Community Banks, Inc. Reports First Quarter 2001 Earnings

Apr 19, 2001, 01:00 ET from Community Banks, Inc.

    MILLERSBURG, Pa., April 19 /PRNewswire/ --
 Community Banks, Inc. (Amex:   CTY), parent company of Community Banks, N.A.
 (CBNA) and Peoples State Bank (PSB), has reported first quarter 2001 operating
 earnings before special charges of $3.64 million or $.414 per share, compared
 to first quarter 2000 operating earnings exclusive of security gains of $3.38
 million or $.382 per share, an increase of approximately 8.4% in per share
 earnings.  These special charges related to the acquisition of Glen Rock State
 Bank, asset write downs, special loan loss provisions, investment security
 losses and other nonrecurring expenses which in the aggregate amounted to $2.8
 million (after tax) or $.32 per share in 2001, versus investment security
 gains (after tax) of $.11 million or $.012 per share in 2000.  Net income
 after deduction of these items was $.81 million or $.092 per share for the
 period ended March 31, 2001, compared to $3.49 million or $.394 per share last
 year.  Per share data has been restated to reflect a 5% stock dividend paid
 April 30, 2001.
     March 30, 2001 marked the effective date of the Glen Rock State Bank
 (GRSB) merger into PSB which added approximately $183 million to CTY's total
 assets as of quarter end 2001.  In the past twelve months, CTY's internal
 asset growth combined with this merger was $343 million to $1.36 billion,
 compared to $1.01 billion at March 31, 2000, excluding GRSB.  This represents
 growth of CTY's assets of 33.8% in the past year.
     On a pooled basis, net loans increased $90 million, or 12.6% to
 $807 million from $717 million at March 31, 2000.  Total deposits increased
 $81 million or 9.2% in 2001 while stockholders' equity increased $19.3 million
 or 21.8%.  Affecting the increase in stockholders' equity was a change of
 $12.4 million in accumulated other comprehensive income.
     Over the past year, CTY has successfully generated significant balance
 sheet growth despite the recent economic slowdown.  The threat of a
 recessionary period in the future creates both challenges and opportunities.
 Although loan growth throughout the first quarter of 2001 has been affected by
 a slowing economy, the declining interest rate environment has generated
 increased housing and refinance activity which is beginning to be reflected in
 loan demand and gains on mortgage sales to the secondary market.  Management
 remains optimistic that CTY is well postured to weather the current economic
 cycle.
     The increase in net loans contributed to an increase in tax equivalent net
 interest income for the first quarter of 2001 of $.7 million, or 6.1% to
 $11.9 million versus $11.2 million in 2000.  Non-interest income excluding
 security gains/losses and gains on loan sales increased 14.3% or $.24 million
 for the quarter ended March 31, 2001.  For the same period, gains on loan
 sales were up nearly 150% to $.163 million.  The anticipated expansion of the
 Corporation's fee based services including its retail investment and annuity
 programs are expected to generate additional growth in non-interest income in
 the future.
     In addition to the non-recurring expenses related to the GRSB acquisition,
 management strengthened the balance sheet by building the allowance for loan
 losses to 1.42% of net loans at March 31, 2001.  This was deemed prudent given
 the current level of nonperforming loans to total loans ratio which increased
 from .88% last year to 1.03%, principally as a result of one deteriorating
 credit which entered nonperforming status during the quarter.  Management
 believes CTY has sufficiently reserved for potential losses regarding this and
 other nonperforming loans.  The allowance for loan losses was 139% of
 nonperforming loans at March 31,2001.  CTY's net loan charge-offs for the
 quarter 2001 represented .03% of average net loans, and nonperforming loans
 and other real estate at March 31, 2001 approximated .65% of total assets
 versus .57% a year ago.
     The Corporation continues to effectively control expenses as evidenced by
 efficiency ratios, excluding special charges, of 56.4% and 56.6% in 2001 and
 2000, respectively.
    Commenting on these results, Eddie L. Dunklebarger, President and CEO
 noted, "We are pleased that our strong first quarter operating results have
 afforded us the opportunity to capture the expenses and accruals related to
 the Glen Rock State Bank acquisition, and take a conservative posture with
 respect to strengthening our allowance for loan loss reserves.  We fully
 expect the remainder of the year 2001 to be a return to the level of
 profitability  which our shareholders are accustomed and we as management
 demand of ourselves."
     Currently, Community Banks, Inc. banking subsidiaries have 41 offices
 located in Adams, Cumberland, Dauphin, Luzerne, Northumberland, Schuylkill,
 Snyder, and York Counties as well as over 80 on-site and remote ATM locations.
 An additional CBNA office located on St. John's Church Road in Camp Hill and a
 PSB office on Queen Street In York are planned for the late Fall of 2001
 opening.
     Community Banks, Inc.'s stock trades on the AMEX under the symbol "CTY".
 
