Pennrock (NASDAQ:PRFS)
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PennRock Announces First Quarter Earnings
BLUE BALL, Pa., April 19 /PRNewswire-FirstCall/ -- PennRock Financial Services
Corp. (NASDAQ:PRFS), parent company of Blue Ball National Bank, PennRock
Financial Advisors, N.A. and PennRock Insurance Group, Inc. reports net income
for the first quarter of 2005 of $3.7 million or $.47 diluted earnings per
share, as compared with $4.1 million or $.53 diluted earnings per share for the
first quarter of 2004.
Assets totaled $1.2 billion as of March 31, 2005, an increase of $108.3 million
or 10% from $1.1 billion from March 31, 2004. Total loans grew $114.6 million
or 16%. Loan growth was funded by an increase in deposits of $37.2 million, an
increase in borrowed funds of $66.3 million and a decrease in securities
available for sale of $22.7 million.
"Our significant increase in loans should have a positive impact on future
earnings," said Melvin Pankuch, Executive Vice President and Chief Executive
Officer of PennRock. "We are working diligently to successfully complete the
affiliation with CommunityBanks, Inc., while simultaneously continuing our
existing operations. The combined organization will present new opportunities
and benefits to the shareholders and customers."
Total non-performing loans increased from $571,000 as of March 31, 2004 to $2.6
million as of March 31, 2005. This increase is the result of one large
commercial real estate loan being placed on non-accrual status in the first
quarter of 2005. The ratio of non-performing loans to total loans increased
from .15% last year to .30% this year. PennRock recorded no provision for loan
losses in the first quarter of 2005 compared with $398,000 in the first quarter
of 2004.
Interest income increased $2.0 million from $13.3 million in the first quarter
of 2004 to $15.3 million in 2005, while interest expenses increased $1.4, from
$4.3 million to $5.7 million. The net interest margin, which is the ratio of
net interest income to average interest earning assets, was 3.60% in the first
quarter of 2005, a decline of 16 basis points from 3.76% in 2004.
Non-interest income, excluding gains and losses on investment securities,
decreased from $3.4 million for the first quarter of 2004 to $2.7 million in
2005. Most of the decline was due to a decrease in financial services revenue
and income from mortgage banking activities.
Non-interest expenses increased $420,000 or 6% from the first quarter of 2004.
This increase is attributable to increases in salaries and benefits and
Sarbanes-Oxley Section 404 compliance. Employee benefit insurance costs were
$82,000 higher in the first quarter of 2005 compared with the first quarter of
2004 while audit related costs were $187,000 higher.
In November 2004, PennRock and CommunityBanks, Inc. (Community) announced their
intention to combine organizations and operate under Community's charter.
Consummation is expected for mid-year 2005, after which the combined
organization will represent the 8th largest financial institution headquartered
in Pennsylvania, with over $3 billion in consolidated assets. The combined
franchise will included 69 banking offices in 11 counties throughout
Pennsylvania and upper Maryland, and will have a dramatic presence in the
Harrisburg, Lancaster, Berks and York regions. The merger has received
approval from various banking regulators and is in the process of meeting the
necessary requirements and approvals from shareholders of both organizations.
PennRock Financial Services Corp., headquartered in Blue Ball, PA is a bank
holding company with $1.2 billion in consolidated assets. PennRock is the
parent company of Blue Ball National Bank, PennRock Financial Advisors, N.A.,
and PennRock Insurance Group, Inc. Blue Ball National Bank provides a broad
range of banking services to consumers, small businesses and corporations
through 19 offices in south-central and southeastern Pennsylvania. PennRock
Financial Advisors, N.A. offers asset management, corporate retirement plan
administration, third party administration, and investment management & trust
services to clients in southeastern Pennsylvania, New Jersey and Delaware.
PennRock Insurance Group, Inc. sells annuities and life insurance products. To
learn more about PennRock and its subsidiaries, visit http://www.pennrock.com/.
This press release contains "forward-looking statements" concerning future
events. The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. In order to comply with the terms of
the safe harbor, we must inform you that a variety of factors could cause
PennRock Financial Services Corp., Blue Ball National Bank, and other
affiliated companies' actual results and experiences to differ materially from
the anticipated results or other expectations expressed in these forward-
looking statements. Our ability to predict the result or the effect of future
plans and strategies is inherently uncertain. Actual results could differ
materially due to market conditions, increased competition, legislative or
regulatory changes, acquisition related synergies and integration issues, and
other risks and uncertainties as discussed in reports we have filed with the
SEC. We caution you not to place undue reliance on these forward-looking
statements. We are under no obligation to publicly revise or update these
statements.
