EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1
     
CONTACT:
  JoAnn McMinn SVP, Investor Relations Officer
(814) 231-5779
 
    
HEADLINE:
  Omega Announces Third Quarter Earnings

FOR IMMEDIATE RELEASE ¾ October 2004 ¾

STATE COLLEGE, PA – Omega Financial Corporation (NASDAQ:OMEF) reported third quarter 2004 net income of $3.552 million, a reduction of $788,000, or 18.2%, when compared to the same period last year, company officials said. Diluted earnings per share are $0.42 for the quarter as compared to $0.51 in 2003, said David B. Lee, Omega’s chairman and chief executive officer. The company’s common share dividends declared rose by 3.4% to $0.30 from $0.29 in the same quarter last year.

“A consistent factor exerting considerable pressure on our earnings throughout the year has been the declining interest rate margin,” Lee said, noting that the margin has shrunk by 9.3% for the quarter and 8.7% for the year to date. He attributed the declining margin to the low-rate environment that has predominated throughout the year. In addition, the company’s gains on securities for the quarter fell significantly from the third quarter of 2003, falling 76.7%.

For the year to date, the company’s net income is $ $11.087 million compared to $12.794 million for 2003. Per share diluted earnings are $1.30, compared to $1.49 for last year. Omega’s common share dividends declared are up 3.4% to $0.90 from $0.87, Lee said.

In spite of increased operating costs during the quarter due to activities related to Omega Financial’s acquisition of Sun Bancorp, the company’s non-interest expense for the year to date have fallen by 4.1%. Lee credited that figure to the company’s continuing effort to control overall operating costs while pursuing new product and marketplace opportunities. The Sun transaction, which was consummated on October 1, 2004, should add to Omega’s earnings per share by the end of the first full year of combined operations.

“As we continue to control our operating costs, we are enhancing our non-traditional products as a means of fostering more total relationships with existing and potential customers,” Lee said.

With the completion of the Sun acquisition, the company now serves 13 Pennsylvania counties through Omega Bank and its divisions Sun Bank and Guaranty Bank. The acquisition expanded Omega’s market presence to 67 Offices in Bedford, Blair, Centre, Clinton, Dauphin, Huntingdon, Juniata, Luzerne, Lycoming, Mifflin, Northumberland, Snyder and Union counties. Omega recently opened a new Asset Management and Trust facility in Bedford County.

Quarterly and annual reports, a corporate profile, stock quotes and other financial data can be accessed through the Omega web site at www.omegafinancial.com. Selected financial highlights are summarized on the following page.

This news release contains certain forward-looking statements about the proposed merger within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding the anticipated future results. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” These forward-looking statements are based upon the current beliefs and expectations of Omega’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the companies’ control. In addition, these forward-looking statements are subject to the assumptions set forth below with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements. Omega does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: (1) competitive pressure among depository institutions increases significantly; (2) costs related to the integration of the business of Omega are greater than expected; (3) operating costs, customer losses and business disruption following the merger may be greater than expected; (4) adverse governmental or regulatory policies may be enacted; (5) changes in the interest rate environment reduces interest margins; (6) general economic conditions, either nationally or in the states in which the combined company will be doing business, are less favorable than expected; (7) legislation or regulatory requirements or changes adversely affect the business in which the combined company will be engaged; and (8) changes may occur in the securities market.

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OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
        
CONSOLIDATED BALANCE SHEETS
        
(In thousands)
                
Unaudited
                
 
   September 30,   December 31,
Assets
     2004       2003  
 
                
Cash and due from banks
   $ 31,822     $ 32,420  
Funds held in escrow
     35,979       —  
Interest bearing deposits with other financial institutions
     23,338       10,682  
Federal funds sold
     10,100       17,850  
Investment securities available for sale
     255,705       240,539  
Investment in unconsolidated subsidiary
     1,114       —  
Total loans
     772,403       788,144  
Less: Allowance for loan losses
     (9,707 )     (10,569 )
Net loans
     762,696       777,575  
Premises and equipment, net
     13,858       14,348  
Bank-owned life insurance
     38,137       37,134  
Other assets
     12,349       9,618  
TOTAL ASSETS
   $ 1,185,098     $ 1,140,166  
 
                
Liabilities and Shareholders’ Equity
                
Deposits:
                
Non-interest bearing
   $ 163,023     $ 155,702  
Interest bearing
     752,038       751,878  
Total deposits
     915,061       907,580  
Short-term borrowings
     28,796       33,263  
ESOP debt
     2,277       2,521  
Junior subordinated debt
     37,114       —  
Long-term debt
     25,700       21,600  
Other interest bearing liabilities
     823       813  
Other liabilities
     6,308       6,950  
TOTAL LIABILITIES
     1,016,079       972,727  
TOTAL SHAREHOLDERS’ EQUITY
     169,019       167,439  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 1,185,098     $ 1,140,166  
 
                

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OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
                
CONSOLIDATED STATEMENTS OF INCOME
                        
(In thousands, except share data)
                
 
   Unaudited                        
 
   Three Months Ended           Nine Months Ended
 
   September 30,           September 30,
 
   2004   2003   2004   2003
 
                                
Interest Income:
                                
