-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NylY8sp1chzrlbP86Jull1D/BgrnUrxuoe3F0tEgB+hqUNOq2MgpgsAavUFv3loZ rA+DwEI1QSvKL0IC+ABEYw== 0000790183-98-000006.txt : 19980430 0000790183-98-000006.hdr.sgml : 19980430 ACCESSION NUMBER: 0000790183-98-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980331 ITEM INFORMATION: FILED AS OF DATE: 19980428 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROGRESS FINANCIAL CORP CENTRAL INDEX KEY: 0000790183 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232413363 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-14815 FILM NUMBER: 98602290 BUSINESS ADDRESS: STREET 1: PO BOX 3036 CITY: BLUE BELL STATE: PA ZIP: 19422-0764 BUSINESS PHONE: 6109414834 MAIL ADDRESS: STREET 1: 4 SENTRY PARKWAY STREET 2: SUITE 200 CITY: BLUE BELL STATE: PA ZIP: 19422-0764 8-K 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 April 22, 1998 (Date of earliest event reported) Progress Financial Corporation (Exact name of registrant as specified in its charter) Delaware 0-14815 25-2413363 (State of other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identified No.) 4 Sentry Parkway, Suite 230, Blue Bell, Pennsylvania 19422-0764 (Address of principal executive offices) (Zip Code) (610)-825-8800 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Exhibit Index appears on page 4. Item 5. Other Events On April 22, 1998, Progress Financial Corporation reported first quarter net income of $996 thousand or diluted earnings per share of $.22 compared with net income of $1.2 million or $.27 per share for the first quarter of 1997. After excluding a gain on the sale of mortgage servicing rights in 1997, net income from operations was $524 thousand or $.12 per share for the quarter ended March 31, 1997, an increase of 83% on an operating basis. For further information see the press release attached as Exhibit 99(a) and incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PROGRESS FINANCIAL CORPORATION Dated: April 28, 1998 By: /s/ Frederick E. Schea ------------------------------------------- Frederick E. Schea Senior Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description 99(a) Press Release issued on April 22, 1998 Exhibit 99(a) Press Release issued On April 22, 1998 NEWS RELEASE Contact: Frederick E. Schea, CFO/Senior Vice President (610) 825-8800 ext. 4804 Patricia Ellick, Director of Investor Relations (610) 825-8800 ext. 4838 Progress Financial Corporation Announces First Quarter Operating Earnings Increased 83% Over 1997 Blue Bell, PA, April 22, 1998 - Progress Financial Corporation (the "Company" - NASDAQ: PFNC) today reported first quarter net income of $996 thousand or diluted earnings per share of $.22 compared with net income of $1.2 million or $.27 per share for the first quarter of 1997. After excluding a gain on the sale of mortgage servicing rights in 1997, net income from operations was $524 thousand or $.12 per share for the quarter ended March 31, 1997, an increase of 83% on an operating basis. First quarter results for 1998 included PAM Holding Corp. and subsidiaries which the Company acquired in 1998 in a transaction which was accounted for under the pooling of interests method of accounting. The prior period financial information has been restated to include PAM Holding Corp. In addition, during the first quarter of 1998, the Company formed Progress Development Corp., which generates fee income from the development of assisted living communities. Commenting on the first quarter results, W. Kirk Wycoff, President and CEO, stated "The acquisition of PAM Holding Corp. along with the formation of Progress Development Corp. Progress Financial Corporation First Quarter Results Page 2 has enhanced our growth in fee income. These new companies reinforce our subsidiary strategy to diversify and increase sources of non-interest income which are synergistic to our core corporate banking business." The Company's higher operating results for the quarter can be tied to improved margins from loan and lease growth and favorable deposit mix changes, largely due to increasing commercial relationships. The net interest margin for the first quarter of 1998 was 4.66% on average earning assets of $451.5 million compared to 4.43% for the first quarter of 1997 on average earning assets of $378.9 million. Consequently, net interest income for the first quarter of 1998 increased $1.1 million or 26% over the same period in 1997. This increase relates to the growth in the loan and lease portfolio to $347.6 million from $288.8 million at March 31, 1997. Loans and leases outstanding at March 31, 1998 included commercial business loans of $65.4 million, an increase of $27.8 million or 74% from March 31, 1997. In addition, commercial real estate loans totaled $116.5 million which increased $25.0 million or 27% from March 31,1997. Loans and Leases Outstanding (Dollars in Thousands) March 31, ---------
