CORRECTING and REPLACING PFF Bancorp Inc. Reports 16 Percent Increase in Earnings Per Share.Business Editors CORRECTION...by PFF PFF Progress & Freedom Foundation PFF Preparing Future Faculty (training university teaching assistants) PFF Page Fault Frequency PFF Pre-Formed Fragmentation (type of ammunition projectile) Bancorp, Inc. POMONA Pomona, city, United States Pomona (pəmō`nə), city (1990 pop. 131,723), Los Angeles co., S Calif. at the foot of the San Gabriel Mts.; inc. 1888. , Calif.--(BUSINESS WIRE)--July 21, 2003 In BW5731 issued July July: see month. 17, 2003, (CA-PFF-BANCORP) reports 16 percent increase in earnings per share, third table Selected Ratios and Other Data, last line should read xxx $14,052 and $963 (sted $375 and $51). This reflects the Total Loan Sales rather than the Gain on Loan Sales. The corrected release reads: PFF BANCORP INC. REPORTS 16 PERCENT INCREASE IN EARNINGS PER SHARE PFF Bancorp Inc. (NYSE NYSE See: New York Stock Exchange :PFB PFB n. Pseudofolliculitis. ), the holding company for PFF Bank & Trust (the "Bank") today reported a 16 percent increase in earnings per 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. share ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") for the quarter ended June June: see month. 30, 2003. EPS increased to $0.79 for the current quarter from $0.68 for the comparable period of 2002. Net earnings rose $479,000 to $9.3 million for the quarter ended June 30, 2003, from $8.9 million for the comparable period of 2002. The growth in net earnings reflects a $1.8 million increase in net interest income from $28.2 million for the quarter ended June 30, 2002 to $30 million for the current quarter. Net interest spread increased to 3.78% for the current quarter from 3.75% for the previous quarter and 3.56% for the quarter ended June 30, 2002. The three basis point sequential One after the other in some consecutive order such as by name or number. quarter expansion in net interest spread was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a 27 basis point decrease in average cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities partially offset by a 24 basis point decrease in average yield on interest-earning assets. Despite a very challenging interest rate environment for the banking industry, the company has continued to achieve upward net interest spread momentum through its successful transition to a higher margin business model. This success is reflected by the following: -- Passbook, money market, NOW and other demand accounts ("core deposits") increased $39.3 million during the quarter to $1.44 billion or 62% of total deposits. One year ago core deposits were $1.2 billion or 55% of total deposits. Larry Lar´ry n. 1. Same as Lorry, or Lorrie. M. Rinehart Rine·hart , Mary Roberts 1876-1958. American writer known for her mysteries, including The Circular Staircase (1908) and The Door (1930). , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. commented: "Without question, along with the entire banking industry, a portion of our deposit growth is attributable to the volatility of the equity markets. However, there is also little doubt that the strong market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and brand recognition that we have achieved are equally significant contributors to the Bank's sustained pattern of deposit growth." -- The aggregate balance of construction, commercial business, commercial real estate and consumer loans (the "Four-Cs") increased $29 million during the quarter to $1.28 billion or 48% of loans receivable, net. One year ago the Four-Cs were $1.08 billion or 43% of loans receivable, net. The prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. driven accelerated amortization of premiums on collateralized mortgage obligations Collateralized mortgage obligation (CMO) A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. ("CMOs") that has adversely impacted earnings over the past several quarters, will not be a factor in future quarters. At June 30, 2003, the company's investment in CMOs totals $825,000, including $34,000 of unamortized premium. For the quarter ended June 30, 2003, CMO CMO See: Collateralized mortgage obligation CMO See collateralized mortgage obligation (CMO). premium amortization was $334,000. CMO premium amortization reduced average yield on interest-earning assets by five basis points during the current quarter, compared with nine and zero basis points for the quarters ended March 31, 2003, and June 30, 2002, respectively. Non-interest income increased $1.3 million between the quarters ended June 30, 2002, and 2003 to $5.6 million. Reflecting the Bank's sustained trend of strong growth in core deposits, deposit and related fees rose from $2.7 million for the quarter ended June 30, 2002, to $2.8 million for the current quarter. A 48% increase in loan principal paydowns from $388.7 million for the quarter ended June 30, 2002, to $573.7 million for the current quarter contributed to an increase in loan and servicing fees from $1.1 million for the quarter ended June 30, 2002, to $1.6 million for the current quarter. The company liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. its portfolio of trading securities during the quarter ended March 31, 2003. As a result, there was no trading gain or loss during the current quarter compared with a $209,000 loss on trading securities, net for the quarter ended June 30, 2002. The company's policy of minimizing 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. interest rate risk exposure by selling virtually all of the 15 and 30 year fixed rate mortgages it originates resulted in a $375,000 gain on sale of loans, net for the current quarter compared to $51,000 for the quarter ended June 30, 2002. General and administrative expense increased $2.4 million between the quarters ended June 30, 2002 and 2003. $1 million of the increase in general and administrative expense was in the area of compensation and benefits as the company has continued to hire experienced banking and investment advisory personnel to support its community banking operations and, through Glencrest Investment Advisors Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and Inc., wealth management activities. The addition of two new branches during the second quarter of fiscal 2003 also