Bayonne Bancshares Reports Substantial Increases in Fourth Quarter and Year-end Earnings.BAYONNE Bayonne, town, France Bayonne (bäyôn`), town (1990 pop. 41,846), Pyrénées-Atlantiques dept., SW France, in Gascony, on the Adour River near its entrance into the Bay of Biscay. , N.J.--(BUSINESS WIRE)--May 7, 1998--Bayonne Bancshares, Inc., (Nasdaq: FSNJ). the holding company for First Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. of New Jersey, SLA (1) (StereoLithography Apparatus) See 3D printing. (2) (Service Level Agreement) A contract between the provider and the user that specifies the level of service expected during its term. , reported net income for the year ended March 31, 1998, of $4.379 million, or $0.68 per share, diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , compared to a loss of $3.215 million, or $1.10 per share, diluted, for the year ended March 31, 1997. Net income for the fourth fiscal quarter ended March 31, 1998, was $1.390 million, or $0.16 per share, diluted, compared to a loss of $244,000, or $0.08 per share, diluted, for the quarter ended March 31, 1997. Commenting on the results, Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. Nilan, President and Chief Executive Officer, stated, "Our results for the past year and, in particular, the last two quarters demonstrate the Bank's ability to generate increased earnings at a time when our industry is facing narrowing interest rate spreads due to accelerated mortgage refinancings and loan prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. ,. These improved results reflect management's successful efforts in repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the Bank's balance sheet, the utilization of the $46.5 million of net new capital raised by the Company last August and the reduction in interest expense resulting from the run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → during the year of approximately $44 million in long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , high-cost certificates of deposit. Over the past three successive quarters, earnings have progressively increased and we have entered the current fiscal year with profit momentum. "Although net loans remained level year to year it is expected that the Bank will achieve its growth objectives through increasing loan volume and diversity of lending activity. The Bank recently implemented what is proving to be a very successful marketing program for home equity loans. We believe this consumer loan program and our continuing focus on initiating and building a quality commercial lending effort should reap positive results." Mr. Nilan continued, "The ability to improve the net interest margin by 20% during the past fiscal year, while reducing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. reflects the soundness of the Bank's fundamental position, particularly in the challenging interest rate conditions that have persisted since the early summer of 1997. Despite the continuation of this difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. , we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the Company's prospects for the current fiscal year and beyond." Bayonne Bancshares' annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets was 0.72% for the year ended March 31, 1998 compared to (0.52%) for the comparable prior year. Return on average stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was 5.82% compared to (6.56%) for the fiscal year ended March 31, 1997. The return on equity ratio for the year ended March 31, 1998, was affected by the $46.5 million increase in capital from the completion of the Bank's second step conversion in August 1997. Stockholders' equity equaled $98.6 million, or $10.85 per share book value, at March 31, 1998, compared to $48.1 million, or $15.68 per share book value, at March 31, 1997. The year-over-year decline in book value per share was attributable to the addition of approximately 6.0 million shares of common stock outstanding resulting from the conversion. The Company's ratio of equity to assets equaled 15.27% at March 31, 1998. Net interest income rose 17.1% to $16.0 million for the year ended March 31, 1998, compared to $13.7 million for the comparable prior year. The increase was primarily due to a decline of $2.6 million in interest expense, the majority of which was accounted for by a $31 million decline in average short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings during the year. The net interest margin was 2.72% for the fiscal year ended March 31, 1998, an increase of 44 basis points from 2.28% reported for the comparable prior year. Non-interest income totaled $1.3 million for the year ended March 31, 1998, compared to a loss of $1.8 million for the prior fiscal year. Excluding losses on securities available for sale and sales of real estate, which equaled $14,000 and $2.970 million for the years ended March 31, 1998, and March 31, 1997, respectively, non-interest income increased 15.5% for the year ended 1998 versus the year ended 1997 