March 28, 2000 Harris Financial announced that it entered into an agreement to merge See mail merge and concatenate. with York York, former name of Toronto, Canada York, Ont.: see Toronto, Ont., Canada. York, city, England York, city (1991 pop. 123,126) and district, North Yorkshire, N England, at the confluence of the Ouse and Foss rivers. Financial Corp., the parent of York Federal Savings and Loan Association Federal Savings and Loan Association An institution chartered by the federal government whose primary function is to collect savings deposits and to provide mortgage loans. . To accomplish the merger, the Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. of Harris Financial, MHC MHC major histocompatibility complex. MHC abbr. major histocompatibility complex MHC major histocompatibility complex. has adopted a plan of conversion pursuant to which it would convert from a mutual to a capital stock form of organization. Harris Financial, MHC is the mutual holding company parent of Harris Financial, Inc. and owns approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 76% of the Corporation's outstanding common shares. The transactions are expected to be completed during the fourth quarter of 2000.
UNAUDITED FINANCIAL HIGHLIGHTS
Six Months Ended Three Months Ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
Net income $ 8,659,000 $ 9,670,000 $ 4,639,000 $ 4,737,000
Basic earnings
per share $ .26 $ .29 $ .14 $ .14
Diluted
earnings per
share $ .26 $ .29 $ .14 $ .14
Harris Financial, Inc. is the bank holding company for a $2.9 billion 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. headquartered in Harrisburg, Pennsylvania This article is about the capital city of the Commonwealth of Pennsylvania. For other places named Harrisburg, see Harrisburg (disambiguation). Harrisburg is the capital of the Commonwealth of Pennsylvania, a state of the United States of America. with 38 branches located in five counties in Southcentral 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 and Washington County, Maryland Washington County is a county located in the U.S. state of Maryland. In 2006, its population was 143,748. It was the first county in the United States to be named for the Revolutionary War general (and later President) George Washington. Its county seat is Hagerstown. .
HARRIS FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(in thousands)
June 30, December 31, June 30,
2000 1999 1999
------------- ------------ ------------
(unaudited) (unaudited)
Assets
Cash and Cash Equivalents $ 50,115 $ 73,613 $ 57,289
Securities and Investments 1,315,328 1,257,603 1,263,384
Loans, Net 1,389,329 1,269,629 1,265,083
Other Assets 96,629 90,555 79,226
---------- ---------- ----------
Total Assets $2,851,401 $2,691,400 $2,664,982
========== ========== ==========
Liabilities and
Stockholders' Equity
Deposits $1,452,738 $1,373,870 $1,276,734
Escrow 4,644 3,511 17,647
Borrowings 1,198,375 1,118,000 1,138,000
Other Liabilities 26,974 26,695 46,461
---------- ---------- ----------
Total Liabilities 2,682,731 2,522,076 2,478,842
---------- ---------- ----------
Stockholders' Equity 168,670 169,324 186,140
---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 2,851,401 $2,691,400 $2,664,982
========== ========== ==========
HARRIS FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands)
Six months ended Three months ended
June 30, June 30,
2000 1999 2000 1999
------- ------- ------- -------
(unaudited) (unaudited)
Interest income $98,134 $84,136 $50,898 $42,428
Interest expense 66,328 53,814 34,610 27,227
------ ------- ------- -------
Net interest income 31,806 30,322 16,288 15,201
Provision for loan loss 1,666 1,590 831 795
------- ------- ------- -------
Net interest income
after provision for
loan loss 30,140 28,732 15,457 14,406
Noninterest income 5,313 6,167 2,563 3,499
Gain (loss) on sale
of securities, net 14 1,365 30 12
Noninterest expense 23,666 22,925 11,834 11,333
------- ------- ------- -------
Income before taxes 11,801 13,339 6,216 6,584
Income tax expense 3,142 3,669 1,577 1,847
------- ------- ------- -------
Net income $ 8,659 $ 9,670 $ 4,639 $ 4,737
======= ======= ======= =======
TABLE 1 - Average Balance Sheets - Quarter (all dollar amounts are
in thousands)
For the three months ended,
---------------------------------
June 30, 2000
---------------------------------
Average
Average (1) (2) (Yield/
Balance Interest Cost)
---------------------------------
Assets:
Interest-earning assets:
Mortgage loans, net $ 548,657 $ 9,796 7.14%
Commercial loans 404,706 9,161 9.05%
