PLAINFIELD, Ind., Oct. 18 /PRNewswire-FirstCall/ -- Lincoln Bancorp
(NASDAQ:LNCB) (the "Company"), the holding company of Lincoln Bank
(the "Bank"), announced today that the Company incurred net income
of $1,215,000 for the third quarter ended September 30, 2005, or
$.24 for both basic and diluted earnings per share. This compared
to net income for the same period in 2004 of $1,185,000, or $.26
for basic and $.25 diluted earnings per share. Net income for the
nine-month period ended September 30, 2005 was $555,000, or $.11
for both basic and diluted earnings per share. Net income for the
comparable period in 2004 was $2,933,000, or $.70 for basic and
$.68 for diluted earnings per share. Assets totaled $841.1 million
at September 30, 2005, an increase from December 31, 2004 of $32.1
million. The increase in assets occurred in net loans, up $25.1
million and investment securities available for sale, up $14.0
million. Key loan growth was experienced in consumer loans, up
$29.2 million. Total deposits were $589.0 million at September 30,
2005, an increase of $72.7 million from $516.3 million at December
31, 2004. Substantial growth from December 31, 2004 was experienced
in noninterest bearing deposits, up $11.5 million, and certificates
of deposit, up $71.2 million. There has been a shift in deposit mix
as customers moved funds to high-rate money market deposits and
shorter term certificates of deposit. The increase in noninterest
bearing deposits was the result of our successful efforts to
attract more commercial checking customers. Borrowed funds declined
by $41.0 million from year end 2004 to $143.3 million at September
30, 2005, primarily as a result of the balance sheet restructuring
during the second quarter of 2005 that involved the sale of
low-yielding investments and the early retirement of high-cost
Federal Home Loan Bank advances. Net interest income for the third
quarter of 2005 was $5,861,000 compared to $5,152,000 for the same
period in 2004. Net interest margin was 3.09% for the three-month
period ended September 30, 2005 compared to 3.02% for the same
period in 2004. The average yield on earning assets increased 48
basis points in the third quarter of 2005 compared to the same
period in 2004 and the average cost of interest-bearing liabilities
increased 50 basis points for the same period. This decreased the
interest rate spread from 2.73% at September 30, 2004 to 2.71% at
September 30, 2005, or 2 basis points. Net interest income
year-to-date through September 30, 2005 was $17,077,000 compared to
$13,085,000 for the same nine-month period in 2004, an increase of
$3,992,000. This increase was primarily the result of the
acquisition of First Shares Bancorp on August 2, 2004. Net interest
margin improved from 2.91% for the nine months ended September 30,
2004 to 3.00% for the same period in 2005. The Bank's provision for
loan losses for the third quarter of 2005 was $145,000 compared to
$116,000 for the same period in 2004. Nonperforming loans to total
loans at September 30, 2005 were .66% compared to .87% at December
31, 2004. Nonperforming assets to total assets were .49% at
September 30, 2005 compared to .85% at December 31, 2004. The
allowance for loan losses as a percent of loans was .96% at
September 30, 2005 compared to .98% at December 31, 2004. During
the quarter, the Bank incurred $1,624,000 in net charged-off loans.
Of this amount, $1,550,000 was from recognition of a loss on a
deteriorated credit reported in the second quarter of 2005. The
provision for loan losses for the nine months ended September 30,
2005 was $2,074,000 compared to $539,000 for the same period in
2004. Other income for the three months ended September 30, 2005
was $1,586,000 compared to $1,170,000 for the same quarter of 2004.
The $416,000 increase in other income was primarily from the
increase in service charges on deposit accounts, up $58,000; net
realized gains on sale of available for sale securities, up
$248,000; and equity in income and losses of limited partnerships,
up $76,000. The majority of the service charge increase was the
result of the acquisition of First Shares Bancorp and the
implementation of the Bank's courtesy overdraft program Lincoln
Advantage during the second quarter of 2004. The increase in gain
on sale of available for sale securities was the result of sale of
equity securities held at the holding company. The increase of
equity in income and losses of limited partnerships was due to
better performance of the partnership. Other income for the nine
months ended September 30, 2005 was $3,885,000 compared to
$2,642,000 for the same period during 2004, or an increase of
$1,243,000. The most notable increases were in service charges on
deposit accounts as noted in the quarterly results above, up
$521,000; net realized gain on sale of loans, up $252,000; equity
in income and losses of limited partnership, up $163,000; and point
of sale income, up $122,000. Other expenses were $5,493,000 for the
three months ended September 30, 2005 compared to $4,641,000 for
the same three months of 2004. Expenses increased for the third
quarter of 2005 as a result of the August 2, 2004 acquisition of
First Shares Bancorp. The third quarter of 2004 only reflects two
months of First Shares expenses for the period. Other expenses for
the nine months ended September 30, 2005 were $18,680,000 compared
to $11,303,000. All categories of expenses reflect the growth of
our business and from the acquisition of First Shares Bancorp.
