Essex Bancorp, Inc. Announces First Quarter Results

Apr 30, 2001, 01:00 ET from Essex Bancorp, Inc.

    NORFOLK, Va., April 30 /PRNewswire/ -- Essex Bancorp, Inc. (Amex:   ESX)
 ("Bancorp") today announced that it had consolidated net income of $197,000
 for the first quarter of 2001, a 10.1% increase over net income of $179,000
 for the first quarter of 2000.  Bancorp's earnings during the first quarter of
 2001 reflected (i) a $106,000 increase in net interest income over the
 comparable period in 2000, resulting from an 11.5% increase in average
 interest-earning assets, (ii) a $132,000 increase in gains on sales of loans
 and (iii) a $106,000 increase in other noninterest income resulting from
 higher ancillary fees on Essex Home Mortgage Servicing Corporation's
 nonaffiliated servicing portfolio.  The benefits of these improvements were
 offset in part by (i) a $31,000 increase in the provision for loans losses as
 Bancorp's ratio of nonperforming assets to total assets increased from .24% as
 of December 31, 2000 to .36% as of March 31, 2001 and (ii) a $267,000 increase
 in noninterest expenses resulting from higher personnel expenses at Essex
 Savings Bank, F.S.B. (the "Bank").  These higher personnel expenses resulted
 from new staffing for the Bank's retail banking branch in Ashland, Virginia
 that opened in May 2000 and higher staffing at Essex First Mortgage, a
 division of the Bank, to support the increase in loan origination volume.
     As announced on February 1, 2001, Bancorp's Board of Directors (the
 "Board") formed a Special Committee and authorized it to undertake the
 requisite activities to ascertain the structure, fairness and advisability of
 a going-private transaction.  Having concluded these activities, on March 29,
 2001, the Special Committee recommended and the Board unanimously approved a
 proposal that Bancorp proceed with a going-private transaction whereby Bancorp
 would merge with a subsidiary, and Bancorp's common shareholders would receive
 a cash payment of $1.45 per share.  The Board intends to submit the going-
 private proposal to Bancorp's shareholders for their approval at Bancorp's
 annual meeting to be held on June 21, 2001.  This press release is not an
 offer to acquire any shares of common stock.  Bancorp's shareholders will
 receive a proxy statement describing the proposed going-private transaction
 (including any conditions to the closing of the transaction).  Any decision
 regarding such a transaction should be based on the information contained in
 the proxy statement.
     The above discussion may contain forward-looking statements that involve
 assumptions and potential risks and uncertainties.  Bancorp's future results
 could differ materially from those discussed herein.  Readers should not place
 undue reliance on any forward-looking statements, which are applicable only as
 of the date hereof.
     Selected Consolidated Financial Data follows.
 
                              ESSEX BANCORP, INC.
                      SELECTED CONSOLIDATED FINANCIAL DATA
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                             March 31,
                                                         2001          2000
     Operations Data:
       Interest income                                $ 5,830        $ 5,107
       Interest expense                                 3,915          3,298
       Net interest income                              1,915          1,809
       Provision for loan losses                          131            100
       Net interest income after
         provision for loan losses                      1,784          1,709
       Noninterest income:
         Loan servicing fees, net                         274            303
         Gains on sales of loans                          160             28
         Other                                            370            264
           Total noninterest income                       804            595
       Noninterest expenses                             2,268          2,001
       Income before provision
         for income taxes                                 320            303
       Provision for income taxes                         123            124
       Net income                                     $   197        $   179
 
       Basic and diluted loss
         available to common
         shareholders (1)                             $  (372)       $  (340)
       Basic and diluted loss
         per common share (2)                         $  (.35)       $  (.32)
       Weighted average shares
         outstanding (2)                                1,061          1,061
 
     Other Data:
       Net interest spread                               2.05%          2.33%
       Net interest margin                               2.62%          2.75%
 
     (1)  Bancorp's basic and diluted income available to common shareholders
          is computed based upon net income adjusted for cumulative but
          undeclared preferred stock dividends and interest of $569,000 and
          $519,000 for the three months ended March 31, 2001 and 2000,
          respectively.
     (2)  Basic income per share is computed based on income available to
          common shareholders divided by the average number of common shares
          outstanding for each period.  Potential common shares are
          antidilutive for all periods presented; therefore, basic and diluted
          loss per common share are the same.
 
