PICK: USAB @ 10 7/8
USABanc.com
185 million assets
21 million market cap
2.23 mm shs
1.40 mm shs float
bv = $6.68
This 'bank' wants to become a
'virtual' financial services dynamo
think of it as CKFR+EGRP+NTBK all in
one. Licensed to accept deposits from
all 50 states .. licensed for on-line
brokerage in all 50 states .. has
in-house banking-platform software
capability .. all for $21.00 million
and going 'live' on Monday ..
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Friday April 16, 9:30 am Eastern Time
Company Press Release
USABancShares Develops 'Next Wave'
Internet Banking Platform
USABanc.com is launched
PHILADELPHIA--(BUSINESS WIRE)--April 16, 1999-- Based upon Macromedia's innovative
''Flash'' technology (NASDAQ:''MACR''), and in conjunction with Electronic Data Systems
(NYSE:''EDS''), USABancShares (NASDAQ:''USAB'') today announced completion of its
proprietary internet banking platform, ''USABanc.com''.
Under development for 18 months, the site will allow real-time access to customer account
information and provide around the clock banking functions such as bill paying, CD purchases, and
loan processing.
The site will go live Monday at www.USABanc.com, with instant functionality for on-line CD
purchases through USABancShares' FDIC insured banking subsidiary and real-time stock quotes;
full transaction functionality is targeted for third quarter roll-out.
In cooperation with USABancShares' stock brokerage subsidiary, customers nationwide will also
purchase stocks and manage their portfolio directly on-line, while participating in IPO investment
opportunities.
USABanc.com is a fault tolerance, fire-wall protected Unix driven solution using the Apache www
server, and relies upon technology from Oracle server 8i, Macromedia's Flash, and Generator. Site
engineering was accomplished by USABancShares' Electric Banking Division on an in-house basis
using Apple Computer hardware (NASDAQ:''AAPL'') and Netscape 4.5.
''What we've done is dramatically different from anything else available,'' commented Kenneth L.
Tepper, President and CEO of USABancshares.
''USABanc.com was developed from the start in anticipation of greater bandwidth, and now that
this bandwidth is widely available, our site's audio/visual interface will attract users who demand not
only efficiency and convenience ... but entertainment as well.''
''Bill Gates had no idea what was coming when he said a few years ago that banks were dinosaurs.
Size is transparent on the web, and our FDIC deposit insurance -- something Gates will never have
-- is exactly the same as that of any major money center bank. We can compete electronically
anywhere, anytime based upon site quality rather than size, branch location ... or even pricing.''
Tepper added, ''The internet is a great equalizer that may eventually destroy any competitive
advantage that a large bank may have over a smaller one; in an industry noted for stringent
conservatism, imagination and creativity will carry a premium in the banking business from now on;
anyone clinging to traditional market share -- anywhere in America -- is at risk!''
Tepper believes that future success for internet banking will be based upon attracting customers with
constantly updated content and an engaging multimedia experience ... not merely 'conventional'
access to traditional banking functions. ''There's no doubt that we'll offer highly competitive products
and rates ... but we created USABanc.com with energy and vision to be simple to use, lightening
fast, and totally captivating. This is a compelling site that will continue to evolve into a completely
immersive experience as added bandwidth further integrates streaming video technology,'' he
concluded.
Daniel Taylor, Director of USABancShares' Electric Banking Division, was responsible for project
implementation; ''In today's on-line marketplace, your product is either outrageously cool or it's
dead on arrival; this site will rock the web!''
''We created a 'destination site' which will provide an in-depth electronic experience of sight and
sound ... as opposed to other existing financial services sites which are plagued with volumes of
meaningless text and poor navigation. Banking functions will be intuitive and incredibly easy to
perform so users aren't overwhelmed with complexity,'' Taylor assured.
Using the platform's 'Orbit' function, customers will be able to rely upon the site as a direct launching
point for access to other important on-line destinations such as retailers, news services, or travel
agencies. Via its 'Planet Credit' application, USABanc.com will also seek strategic alliances allowing
customers to link to selected on-line vendors after having received pre-approved credit for
acquisitions. ''Internet portals don't have to be limited to book sellers or search engines,'' Taylor
concluded.
