EX-99 3 slad4-20.txt EXHIBIT 20.1 Exhibit 20.1 CONTACT: Mary K. Talbot (401) 245-8819 SLADE'S FERRY BANCORP REPORTS HEALTHY GROWTH IN BUSINESS DURING Q3 2003 SOMERSET, Mass. -- Slade's Ferry Bancorp (NASDAQ small cap: SFBC) parent company of Slade's Ferry Trust Company, announced a 20 percent increase in total loans and a $10.6 million increase in deposits for the first nine months of 2003. The second quarter of 2003 Real Estate Investment Trust (REIT) tax settlement of $658,168 with the State of Massachusetts the Bank's increased our effective tax rate. In addition expenses related to investments in the bank's infrastructure have contributed to a decrease of $472,812 in net income for the nine months ending September 30, 2003 when compared to the same period in 2002. Net income for the third quarter of 2003 totaled $699,345, or diluted earnings per share of $0.17, as compared to $1,250,997 and diluted earnings per share of $0.32 that were recorded for the same quarter in 2002. The 2002 period included a $585,358 pre-tax gain on securities, as well as a $138,263 securities write-down charge on securities. "We're closely adhering to our strategic plan and thus have been reorganizing and reinvesting in bank infrastructure to remain competitive which has resulted in some one-time expenses," said CEO Mary Lynn Lenz. "However, we're achieving (and in some cases surpassing) our sales goals to offset those organizational investments." Net loans are up 20 percent over December 31, 2002, having increased from $259.8 million to $311.7 million. The growth has been fueled by low interest rates, combined with the bank's marketing efforts to increase its portfolio of residential mortgages and home equity loans. Total deposits were $346.2 million as of September 30, 2003, an increase of $10.6 million (or 3.2 percent) over December 31, 2002 that is attributed to a money market advertising campaign that has generated approximately $15 million in deposits. Borrowings from the Federal Home Loan Bank increased by $22.9 million as the bank took advantage of a favorable low interest rate environment to continue to draw down longer term, structured funding opportunities. A loss on sale of loans of $115,792 was recorded during 2003. No loan sales were incurred during 2002. This loss on sale of loans is a result of management's continued efforts to aggressively improve asset quality in the bank's loan portfolio. Asset quality in both loan and investment portfolios remain strong. Non-performing loans were $650,000 or 0.20 percent of total gross loans at September 30, 2003, as compared to 0.24 percent of total loans at December 31, 2002. Due to continued changes in the composition of the loan portfolio, stronger underwriting guidelines, and the sale of loans previously deemed impaired, the overall credit risk of the loan portfolio has improved. Subsequent to an analysis of the adequacy of loan loss reserves, management deemed it prudent to recover $680,357 of previously provided loan loss provisions and recorded this provision benefit during the second quarter of 2003 and is reflected in the year to date September 30, 2003 benefit for loan losses. No recoveries or benefits associated with the provision for loan losses were recorded for the same period in 2002, however an expense to earnings totaling $375,000 was made. Total stockholders' equity at September 30, 2003 was $42.0 million versus $41.2 million at December 31, 2002, an increase of approximately 2.1 percent, or $0.8 million. Both the company and the bank maintain capital levels sufficient to be considered "well-capitalized" under applicable regulatory capital guidelines and requirements. The third quarter results also reflect a dividend of $0.09 per share that was paid out on October 17 to stockholders of record as of September 19, 2003. Slade's Ferry Bancorp was founded to serve community-banking needs with both personal and commercial products and services. With more than $400 million in assets and 10 retail branches in Southeastern Massachusetts, Slade's Ferry is a trusted community partner. Traded on the NASDAQ Small Cap Market as SFBC, Slade's Ferry Bancorp can also be found on the web at www.sladesferry.com and in six Massachusetts communities - Fairhaven, Fall River, New Bedford, Seekonk, Somerset and Swansea. # # # This new release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the strength of the company's capital and asset quality. Other such statements may be identified by words such as "believes," "will," "expects," "project," "may," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of Slade's Ferry Bancorp's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectation expressed in