                              ESSEX BANCORP, INC.
                      SELECTED CONSOLIDATED FINANCIAL DATA
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                    March 31,     December 31,
                                                       2001           2000
     Balance Sheet Data:
       Assets
         Cash and cash equivalents                  $  18,833      $  17,783
         Investment securities                          5,025          5,026
         Net loans                                    268,844        265,855
         Loans held for sale                            1,922          1,095
         Other assets                                  14,059         17,963
           Total assets                             $ 308,683      $ 307,722
 
       Liabilities
         Deposits                                   $ 253,182      $ 242,596
         Federal Home Loan Bank advances               31,000         41,000
         Other liabilities                              2,437          2,259
           Total liabilities                          286,619        285,855
       Shareholders' Equity (1)                        22,064         21,867
           Total liabilities and
             shareholders' equity                   $ 308,683      $ 307,722
 
       Nonperforming assets                         $   1,100      $     749
       Allowance for loan losses                    $   1,801      $   1,740
       Nonperforming assets as a percent of
         total assets                                     .36%           .24%
       Allowance for loan losses as a percent of
         total loans                                      .67%           .65%
       Allowance for loan losses as a percent of
         nonperforming loans                           280.56%        301.56%
       Book value per common share (2)               $  (2.69)      $  (2.34)
       Tier I capital ratio (3)                          6.18%          6.07%
       Risk-based capital ratio (3)                     10.27%         10.34%
 
     (1)  Bancorp's shareholders' equity consists of both preferred and common
          stock.  The preferred shareholders have 2,250,000 shares of nonvoting
          perpetual preferred stock redeemable at Bancorp's option at an
          aggregate redemption value of $15.0 million.  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 became exercisable in September 1998.
     (2)  Bancorp's book value per common share is computed by deducting from
          total shareholders' equity the $15.0 million preferred stock
          redemption value and the $9.9 million and $9.3 million of cumulative
          but undeclared preferred stock dividends and interest at March 31,
          2001 and December 31, 2000, respectively, which is then divided by
          total common shares outstanding of 1,060,642 at March 31, 2001 and
          December 31, 2000.  This calculation of book value does not assume
          the exercise of any potential common shares, such as warrants and
          options.
     (3)  Capital ratios are those of Essex Savings Bank, F.S.B.
 
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SOURCE Essex Bancorp, Inc.
    NORFOLK, Va., April 30 /PRNewswire/ -- Essex Bancorp, Inc. (Amex:   ESX)
 ("Bancorp") today announced that it had consolidated net income of $197,000
 for the first quarter of 2001, a 10.1% increase over net income of $179,000
 for the first quarter of 2000.  Bancorp's earnings during the first quarter of
 2001 reflected (i) a $106,000 increase in net interest income over the
 comparable period in 2000, resulting from an 11.5% increase in average
 interest-earning assets, (ii) a $132,000 increase in gains on sales of loans
 and (iii) a $106,000 increase in other noninterest income resulting from
 higher ancillary fees on Essex Home Mortgage Servicing Corporation's
 nonaffiliated servicing portfolio.  The benefits of these improvements were
 offset in part by (i) a $31,000 increase in the provision for loans losses as
 Bancorp's ratio of nonperforming assets to total assets increased from .24% as
 of December 31, 2000 to .36% as of March 31, 2001 and (ii) a $267,000 increase
 in noninterest expenses resulting from higher personnel expenses at Essex
 Savings Bank, F.S.B. (the "Bank").  These higher personnel expenses resulted
 from new staffing for the Bank's retail banking branch in Ashland, Virginia
 that opened in May 2000 and higher staffing at Essex First Mortgage, a
 division of the Bank, to support the increase in loan origination volume.
     As announced on February 1, 2001, Bancorp's Board of Directors (the
 "Board") formed a Special Committee and authorized it to undertake the
 requisite activities to ascertain the structure, fairness and advisability of
 a going-private transaction.  Having concluded these activities, on March 29,
 2001, the Special Committee recommended and the Board unanimously approved a
 proposal that Bancorp proceed with a going-private transaction whereby Bancorp
 would merge with a subsidiary, and Bancorp's common shareholders would receive
 a cash payment of $1.45 per share.  The Board intends to submit the going-
 private proposal to Bancorp's shareholders for their approval at Bancorp's
 annual meeting to be held on June 21, 2001.  This press release is not an
 offer to acquire any shares of common stock.  Bancorp's shareholders will
 receive a proxy statement describing the proposed going-private transaction
 (including any conditions to the closing of the transaction).  Any decision
 regarding such a transaction should be based on the information contained in
 the proxy statement.
     The above discussion may contain forward-looking statements that involve
 assumptions and potential risks and uncertainties.  Bancorp's future results
 could differ materially from those discussed herein.  Readers should not place
 undue reliance on any forward-looking statements, which are applicable only as
 of the date hereof.
     Selected Consolidated Financial Data follows.
 