1998 1997 YTD Average YTD Actual % of Total Actual % of Total Average Commercial Business $ 65,394 18.81% $68,312 $37,551 13.00% $34,026 Commercial Real Estate 116,529 33.52 113,784 91,568 31.71 93,560 Lease Financing 58,525 16.84 57,698 45,478 15.75 42,789 Residential Mortgages 56,867 16.36 56,744 64,001 22.16 64,369 Construction 25,322 7.28 25,596 26,468 9.17 21,570 Consumer 25,006 7.19 25,536 23,718 8.21 23,669 ------ Total $347,643 100.00% $347,670 $288,784 100.00% $279,983 ======== ======= ======== ======== ======= ========
Progress Financial Corporation First Quarter Results Page 3 The Company reported non-performing assets of $2.2 million at March 31, 1998 down from $2.6 million at December 31, 1997 and $5.7 million at March 31, 1997. The Company's non-performing assets to total assets at March 31, 1998 of .46% includes $300 thousand of real estate owned. This compares to a non-performing asset ratio of .50% at December 31, 1997 and 1.38% at March 31, 1997. During the three months ended March 31, 1998, the Company recorded a $202 thousand provision compared with $193 thousand for the comparable period in 1997. As of March 31, 1998, the allowance for possible loan and lease losses increased to $4.1 million from $3.9 million at December 31, 1997 and $3.9 million at March 31, 1997. The ratio of the allowance for possible loan and lease losses to non-performing assets was 186% at March 31, 1998 compared to 151% at year-end 1997. Non-interest income for the quarter ended March 31, 1998 amounted to $1.8 million including $215 thousand in gains on investment sales. Non-interest income for the quarter ended March 31, 1997 amounted to $1.7 million, including a gain of $978 thousand from the sale of mortgage servicing rights. Loan brokerage and advisory fees were $445 thousand compared to $30 thousand for the same period in the prior year. These fees resulted from expanded activities at Progress Realty Advisors, Inc., partially through divisions acquired in 1997. Total non-interest expense was $5.2 million for the quarter ended March 31, 1998 and $3.9 million for the quarter ended March 31, 1997. The increase in non-interest expense for the quarter ended March 31, 1998 over the comparable quarter in 1997 was partially due to increases in salaries and employee benefits of $842 thousand relating to employees of acquired companies and new positions within the Bank. Other expenses increased by $762 thousand, including $398 thousand in interest on capital securities. Offsetting these increases was a decrease of $171 thousand in loan and REO expenses. Progress Financial Corporation First Quarter Results Page 4 Total assets decreased to $484.8 million at March 31, 1998 from $508.9 million at December 31, 1997 and increased from $416.6 million at March 31, 1997.Total deposits increased to $343.6 million at March 31, 1998 from $340.8 million at December 31, 1997 and $309.9 million at March 31, 1997. Progress Financial Corporation is a unitary thrift holding company headquartered in Blue Bell, Pennsylvania. The business of the Company consists primarily of the operation of Progress Bank, which serves businesses and consumers through eleven full service offices. The Company also offers a diversified array of other financial services including equipment leasing through the Bank's subsidiaries, Quaker State Leasing Company, Blue Bell, Pennsylvania; The Equipment Leasing Company, Timonium, Maryland; and PAM Financial Corp., Bethlehem, Pennsylvania. In addition, the Company conducts commercial mortgage banking and brokerage services through Progress Realty Advisors, Inc. with locations in Blue Bell, Pennsylvania, Richmond and Chesapeake, Virginia and Woodbridge, New Jersey; business to business telemarketing through Procall Teleservices, Inc. and construction development of assisted living communities through Progress Development Corp. The Company's common stock is traded on the NASDAQ Stock Market, National Market under the Symbol "PFNC". FINANCIAL DATA ATTACHED Progress Financial Corporation Financial Highlights (unaudited) Three Months Ended March 31, 1998 1997 Reported Results: Basic earnings per share (1) .24 $ .29 Diluted earnings per share (1) .22 .27 Dividends per common share (1) .03 .02 Book value per share $6.37 $5.55 Weighted average shares outstanding: (1) Basic 4,136,876 4,011,462 Diluted 4,600,063 4,287,212 Net interest margin 4.66% 4.43% Return on average assets .83 1.14 Return on average equity 15.53 22.22 Equity to assets 5.52 5.17 Ratio of allowance for loan and lease losses to loan and leases receivable 1.19 1.36 Ratio of non-performing assets to total assets .46 1.38 Ratio of allowance for loan losses to non-performing assets 185.98% 68.35% (1)Per share amounts have been