Also, during the second quarter of 2005 there were nonrecurring
prepayment fees and adjustments of $1.6 million paid to the Federal
Home Loan Bank of Indianapolis for the early extinguishment of
certain high-cost advances totaling $33.9 million. Additionally,
the Bank recognized contract costs relating to the retirement of
the Company's CEO and another senior officer totaling $248,000. The
book value of Lincoln Bancorp common stock was $18.61 per share at
September 30, 2005 compared to $18.96 at December 31, 2004. Lincoln
Bancorp and Lincoln Bank are headquartered in Plainfield, Indiana
with additional offices in Avon, Bargersville, Brownsburg,
Crawfordsville, Frankfort, Franklin, Greenwood, Mooresville,
Morgantown, Nashville and Trafalgar. Statements contained in this
press release that are not historical facts may constitute
forward-looking statements (within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended) which involve
significant risks and uncertainties. The Company intends such
forward-looking statements to be covered in the Private Securities
Litigation Reform Act of 1995, and is including this statement for
purposes of invoking these safe harbor provisions. The Company's
ability to predict results or the actual effect of future plans or
strategies is inherently uncertain and involves a number of risks
and uncertainties, some of which have been set forth in the
Company's most recent annual report on Form 10-K, which disclosures
are incorporated by reference herein. The fact that there are
various risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed
on such statements. LINCOLN BANCORP SELECTED CONSOLIDATED FINANCIAL
DATA OF THE COMPANY (Unaudited) (Dollars in Thousands, Except Per
Share Amounts) September 30 December 31 2005 2004 Balance Sheet
Data: Total assets $841,084 $808,967 Loans, net (including loans
held for sale) 601,081 576,004 Cash and cash equivalents 26,328
27,790 Investment securities available for sale 132,934 118,917
Investment securities held to maturity - 1,695 Deposits 589,028
516,329 Borrowings 143,291 184,330 Stockholders' equity 100,561
101,755 Book value per common share $18.61 $18.96 Shares
outstanding 5,402,453 5,366,563 Equity to assets 11.96% 12.58%
Non-performing assets to total assets 0.49% 0.85% Non-performing
loans to total loans 0.66% 0.87% Allowance for loan losses to total
loans 0.96% 0.98% Three Months Ended Nine Months Ended September 30
September 30 2005 2004 2005 2004 Operating Data: Interest Income:
Loans $9,615 $8,023 $27,699 $21,314 Investment securities 1,232 992
3,634 2,288 Deposits with financial institutions and federal funds
sold 180 79 420 105 Dividends on FHLB stock 127 114 349 325 Total
interest income 11,154 9,208 32,102 24,032 Interest Expense:
Deposits 3,703 1,965 9,388 4,792 Borrowings 1,590 2,091 5,637 6,155
Total interest expense 5,293 4,056 15,025 10,947 Net Interest
Income 5,861 5,152 17,077 13,085 Provision for loan losses 145 116
2,074 539 Net Interest Income After Provision for Loan Losses 5,716
5,036 15,003 12,546 Other Income: Service charges on deposit
accounts 554 496 1,536 1,015 Net realized and unrealized gains on
loans 194 181 571 319 Net realized gains (losses) on sale of
available for sale securities 248 - (44) - Equity in losses of
limited partnership 43 (33) 64 (99) Point of sale income 156 114
425 303 Loan servicing fees 99 96 308 261 Increase in cash value of
life insurance 166 163 514 416 Other 126 153 511 427 Total other
income 1,586 1,170 3,885 2,642 Other Expenses: Salaries and
employee benefits 2,568 2,398 8,102 5,894 Net occupancy expenses
499 310 1,434 778 Equipment expenses 324 291 1,106 699 Data
processing expense 597 440 1,829 1,176 Professional fees 198 118
594 353 Mortgage servicing rights amortization 67 38 221 132
Advertising and business development 186 133 574 368 Core deposit
intangible amortization 173 140 558 187 Prepayment fees on Federal
Home Loan Bank advances - - 1,622 - Other 881 773 2,640 1,716 Total
other expenses 5,493 4,641 18,680 11,303 Income before income taxes
1,809 1,565 208 3,885 Income taxes 594 380 (347) 952 Net income
$1,215 $1,185 $555 $2,933 Basic earnings per share $0.24 $0.26
$0.11 $0.70 Diluted earnings per share $0.24 $0.25 $0.11 $0.68
Other Data: Interest rate spread 2.71% 2.73% 2.67% 2.56% Net
interest margin 3.09% 3.02% 3.00% 2.91% Return on average assets
0.59% 0.64% 0.09% 0.61% Return on average equity 4.80% 5.03% 0.72%
4.59% DATASOURCE: Lincoln Bancorp CONTACT: Jerry R. Engle,
President / CEO of Lincoln Bancorp, +1-317-839-6539 Web site:
http://www.lincolnbankonline.com/
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