SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

 

FORM 10-Q

 

(Mark One)

 

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended    3/31/03

 

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from    to    

 

Commission file number 0-16143

 

FIRST ESSEX BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

 

Registrant’s telephone number, including area code:  (978) 681-7500

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ý       No o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 126-2 of the Securities Exchange Act of 1934).

 

Yes ý       No o

 

The number of shares outstanding of each of the registrant’s classes of common stock as of  March 31, 2003:

 

 

 

CAUTIONARY STATEMENT FOR PURPOSES OF THE

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

 

First Essex Bancorp, Inc. (the Company) desires to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  This Report contains certain “forward-looking statements” including statements concerning plans, objectives, future events or performance, assumptions, and other statements which are other than statements of historical fact.  The Company wishes to caution readers that the following important factors, among others, may have affected, and could in the future affect, the Company’s actual results and could cause the Company’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, with which the Company and its wholly owned banking subsidiary, First Essex Bank, must comply, and the associated costs of compliance with such laws and regulations, either currently or in the future as applicable; (ii)  the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company’s organization, compensation and benefit plans; (iii) the effect on the Company’s competitive position within its market area of the increasing consolidation within the banking and financial services industries, including increased competition from larger regional and out-of-state banking organizations as well as nonbank providers of various financial services; (iv) the effect of unforeseen changes in interest rates; and (v) the effect of changes in the business cycle and downturns in the local, regional and national economies.  The Company disclaims any intent or obligation to update forward-looking statements whether in response to new information, further events or otherwise.

 

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FIRST ESSEX BANCORP, INC.

INDEX

 

PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited):
	Consolidated Balance Sheets as of  March 31, 2003 and December 31, 2002
	Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002
	Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2003 and 2002
	Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002
	Notes to the Consolidated Financial Statements
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk
ITEM 4.	Controls and Procedures
PART II - OTHER INFORMATION
ITEM 6.	Exhibits and Reports on Form 8-K
	Signatures
	Certifications

 

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ITEM 1. FINANCIAL STATEMENTS

 

FIRST ESSEX BANCORP, INC.

Consolidated Balance Sheets

(Unaudited)

 

		March 31, 2003			December 31, 2002
		(Dollars in thousands)
ASSETS
Cash and cash equivalents		$	88,097		$	217,158
Investment securities available-for-sale		402,057			332,421
Stock in Savings Bank Life Insurance Company		1,194			1,194
Stock in Federal Home Loan Bank of Boston		12,771			12,771
Mortgage loans held-for-sale		7,101			7,684
Loans receivable, less allowance for loan losses of $14,472 and $14,452		1,149,536			1,114,258
Foreclosed property		1,980			1,198
Bank premises and equipment		8,415			8,670
Accrued interest receivable		6,848			7,193
Goodwill		11,633			11,633
Core deposit intangible		3,322			3,661
Other assets		62,260			58,089
		$	1,755,214		$	1,775,930
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits		$	1,369,567		$	1,380,637
Borrowed funds		195,045			207,408
Company-obligated mandatorily redeemable trust preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company		24,441			24,409
Mortgagors’ escrow accounts		1,525			860
Other liabilities		20,111			18,690
Total liabilities		1,610,689			1,632,004
STOCKHOLDERS’ EQUITY:
Serial preferred stock: $.10 par value per share; 5,000,000 shares authorized, no shares issued or outstanding
Common stock, $.10 par value per share; 25,000,000 shares authorized, 10,147,524 and 10,090,176 shares issued		1,015			1,009
Additional paid-in capital		83,359			82,698
Retained earnings		80,523			77,365
Treasury stock, at cost, 2,429,300 shares		(23,535		)	(23,535		)
Accumulated other comprehensive income		3,163			6,389
Total stockholders’ equity		144,525			143,926
		$	1,755,214		$	1,775,930

 

See accompanying notes to the consolidated financial statements.

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FIRST ESSEX BANCORP, INC.

Consolidated Statement of Operations

(Unaudited)

 

		Three Months Ended March 31,
		2003			2002
		(Dollars in thousands, except per share amounts)
Interest and dividend income:
Loans		$	19,665		$	19,987
Investment securities available-for-sale		4,299			6,081
Short-term investments		348			169
Other earning assets		268			267
Total interest and dividend income		24,580			26,504
Interest expense:
Deposits		6,372			8,363
Borrowed funds		2,770			2,875
Total interest expense		9,142			11,238
Net interest income		15,438			15,266
Provision for loan losses		1,938			1,812
Net interest income after provision for loan losses		13,500			13,454
Non-interest income:
Net gain on sales of loans		478			410