Direct consumer loans 177,263 3,969 8.96%
Indirect consumer loans 230,650 4,313 7.48%
Marketable securities - taxable 1,248,804 22,672 7.26%
Marketable securities - taxfree 61,399 1,378 8.98%
Other interest-earning assets 22,433 228 4.07%
---------------------------------
Total interest-earning assets 2,693,912 51,517 7.65%
-----------------
Noninterest-earning assets 106,053
---------
Total Assets $2,799,965
=========
Liabilities and
Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits $ 135,618 $ 1,015 2.99%
Time deposits 955,884 13,327 5.58%
NOW and money market accounts 341,370 2,369 2.78%
Escrow/stock subscriptions 3,821 11 1.15%
Borrowed funds 1,165,815 17,888 6.14%
---------------------------------
Total interest-bearing
liabilities 2,602,508 34,610 5.32%
-----------------
Noninterest-bearing
liabilities 30,683
---------
Total liabilities 2,633,191
Stockholders' equity 166,774
---------
Total liabilities and
stockholders' equity $2,799,965
=========
Net interest income $ 16,907
=========
Interest rate spread (3) 2.33%
====
Net interest-earning assets $ 91,404
=========
Net interest margin (4) 2.51%
====
Ratio of interest-earning
assets to
interest-bearing
liabilities 1.04
====
---------------------------------
June 30, 1999
---------------------------------
Average
Average (1) (2) (Yield/
Balance Interest Cost)
---------------------------------
Assets:
Interest-earning assets:
Mortgage loans, net $622,250 $11,756 7.56%
Commercial loans 274,863 5,315 7.73%
Direct consumer loans 141,746 3,140 8.86%
Indirect consumer loans 171,719 3,237 7.54%
Marketable securities - taxable 1,110,389 17,238 6.21%
Marketable securities - taxfree 118,115 2,403 8.14%
Other interest-earning assets 28,120 303 4.31%
---------------------------------
Total interest-earning assets 2,467,202 43,392 7.03%
--------------------
Noninterest-earning assets 94,989
---------
Total Assets $2,562,191
=========
Liabilities and
Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits $145,782 $721 1.98%
Time deposits 777,289 10,128 5.21%
NOW and money market accounts 300,709 1,706 2.27%
Escrow/stock subscriptions 15,401 28 0.73%
Borrowed funds 1,101,372 14,644 5.32%
---------------------------------
Total interest-bearing
liabilities 2,340,553 27,227 4.65%
--------------------
Noninterest-bearing
liabilities 30,179
---------
Total liabilities 2,370,732
Stockholders' equity 191,459
---------
Total liabilities and
stockholders' equity $2,562,191
=========
Net interest income $16,165
=========
Interest rate spread (3) 2.38%
====
Net interest-earning assets $126,649
========
Net interest margin (4) 2.62%
====
Ratio of interest-earning
assets to
interest-bearing
liabilities 1.05
========
(1) Includes income recognized on deferred loan fees of $287,000 for
the three months ended June 30, 2000, and $528,000 for the three
months ended June 30, 1999.
(2) Interest income and yields are shown on a tax equivalent basis.
(3) Represents the difference between the average yield on
interest-earning assets and the average cost on interest-bearing
liabilities.
(4) Represents the annualized net interest income before the provision
for loan losses divided by average interest-earning assets.
TABLE 2 - Average Balance Sheets - Year-to-date (all dollar
amounts are in thousands)
For the six months ended,
----------------------------------
June 30, 2000
----------------------------------
Average
Average (1) (2) (Yield/
Balance Interest Cost)
----------------------------------
Assets:
Interest-earning assets:
Mortgage loans, net $ 548,754 $ 19,540 7.12%
Commercial loans 380,239 16,432 8.64%
Direct consumer loans 173,530 7,651 8.82%
Indirect consumer loans 226,032 8,422 7.45%
Marketable securities -
taxable 1,232,814 44,097 7.15%
Marketable securities -
taxfree 60,400 2,703 8.95%
Other interest-earning assets 23,238 507 4.36%
---------------------------------
Total interest-earning assets 2,645,007 99,352 7.51%
-------------------
Noninterest-earning assets 100,639
---------
Total Assets $2,745,646
=========
Liabilities and
Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits $ 129,909 $ 1,692 2.60%
Time deposits 948,428 26,016 5.49%
NOW and money market accounts 337,700 4,585 2.72%
Escrow/stock subscriptions 3,742 27 1.44%
Borrowed funds 1,131,385 34,008 6.01%
---------------------------------
Total interest-bearing
liabilities 2,551,164 66,328 5.20%
-------------------
Noninterest-bearing liabilities 27,781
---------
Total liabilities 2,578,945
Stockholders' equity 166,701
---------
Total liabilities and
stockholders' equity $2,745,646
=========
Net interest income $ 33,024