contributed to the increase in general and administrative expenses. Non-accrual loans increased to $22.3 million or 0.71% of gross loans at June 30, 2003, from $18.6 million or 0.59% of gross loans at March 31, 2003. The increase in non-accrual loans was attributable to $5.5 million of tract construction loans on a residential subdivision located in La Quinta A division of Seagate that was originally an acquisition and then absorbed into the company by 1999. Quinta was the developer of Optically Assisted Winchester (OAW) technology. See OAW. , Calif. The loans are secured by five single-family sin·gle-fam·i·ly adj. Relating to or being a dwelling designed for one family only: a single-family home; single-family occupancy. homes (of 10 originally constructed in the first phase) and 26 finished lots for the future construction of homes. Due to the lack of absorption in the project, the third-party equity provider has taken over day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. operations of the project, and has arranged for the bulk sale of the 26 lots on which escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. is scheduled to close in early August 2003. Proceeds from the sale of the lots will reduce the Bank's outstanding loans to $2.1 million on the remaining five homes, and will include the collection of all accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. but unpaid interest on the loans. Other developments with respect to problem credits during the current quarter were as follows: -- The lead lender on the Bank's two commercial aircraft leases totaling $3.2 million repurchased the Bank's interests in the leases for $2.9 million. The Bank charged-off the $319,000 difference between the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. price and its investment in the leases; and -- The Bank charged off the $2.1 million difference between the estimated realizable value of jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. inventory repossessed by the Bank and the $2.7 million commercial business loan to the chain of jewelry stores that has been discussed in previous quarters' earnings releases as well as the company's March 31, 2003 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . In determining the adequacy of the allowance for loan and lease losses at March 31, 2003, the company had anticipated and fully provided for the losses represented by the charge-offs noted above. At June 30, 2003, the allowance for loan losses was $29.2 million or 0.93% of gross loans and 131% of non-accrual loans compared with $31.1 million or 0.99% of gross loans and 168% of non-accrual loans at March 31, 2003. The company recorded a $660,000 provision for loan losses for the quarter ended June 30, 2003, compared to $1 million for the quarter ended June 30, 2002. On May 28, 2003, the company's board of directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly cash dividend of $0.10 per share payable June 27, 2003, to shareholders of record June 13, 2003. The company repurchased 16,500 shares of its common stock at a weighted average price of $33.96 per share during the current quarter. As of June 30, 2003, 565,200 shares remain under a 600,000-share repurchase authorization The right or permission to use a system resource; the process of granting access. See access control. adopted by the company's board of directors on March 26, 2003. Commenting on the company's earnings guidance for fiscal 2004, Rinehart added: "The strength of our retail deposit franchise has enabled us to lower our funding costs commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the rate at which asset yields have been coming down. However, with our deposit costs well below 2%, it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have becoming increasingly difficult for us to continue to achieve funding cost reductions of the magnitude we've we've Contraction of we have. we've have seen over the past several quarters. As a result, we are maintaining our fiscal 2004 EPS guidance of $3.15 based on our outlook for a relatively stable spread during the September September: see month. quarter followed by the potential for slight spread compression during the second half of the fiscal year." At June 30, 2003, the company was conducting its business through 26 full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. banking branches, a registered investment advisor Registered Investment Advisor (RIA) is a designation obtainable in the United States by an individual who has registered with the U.S. Securities and Exchange Commission or state regulatory agency (where the primary business is situated or multiple States in some cases) in office, two trust offices, a Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, regional loan center and two loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. offices in Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern . The company will host a conference call at 8:30 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant July 18, 2003, to discuss its financial results. The conference call can be accessed by dialing 1-800-340-5258 and referencing conference I.D. 1341983. An audio replay of this conference call will be available through July 31, 2003, by dialing 1-800-642-1687 and referencing the conference I.D. above. Certain matters discussed in this news release may constitute 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. These forward-looking statements may relate to, among other things, expectations of the business environment in which the company operates, projections of future performance, perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. opportunities in the market and statements regarding the company's strategic objectives. These forward-looking statements are based upon current management expectations, and may therefore involve risks and uncertainties. The company's actual results or performance, may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). real estate market, competitive conditions in the business and geographic areas in which the company conducts its business, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. actions or changes and other risks detailed in the company's reports filed with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended March 31, 2003.