PennRock Financial Services Corp.
Consolidated Balance Sheets
In thousands, except share and per share data
March 31,
ASSETS 2005 2004
Cash and due from banks 25,372 $23,037
Short-term investments 5,807 4,629
Mortgages held for sale 2,862 3,520
Securities available for sale (at fair value) 268,800 291,494
Loans 824,288 709,648
Allowance for loan losses (9,008) (8,949)
Net loans 815,280 700,699
Premises and equipment 17,104 16,386
Accrued interest receivable 3,578 3,033
Bank owned life insurance 28,751 27,856
Other assets 39,385 28,031
Total assets $1,206,939 $1,098,685
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $154,965 $146,484
Interest bearing 691,194 662,456
Total deposits 846,159 808,940
Short-term borrowings 114,206 72,916
Long-term debt 127,000 102,000
Accrued interest payable 3,125 2,339
Other liabilities 10,889 11,517
Total liabilities 1,101,379 997,712
Stockholders' Equity:
Common stock, par value $2.50 per share; authorized
20,000 shares; issued - 7,718,543 shares 19,296 19,296
Surplus 54,798 53,677
Accumulated other comprehensive loss, net of
tax (3,549) (918)
Retained earnings 35,160 30,740
Treasury stock at cost (17,723 and 81,255
shares) (145) (1,822)
Total stockholders' equity 105,560 100,973
Total liabilities and stockholders' equity $1,206,939 $1,098,685
PennRock Financial Services Corp.
Consolidated Statements of Income
In thousands except share and per
share data: For the Three Months Ended
March 31,
2005 2004
Interest income:
Interest and fees on loans $12,422 $10,566
Securities available for sale 2,801 2,741
Other 63 28
Total interest income 15,286 13,335
Interest expense:
Deposits 3,480 2,803
Short-term borrowings 919 286
Long-term debt 1,328 1,223
Total interest expense 5,727 4,312
Net interest income 9,559 9,023
Provision for loan losses 398
Non-interest income:
Service charges on deposit accounts 799 808
Other service charges 106 92
Financial services 1,058 1,379
Gains (losses) on sales of securities 240 640
Mortgage banking 118 243
Increase in surrender value of bank
owned life insurance 226 261
Other 417 627
Total non-interest income 2,964 4,050
Non-interest expense:
Salaries and benefits 4,953 4,861
Occupancy, net 591 496
Equipment depreciation and service 342 220
Other 1,994 1,883
Total non-interest expense 7,880 7,460
Income before income taxes 4,643 5,215
Income taxes 958 1,096
Net income $3,685 $4,119
Per share information:
Basic earnings $0.48 $0.54
Diluted earnings 0.47 0.53
Cash dividends 0.22 0.20
Weighted average number of shares
outstanding:
Basic 7,693,545 7,640,416
Diluted 7,778,940 7,755,301
PennRock Financial Services Corp.
Selected Consolidated Financial Information
In thousands except share and per share
data For the Three Months Ended
March 31,
2005 2004
Performance data:
Return on average assets 1.24% 1.49%
Return on average equity 14.32% 16.56%
Yield on interest earning assets 5.69% 5.45%
Cost of interest bearing liabilities 2.48% 2.02%
Net interest margin 3.60% 3.76%
Interest rate spread 3.22% 3.44%
Efficiency ratio 60.23% 56.84%
As of March 31,
2005 2004
Equity data:
Book value per share $13.71 $13.22
Market value per share 34.92 28.40
Total equity to average assets 8.97% 8.94%
Tier 1 capital to risk-weighted assets 10.57% 10.97%
Total capital to risk-weighted assets 11.55% 12.07%
Asset quality:
Non-accrual loans $2,395 $819
Loans accruing but 90 days past due
as to principal or interest 88 217
Total non-performing loans 2,483 1,036
Other real estate owned 69 12
Total non-performing assets $2,552 $1,048
Non-performing loans to total loans 0.30% 0.15%
Allowance for loan losses to
non-performing loans 362.79% 863.80%
Allowance for loan losses:
Balance, beginning of year $9,007 $8,643
Provision charged to expense 398
Total loans charged off (68) (107)
Recoveries 68 15
Balance, end of quarter $9,007 $8,949
Allowance for loan losses to period-end loans 1.09% 1.26%
DATASOURCE: PennRock Financial Services Corp.
CONTACT: Shannan Guthrie, PennRock Financial Services Corp.,
+1-717-354-3612 or
Web site: http://www.pennrock.com/