HMLK Hemlock Federal Financial (MM)

Hemlock Federal Financial Corporation Announces First Quarter Earnings OAK FOREST, Ill., April 23 /PRNewswire-FirstCall/ -- Hemlock Federal Financial Corporation (the 'Company') , the holding company for Hemlock Federal Bank for Savings (the 'Bank'), today announced earnings for the first quarter ended March 31, 2004. Net income was $423,000 or $.46 per share for the first quarter ended March 31, 2004, compared to net income of $446,000, or $.50 per share, for the quarter ended March 31, 2003. Diluted earnings per share were $.43 for the quarter ended March 31, 2004 as compared to $.46 per share for the same period one year ago. Net interest income for the quarter ended March 31, 2004 totaled $1.82 million, compared to $1.73 million for the same period one year ago. During the three months ended March 31, 2004, total interest income decreased by $202,000 compared to the same period one year ago, primarily as a result of a decrease in yields on interest earning assets due to the refinance activity that took place throughout 2003. The decrease in interest income was offset by a decrease of $297,000 in interest expense, due to a decrease in the cost of funds, partially offset by an increase in the balance of deposits. Non-interest income decreased to $510,000 for the three months ended March 31, 2004, from $584,000 for the same period one year ago. The $74,000 decrease is due to a $90,000 decrease in the gain on sale of securities for the three months ended March 21, 2004, as compared to the same period one year ago. Non-interest expense increased to $1.75 million for the three months ended March 31, 2004, from $1.66 million for the same period one year ago. Total assets decreased to $318.37 million as of March 31, 2004, from $318.77 million as of December 31, 2003, a decrease of $400,000. Securities held to maturity decreased by $1.50 million, while securities available for sale increased by $5.17 million. Total loans decreased by $476,000, while cash and cash equivalents decreased by $3.87 million, due to the reinvestment of cash into securities available for sale. Total deposits increased to $207.25 million as of March 31, 2004 from $206.67 million as of December 31, 2003, an increase of $570,000. Total borrowings decreased from $86.31 million as of December 31, 2003, to $85.40 million as of March 31, 2004. Shareholders' equity increased to $22.57 million as of March 31, 2004 from $22.34 million as of December 31, 2003. The increase of $230,000 is primarily due to the income earned during the quarter, partially offset by dividends paid as well as a decrease in the valuation of the available for sale securities portfolio. Hemlock Federal Financial Corporation At At Selected Financial March 31, December 31, Condition Data 2004 2003 (In Thousands) Total Assets $318,365 $318,774 Cash & cash equivalents 10,112 13,980 Loans Receivable, net 135,089 135,655 Loans held for sale 90 - Securities available-for- sale 70,521 65,355 Securities held-to- maturity 78,491 79,986 Deposits 207,249 206,672 Borrowings 85,397 86,307 Total Shareholders' Equity 22,569 22,343 Three Months Ended March 31, Selected Operations Data 2004 2003 (In Thousands) Interest income $3,526 $3,728 Interest expense 1,702 1,999 Net interest income 1,824 1,729 Provision for loan losses 0 0 Net interest income after provision for loan losses 1,824 1,729 Total non-interest income 510 584 Total non-interest expense 1,749 1,655 Income before taxes 585 658 Income Taxes 162 212 Net Income 423 $446 Three Months Ended Selected Financial Ratios March 31, (Annualized) 2004 2003 Performance Ratios: Return on average assets 0.53% 0.56% Return on average equity 7.53% 8.30% Equity to total assets at end of period: 7.09% 6.74% Interest rate spread at end of period: 2.37% 2.43% Net interest margin 2.41% 2.29% Average interest-earning assets to average interest bearing liabilities 103.03% 103.11% Efficiency Ratio 74.94% 71.55% Noninterest expense to average assets 2.19% 2.09% Asset Quality Ratios: Non-performing assets to total assets at end of period 0.11% 0.12% Allowance for loan losses to non-performing loans 281.69% 251.69% Allowance for loan losses to total loans receivable, net 0.72% 0.69% Per Share Information: Book value per share outstanding: $24.43 $22.22 Basic earnings per share 0.46 0.50 Diluted earnings per share 0.43 0.46 Dividend declared 0.17 0.16 DATASOURCE: Hemlock Federal Financial Corporation CONTACT: Michael R. Stevens, President of Hemlock Federal Financial Corporation, +1-708-687-9400 Web site: http://www.hemlockbank.com/

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