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SECOND BANCORP Company: Quarter earnings lower than expected

Tuesday, January 14, 2003

The bank holding company expects earnings to increase 7 percent this year.
WARREN -- Second Bancorp said low interest rates and a sluggish economy produced earnings that were lower than expected in the fourth quarter.
The parent of Second National Bank said Thursday that it expects to report earnings in the just completed quarter of 48 cents a share before expenses related to branch openings and closings. The consensus of analysts' earnings estimates was 52 cents a share.
Considering an accounting charge for changes in the branch network, expected earnings are 34 cents a share for the quarter.
The company intends to issue its quarterly financial statement Jan. 23.
Lower interest rates
David Kellerman, bank treasurer, said lower interest rates reduced the profit margin on loans and caused people to pay off mortgages earlier.
For the year, 2002 earnings are expected to be $1.93 a share, compared with analysts' estimate of $1.96. Those earnings would be a 14 percent increase over 2001, however.
With the branch reconfiguration charge, the annual earnings are expected to be $1.79 a share.
The company said it expects the same business conditions to restrain earnings growth this year. It estimates that earnings per share will be $2.06, which would be a 7 percent increase over this year's expected earnings.
The company announced in October that it would take a $2 million accounting charge for changes in its branch structure.
It is closing some branches and building new ones in high-growth areas, although it said the plan won't impact its branches in Trumbull County. New branches are being built in Hudson, Kent, Medina and Wooster.
The company expects to record a $6 million gain on the sale of two branches, which is pending approval from regulators.