Shareholder Letter From Federal Trust Corporation
09 Fevereiro 2006 - 6:51PM
PR Newswire (US)
SANFORD, Fla., Feb. 9 /PRNewswire-FirstCall/ -- Dear Fellow
Shareholders: Earnings for Federal Trust Corporation for the
quarter ended December 31, 2005, were $1,165,000 or $.14 per basic
and diluted share, compared to $487,000 or $.06 per basic and
diluted share for the fourth quarter of 2004. For the year,
earnings increased 44% to $4,436,000 from $3,089,000 in 2004. On a
per share basis, 2005 earnings were $.55 basic and $.54 fully
diluted per share compared to $.44 basic and $.43 per fully diluted
share for 2004. At December 31, 2005, our total assets were $735.4
million, an increase of $132.6 million, or 22%, from December 31,
2004. Stockholders' equity at the end of 2005 was $44.1 million,
and the book value per share was $5.35. (Logo:
http://www.newscom.com/cgi-bin/prnh/19990513/FDTRLOGO ) Our fourth
quarter results confirmed our forecasted performance for the year.
During 2005, we remained focused on increasing earnings, but at the
same time, we invested resources of time and money in the expansion
of our branch network in targeted markets. It was a very busy
quarter from the standpoint of obtaining permits, starting
construction and executing leases, which are the groundbreaking
steps necessary to expand the franchise to the 11 full-service
branches described in a prior press release. As some of you may
have heard, finding suitable branch locations in Florida has become
increasingly difficult. While some quality locations are available,
the associated high costs are not feasible in many cases. Rather
than accepting lower cost, less desirable locations, as some of our
competitors have done to support their expansion plans, we have
been disciplined in our site selection approach by limiting our
search to quality locations that are cost-effective. An example of
this approach is our Lake Mary branch, which opened in January and
has already surpassed $6 million in deposits. A grand opening
celebration and other periodic marketing efforts should make our
newest office profitable by the end of 2006. The other branch sites
that will be coming on-line possess the same dynamic
characteristics. Another major initiative accomplished this quarter
was the hiring and training of staff for our newly formed mortgage
company. Headed by President Thomas Spatola, a proven mortgage
specialist with over 30 years' experience, Federal Trust Mortgage
Company has exciting production plans for 2006, which should have a
positive impact to earnings. Since becoming a public company eight
years ago, we have seen Federal Trust grow from one to seven
offices, with assets growing from $147 million to $735 million, and
our stock price increase from $2.00 to $12.63 per share, an
increase of 532%. We believe these results are impressive, and have
gained much attention in the investment market. The results we have
achieved could not have been accomplished without the support and
unity of our shareholders. In the midst of our remarkable progress,
we have been instructed by two investors to sell the company now.
One has since retracted his position, but after many negative and
disruptive remarks in trade publications, indicated that he wants
to put his representative on our Board of Directors. We believe
that neither of these actions is in the best interest of Federal
Trust or our shareholders. These actions seem to be part of the new
trend known as "wolf pack" tactics being employed by money fund
investors to promote their own agendas. We hope that this will not
result in a costly and time-consuming proxy solicitation contest.
Nevertheless, it is gratifying to know that other investment
bankers who have followed our Company and supported our stock,
believe in our strategy and our ability to make Federal Trust even
more valuable (see Allen C. Ewing & Company's letter enclosed).
Others have echoed this sentiment by encouraging us to stay the
course. It is my sincerest desire that you will continue to support
your management and Board as we continue to implement our strategic
plan to enhance our franchise and shareholder value. Sincerely,
James V. Suskiewich Chairman TO: Ewing Clients Who Own Shares of
Federal Trust Corporation, Sanford, FL FROM: Ben Bishop DATE:
December 9, 2005 SUBJECT: Update as of 9/30/05 Quarterly Report
Recent Comments by Keefe Partners Our clients have owned this stock
for many years and most have a very low cost basis. The stock
traded today at $12.00. The Company's third quarter report is
attached, and it states that assets were $718 million, equity was
$43 million or $5.24/share based on 8,400,000 shares, and earnings
for the nine months were $3,270,000, or $0.41/share. While earnings
in the third quarter were disappointing at $0.11/share versus
$0.13/share in the third quarter of 2004 because of a non-recurring
charge of $0.03/share, the Company should earn $4,400,000, or
$0.55/share in 2005 versus $0.44 in 2004. Approximately six years
ago, Jim Suskiewich, Chairman and CEO of Federal Trust, and the
Federal Trust Board implemented a strategy for Federal Trust to
build a major retail franchise along the I-4 Corridor between
Orlando and Daytona Beach and to staff the Company with experienced
lenders to emphasize small business commercial lending. Over the
past six years, the Company has opened four branches, two more
branches will open in 2005 and early 2006, and additional branch
sites have been acquired (see map). Notwithstanding the costs of
the development of these eight branches which impact current
earnings negatively for up to three years, the Company's earnings
have grown at 20% per year for the three years ended 12/31/04. The
Company's earnings in 2006 should return to historical growth rates
which would produce earnings in 2006 of $0.60- $0.65/share and a
pro forma book value as of 12/31/06 of approximately $5.75.
Earnings growth in 2007 should continue at a similar pace assisted
by the improving profitability of the new branches. In recent
months, Jim Suskiewich and the Federal Trust Board have been
criticized by Keefe Managers, an investment firm in New York City,
because of the Company's low ROA ratio, and Keefe also wishes to
elect one of its clients who is a banker from Connecticut to the
Federal Trust Board. Keefe at one time suggested that the Board
should put the Company up for sale. Keefe Managers owns
approximately 9.6% of Federal Trust shares. Regional bank holding
companies have acquired Florida banks because of their long-term
asset growth potential, their current and future earnings, and
their potential value, i.e., branches, core deposits, loans,
customers, etc. Allen C. Ewing & Co. has recommended Federal
Trust shares over the years because of its growth franchise, its
good management, and the likelihood that the Company will be merged
in due course. Federal Trust is in the process of carrying out its
successful business plan of building earnings and franchise value.
Its projected eleven-branch network should be in full operation by
2007, at which time the Company should be much larger and more
profitable. To merge the Company now, as implied by Keefe, would be
premature, in our opinion, as a better price will be available in
2007. http://www.newscom.com/cgi-bin/prnh/19990513/FDTRLOGO
http://photoarchive.ap.org/ DATASOURCE: Federal Trust Corporation
CONTACT: Donna Schwartz, Federal Trust Corporation,
+1-407-324-1881, ext. 125 Web site: http://www.federaltrust.com/
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