     This press release contains "forward looking" statements as defined in the
 Private Securities Litigation Reform Act of 1995, that are based on
 Community's current expectations, estimates and projections about future
 events and financial trends affecting the financial condition of its business.
 These statements are not historical facts or guarantees of future performance,
 events or results.  Such statements involve potential risks and uncertainties.
 Accordingly, actual results may differ materially.  Community undertakes no
 obligation to publicly update or revise any forward looking statements,
 whether as a result of new information, future events or otherwise.
 
                               Community Banks, Inc.
 
                           Selected Financial Information
              (Dollars in thousands, except per share data and ratios)
 
           All periods reflect the combined data of Community Banks, Inc.
                              and Glen Rock State Bank
 
                                             Three Months Ended
                                                 March  31,
                                            2001           2000
      Consolidated summary of operations:
 
       Interest income                     $24,376        $21,492
       Interest expense                     13,401         10,973
          Net interest income               10,975         10,519
       Provision for loan losses             1,573            361
          Net interest income after
           provision for loan losses         9,402         10,158
 
       Other income:
       Trust income                            107            141
       Service charges on deposit accounts     759            620
       Other service charges, commissions,
        and fees                               467            474
       Net security gains (losses)            (128)           168
       Income on insurance premiums            257            166
       Gains on loan sales                     163             65
       Other income                            358            303
          Total other income                 1,983          1,937
 
       Other expenses:
       Salaries and employee benefits        4,554          4,060
       Net occupancy expense                 1,375          1,146
       Operating expenses of insurance
        subsidiary                             139             87
       Merger and restructuring related
        expenses                             1,899              -
       Other operating expenses              2,645          2,158
          Total other expense               10,612          7,451
          Income before income taxes           773          4,644
       Provision for income taxes              (35)         1,154
          Net income                          $808         $3,490
 
 
       Net loan charge-offs                   $244           $186
       Net interest margin (FTE)             3.90%          4.09%
       Core efficiency ratio A]             56.44%         56.55%
 
     Consolidated per share data:  B]
 
       Basic core operating earnings per
        share  C]                            $0.42          $0.39
        Diluted core operating earnings per
        share  C]                            $0.41          $0.38
 
       Basic earnings per share              $0.09          $0.40
 
       Diluted earnings per share            $0.09          $0.39
 
       Book value at end of period  D]      $12.11         $11.42
 
                               Community Banks, Inc.
 
                           Selected Financial Information
              (Dollars in thousands, except per share data and ratios)
 
      All periods reflect the combined data of Community Banks, Inc. and Glen
                                  Rock State Bank
 
     Consolidated balance sheet data:
 
                                                     Three Months Ended
                                                          March 31,
                                                 2001        2000     % Change
        Average net loans                      $802,664      $704,028     14.0
        Average earning assets                1,233,712     1,101,071     12.0
        Average deposits                        930,114       847,375      9.8
        Average fully diluted shares
         outstanding  B]                      8,796,000     8,862,000     -0.7
 
                                                                      3/31/01
                                                                        vs.
                                    March 31, December 31,  March 31, 3/31/00
                                      2001        2000        2000    % Change
 
       Assets                     $1,358,392  $1,308,713  $1,202,744    12.9
       Net loans                     806,550     804,546     717,078    12.5
       Deposits                      953,373     919,241     872,713     9.2
       Stockholders' equity D]       106,388     104,672      99,478     6.9
       Accumulated other
        comprehensive income (loss)    1,285        (694)    (11,080)
       Fully diluted shares
        outstanding  B]            8,896,000   8,769,000   8,826,000     0.8
 
       Non-accrual loans              $7,568      $5,843      $5,392    40.4
       Other real estate owned           447         416         480    -6.9
       Restructured loans                  -         205         238  -100.0
       Accruing loans 90 days past
        due                              820         612         751     9.2
           Total nonperforming
            loans and OREO            $8,835      $7,076      $6,861    28.8
 
       Allowance for loan losses     $11,657     $10,328      $9,151    27.4
 
 
     Asset quality ratios:
 
       Reserve for loan losses to
        total loans                     1.42%       1.27%       1.26%    12.7
        outstanding
       Reserve for loan losses to
        non-performing loans             139%        155%        143%    -2.8
       Non-performing loans to
        total loans                     1.03%       0.82%       0.88%    17.0
        outstanding
       Non-performing assets to
        total assets                    0.65%       0.54%       0.57%    14.0
 
     A]  Excluding special charges of $2.6 million for the period ending
         March 31, 2001.
 
     B]  Per share data has been restated to reflect a 5% stock dividend
         payable April 30, 2001.
 
     C]  Excluding special charges (after tax) of $2.8 million in 2001 and
         security gains (after tax) of $.11 million in 2000.
 
     D]  Excluding accumulated other comprehensive income.
 
