PRESS RELEASE
January 28, 2003

 

Contact
Ken F. Parsons
Chief Executive Officer
(360) 459-1100
(360) 459-0137 (fax)

First Community Financial Group Reports Record Earnings for 2002

 

Lacey, Wash., January 28 -- First Community Financial Group, Inc. ("FCFG" or "the Company"), parent company of First Community Bank of Washington, (www.fcbonline.com) today announced earnings for the year ended December 31, 2002 of $6,212,000. This is an increase of $1,775,000, or 40% over the year ended December 31, 2001 and represents the highest-ever annual earnings reported for FCFG. Earnings per diluted share amounted to $1.39 for the year ended December 31, 2002, up from $0.99 reported in 2001 (adjusted for the 2 for 1 stock split announced in November 2002). For the year, the Company's return on average assets was 1.56%, compared to 1.27% in 2001, and return on average equity was 15.13%, compared to 12.13% in 2001.

 

"We are very pleased with our earnings performance this year", remarked Ken F. Parsons, the Company's Chairman, President and CEO. "The results are especially satisfying in a year in which we further expanded our presence in Pierce County with the completion of our acquisition of Harbor Bank in Gig Harbor."

Total assets climbed 30% to $474,853,000 at December 31, 2002, while total loans, including those held for sale, rose 25% to $369,564,000. Total deposits ended the year at $384,207,000, an increase of 22% over the previous year. 

The net interest margin rose from 6.37% in 2001 to 6.84% in 2002. The continued reduction in market interest rates affected both the return on loans and investments as well as the cost of funds. The average rate of return on earning assets dropped from 9.79% to 8.75%. The reduction in average cost of funds, to 2.23% from 4.03%, more than offset the reduction in the yield earned on assets.

Total interest income for the year increased $186,000 despite the reduction in average yield. Interest income on loans increased $465,000. Earnings from higher average loan balances more than offset the effect of reduced average yield on loans, which dropped from 10.18% in 2001 to 9.08% in 2002.

 

Interest expense on deposits in 2002 decreased a total of 41% or $4,161,000 over the previous year due to the reduction in the rates paid on deposits. While total deposits increased for the year, with average deposit balances up 10% over 2001, the effect of the reduction in average rates paid, to 2.15% in 2002 from 4.02% in 2001, was more dramatic.

 

Interest expense on other borrowings in 2002 increased by a total of $323,000 from 2001. The primary source of this increase is the issuance $13,000,000 in Trust Preferred Securities in July 2002. Interest expense associated with this debt totaled $371,000 in 2002.

 

The Company's capital position continues to grow stronger, increasing $5,414,000 to $44,209,000 in 2002 after payment of dividends totaling $0.20 per share (split adjusted), or $878,000 during the year. The ratio of total capital to risk weighted assets rose from 10.52% at the end of 2001 to finish the year at 11.48%.

 

First Community Financial Group, Inc., through its wholly owned subsidiary, First Community Bank of Washington, has 21 offices in four western Washington counties and offers a full spectrum of financial services including commercial, construction, residential and consumer lending, deposit products and other banking services. The bank provides a broad range of investment services through its subsidiary FCB Financial Services, Inc. Further information about the bank may be found on the Internet at www.fcbonline.com.

 

Note Regarding Forward-Looking Information
This news release may contain statements that are not historical in nature, including the discussions of the adequacy of the Company's capital resources and allowance for credit losses, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PLSRA"). Forward-looking statements are subject to the risks and uncertainties that may cause actual future results to differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. FCFG does not undertake any obligation to publicly release any revisions to forward-looking statements contained in this release, with respect to events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events. Such risks and uncertainties with respect to the Company include those related to the economic environment, particularly in the region in which the Company operates, competitive products and pricing, fiscal and monetary policies of the federal government, changes in government regulations affecting financial institutions and small loan practices, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management and asset/liability management, the financial and securities markets, and the availability of and costs associated with sources of liquidity. Readers should also carefully review any risk factors described in the Company's Annual Report on Form 10-K, the most recent 10-Q, and other documents filed from time to time with the Securities and Exchange Commission.

 

Condensed Statements of Condition
Condensed Statements of Operations

 

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