our forward-looking statements: (1) enactment of adverse government regulations (2) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (3) the strength of the United States economy in general and specifically the strength of the New England economics may be different than expected, resulting in, among other things, a deterioration in overall credit quality and borrowers' ability to service and repay loans, or a reduced demand for credit, including the resultant effect on the Bank's loan portfolio, levels of charge-offs and non-performing loans and allowance for loan losses; (4) changes in the interest rate environment may reduce interest margins and adversely impact net interest income and (5) changes in assumptions used in making such forward-looking statements. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Slade's Ferry Bancorp's actual results could differ materially from those discussed. All subsequent written and oral forward-looking statements attributable to Slade's Ferry Bancorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements set forth above. Slade's Ferry Bancorp does not intend or undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date of the forward-looking statements are made. SLADE'S FERRY BANCORP CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF
SEPTEMBER 30, DECEMBER 31, ASSETS: 2003 2002 ---------------------------------------------------------------------------------- Cash and deposits with other banks $ 18,887,821 $ 14,993,969 Money market mutual funds 41,851 222,567 Federal funds sold 11,000,000 19,500,000 ---------------------------------------------------------------------------------- Cash and Cash Equivalents 29,929,672 34,716,536 Interest bearing time deposits with other banks 200,000 200,000 Securities held to maturity 12,148,328 13,696,254 Securities available for sale 52,502,490 65,907,926 Federal Home Loan Bank stock 2,105,400 1,013,400 Loans (net) - Note A 311,724,282 259,816,056 Premises & equipment 5,991,270 6,067,879 Accrued interest receivable 1,511,498 1,492,591 Goodwill 2,173,368 2,173,368 Cash surrender value of life insurance 11,019,566 9,750,661 Other assets 3,586,329 3,540,312 ---------------------------------------------------------------------------------- TOTAL ASSETS $432,892,203 $398,374,983 ================================================================================== LIABILITIES & STOCKHOLDERS' EQUITY: Deposits $346,229,006 $335,632,532 Advances from Federal Home Loan Bank 42,106,161 19,185,338 Other liabilities 2,477,628 2,336,109 ---------------------------------------------------------------------------------- Total Liabilities 390,812,795 357,153,979 Preferred stockholders' equity in subsidiary 50,500 54,000 ---------------------------------------------------------------------------------- Stockholders' equity: Common stock 39,796 39,378 Paid in capital 28,316,556 27,693,199 Retained earnings 13,991,179 13,445,335 Accum. other comprehensive loss (318,623) (10,908) ---------------------------------------------------------------------------------- Total Stockholders' Equity 42,028,908 41,167,004 ---------------------------------------------------------------------------------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $432,892,203 $398,374,983 ================================================================================== Note: A-Loans net of: Reserve for Loan Losses $ 4,377,797 $ 4,854,388 Unearned Income $ 377,168 $ 341,234
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE (UNAUDITED) 9 MONTHS ENDING SEPTEMBER 30,
2003 2002 --------------------------------------------------------------------------------- INTEREST AND DIVIDEND INCOME: Interest and fees on loans $12,928,787 $13,088,783 Interest and dividends on investments 2,258,138 3,461,700 Other interest 135,253 258,593 --------------------------------------------------------------------------------- Total interest and dividend income 15,322,178 16,809,076 --------------------------------------------------------------------------------- INTEREST EXPENSE: Interest on deposits 3,538,854 5,307,036 Interest on other borrowed funds 1,059,978 892,868 --------------------------------------------------------------------------------- Total interest expense 4,598,832 6,199,904 --------------------------------------------------------------------------------- Net interest and dividend income 10,723,346 10,609,172 Provision (benefit) for loan losses (539,357) 375,000 --------------------------------------------------------------------------------- Net interest and dividend income after provision (benefit) for loan losses 11,262,703 10,234,172 --------------------------------------------------------------------------------- OTHER