 

SOURCE Community Banks, Inc.
    MILLERSBURG, Pa., April 19 /PRNewswire/ --
 Community Banks, Inc. (Amex:   CTY), parent company of Community Banks, N.A.
 (CBNA) and Peoples State Bank (PSB), has reported first quarter 2001 operating
 earnings before special charges of $3.64 million or $.414 per share, compared
 to first quarter 2000 operating earnings exclusive of security gains of $3.38
 million or $.382 per share, an increase of approximately 8.4% in per share
 earnings.  These special charges related to the acquisition of Glen Rock State
 Bank, asset write downs, special loan loss provisions, investment security
 losses and other nonrecurring expenses which in the aggregate amounted to $2.8
 million (after tax) or $.32 per share in 2001, versus investment security
 gains (after tax) of $.11 million or $.012 per share in 2000.  Net income
 after deduction of these items was $.81 million or $.092 per share for the
 period ended March 31, 2001, compared to $3.49 million or $.394 per share last
 year.  Per share data has been restated to reflect a 5% stock dividend paid
 April 30, 2001.
     March 30, 2001 marked the effective date of the Glen Rock State Bank
 (GRSB) merger into PSB which added approximately $183 million to CTY's total
 assets as of quarter end 2001.  In the past twelve months, CTY's internal
 asset growth combined with this merger was $343 million to $1.36 billion,
 compared to $1.01 billion at March 31, 2000, excluding GRSB.  This represents
 growth of CTY's assets of 33.8% in the past year.
     On a pooled basis, net loans increased $90 million, or 12.6% to
 $807 million from $717 million at March 31, 2000.  Total deposits increased
 $81 million or 9.2% in 2001 while stockholders' equity increased $19.3 million
 or 21.8%.  Affecting the increase in stockholders' equity was a change of
 $12.4 million in accumulated other comprehensive income.
     Over the past year, CTY has successfully generated significant balance
 sheet growth despite the recent economic slowdown.  The threat of a
 recessionary period in the future creates both challenges and opportunities.
 Although loan growth throughout the first quarter of 2001 has been affected by
 a slowing economy, the declining interest rate environment has generated
 increased housing and refinance activity which is beginning to be reflected in
 loan demand and gains on mortgage sales to the secondary market.  Management
 remains optimistic that CTY is well postured to weather the current economic
 cycle.
     The increase in net loans contributed to an increase in tax equivalent net
 interest income for the first quarter of 2001 of $.7 million, or 6.1% to
 $11.9 million versus $11.2 million in 2000.  Non-interest income excluding
 security gains/losses and gains on loan sales increased 14.3% or $.24 million
 for the quarter ended March 31, 2001.  For the same period, gains on loan
 sales were up nearly 150% to $.163 million.  The anticipated expansion of the
 Corporation's fee based services including its retail investment and annuity
 programs are expected to generate additional growth in non-interest income in
 the future.
     In addition to the non-recurring expenses related to the GRSB acquisition,
 management strengthened the balance sheet by building the allowance for loan
 losses to 1.42% of net loans at March 31, 2001.  This was deemed prudent given
 the current level of nonperforming loans to total loans ratio which increased
 from .88% last year to 1.03%, principally as a result of one deteriorating
 credit which entered nonperforming status during the quarter.  Management
 believes CTY has sufficiently reserved for potential losses regarding this and
 other nonperforming loans.  The allowance for loan losses was 139% of
 nonperforming loans at March 31,2001.  CTY's net loan charge-offs for the
 quarter 2001 represented .03% of average net loans, and nonperforming loans
 and other real estate at March 31, 2001 approximated .65% of total assets
 versus .57% a year ago.
     The Corporation continues to effectively control expenses as evidenced by
 efficiency ratios, excluding special charges, of 56.4% and 56.6% in 2001 and
 2000, respectively.
    Commenting on these results, Eddie L. Dunklebarger, President and CEO
 noted, "We are pleased that our strong first quarter operating results have
 afforded us the opportunity to capture the expenses and accruals related to
 the Glen Rock State Bank acquisition, and take a conservative posture with
 respect to strengthening our allowance for loan loss reserves.  We fully
 expect the remainder of the year 2001 to be a return to the level of
 profitability  which our shareholders are accustomed and we as management
 demand of ourselves."
     Currently, Community Banks, Inc. banking subsidiaries have 41 offices
 located in Adams, Cumberland, Dauphin, Luzerne, Northumberland, Schuylkill,
 Snyder, and York Counties as well as over 80 on-site and remote ATM locations.
 An additional CBNA office located on St. John's Church Road in Camp Hill and a
 PSB office on Queen Street In York are planned for the late Fall of 2001
 opening.
     Community Banks, Inc.'s stock trades on the AMEX under the symbol "CTY".
 
