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"Second Bancorp Retains Customers, Earnings Potential, Company Reports"
"WARREN, Ohio -- As Second Bancorp Inc. prepares for its merger June 30 with Sky Financial Group of Bowling Green, the bank holding company's newly released first quarter results show it is delivering the "bargained-for customer base and accompanying earnings potential," according to its chief executive officer, R.L. Blossom."Among the many challenges Second Bancorp and Second National Bank face as we move toward completion of the merger are customer retention and continuing business development," Blossom said. "With average total loans for the first quarter 1.6% higher than for fourth quarter 2003 and average deposits up 4.6% for the same periods, we're satisfied that our staff continues to focus on those things which have historically created value for our shareholders."Net income for the first quarter of 2004 was $2.77 million, or $.29 per share, compared to $8,.67 million, or $.89 per share, for the same period last year, the company reported yesterday. A 19-cent dividend per share of common stock will be paid April 30 to shareholders of record April 15.Earnings for first quarter 2004 were adversely affected by $1.14 million in non recurring expenses associated with the merger, the company noted. Earnings for last year's first quarter included gains (after tax) of $3.65 million on the sale of two of Second National Bank branches in Jefferson County, Ohio. Absent these items, earnings for the current quarter would have been $3.8 million, or $.39 per share; last year's first quarter would have been $5 million, or $.52 per share.Return on average assets (ROA) for the just completed quarter was .52% compared to 1.85% for the comparable quarter in 2003, the company reported. Second Bancorp's return on average equity (ROE) was 7.93% for the quarter compared to 25.61% for the year-ago quarter.The company blamed low interest rates for compressing net-interest margin, which was 2.84% for the just completed quarter compared to 3.33% during the same period last year. Lower non-interest income reflected slowing secondary market activity in its mortgage lending line of business and higher non-interest expenses (including merger costs) produced a 73.95% efficiency ratio for the quarter compared to 47.48% for the same quarter last year.Second Bancorp announced Jan. 8 it had entered into a merger agreement under which Sky Financial will acquire all of Second Bancorp's outstanding shares in a stock-for-stock transaction. Under the agreement, Second Bancorp's common shareholders will receive 1.26 shares of Sky Financial stock in exchange for each Second Bancorp share. Second Bancorp's special meeting of shareholders for the purpose of considering and approving the merger will be held May 18. The transaction, subject also to regulatory approvals, is expected to be completed as of the close of business June 30.Second Bancorp is a $2.1 billion financial holding company that provides commercial and consumer banking, wealth management, insurance and investment products and services through Second National Bank and Stouffer Herzog Insurance Agency Inc.Visit Second National Bank at www.secondnationalbank.com."