PFF BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)
June 30, March 31,
2003 2003
ASSETS
Cash and cash equivalents $40,513 $50,323
Loans held for sale at lower of cost or
fair value 1,578 3,327
Investment securities held-to-maturity
(estimated fair value of
$6,043 at June 30, 2003, and $5,957 at
March 31, 2003) 5,750 5,753
Investment securities available-for-sale,
at fair value 61,794 94,094
Mortgage-backed securities available-for-
sale, at fair value 235,608 215,266
Collateralized mortgage obligations
available-for-sale, at fair value 825 15,200
Loans receivable, net 2,686,548 2,688,950
Federal Home Loan Bank (FHLB) stock, at
cost 26,924 26,610
Accrued interest receivable 13,234 14,162
Assets acquired through foreclosure, net 709 75
Property and equipment, net 23,500 23,325
Prepaid expenses and other assets 17,906 16,939
Total assets $3,114,889 $3,154,024
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $2,341,876 $2,326,108
FHLB advances and other borrowings 443,000 485,385
Accrued expenses and other liabilities 43,887 69,399
Total liabilities 2,828,763 2,880,892
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.01 par value.
Authorized 2,000,000
shares; none issued -- --
Common stock, $.01 par value.
Authorized 59,000,000
shares; issued 21,004,062 and
20,936,555; outstanding
11,820,795 and 11,769,788 at June 30,
2003, and March 31, 2003, respectively 209 208
Additional paid-in-capital 134,332 131,770
Retained earnings, substantially
restricted 158,077 150,282
Unearned stock-based compensation (3,552) (3,996)
Treasury stock (9,183,267 and 9,166,767
at June 30, 2003,
and March 31, 2003, respectively) (92) (92)
Accumulated other comprehensive losses (2,848) (5,040)
Total stockholders' equity 286,126 273,132
Total liabilities and stockholders'
equity $3,114,889 $3,154,024
PFF BANCORP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended
June 30,
2003 2002
Interest income:
Loans receivable $41,090 $43,486
Mortgage-backed securities 1,932 2,604
Collateralized mortgage obligations (294) 490
Investment securities and deposits 1,076 2,043
Total interest income 43,804 48,623
Interest expense:
Deposits 10,291 14,751
Borrowings 3,465 5,629
Total interest expense 13,756 20,380
Net interest income 30,048 28,243
Provision for credit losses 660 1,000
Net interest income after provision for
credit losses 29,388 27,243
Non-interest income:
Deposit and related fees 2,831 2,726
Loan and servicing fees 1,593 1,141
Trust fees 557 549
Gain on sale of loans, net 375 51
Gain on sale of securities, net 117 15
Gain (loss) on trading securities, net -- (209)
Other non-interest income 134 39
Total non-interest income 5,607 4,312
Non-interest expense:
General and administrative:
Compensation and benefits 10,673 9,663
Occupancy and equipment 3,059 2,855
Marketing and professional services 2,088 1,538
Other non-interest expense 3,015 2,419
Total general and administrative 18,835 16,475
Foreclosed real estate operations, net (1) (105)
Total non-interest expense 18,834 16,370
Earnings before income taxes 16,161 15,185
Income taxes 6,829 6,332
Net earnings $9,332 $8,853
Basic earnings per share $0.83 $0.70
Weighted average shares outstanding for
basic earnings per share calculation 11,300,157 12,600,125
Diluted earnings per share $0.79 $0.68