Electronic Data Systems (EDS), a major e-commerce provider, was selected to provide a back-end
solution. Robert Smik, Director of Operations for USABancShares, commented, ''EDS provides a
proven and reliable bridge between their comprehensive banking application and the ability for our
customers to access account information -- in real time -- when, where and how they want it''. Paul
Duckham, the EDS executive in charge of the MISER division, shared in Smik's enthusiasm; ''We
are excited about working with USABancShares. Their aggressive approach to multiple delivery
channels is the direction we see the financial industry going''. EDS has been a leader in the global
information services industry for more than 35 years, with revenues of $16.9 billion in 1998.
USABancShares is a bank holding company regulated by the Federal Reserve Board; Its FDIC
insured banking subsidiary, BankPhiladelphia, is a Pennsylvania State Chartered Savings bank
engaged in both originating and acquiring commercial, consumer and residential loans. Its Electric
Banking Division is responsible for the ongoing development and implementation of the
USABanc.com financial services platform.
Forward Looking Statements
Some of the statements contained in this press release discuss future expectations, contain
preliminary unaudited results of operations and financial condition and state other ''forward looking''
information. Those statements are subject to know and unknown risks, uncertainties and other
factors that could cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and was derived using
numerous assumptions. Important factors that may cause actual results to differ from projections
include, for example: general economic conditions, including their impact on capital expenditures;
business conditions in the financial services industry; the regulatory environment; rapidly changing
technology and evolving banking industry standards; competitive factors, including increased
competition with community, regional and national financial institutions; new services and products
offered by competitors; and price pressures.
Contact:
USABancShares Inc., Philadelphia
Kenneth L. Tepper, President & CEO, 215/569-4200
or
Daniel Taylor, Director, Electric Banking Division,
215/569-4200
usabanc.com
or
Electronic Data Systems (EDS)
Thomas J. Mann, Division EVP, 301/604-5629
eds.com
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More:
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Wednesday April 14, 7:57 am Eastern Time
Company Press Release
USABancShares Announces 31%
Increase in Earnings
PHILADELPHIA--(BUSINESS WIRE)--April 14,
1999--USABancShares Inc. (Nasdaq: USAB - news), parent
company of BankPhiladelphia announced unaudited earnings for the first quarter ended March 31,
1999 of $413,000 or $0.19 fully diluted earnings per share compared to $314,000 or $0.15 fully
diluted earnings per share for the quarter ended Dec. 31, 1998. Total assets of the company
increased to $185.6 million or 12.6% from 165.1 million at Dec. 31, 1998. Average loans
outstanding, investments and cash have increased approximately $6.6 million, $3.0 million and $2.6
million, during the March 31, 1999 quarter. The company completed its $10.0 million trust preferred
offering on March 9, 1999, which has allowed continued growth in its assets base while maintaining
well capitalized status. In addition, on April 11, 1999, the bank opened its fourth retail office located
in Wynnewood, Pa.
''The progress of the company's core earnings, infrastructure enhancements and loan originations are
all proceeding according to plan, and we continue to review strategic alternatives to assure continued
enhancement of shareholder value,'' commented Kenneth L. Tepper, USA's president and chief
executive officer. ''While our loan acquisition opportunities remain attractive, first quarter results
indicate the growing strength of our commercial lending and community banking franchise...as new
loan originations exceeded $11.0 million for the quarter and new transaction-based deposit accounts
exceeded $7.0 million,'' Tepper concluded.
Financial Results:
For the first quarter ended March 31, 1999, the company's return on average equity and return on
average assets were 12.7% and 1.0%, respectively. These ratio's compare to 9.34% and 0.79%,
respectively and 18.1% and 1.7%, respectively for the quarters ended Dec. 31, 1998 and March
31, 1998, respectively. The first quarter ended March 31, 1999 earnings of $414,000 or $0.19 per
share compare to $412,000 or $0.24 for the same period ended March 31, 1998 (last year's results
included non-recurring interest income of approximately $100,000 related to the acquisition of
certain discounted loan pools.)