INCOME: Service charges on deposit accounts 840,054 641,684 Security gains, net 1,944 582,540 Other income 749,221 741,389 --------------------------------------------------------------------------------- Total other income 1,591,219 1,965,613 --------------------------------------------------------------------------------- OTHER EXPENSE: Salaries and employee benefits 5,743,711 5,367,058 Occupancy expense 710,580 637,618 Equipment expense 398,971 369,307 Writedown on securities 0 1,085,158 Loss on sale of loans 115,792 0 Other expenses 2,517,286 2,082,961 --------------------------------------------------------------------------------- Total other expense 9,486,340 9,542,102 --------------------------------------------------------------------------------- Income before income taxes and extraordinary item 3,367,582 2,657,683 Income taxes 1,092,553 568,010 --------------------------------------------------------------------------------- Net Income before extraordinary item 2,275,029 2,089,673 Extraordinary item, net of income taxes (1) (658,168) 0 --------------------------------------------------------------------------------- NET INCOME $ 1,616,861 $ 2,089,673 ================================================================================= Basic earnings (loss) per share: Income before extraordinary item $ 0.57 $ 0.54 Extraordinary item, net of income tax (0.17) 0.00 ----------- ----------- Net income $ 0.40 $ 0.54 =========== =========== Diluted earnings (loss) per share: Income before extraordinary item $ 0.57 $ 0.53 Extraordinary item, net of income tax (0.16) 0.00 ----------- ----------- Net income $ 0.41 $ 0.53 =========== =========== Reflects the final settlement from the MA Department of Revenue for the interest and state excise tax assessed on the REIT, net of any applicable tax benefits.
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE (UNAUDITED) 3 MONTHS ENDING SEPTEMBER 30,
2003 2002 ------------------------------------------------------------------------------- INTEREST AND DIVIDEND INCOME: Interest and fees on loans $4,419,503 $4,274,244 Interest and dividends on investments 671,857 1,102,826 Other interest 26,873 107,836 ------------------------------------------------------------------------------- Total interest and dividend income 5,118,233 5,484,906 ------------------------------------------------------------------------------- INTEREST EXPENSE: Interest on deposits 1,090,910 1,640,563 Interest on other borrowed funds 408,772 333,679 ------------------------------------------------------------------------------- Total interest expense 1,499,682 1,974,242 ------------------------------------------------------------------------------- Net interest and dividend income 3,618,551 3,510,664 Provision (benefit) for loan losses 0 0 ------------------------------------------------------------------------------- Net interest and dividend income after provision (benefit) for loan losses 3,618,551 3,510,664 ------------------------------------------------------------------------------- OTHER INCOME: Service charges on deposit accounts 298,734 229,650 Security gains, net 42,862 585,358 Other income 239,828 234,370 ------------------------------------------------------------------------------- Total other income 581,424 1,049,378 ------------------------------------------------------------------------------- OTHER EXPENSE: Salaries and employee benefits 2,005,682 1,807,639 Occupancy expense 225,567 219,173 Equipment expense 143,949 118,594 Writedown on securities 0 138,263 Loss on sale of loans 12,258 0 Other expenses 793,836 688,343 ------------------------------------------------------------------------------- Total other expense 3,181,292 2,972,012 ------------------------------------------------------------------------------- Income before income taxes and extraordinary item 1,018,683 1,588,030 Income taxes 319,338 337,033 ------------------------------------------------------------------------------- Net Income before extraordinary item 699,345 1,250,997 Extraordinary item, net of income taxes 0 0 ------------------------------------------------------------------------------- NET INCOME $ 699,345 $1,250,997 =============================================================================== Basic earnings (loss) per share: Income before extraordinary item $ 0.18 $ 0.32 Extraordinary item, net of income tax 0.00 0.00 ------------------------- Net income $ 0.18 $ 0.32 ========================= Diluted earnings (loss) per share: Income before extraordinary item $ 0.17 $ 0.32 Extraordinary item, net of income tax 0.00 0.00 ------------------------- Net income $ 0.17 $ 0.32 =========================