Weighted average shares outstanding for
diluted earnings per share calculation 11,787,238 13,046,236
PFF BANCORP INC. AND SUBSIDIARIES
Selected Ratios and Other Data
(Dollars in thousands, except share data)
(Unaudited)
Three Months Ended
June 30,
2003 2002
Performance Ratios
Return on average assets (a) 1.19% 1.18%
Return on average stockholders'
equity (a) 13.23% 12.01%
General and administrative expense
to average assets (a) 2.40% 2.19%
Efficiency ratio (c) 52.83% 50.61%
Average interest-earning assets to
average interest-bearing liabilities 108.74% 109.62%
Yields and Costs
Net interest spread 3.78% 3.56%
Effective interest spread (a) (b) 3.94% 3.82%
Average yield on interest-earning
assets 5.74% 6.59%
Average cost of interest-bearing
liabilities 1.96% 3.03%
Average yield on loans receivable,
net 6.12% 6.99%
Average yield on securities 3.17% 4.87%
Average cost of core deposits 1.07% 1.89%
Average cost of C.D.'s 2.85% 3.62%
Average cost of total deposits 1.76% 2.71%
Average cost of FHLB advances 2.98% 4.41%
Asset Quality
Net charge-offs $2,558 $378
Net charge-offs to average loans
receivable, net (a) 0.38% 0.06%
Average Balances
Average total assets $3,138,525 $3,011,198
Average interest-earning assets $3,053,404 $2,953,634
Average interest-bearing liabilities $2,808,101 $2,694,502
Average loans receivable, net $2,686,677 $2,491,000
Average securities $301,735 $361,634
Average core deposits $1,431,764 $1,148,353
Average C.D.'s $909,602 $1,034,649
Average total deposits $2,341,366 $2,183,002
Average FHLB advances $466,735 $511,500
Average stockholders' equity $282,117 $294,953
Loan Activity
Originations $508,551 $393,656
Purchases $93,262 $62,567
Principal repayments $573,675 $388,688
Sales $ 14,052 $ 963
(a)Computed on an annualized basis.
(b)Net interest income divided by average interest-
earning assets.
(c)Total general and administrative expense divided by net interest
income plus core non-interest income.
PFF BANCORP INC. AND SUBSIDIARIES
SELECTED RATIOS AND OTHER DATA
(Dollars in thousands, except share data)
(Unaudited)
As of As of
June 30, March 31,
2003 2003
Asset Quality
Non-accrual loans $22,340 $18,572
Non-accrual loans to gross loans 0.71% 0.59%
Non-performing assets to total
assets (a) 0.74% 0.59%
Allowance for loan losses $29,223 $31,121
Allowance for loan losses to non-
accrual loans 130.81% 167.57%
Allowance for loan losses to gross
loans 0.93% 0.99%
Capital
Stockholders' equity to assets ratio 9.19% 8.66%
Core capital ratio(d) 8.35% 8.17%
Risk-based capital ratio(d) 12.04% 11.85%
Shares outstanding at end of period 11,820,795 11,769,788
Book value per share outstanding $24.21 $23.21
Tangible book value per share
outstanding (b) $24.10 $23.10
Loan and Deposit Balances
Construction loans (c) $546,830 $543,085
Commercial business loans $153,932 $149,232
Commercial real estate loans $421,149 $396,765
Consumer loans $156,830 $160,673
1-4 mortgage loans $1,369,686 $1,403,279
Core deposits $1,443,052 $1,403,739
C.D.'s $898,824 $922,369
(a)Non-performing assets consist of non-accrual loans and real estate
acquired through foreclosure.
(b)Stated book value minus goodwill.
(c)Net of undisbursed balances of $424,788 and $405,908 at June 30,
2003 and March 31, 2003, respectively.
(d)PFF Bank & Trust
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