as a result of increased deposit fees and income from sales of mutual funds and annuities by Bayonne Service Corp., the Bank's subsidiary. Operating expenses for the year were $10.2 million compared to $14.6 million for the year ended March 31, 1997, which included the SAIF assessment of $2.9 million and a non-recurring expense of $1.4 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the supplemental executive retirement plan. Adjusting for these one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items, operating expenses for the year ended March 31, 1998, declined 2.2%. This decline reflects lower executive personnel expenses and reduced deposit insurance premiums, offset by higher data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a expenses and additional costs relating to becoming a fully publicly owned Publicly owned can refer to:
Net loans at March 31, 1998, decreased slightly to $235.5 million from $235.6 million at March 31, 1997, as total originations of $18.5 million of commercial and residential loans were offset by the acceleration of mortgage prepayments, primarily in the last quarter of the year, and by the amortization of mortgage loans. At March 31, 1998, non-performing assets, which include non-accrual loans and REO reo Noun NZ a language [Maori] , declined 30.6% to $4.1 million from the March 31, 1997, total of $6.0 million. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. declined to 1.62% of net loans receivable as of March 31, 1998, compared to 2.38% at March 31, 1997. The allowance for loan losses remained at the previous year's level of $3.0 million, or 1.25% and 1.34% of net loans receivable, at March 31, 1998, and 1997, respectively. Securities available for sale increased to $362.8 million at March 31, 1998, compared to $290.6 million at March 31, 1997. This increase reflects purchases of mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. in connection with the deployment of the proceeds of the equity capital raised last August in the conversion, and from the proceeds of U.S. Government securities sold to reposition the portfolio into higher-yielding assets. Total deposits declined to $423.5 million at March 31, 1998, compared to $444.1 million at March 31, 1997, due primarily to the maturing of approximately $44 million of long-term, high-rate certificates of deposit. The reduced interest expense and replacement of a portion of these funds into lower-yielding certificates of deposit had a positive effect on the Bank's net interest margin for the quarter and the year ended March 31, 1998. The Bank should continue to experience a reduction in the cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. resulting from another $17.5 million in high-cost certificates of deposit maturing in the current fiscal year. On March 19, 1998, the Company's Board of Directors declared a $.0425 per share dividend, payable on April 16, 1998, to shareholders of record on April 6, 1998. This represents the thirteenth consecutive quarterly dividend paid by the Company since the Bank converted to a stock company in January January: see month. 1995. Bayonne Bancshares, Inc. is the holding company for First Savings Bank of New Jersey, SLA which operates from its main office and three branch offices in Bayonne, New Jersey Bayonne is a city in Hudson County, New Jersey, United States, south of Jersey City. As of the United States 2000 Census, the city had a total population of 61,842. According to tradition, the city derives its name from the city of Bayonne in France. . The Company had total assets of $646.1 million and $423.5 million in deposits as of March 31, 1998. First Savings Bank's tangible, core and risk-based capital ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. at March 31, 1998, were 12.0%, 12.0% and 33.81%, respectively. These ratios exceed the minimum regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. of 2.00%, 4.00% and 8.00%, respectively. The Bank is considered "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. " by regulatory standards. -0- The foregoing contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are not historical facts and include expression about our confidence and strategies and our expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by such forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. terminology as "expect", "look", "believe", "anticipate", "may", "will", or similar statements or variations of such terms. Such forward-looking statements involve certain risk and uncertainties, including, but not limited to, the direction of interest rates, continued levels of loan quality, origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real volume, continued relationships with major customers and referrals for sources of loans, the effect of economic conditions and regulatory barriers; and the effect of tax and legal structures. Actual results may differ materially from such forward-looking statements. The Company assumes no obligation for updating any such forward-looking statements at any time.