     This press release contains "forward looking" statements as defined in the
 Private Securities Litigation Reform Act of 1995, that are based on
 Community's current expectations, estimates and projections about future
 events and financial trends affecting the financial condition of its business.
 These statements are not historical facts or guarantees of future performance,
 events or results.  Such statements involve potential risks and uncertainties.
 Accordingly, actual results may differ materially.  Community undertakes no
 obligation to publicly update or revise any forward looking statements,
 whether as a result of new information, future events or otherwise.
 
                               Community Banks, Inc.
 
                           Selected Financial Information
              (Dollars in thousands, except per share data and ratios)
 
           All periods reflect the combined data of Community Banks, Inc.
                              and Glen Rock State Bank
 
                                             Three Months Ended
                                                 March  31,
                                            2001           2000
      Consolidated summary of operations:
 
       Interest income                     $24,376        $21,492
       Interest expense                     13,401         10,973
          Net interest income               10,975         10,519
       Provision for loan losses             1,573            361
          Net interest income after
           provision for loan losses         9,402         10,158
 
       Other income:
       Trust income                            107            141
       Service charges on deposit accounts     759            620
       Other service charges, commissions,
        and fees                               467            474
       Net security gains (losses)            (128)           168
       Income on insurance premiums            257            166
       Gains on loan sales                     163             65
       Other income                            358            303
          Total other income                 1,983          1,937
 
       Other expenses:
       Salaries and employee benefits        4,554          4,060
       Net occupancy expense                 1,375          1,146
       Operating expenses of insurance
        subsidiary                             139             87
       Merger and restructuring related
        expenses                             1,899              -
       Other operating expenses              2,645          2,158
          Total other expense               10,612          7,451
          Income before income taxes           773          4,644
       Provision for income taxes              (35)         1,154
          Net income                          $808         $3,490
 
 
       Net loan charge-offs                   $244           $186
       Net interest margin (FTE)             3.90%          4.09%
       Core efficiency ratio A]             56.44%         56.55%
 
     Consolidated per share data:  B]
 
       Basic core operating earnings per
        share  C]                            $0.42          $0.39
        Diluted core operating earnings per
        share  C]                            $0.41          $0.38
 
       Basic earnings per share              $0.09          $0.40
 
       Diluted earnings per share            $0.09          $0.39
 
       Book value at end of period  D]      $12.11         $11.42
 
                               Community Banks, Inc.
 
                           Selected Financial Information
              (Dollars in thousands, except per share data and ratios)
 
      All periods reflect the combined data of Community Banks, Inc. and Glen
                                  Rock State Bank
 
     Consolidated balance sheet data:
 
                                                     Three Months Ended
                                                          March 31,
                                                 2001        2000     % Change
        Average net loans                      $802,664      $704,028     14.0
        Average earning assets                1,233,712     1,101,071     12.0
        Average deposits                        930,114       847,375      9.8
        Average fully diluted shares
         outstanding  B]                      8,796,000     8,862,000     -0.7
 
                                                                      3/31/01
                                                                        vs.
                                    March 31, December 31,  March 31, 3/31/00
                                      2001        2000        2000    % Change
 
       Assets                     $1,358,392  $1,308,713  $1,202,744    12.9
       Net loans                     806,550     804,546     717,078    12.5
       Deposits                      953,373     919,241     872,713     9.2
       Stockholders' equity D]       106,388     104,672      99,478     6.9
       Accumulated other
        comprehensive income (loss)    1,285        (694)    (11,080)
       Fully diluted shares
        outstanding  B]            8,896,000   8,769,000   8,826,000     0.8
 
       Non-accrual loans              $7,568      $5,843      $5,392    40.4
       Other real estate owned           447         416         480    -6.9
       Restructured loans                  -         205         238  -100.0
       Accruing loans 90 days past
        due                              820         612         751     9.2
           Total nonperforming
            loans and OREO            $8,835      $7,076      $6,861    28.8
 
       Allowance for loan losses     $11,657     $10,328      $9,151    27.4
 
 
     Asset quality ratios:
 
       Reserve for loan losses to
        total loans                     1.42%       1.27%       1.26%    12.7
        outstanding
       Reserve for loan losses to
        non-performing loans             139%        155%        143%    -2.8
       Non-performing loans to
        total loans                     1.03%       0.82%       0.88%    17.0
        outstanding
       Non-performing assets to
        total assets                    0.65%       0.54%       0.57%    14.0
 
     A]  Excluding special charges of $2.6 million for the period ending
         March 31, 2001.
 
     B]  Per share data has been restated to reflect a 5% stock dividend
         payable April 30, 2001.
 
     C]  Excluding special charges (after tax) of $2.8 million in 2001 and
         security gains (after tax) of $.11 million in 2000.
 
     D]  Excluding accumulated other comprehensive income.
 
 SOURCE  Community Banks, Inc.