==========
Interest rate spread (3) 2.31%
====
Net interest-earning assets $ 93,843
==========
Net interest margin (4) 2.50%
====
Ratio of interest-earning
assets to interest-bearing
liabilities 1.04
====
------------------------------------
June 30, 1999
------------------------------------
Average
Average (1) (2) (Yield/
Balance Interest Cost)
------------------------------------
Assets:
Interest-earning assets:
Mortgage loans, net $ 615,765 $ 23,726 7.71%
Commercial loans 249,803 9,682 7.75%
Direct consumer loans 142,743 6,080 8.52%
Indirect consumer loans 152,845 5,977 7.82%
Marketable securities - 1,121,005 35,092 6.26%
taxable
Marketable securities - 117,907 4,838 8.21%
taxfree
Other interest-earning assets 28,596 669 4.68%
-----------------------------------
Total interest-earning assets 2,428,664 86,064 7.09%
----------------------
Noninterest-earning assets 98,121
---------
Total Assets $2,526,785
=========
Liabilities and
Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits $ 144,832 $ 1,408 1.94%
Time deposits 773,084 20,222 5.23%
NOW and money market accounts 296,424 3,396 2.29%
Escrow/stock subscriptions 13,078 53 0.81%
Borrowed funds 1,080,955 28,735 5.32%
-----------------------------------
Total interest-bearing
liabilities 2,308,373 53,814 4.66%
----------------------
Noninterest-bearing liabilities 27,486
---------
Total liabilities 2,335,859
Stockholders' equity 190,926
---------
Total liabilities and
stockholders' equity $2,526,785
=========
Net interest income $ 32,250
==========
Interest rate spread (3) 2.43%
====
Net interest-earning assets $ 120,291
=========
Net interest margin (4) 2.66%
====
Ratio of interest-earning
assets to interest-bearing
liabilities 1.05
====
(1) Includes income recognized on deferred loan fees of $498,000 for
the six months ended June 30, 2000, and $972,000 for the six
months ended June 30, 1999.
(2) Interest income and yields are shown on a tax equivalent basis.
(3) Represents the difference between the average yield on
interest-earning assets and the average cost on interest-bearing
liabilities.
(4) Represents the annualized net interest income before the provision
for loan losses divided by average interest-earning assets.
TABLE 3 - Analysis of Allowance for Loan Losses
(all dollar amounts are in thousands)
As of or As of or
for the for the
six months twelve months
ended ended
June 30, December 31,
Allowance for Loan Loss 2000 1999
----------------------- -------- --------
Balance at beginning of the period $ 11,873 $ 9,088
Provision for loan losses 1,666 3,180
Provision component related to unfunded
commitments -- 617
Charge Offs:
Commercial loans (22) (50)
One-to-four family loans (125) (253)
Other mortgage loans -- --
Consumer loans (1,208) (970)
-------- --------
Total charge offs (1,355) (1,273)
-------- --------
Recoveries:
Commercial loans 4 61
One-to-four family loans 1 73
Other mortgage loans -- --
Consumer loans 247 127
-------- --------
Total recoveries 252 261
-------- --------
Net Charge Offs (1,103) (1,012)
-------- --------
Balance at end of period $ 12,436 $ 11,873
======== ========
Net Charge Offs to Average Loans
Outstanding (1) 0.17% 0.08%
======== ========
(1) Year to date ratio is annualized
TABLE 4 - Allowance for Loan Losses Coverage Ratios (all dollar
amounts are in thousands)
As of or As of or
for the for the
six months twelve months
ended ended
June 30, December 31,
2000 1999
---------- ----------
Allowance at end of period $ 12,436 $ 11,873
Non-accrual loans $ 4,218 $ 10,007
90 Days past due, but
still accruing $ 5,606 $ 6,128
Potential problem loans $ 18,353 $ 16,263
Allowance/non-accrual loans 294.83% 118.65%
---------- ----------
Allowance/90 days past due,
but still accruing 221.83% 193.75%
---------- ----------
Allowance/non-accrual loans
and 90 days past due,
but still accruing 126.59% 73.59%
---------- ----------
Allowance/problem loans 67.76% 73.01%
---------- ----------
TABLE 5 - Allocation of the Allowance for Loan Losses
(all dollar amounts are in thousands)
As of June 30, 2000 As of December 31, 1999
------------------ -----------------
% of Total % of Total
Amount Reserves Amount Reserves
------- ------- ------- -------
One-to-four family
mortgage loans $ 840 6.76% $ 838 7.06%
Commercial loans 7,232 58.15% 7,154 60.25%
Consumer and other
loans 3,346 26.90% 3,073 25.88%
Unallocated 1,018 8.19% 808 6.81%
------- ------- ------- -------
Total $12,436 100.00% $11,873 100.00%
======= ======= ======= =======
Reserve for
unfunded
commitments $ 308 $ 308
======= =======
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