For the Three Months ended For the Year ended
March 31, March 31,
1998 1997 1998 1997
Dollars in thousands,
except per share amounts
---------------------- ---------------------
Interest and Dividend Income:
Loans $ 5,040 $ 5,010 $ 19,745 $ 19,944
Securities available
for sale 4,969 4,335 19,299 19,147
Securities held to
maturity 306 306 1,210 1,240
Deposits with financial
institutions 223 265 606 795
Total interest and
dividend income 10,538 9,916 40,860 41,126
Interest expense:
Interest on deposits 4,592 5,095 19,980 20,814
Interest on other
borrowings 1,483 1,074 4,892 6,655
------ ------ ------ -------
Total interest expense 6,075 6,169 24,872 27,469
Net interest income 4,463 3,747 15,988 13,657
Provision for loan
losses 45 230 180 320
--- ---- ---- ---
Net interest income
after provision
for loan losses 4,418 3,517 15,808 13,337
Other income (loss):
Loan fees and service
charges 44 59 238 294
Deposit fees 171 143 611 576
Loss on securities
available for sale, net -- (66) (5) (2,878)
Income from Bayonne
Service Corp. 85 34 204 168
Loss on sales of real
estate (13) (40) (9) (92)
Other 76 13 304 136
--- --- ---- ---
Total other income (loss) 363 143 1,343 (1,796)
Operating expenses:
Compensation and employee
benefits 1,325 2,928 5,619 7,184
Occupancy and Equipment 279 314 1,179 1,201
Data processing service
expenses 196 189 821 707
Deposit insurance
premiums 141 91 569 974
SAIF Assessment - - - 2,895
Other 576 525 1,982 1,641
---- ---- ------ -----
Total operating expenses 2,517 4,047 10,170 14,602
------ ------ ------- ------
Income (loss) before
income tax expense 2,264 (387) 6,981 (3,061)
Income Tax-expense,
(benefit) 874 (143) 2,602 154
---- ----- ------ ---
Net income (loss) $ 1,390 $ (244) $ 4,379 $ (3,215)
======== ======= ======== =========
Basic earnings (loss)
per share $ 0.17 $ (0.08)(1) $ 0.69 $ (1.10)(1)
======= ======== ======= ========
Fully diluted earnings
(loss) per share $ 0.16 $ (0.08)(1) $ 0.68 $ (1.10)(1)
======= ======== ======= ========
(1) Earnings per share were restated to reflect the Company's
adoption of Statement of Financial Accounting Standards No. 128,
Earnings per Share.
Bayonne Bancshares Inc.
Consolidated Statements of Financial Condition
March 31, 1998 and March 31, 1997
March 31, March 31,
1998 1997
-------------------------
ASSETS (In thousands)
Cash and cash equivalents:
Cash on hand and
in banks $ 4,712 $ 6,828
Deposits with financial
institutions 11,900 8,500
AMF short-term fund 5 144
--------- ---------
Total cash and cash
equivalents 16,617 15,472
Securities available for sale,
at market value 362,778 290,614
Securities held to
maturity 10,274 11,277
Loans receivable, net 235,465 235,624
Accrued interest receivable,
net 4,089 3,720
Federal Home Loan Bank stock,
at cost 7,460 7,460
Real estate acquired in
settlement of loans 330 364
Office properties and
equipment, net 5,351 5,812
Prepaid expenses 672 816
Other assets 3,022 5,845
--------- ---------
TOTAL ASSETS $ 646,058 $ 577,004
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 423,545 $ 444,139
Borrowings 115,000 75,000
ESOP loan 380 598
Advance payment by borrowers
for taxes and insurance 3,754 1,539
Accrued expenses and other
liabilities 4,730 7,649
--------- ---------
TOTAL LIABILITIES $ 547,409 $ 528,925
--------- ---------
Stockholders' equity:
Common stock $ 91 $ 307
Additional paid in
capital 60,246 12,426
Common stock acquired by
ESOP and MRP (4,301) (976)
Retained earnings-substantially
restricted 43,702 40,658
Net unrealized loss on securities
available for sale,net of tax (1,089) (4,336)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 98,649 48,079
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 646,058 $ 577,004
CONTACT: Bayonne Bancshares, Inc. Eugene Eugene, city (1990 pop. 112,669), seat of Lane co., W Oregon, on the Willamette River; inc. 1862. A processing and shipping center in a farming area, the "Emerald City" has lumbering, food-processing, and microchip and other electronics industries. Malinowski Mal·i·now·ski , Bronislaw Kasper 1884-1942. Polish-born British anthropologist who maintained that customs and beliefs have specific social functions. Noun 1. , Vice President/CFO, tel: 201/437-1000 or The Levine Le·vine , James Lawrence Born 1943. American pianist and conductor. He began his career with the Metropolitan Opera as principal conductor in 1973 and has since served as both music and artistic director. Group Hal Levine, 212/682-8875 |
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