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CALFED INC. REPORTS FIRST QUARTER EARNINGS; BANK SUBSIDIARY IN CAPITAL COMPLIANCE

 CALFED INC. REPORTS FIRST QUARTER EARNINGS;
 BANK SUBSIDIARY IN CAPITAL COMPLIANCE
 LOS ANGELES, April 24 /PRNewswire/ -- CalFed Inc. (NYSE: CAL) today reported net earnings for the first quarter of 1992 of $13.1 million, or $0.51 per fully diluted share, compared to a restated net loss of $2.7 million, or $.11 per fully diluted share, for the first quarter of 1991. The company also said that its principal subsidiary, California Federal Bank, continues to exceed all federal regulatory capital requirements at March 31, 1992.
 The company's 1992 first quarter earnings include a $16.0 million after-tax gain on the previously announced sale of a substantial portion of its trust management business, and a $4.7 million write- off of goodwill in the company's consumer finance subsidiary, California Thrift & Loan.
 Excluding the one-time gain and the goodwill write-off, the bank's core business was profitable, reflecting an increase in fee income and an improved interest-rate spread.
 "We remain encouraged by the continued improvements in the company's consumer banking business," said Jerry St. Dennis, chairman and chief executive officer of CalFed Inc. "In particular, California Federal Bank has been successful in increasing sales of checking accounts, mutual funds and other fee-based services, enhancing the profitability of its retail network.
 "The weakness in California real estate markets continues to affect the company's results," said St. Dennis. "However, although non-performing assets rose 7 percent in the first three months of 1992, primarily reflecting an increase in non-performing residential loans, residential delinquencies showed signs of easing late in the quarter."
 California Federal Bank's tangible, core and risk-based capital ratios at March 31, 1992, were 2.88 percent, 3.92 percent and 7.34 percent, respectively, exceeding the corresponding regulatory requirements of 1.50 percent, 3.00 percent and 7.20 percent.
 The bank remained in capital compliance despite the mandatory elimination of approximately $86.6 million in supervisory goodwill from regulatory capital on Jan. 1, 1992. The Office of Thrift Supervision (OTS), nonetheless, requested that California Federal Bank submit a capital plan. The proposed plan, submitted in late February, is subject to review and approval by the OTS.
 Fee income, an important component of the company's core earnings, increased 52 percent to $21.3 million for the first quarter of 1992 from $14.0 million for the first three months of 1991. Fees on sales of alternative investment products more than doubled as the bank increased its emphasis on the sales of mutual funds and annuities, capitalizing on rising consumer demand for investment alternatives to lower-yielding savings accounts. The company's portfolio of loans serviced for others totaled $8.4 billion at March 31, 1992, compared to $7.7 billion for the same 1991 period, which resulted in a 22 percent rise in loan servicing fees.
 The company originated $775.0 million in new loans during the first three months of 1992, compared to $1.1 billion in the comparable 1991 period. The company's decision to discontinue its commercial and income-property lending activities in 1991, coupled with a decrease in borrower demand for adjustable-rate mortgages, contributed to the decline in loan origination volume. In addition, the company refocused its lending efforts on residential loans with smaller average balances compared to previous years.
 Retail core deposits totaled $13.3 billion at March 31, 1992, compared to $13.2 billion during the same 1991 period. California Federal Bank opened more than 32,000 new checking accounts during the first three months of 1992. Checking, money market and other non- term savings accounts comprised 36 percent of the bank's total deposits at March 31, 1992, compared to 27 percent at the end of the first quarter of 1991. Checking and other transaction accounts remain a source of stable, low-cost funds and provide an opportunity to cross-sell other CalFed services.
 Net interest income for the first quarter of 1992 totaled $110.7 million, compared to $108.0 million for the same 1991 period, reflecting an improved interest-rate spread. The company's interest- rate spread increased to 2.51 percent for the three months ended March 31, 1992, from 2.21 for the comparable 1991 period. The effects of the improved interest-rate spread were partly offset by the rise in non-performing loans and a $3.5 billion reduction in average interest earning assets.
 Non-performing assets (non-accrual, past due and restructured loans and real estate acquired in settlement of loans) totaled $1,110.1 million, or 6.15 percent of total assets, at March 31, 1992, compared to $1,032.9 million, or 5.67 percent of assets, at Dec. 31, 1991, and $866.1 million, or 3.72 percent at March 31, 1991. The increase in the first three months of 1992 reflects the lingering effects of the economic recession on real estate markets in California. In addition, the increase in the level of non-performing assets as a percent of total assets reflects a reduction in the company's total assets by $5.3 billion since March 31, 1991.
 The company's provision for loan losses in the first quarter of 1992 was $21.9 million, compared to $12.8 million for the same 1991 period. CalFed's allowance for loan losses totaled $322.7 million at March 31, 1992, compared to $227.9 million at March 31, 1991.
 Consistent with CalFed's restructuring efforts, a subsidiary of the company, Trust Services of America Inc., sold a significant portion of its fiduciary accounts during the first quarter of 1992 for $47.5 million, and the company recognized an after-tax gain of $16.0 million. The company also wrote off $4.7 million of goodwill associated with its investment in California Thrift & Loan. CalFed has previously indicated its intent to divest its investment in this consumer finance subsidiary.
 During the first quarter of 1992, the company retroactively implemented Statement of Financial Accounting Standards No. 109, which changed the company's method of accounting for income taxes and, as a result, the company has restated prior years' financial statements. Among the effects of adopting the accounting standard were a $178.0 million reduction in goodwill and a $150.5 million reduction in retained earnings as of Jan. 1, 1992.
