SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

 

FORM 10-Q

 

 

 

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  September 30, 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
		Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002
		Consolidated Statements of Operations for the three months ended September 30, 2003 and 2002
		Consolidated Statements of Operations for the nine months ended September 30, 2003 and 2002
		Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2003 and 2002
		Consolidated Statements of Cash Flows for the nine months ended September 30, 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

 

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ITEM 1.  FINANCIAL STATEMENTS

 

FIRST ESSEX BANCORP, INC.
Consolidated Balance Sheets
(Unaudited)

 

		September 30, 2003			December 31, 2002
		(Dollars in thousands)
ASSETS
Cash and cash equivalents		$	52,039		$	217,158
Investment securities available-for-sale		385,028			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		6,554			7,684
Loans receivable, less allowance for loan losses of $15,334 and $14,452		1,196,888			1,114,258
Foreclosed property		817			1,198
Bank premises and equipment		8,295			8,670
Accrued interest receivable		6,526			7,193
Goodwill		11,633			11,633
Core deposit intangible		2,672			3,661
Other assets		61,668			58,089
		$	1,746,085		$	1,775,930
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits		$	1,318,228		$	1,380,637
Borrowed funds		234,628			207,408
Company-obligated mandatorily redeemable trust preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company		24,506			24,409
Mortgagors’ escrow accounts		1,581			860
Other liabilities		14,789			18,690
Total liabilities		1,593,732			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, 10,229,361 and 10,090,176 shares issued		1,023			1,009
Additional paid-in capital		84,768			82,698
Retained earnings		86,928			77,365
Treasury stock, at cost, 2,432,851, and 2,429,300 shares		(23,715		)	(23,535		)
Accumulated other comprehensive income		3,349			6,389
Total stockholders’ equity		152,353			143,926
		$	1,746,085		$	1,775,930

 

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FIRST ESSEX BANCORP, INC.
Consolidated Statements of Operations
(Unaudited)

 

		Three Months Ended September 30,
		2003			2002
		(Dollars in thousands, except per share amounts)
Interest and dividend income:
Loans		$	19,697		$	20,677
Investment securities available-for-sale		3,994			5,330
Short-term investments		88			526
Other earning assets		268			267
Total interest and dividend income		24,047			26,800
Interest expense:
Deposits		5,167			7,785
Borrowed funds		2,230			2,413
Trust preferred securities		487			512
Total interest expense		7,884			10,710
Net interest income		16,163			16,090
Provision for loan losses		1,938			1,812
Net interest income after provision for loan losses		14,225			14,278
Non-interest income:
Net gain on sales of loans		539			379
Loan fees		283			244
Other income		2,032