restated to reflect the 5% stock dividend distributed to shareholders on September 15, 1997. *All prior period financial information has been restated to include the 1998 acquisition of PAM Holding Corp. and subsidiaries. Progress Financial Corporation Consolidated Statements of Financial Condition (Dollars in Thousands) (unaudited) Ending Balance Average Balance March 31, March 31, 1998 1997 1998 1997 Assets: Cash and due from banks: Interest bearing $2,644 $3,351 $2,187 $1,614 Non-interest bearing 8,247 9,014 9,310 7,691 Investments: Available for sale at fair value (amortized cost: $3,985 in 1998 and $3,490 in 1997) 4,304 3,441 5,823 3,433 Held to maturity at amortized cost (fair value: $7,733 in 1998 and $1,717 in 1997) 7,700 1,717 5,276 4,140 Mortgage-backed securities: Available for sale at fair value (amortized cost: $46,393 in 1998 and $43,194 in 1997) 46,482 42,672 43,045 43,159 Held to maturity at amortized cost (fair value: $45,250 in 1998 and $44,343 in 1997) 45,636 45,602 47,473 46,584 Loans and leases receivable: 346,973 288,150 346,882 279,474 Deferred fees, net 670 634 788 509 Allowance for loan losses (4,120) (3,916) (4,065) (3,856) Loans receivable, net 343,523 284,868 343,605 276,127 Real estate owned, net 300 4,035 384 2,189 Premises and equipment 9,623 7,697 9,422 7,743 Accrued interest receivable 2,982 2,281 2,672 1,928 Deferred income taxes 177 2,535 241 2,922 Other assets 13,191 9,375 14,413 10,803 ------ ------- -------- ------- Total assets $484,809 $416,588 $483,851 $408,333 ======== ======== ======== ======== Liabilities and Stockholders' Equity Liabilities: Deposits $343,580 $309,942 $335,167 $304,226 Advances from Federal Home Loan Bank 45,900 28,000 47,942 24,736 Other borrowings 41,957 47,123 47,116 48,433 Advance payments from borrowers 1,994 5,834 2,704 5,599 Accrued interest payable 2,418 1,266 2,577 1,638 Other liabilities 7,207 2,900 7,341 2,713 ----- ------- ----- ------ Total liabilities 443,056 395,065 442,847 387,345 ------- ------- ------- ------- Corporation-obligated mandatorily redeemable capital securities of subsidiary trust holding solely junior subordinated debentures of the Corporation 15,000 --- 15,000 --- Commitments & contingencies Stockholders' equity: Serial preferred, $1 par value; 1,000,000 shares authorized and unissued --- --- --- --- Common stock, $1 par value; 6,000,000 shares authorized; 4,201,000 and 3,876,000 shares issued and outstanding at March 31, 1998 and March 31, 1997, respectively 4,201 3,876 4,137 3,862 Capital surplus 21,478 18,183 21,094 18,168 Unearned Employee Stock Ownership Plan shares (151) (202) (158) (208) Retained earnings (deficit) 953 80 572 (528) Unrealized gain (loss) on securities available for sale, net of deferred income taxes 272 (414) 359 (306) --- ----- --- ----- Total stockholders' equity 26,753 21,523 26,004 20,988 ------ ------ ------ ------ Total liabilities, Corporation-obligated mandatorily redeemable capital securities of subsidiary trust holding solely junior subordinated debentures of the Corporation and stockholders' equity $484,809 $416,588 $483,851 $408,333 ======== ======== ======== ======== Consolidated Statements of Income (Dollars in Thousands) (unaudited) Three Months Ended March 31, 1998 1997 Interest income: Loans and leases, including fees $8,293 $6,671 Mortgage-backed securities 1,475 1,546 Investment securities 141 110 Other 23 25 -- -- Total interest income 9,932 8,352 Interest expense: Deposits 3,350 2,959 Advances from the Federal Home Loan Bank 423 407 Other borrowings 968 851 --- ---- Total interest expense 4,741 4,217 ----- ----- Net interest income 5,191 4,135 Provision for possible loan and lease losses 202 193 Net interest income after provision for possible loan and lease losses 4,989 3,942 Non-interest income: Service charges on deposits 367 360 Leasing fees 365 307 Loan brokerage and advisory fees 445 30 Mortgage origination and servicing 33 111 Gain on sale of mortgage servicing rights --- 978 Gain from sale of securities 215 34 Loss on properties sold --- (193) Fees and other 380 107 --- ---- Total non-interest income 1,805 1,734 ----- ----- Non-interest expense: Salaries and employee benefits 2,803 1,961 Occupancy 305 307 Data processing 249 312 Furniture, fixtures and equipment 254 189 Deposit insurance premiums 25 46 Loan and real estate owned expenses, net (68) 103 Professional services 191 239 Other 1,460 698 ----- ---- Total other expense 5,219 3,855 ----- ----- Income before income taxes 1,575 1,821 Income tax expense 579 671 --- ------ Net income $ 996 $1,150 ====== ====== Earnings Per Share: Basic $.24 $.29 Diluted .22 .27 Weighted average number of shares outstanding: Basic 4,136,876 4,011,462 Diluted 4,600,063 4,287,212 Dividends declared per share $0.03 $0.02 ###
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