The company's quarterly net interest income has increased $623,000 to $1.7 million during the first
quarter of 1999 from $1.1 million for the first quarter in 1998. The improvement is attributable to
increased earning assets of $63.3 million or 69%. The increase in average earning assets was
partially offset by a decrease in the net interest margin of 15 basis points, compared to the period
ended March 31, 1998. Non-interest income has more than doubled to $270,000 vs $138,000,
respectively. The increase is attributable to an increase in miscellaneous retail and loan fees of
$67,000 gain on sale of investments of $20,000 and brokerage operations of $9,000. Non-interest
expenses increased $680,000 or 100% to $1.2 million vs. $535,000 for the quarter ended March
31, 1998. The increase in expense levels reflects an increase in compensation of $262,000,
occupancy of $95,000 and $323,000 of other expenses. The increase in total expenses is a
reflection of the company growing its retail franchise and its operational infrastructure. Other
expenses such as advertising and stationary printing and supplies increased $50,000 respectively,
related to the change of the bank's name and ongoing marketing promotions to increase the
awareness of the bank throughout the Philadelphia market place via outdoor advertising, radio and
cable. The increase in compensation relates to the staffing of the two new branch locations and staff
increases in the operational division of the company. Total number of employees has increased from
18 to 42 at March 31, 1998 to March 31, 1999, respectively.
The company's assets increased 12.6% or $20.5 million to $185.6 million at March 31, 1999 from
December 31, 1998. The increase in assets is comprised of net loan assets increasing by $7.9 million
or 7.7% to $110.0 million and the security portfolio increasing $20.6 million to $64.7 million at
March 31, 1999. The asset growth was funded by deposit growth of $11.4 million to $125.8 million
and the proceeds from the trust preferred offering of $9.1 million. Loan growth mainly came from
commercial real estate originations. The bank acquired one performing loan of approximately $1.7
million for a purchase price of $1.4 million during the first quarter ended March 31, 1999. Deposit
growth occurred primarily in the transaction accounts comprising $6.8 million with the remaining
increase in deposits coming from certificates of deposit $4.6 million.
Allowance for loan losses to total loans was 1.06% with a total allowance for loan losses of $1.2
million at March 31, 1999 compared to 1.02% or $1.0 million, respectively at December 31, 1998.
Non-performing assets were $2.1 million or 1.11% to total assets at March 31, 1999 compared to
$2.0 million or 1.22% of total assets at December 31, 1998. The company has continued to provide
for loan losses in order to maintain an allowance for loan losses at a level management has
determined to be adequate for its loan portfolio and the inherent risks associated with the portfolio.
USAB is committed to continue to improve shareholder value by continuing to grow its franchise at
profitable levels.
Forward Looking Statements: Some of the statements contained in this press release discuss future
expectations, contain preliminary unaudited results of operations and financial condition and state
other ''forward looking'' information. Those statements are subject to known and unknown risks,
uncertainties and other factors that could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is based on various factors and
was derived using numerous assumptions. Important factors that may cause actual results to differ
from projections include, for example: general economic conditions, including their impact on capital
expenditures; business conditions in the financial services industry; the regulatory environment;
rapidly changing technology and evolving banking industry standards; competitive factors, including
increased competition with community, regional and national financial institutions; new services and
products offered by competitors; and price pressures.
Summary of Recent Developments
(Unaudited)
(dollars in thousands, except per share data)
March 31,
At At 1999
Selected Financial Condition March 31, Dec. 31, Average
and Other: 1999 1998 Balances
---------- ---------- ----------
Total Assets $ 185,587 $ 165,109 $ 170,300
Loans Receivable, net 110,013 102,138 104,625
Investments 64,742 47,793 49,751
Deposits 125,766 114,378 118,264
Other Borrowings 44,163 35,326 36,738
Stockholders' equity $ 13,644 $ 13,588 $ 13,602
Three Months Ended
------------------------------------
March 31, March 31, Dec. 31,
Selected Operating Data: 1999 1998 1998
---------- ---------- ----------
Total interest income $ 3,891 $ 2,287 $ 3,486
Total interest expense 2,155 1,174 1,895
---------- ---------- ----------
Net interest income 1,736 1,113 1,591
Provision for loan losses 100 35 200
---------- ---------- ----------
Net interest income after