Interest and fees on loans
   $ 10,987   $ 11,716   $ 33,179   $ 36,238
Interest and dividends on investment securities
   1,774   2,269   5,386   6,725
Other interest income
   158   42   305   264
TOTAL INTEREST INCOME.
   12,919   14,027   38,870   43,227
Interest Expense:
                                
Interest on deposits
   2,738   2,897   8,073   9,536
Interest on short-term borrowings
   151   68   299   265
Interest on long-term debt and
                                
other interest bearing liabilities
   257   273   749   768
TOTAL INTEREST EXPENSE
   3,146   3,238   9,121   10,569
NET INTEREST INCOME
   9,773   10,789   29,749   32,658
Provision for loan losses
           100           350
INCOME FROM CREDIT ACTIVITIES
   9,773   10,689   29,749   32,308
Other Income:
                                
Service fees on deposit accounts
   1,652   1,452   4,568   4,318
Service fees on loans
   232   350   879   1,131
Earnings on bank-owned life insurance
   319   330   1,003   1,103
Trust fees
   790   934   2,589   2,738
Gain (loss) on sale of loans and other assets
   12   2   13   281
Net gains on investment securities
   60   257   271   987
Other
   853   829   2,617   2,477
TOTAL OTHER INCOME
   3,918   4,154   11,940   13,035
Other Expense:
                                
Salaries and employee benefits
   4,938   5,132   14,695   15,160
Net occupancy expense
   547   587   1,733   1,773
Equipment expense
   706   696   2,137   2,092
Data processing service
   439   431   1,292   1,271
Other
   2,415   2,248   7,465   8,206
TOTAL OTHER EXPENSE
   9,045   9,094   27,322   28,502
Income before taxes
   4,646   5,749   14,367   16,841
Income tax expense
   1,094   1,409   3,280   4,047
NET INCOME
   $ 3,552   $ 4,340   $ 11,087   $ 12,794
 
                
Net income per common share:
                                
Basic
   $ 0.42   $ 0.52   $ 1.31   $ 1.54
Diluted
   $ 0.42   $ 0.51   $ 1.30   $ 1.49
Weighted average shares and equivalents:
                                
Basic
   8,443,429   8,086,052   8,461,174   8,096,768
Diluted
   8,500,451   8,517,424   8,530,007   8,529,741
Dividends declared per share:
                                
Common
   $ .30     $ .29     $ .90     $ .87  
Preferred
           $ .45             $ 1.35  

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    OMEGA FINANCIAL CORPORATION AND SUBSIDIARIES
                                
    CONSOLIDATED FINANCIAL HIGHLIGHTS
                                
    (Unaudited)
                                
    (In thousands, except as indicated * )
                                
    For the Quarter
           Year to Date
        
 
     2004       2003     % Change     2004       2003     % Change
 
                                                
Earnings:
                                                
Net income
  $ 3,552     $ 4,340       (18.2 )%   $ 11,087     $ 12,794       (13.3 )%
Per share statistics: *
                                                
Diluted earnings
   $ .42     $ .51       (17.6 )%   $ 1.30     $ 1.49       (12.8 )%
Dividends declared — common
     .30       .29       3.4       .90       .87       3.4  
Dividends declared — preferred
     —       .45       (100.0 )     —       1.35       (100.0 )
Book value — common
     20.01       20.02       0.0       20.01       20.02       0.0  
Market value — High
     35.31       37.37       (5.5 )     38.75       37.74       2.7  
Low
     29.13       32.92       (11.5 )     29.13       31.25       (6.8 )
Financial position at September 30:
                                                
Assets
   $ 1,185,098     $ 1,152,161       2.9 %   $ 1,185,098     $ 1,152,161       2.9 %
Deposits
     915,061       916,372       (0.1 )     915,061       916,372       (0.1 )
Net loans
     762,696       784,751       (2.8 )     762,696       784,751       (2.8 )
Shareholders’ equity
     169,019       165,097       2.4       169,019       165,097       2.4  
Average Balances:
                                                
Assets
   $ 1,151,734     $ 1,155,957       (0.4 )%   $ 1,139,712     $ 1,147,324       (0.7 )%
Deposits
     919,926       923,643       (0.4 )     908,171       915,200       (0.8 )
Net loans
     762,735       775,708       (1.7 )     770,630       778,577       (1.0 )
Shareholders’ equity
     168,896       167,057       1.1       170,003       166,016       2.4  
Profitability ratios — annualized: *
                                                
Return on average assets
     1.23 %     1.50 %     (18.0 )%     1.30 %     1.49 %     (12.8 )%
Return on average equity
    8.41       10.39       (19.1 )     8.70       10.28       (15.4 )
Net interest margin — fully tax equivalent
     3.89       4.29       (9.3 )     3.99       4.37       (8.7 )
Shares outstanding at September 30: *
                                                
Common
     8,444,941       8,080,044       4.5 %     8,444,941       8,080,044       4.5 %
Preferred
     —       219,781       (100.0 )%     —       219,781       (100.0 )%

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