                              ESSEX BANCORP, INC.
                      SELECTED CONSOLIDATED FINANCIAL DATA
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                             March 31,
                                                         2001          2000
     Operations Data:
       Interest income                                $ 5,830        $ 5,107
       Interest expense                                 3,915          3,298
       Net interest income                              1,915          1,809
       Provision for loan losses                          131            100
       Net interest income after
         provision for loan losses                      1,784          1,709
       Noninterest income:
         Loan servicing fees, net                         274            303
         Gains on sales of loans                          160             28
         Other                                            370            264
           Total noninterest income                       804            595
       Noninterest expenses                             2,268          2,001
       Income before provision
         for income taxes                                 320            303
       Provision for income taxes                         123            124
       Net income                                     $   197        $   179
 
       Basic and diluted loss
         available to common
         shareholders (1)                             $  (372)       $  (340)
       Basic and diluted loss
         per common share (2)                         $  (.35)       $  (.32)
       Weighted average shares
         outstanding (2)                                1,061          1,061
 
     Other Data:
       Net interest spread                               2.05%          2.33%
       Net interest margin                               2.62%          2.75%
 
     (1)  Bancorp's basic and diluted income available to common shareholders
          is computed based upon net income adjusted for cumulative but
          undeclared preferred stock dividends and interest of $569,000 and
          $519,000 for the three months ended March 31, 2001 and 2000,
          respectively.
     (2)  Basic income per share is computed based on income available to
          common shareholders divided by the average number of common shares
          outstanding for each period.  Potential common shares are
          antidilutive for all periods presented; therefore, basic and diluted
          loss per common share are the same.
 
                              ESSEX BANCORP, INC.
                      SELECTED CONSOLIDATED FINANCIAL DATA
                     (In thousands, except per share data)
                                  (Unaudited)
 
                                                    March 31,     December 31,
                                                       2001           2000
     Balance Sheet Data:
       Assets
         Cash and cash equivalents                  $  18,833      $  17,783
         Investment securities                          5,025          5,026
         Net loans                                    268,844        265,855
         Loans held for sale                            1,922          1,095
         Other assets                                  14,059         17,963
           Total assets                             $ 308,683      $ 307,722
 
       Liabilities
         Deposits                                   $ 253,182      $ 242,596
         Federal Home Loan Bank advances               31,000         41,000
         Other liabilities                              2,437          2,259
           Total liabilities                          286,619        285,855
       Shareholders' Equity (1)                        22,064         21,867
           Total liabilities and
             shareholders' equity                   $ 308,683      $ 307,722
 
       Nonperforming assets                         $   1,100      $     749
       Allowance for loan losses                    $   1,801      $   1,740
       Nonperforming assets as a percent of
         total assets                                     .36%           .24%
       Allowance for loan losses as a percent of
         total loans                                      .67%           .65%
       Allowance for loan losses as a percent of
         nonperforming loans                           280.56%        301.56%
       Book value per common share (2)               $  (2.69)      $  (2.34)
       Tier I capital ratio (3)                          6.18%          6.07%
       Risk-based capital ratio (3)                     10.27%         10.34%
 
     (1)  Bancorp's shareholders' equity consists of both preferred and common
          stock.  The preferred shareholders have 2,250,000 shares of nonvoting
          perpetual preferred stock redeemable at Bancorp's option at an
          aggregate redemption value of $15.0 million.  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 became exercisable in September 1998.
     (2)  Bancorp's book value per common share is computed by deducting from
          total shareholders' equity the $15.0 million preferred stock
          redemption value and the $9.9 million and $9.3 million of cumulative
          but undeclared preferred stock dividends and interest at March 31,
          2001 and December 31, 2000, respectively, which is then divided by
          total common shares outstanding of 1,060,642 at March 31, 2001 and
          December 31, 2000.  This calculation of book value does not assume
          the exercise of any potential common shares, such as warrants and
          options.
     (3)  Capital ratios are those of Essex Savings Bank, F.S.B.
 
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 SOURCE  Essex Bancorp, Inc.