provision for loan losses 1,636 1,078 1,391
Total non-interest income 270 138 369
Total non-interest expenses 1,216 536 1,237
---------- ---------- ----------
Income before income taxes 690 680 523
Income taxes 276 268 210
---------- ---------- ----------
Net income $ 414 $ 412 $ 313
========== ========== ==========
Fully diluted earnings per share $ 0.19 $ 0.24 $ 0.15
========== ========== ==========
Fully diluted shares outstanding 2,231,655 1,696,888 2,116,223
Three Months Ended
------------------------------------
March 31, March 31, Dec. 31,
Performance Ratios: 1999 1998 1998
---------- ---------- ----------
Return on average assets 1.00% 1.72% 0.79%
Return on average equity 12.70% 18.16% 9.34%
Net interest margin 4.71% 4.86% 4.37%
Interest rate spread 4.48% 4.11% 4.04%
Efficiency ratio 64.08% 47.77% 71.63%
Non-interest expenses to
average assets 2.86% 2.23% 3.13%
Average interest earning assets
to interest bearing
liabilities 104.45% 114.71% 106.48%
Three Months Ended
------------------------------------
March 31, March 31, Dec. 31,
Asset Quality Ratios: 1999 1998 1998
---------- ---------- ----------
Non-performing loans, net
of discount to total loans,
net of discount 1.72% 0.32% 1.89%
Non-performing assets, net of
discount to total assets 1.11% 0.20% 1.22%
Allowance for loan losses
to total non-performing
loans, net of discount 57.23% 294.49% 53.72%
Allowance for loan losses to
total loans, net of
discount 1.06% 0.94% 1.02%
Allowance for loan losses
and purchase discount
as a percentage of
total loans 4.94% 6.80% 5.85%
Contact:
USABancShares Inc., Philadelphia
Brian M. Hartline, 215/569-4200 x248
bmh@usabanc.com
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General Info:
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General
USABancShares, Inc. (the "Corporation") is a Pennsylvania corporation headquartered in
Philadelphia, Pennsylvania and was organized in November 1995 in order to facilitate the acquisition
of People's Thrift Savings Bank, which changed its name to "BankPhiladelphia" in July 1998 (the
"Bank"). The Bank, which is the primary business of the Corporation, has operated as a
community-based financial institution for over 110 years. The Bank was originally organized in 1887
as a mutual building and loan association and converted to a Pennsylvania-chartered stock savings
bank in December 1990. Since the Corporation's acquisition of the Bank in November 1995, the
Corporation has experienced rapid growth which was fueled primarily by the purchase of loan pools
at a discount from a wide variety of sources. Recently, these sources consist primarily of private
sector sellers and, to a lesser extent, governmental agencies. The Corporation has historically funded
its loan growth primarily through certificates of deposit and, to a lesser extent, advances from the
Federal Home Loan Bank of Pittsburgh ("FHLB"). The Corporation expects growth to continue as
the Bank leverages its deposit inflows into new loan originations with continued purchases of pools
of loans at a discount, consisting primarily of performing loans secured by single-family residential,
multi-family residential and commercial properties. From December 31, 1995 through December
31, 1998, the Corporation's total assets, net loans receivable, deposits and stockholders' equity
have increased by $139.3 million, $95.1 million, $93.6 million and $8.9 million or 540%, 1,359%,
450% and 189%, respectively. At December 31, 1998, the Corporation had total assets of $165.1
million, net loans receivable of $102.1 million, total deposits of $114.4 million and total stockholders'
equity of $13.6 million.
USACapital
USACapital, Inc. ("USACapital"), a registered broker-dealer with the National Association of
Securities Dealers, is a Pennsylvania corporation wholly owned by the Corporation. A subsidiary of
the Corporation acquired USACapital in April 1997 for a purchase price of $75,000, paid in shares
of the Corporation's common stock. USACapital is engaged in the business of trading stocks,
bonds, annuities, and other investment related products to the general public. The operations of
USACapital presently represent less than 10% of the Corporation's consolidated net income.
However, during the year ended December 31, 1998, USACapital increased its staff from two
persons to 18 persons, which management believes will facilitate the growth of USACapital's
business. The majority of the additional employees at USACapital are compensated on a
commission basis, which will maintain a variable expense base related to performance. USACapital
operates out of the Corporation's corporate office. USACapital generated pre-tax earnings of
$141,000 for the year ended December 31, 1998 and $102,000 from the Corporation's acquisition
of USACapital in April 1997 through December 31, 1997.
Personnel
As of December 31, 1998, the Corporation, the Bank and USACapital have a total of 38 full-time
and 2 part-time employees.
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