bob, thank you for your analysis. Please check the Company Press Release.
Tuesday October 21 5:33 PM EDT
Company Press Release
Essex Bancorp, Inc. Announces Third Quarter Results
NORFOLK, Va., Oct. 21 /PRNewswire/ -- Essex Bancorp, Inc. (Amex:ESX) (''Bancorp'') today announced that it had a
consolidated net loss of $491,000 for the third quarter of 1997 as compared to a net loss of $754,000 for the third quarter of
1996. The net loss for the third quarter of 1997 included a charge of $566,000 associated with Bancorp's fully-vested stock
options resulting from unusual trading activity in Bancorp's common stock during the third quarter of 1997, which propelled
Bancorp's stock to a 52-week high of $10.25 before closing at $4.75 on September 30, 1997.
The net loss for the third quarter of 1996 included a $575,000 loan loss provision, which was deemed necessary by
management to ensure the adequacy of the general loan loss allowance after allocating additional loss reserves to Essex
Savings Bank, F.S.B.'s (the ''Bank'') problem credit secured by a low- income apartment complex in Richmond, Virginia. This
credit was charged off in its entirety during the third quarter of 1996. Excluding the impact of these transactions in 1997 and
1996, Bancorp's results of operations for the third quarter of 1997 improved $254,000 over the third quarter of 1996. This
improvement reflected the impact of (i) an increase in Bancorp's net yield on interest-earning assets from 2.43% for the third
quarter of 1996 to 3.00% for the third quarter of 1997 resulting from a higher ratio of interest-earning assets to
interest-bearing liabilities as well as a higher yield on loans and (ii) a decrease in noninterest expense resulting from the Bank's
sale of nine retail bank branches during 1996. Despite the improvement in operating results, Bancorp did not generate sufficient
income during the third quarter of 1997 to cover the $412,000 of cumulative but undeclared quarterly dividends on Bancorp's
Series B and C preferred stock.
By December 31, 1996, after completing the sale of nine of the Bank's retail bank branches during 1996, Bancorp's total
assets had been reduced to $174.3 million, nonperforming assets approximated 2.99% of total assets and loans 30-89 days
past due totaled $1.5 million. By September 30, 1997, Bancorp's total assets had grown to $191.9 million (approximately a
10.1% increase) and asset quality had improved as reflected in a decline in nonperforming assets to 2.11% of total assets and
a decline in loans 30-89 days past due to $921,000. The increase in Bancorp's total assets primarily resulted from growth in
the Bank's deposits from $131.0 million at December 31, 1996 to $151.0 million at September 30, 1997. Notwithstanding
this growth, the Bank exceeded all regulatory capital requirements at September 30, 1997 with excess core capital of $7.8
million and excess risk-based capital of $7.5 million over the minimum regulatory requirements. The Bank is considered a
well-capitalized institution under the Prompt Corrective Action provisions of the Federal Deposit Insurance Act. In addition
during the third quarter of 1997, the Office of Thrift Supervision completed its safety and soundness examination of Bancorp
and the Bank and concluded that no adjustments to loss allowances were required. Moreover, the Bank is no longer viewed
as an institution requiring more-than-normal supervision.
(Selected Consolidated Financial Data follows.)
ESSEX BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
(Unaudited)
Nine Months Three Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
Operations Data:
Interest income $10,766 $16,474 $3,742 $4,700
Interest expense 6,834 11,580 2,389 3,223
Net interest income 3,932 4,894 1,353 1,477
Provision for loan losses 114 1,378 30 575
Net interest income after
provision for loan
losses 3,818 3,516 1,323 902
Noninterest income 1,931 3,522 522 833
Noninterest expenses:
Amortization 402 6,877 135 144
Other 5,430 7,835 2,201 2,344
Loss before provision
for income taxes (83) (7,674) (491) (754)
Provision for income taxes -- -- -- --
Net loss $(83) $(7,674) $(491) $ (754)
Loss per share $(1.23)(1) $(7.30) $(.85)(1) $ (.72)
Weighted average shares
outstanding 1,055,132 1,050,704 1,057,198 1,051,799
Other Data:
Net interest spread 2.70% 2.12% 2.66% 2.16%
Net interest margin 3.02% 2.31% 3.00% 2.43%
ESSEX BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
September 30, December 30,
1997 1996
Balance Sheet Data:
Total assets $191,887 $174,267
Net loans 160,093 145,551
Deposits 150,964 131,033
Federal Home Loan Bank advances 23,333 25,690
Shareholders equity (2) 15,028 15,106
Nonperforming assets 4,052 5,215
Allowance for loan losses 2,090 2,556
Nonperforming assets as a
percent of total assets 2.11% 2.99%
Tier I capital ratio 8.07% 8.66%
Risk-based capital ratio 14.47% 14.73%
(1) Essex Bancorp, Inc.'s (''Bancorp'') loss per common share is computed based upon net loss adjusted for
cumulative but undeclared preferred stock dividends of $1.2 million and $412,000 for the nine months and three months
ended September 30, 1997, respectively, divided by the average number of common shares outstanding. If dilutive for
any period, warrants and options are treated as outstanding.
(2) Bancorp's shareholders' equity consists of both preferred and common stock. The preferred shareholders have
2,250,000 shares of nonvoting perpetual preferred stock with an aggregate redemption value of $15.0 million and are
redeemable at Bancorp s option. In addition, the preferred shareholders have warrants to purchase 7,949,000 shares of
Bancorp's common stock at a price of $0.9375 per share. These warrants are exercisable beginning in September
1998.
SOURCE Essex Bancorp, Inc.
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