 CalFed Inc.'s total assets were $18.1 billion at March 31, 1992, compared to $23.3 billion in the first quarter of 1991. Stockholders' equity stood at $868.9 million at March 31, 1992, a $151.1 million decrease, compared to March 31, 1991. The company's equity-to-asset ratio at March 31, 1992, was 4.81 percent, compared to 4.39 percent at the end of the same 1991 quarter.
 CalFed Inc.'s tangible book value per share totaled $22.14 per share on 25,650,417 shares outstanding at March 31, 1992, compared to $27.30 per share on 25,588,083 shares outstanding at March 31, 1991.
 CalFed Inc. is a Los Angeles-based financial services holding company. Its principal subsidiary, California Federal Bank, FSB, provides home mortgage loans and consumer banking services through 183 offices in California, Florida, Nevada and Georgia.
 CALFED INC. AND SUBSIDIARIES
 Consolidated Statements of Financial Condition
 (Dollars in millions)
 (Unaudited)
 March 31, Dec. 31, March 31,
 1992 1991 1991
 Assets
 Cash $933.2 $450.4 $652.9
 Certificates of deposit 67.2 55.8 12.6
 Federal funds sold 300.0 --- 50.0
 Securities purchased
 under agreements to
 resell --- 398.2 ---
 Investment securities 147.7 16.9 1,500.7
 Securities held for sale 447.0 834.3 ---
 Mortgage-backed
 securities 2,057.8 1,197.6 1,147.9
 Loans receivable 12,568.3 13,377.8 14,999.6
 Mortgage-backed
 securities held
 for sale --- 189.7 46.8
 Loans held for sale 107.2 209.7 834.6
 Other FDIC-related
 earning assets 10.3 14.6 121.1
 Interest receivable 119.2 119.8 182.0
 Real estate held for
 sale or investment 178.0 224.6 428.4
 Real estate acquired in
 settlement of loans 310.9 273.0 284.3
 Federal Home Loan Bank
 stock 148.1 146.3 181.8
 Prepaid expenses
 and other assets 206.0 215.4 155.8
 Deferred income tax
 receivable 13.1 13.1 28.2
 Premises and equipment 142.6 149.3 165.8
 Goodwill 301.0 309.6 321.4
 Assets of discontinued
 operations --- 34.4 2,145.3
 Total assets $18,057.6 $18,230.5 $23,259.2
 Liabilities and
 Stockholders' Equity
 Deposits $14,121.5 $14,827.7 $16,145.4
 Advances from Federal
 Home Loan Banks 2,065.6 1,566.2 2,556.2
 Securities sold under
 agreements to
 repurchase 227.5 68.1 306.0
 Convertible subordinated
 debentures 122.6 122.6 122.6
 Federal funds purchased --- --- 33.0
 Other borrowings 394.7 461.5 674.9
 Other liabilities 256.8 321.3 390.4
 Liabilities of discontinued
 operations --- 7.3 2,010.7
 Total liabilities 17,188.7 17,374.7 22,239.2
 Commitments and contingencies
 Stockholders' equity:
 Common stock 25.7 25.7 25.6
 Additional paid-in
 capital 478.3 478.3 478.1
 Net unrealized losses
 on equity securities (.5) (.5) (3.7)
 Retained earnings 365.4 352.3 520.0
 Total stockholders'
 equity 868.9 855.8 1,020.0
 Total liabilities and
 stockholders' equity $18,057.6 $18,230.5 $23,259.2
 CALFED INC. AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Dollars in millions, except per share data)
 (Unaudited)
 For the
 three months ended
 March 31,
 1992 1991
 Interest income:
 Loans receivable $302.6 $412.3
 Mortgage-backed
 securities 35.3 51.5
 Investment securities 22.3 45.6
 Total interest
 income 360.2 509.4
 Interest expense:
 Deposits 204.4 311.4
 Borrowings 45.1 90.0
 Total interest
 expense 249.5 401.4
 Net interest income 110.7 108.0
 Provision for
 loan losses 21.9 12.8
 Net interest income
 after provision for
 loan losses 88.8 95.2
 Other income:
 Fee income 21.3 14.0
 Gain on sales
 of loans, net 1.9 2.1
 Gain on sales of
 mortgage-backed
 securities, net 1.5 6.7
 Loss on sales of
 securities (2.0) ---
 Operations of
 real estate held
 for investment (8.2) (6.0)
 Operations of
 real estate acquired
 in settlement
 of loans (14.9) (15.5)
 FDIC capital loss coverage 4.0 .3
 Other 4.7 .9
 Total other income 8.3 2.5
 Other expenses:
 Compensation 35.9 40.8
 Office occupancy 14.1 14.2
 Other general and administrative 27.4 20.3
 Amortization of goodwill 8.6 3.9
 Federal deposit
 insurance premiums
 and special assessments 8.7 9.8
 Total other expenses 94.7 89.0
 Earnings from
 continuing operations
 before income tax expense 2.4 8.7
 Income tax expense 5.3 12.9
 Net loss from continuing operations (2.9) (4.2)
 Earnings from discontinued
 operations, net of taxes --- 1.5
 Gain on sale of discontinued
 operations, net of taxes 16.0 ---
 Net earnings (loss) $13.1 ($2.7)
 Primary (loss) per
 share from continuing
 operations ($.11) ($.16)
 Fully diluted (loss)
 per share from
 continuing operations ($.11) ($.16)
 Primary earnings
 (loss) per share $.51 ($.11)
 Fully diluted
 earnings (loss) per share $.51 ($.11)
 -0- 4/24/92
 /CONTACT: James F. Hurley, 213-930-9750, or Rhanda Kahawaii Dunn, 213-932-2283, both of CalFed Inc./
 (CAL) CO: CalFed Inc. ST: California IN: FIN SU: ERN


EH-JL -- LA001 -- 2271 04/24/92 08:03 EDT
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