The Washington Savings Bank, F.S.B. Reports the Third Quarter and
Nine Month Results
BOWIE, Md., May 19 /PRNewswire-FirstCall/ -- The Washington Savings Bank,
F.S.B. (AMEX:WSB), a federally-chartered, federally-insured savings bank, with
principal executive offices in Bowie, Maryland, today announced results for
both its third quarter and nine month period ended April 30, 2005.
WSB reported net earnings of $1,368,000, or $0.19 per basic share and $0.17 per
diluted share, and $6,099,000, or $0.83 per basic share and $0.74 per diluted
share, for the three and nine month periods ended April 30, 2005, respectively.
The net earnings for the three and nine month period ended April 30, 2005,
represent a decrease of $1,292,000 or 48.6% and $472,000, or 7.2% compared to
the same corresponding periods last fiscal year. The decrease is primarily the
result of a $2.8 million charge in the third quarter to the provision for loan
losses. The provision was made due to unfavorable trends including an increase
in internally criticized loans and to reflect changes in WSB's lending policies
and procedures.
Net interest income increased $5.3 million, or 37%, which partially offset the
31% increase in non-interest expense, compared to the nine-month period last
year. The increase in net interest income is the result of higher balances of
higher-yielding loans, including our construction loan portfolio. The increase
in non-interest expenses is the result of an increase in salaries and benefits,
and professional services. The increase in salaries and benefits is associated
with loan production commissions and staffing increases for loan operations
support. The increase in professional services is the result of additional
expenses associated with preparation for the required Sarbanes-Oxley Act,
Section 404 certifications as well as compliance under the Supervisory
Agreement.
Phillip C. Bowman, CEO, noted "WSB's April 30, 2005 total assets increased by
13% to $533,211,000 over last year's April 30th balance, and increased 2% for
the nine month period since July 31, 2004. Book value per share increased 13%
to $7.25 over last year's April 30th level of $6.41. While our earnings for
the comparative quarter and nine month periods are below what we have become
accustomed to in the past years, the results are still strong and we are
encouraged as to the future prospects of the Company." The Board believes that the retention of the approximately $516,000 that would
have been paid this quarter under our historical dividend practice will help
the Bank maintain its current "well capitalized" capital level and pursue its
business plan and strategic objectives, which the Board believes is in the
stockholders' long term best interests. While not declaring a dividend this
quarter, the Board will review the Bank's dividend practice on a quarterly
basis.
This release contains forward-looking statements within the meaning of and
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. A forward-looking statement encompasses any estimate,
prediction, opinion or statement of belief contained in this release and the
underlying management assumptions. Forward-looking statements are based on
current expectations and assessments of potential developments affecting market
conditions, interest rates and other economic conditions, and results may
ultimately vary from the statements made in this release. In addition to
expectations, assessments, and risks described by the Bank in its annual and
quarterly reports filed pursuant to Section 12(b) of the Securities Exchange
Act of 1934, the Bank's future results and prospects may be dependent upon a
number of factors that could cause the Bank's performance to compare
unfavorably to prior periods. Among these factors are: (a) the Bank's plans to
reduce its concentration in residential construction lending; (b) ongoing
review of the Bank's business and operations; (c) implementation of changes in
lending practices and lending operations; (d) the Bank's compliance with the
2004 supervisory agreement with the Office of Thrift Supervision and any
regulatory actions taken in response thereto; and (e) the Board's review of the
Bank's capital management plan.
FINANCIAL HIGHLIGHTS
(Unaudited) Three Months Ended April 30,
2005 2004 % Change
Interest Income $ 10,877,000 $ 8,154,000 33 %
Interest Expense $ 3,944,000 $ 2,954,000 34 %
Net Interest Income $ 6,933,000 $ 5,200,000 33 %
Non-Interest Income $ 1,812,000 $ 2,113,000 (14)%
Non-Interest Expenses $ 3,738,000 $ 2,822,000 32 %
Provision for Loan Losses $ 2,790,000 $ 180,000 1450 %
Net Earnings $ 1,368,000 $ 2,660,000 (49)%
Basic Earnings Per Share $ 0.19 $ 0.37 (49)%
Diluted Earnings Per Share $ 0.17 $ 0.33 (49)%
Average Shares Outstanding 7,378,093 7,253,835 2 %
Average Diluted Shares Outstanding 8,218,494 8,075,981 2 %
Nine Months Ended April 30,
2005 2004 % Change
Interest Income $ 31,470,000 $ 23,084,000 36 %
Interest Expense $ 11,709,000 $ 8,696,000 35 %
Net Interest Income $ 19,761,000 $ 14,388,000 37 %
Non-Interest Income $ 4,820,000 $ 4,746,000 2 %
Non-Interest Expenses $ 10,699,000 $ 8,195,000 31 %
Provision for Loan Losses $ 3,980,000 $ 360,000 1006 %
Net Earnings $ 6,099,000 $ 6,571,000 (7)%
Basic Earnings Per Share $ 0.83 $ 0.93 (11)%
Diluted Earnings Per Share $ 0.74 $ 0.82 (10)%
Average Shares Outstanding 7,363,338 7,066,102 4 %
Average Diluted Shares Outstanding 8,223,811 8,009,467 3 %
As of April 30, and nine months then ended
2005 2004 % Change
Total Assets $ 533,211,000 $ 471,344,000 13 %
Deposits and Borrowings $ 474,797,000 $ 420,645,000 13 %
Total Stockholders' Equity $ 53,458,000 $ 46,830,000 14 %
Book Value Per Share $ 7.25 $ 6.41 13 %
Return on Average Assets 1.49 % 2.08 % (28)%
Return on Average Equity 15.79 % 20.55 % (23)%
Efficiency Ratio 43.5 42.83
DATASOURCE: The Washington Savings Bank, F.S.B.
CONTACT: Phillip C. Bowman, CEO, or Kevin P. Huffman, President, COO, +1-301-352-3120, both of The Washington Savings Bank, F.S.B.
Web site: http://www.twsb.com/
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