CU Bancorp reports third-quarter results, announces 36 percent increase in dividend.ENCINO, Calif.--(BUSINESS WIRE)--Oct. 23, 1996--CU Bancorp (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CUBN), the holding company of 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). United Bank, Thursday Thursday: see week. reported a net loss of $5.1 million, or 44 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the third quarter of 1996, ended Sept. 30, following the absorption of the merger with Home Interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. Bancorp, parent of Home Bank, which was completed during the same quarter. The company concurrently announced an increase in the quarterly dividend to $0.0625 per share, payable Nov. 25, 1996, to shareholders of record as of Nov. 6, 1996. The net loss of $5.1 million compares with net income of $1.9 million, or 17 cents per share, for the second quarter of the year. The third-quarter loss was the result of non-recurring expenses related to the merger, including increased provisions for loan losses and ORE, systems conversion costs, contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). and general deal-related advisory expenses, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and G. Carpenter, chairman of the board and chief executive officer. Total non-recurring expenses of $11.5 million for the quarter reduced after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. earnings by $7.2 million, or 62 cents per share. "Our core earnings, which measure asset valuation, asset quality management and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. earnings performance, increased during the third quarter," said Carpenter. "We fully anticipated and allowed for the inherent costs and valuations associated with the merging of our two operations, which was clearly reflected in the pricing of the transaction. "Our ability to absorb a non-recurring adjustment in this fashion is demonstrated by the continuing strength of our balance sheet and capital. The combination of core earnings, balance sheet strength and capital in excess of all regulatory mandates provides us with great confidence in the 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. outlook for the new California United Bank, reflected in the board's determination to increase the quarterly dividend." Core earnings per share were 18 cents for the third quarter and 48 cents year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . The company's total risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. at Sept. 30, 1996, was 13.7 percent; its Tier 1 risk-based capital ratio was 12.4 percent; and its Tier 1 leverage ratio was 9.7 percent, all well above mandated levels. Asset quality and related reserves were adjusted during the third quarter to manage the combination of portfolios and consolidate the banks' approach to asset quality management, according to David I David I, king of Scotland David I, 1084–1153, king of Scotland (1124–53), youngest son of Malcolm III and St. Margaret of Scotland. During the reign of his brother Alexander I, whom he succeeded, David was earl of Cumbria, ruling S of the Clyde . Rainer, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "The bank is aggressively managing asset quality utilizing CU Bancorp's well-recognized approach to disciplined credit management. As a result, we fully expect to have all asset-quality issues associated with this merger addressed by the end of the year," he said. "Our goal in application of this disciplined approach to growth opportunities is to further strengthen our `fortress' balance sheet and enable us to produce a reliable, uninterrupted and growing earnings stream, on behalf of our shareholders," stated Carpenter. "Despite the demands of the merger activity during the third quarter, CU Bancorp remained on target with its current performance objectives," said Rainer, "posting a second consecutive record quarter of commercial loan production. During the third quarter, commercial loan production was ahead of schedule to achieve the bank's year-end goal of $155 million in new loan commitments. "Additionally, two business units formed earlier in the year, Investment Services and Private Banking, are building strong portfolios which are expected to produce good returns for the bank in the near term." "Overall, we are extremely pleased with the speed and efficiency of the integration of the two companies," said Rainer, "and anticipate cost-recovery and transaction benefits in the short term, which should quickly validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our investment in this important transaction." Non-recurring conversion costs during the third quarter reflect the in-progress integration of the three operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. of California United Bank, Home Bank and Corporate Bank, which was acquired by CUB cub the newborn of a number of animal species as diverse as lion, fox and bear. in January of this year. MIS (1) (Management Information System) An information system that integrates data from all the departments it serves and provides operations and management with the information they require. conversion costs are expected to be recovered within 12 to 18 months, according to James Staes, vice chairman, who is leading the conversion efforts. "Our systems conversion is proceeding right on plan," said Staes. "Within a short time, California United Bank will be in a position to offer our customers a lineup A criminal investigation technique in which the police arrange a number of individuals in a row before a witness to a crime and ask the witness to identify which, if any, of the individuals committed the crime. of products and services competitive with any offered by the bigger banks, but with the unique service level that distinguishes CUB in its markets as a responsive relationship bank." Total assets at CU Bancorp as of Sept. 30, 1996, were $834 million, compared with $816 million at the close of the second quarter. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. totaled $86 million, or $7.65 per share, at Sept. 30, 1996, compared with $91 million, or $8.09 per share, for the prior quarter. CU Bancorp is the holding company of California United Bank, the 11th-largest independent bank with headquarters in 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, . It serves middle-market businesses and consumers throughout Southern California from 22 branches in Westwood, the San Gabriel San Gabriel (săn gā`brēəl), city (1990 pop. 37,120), Los Angeles co., SW Calif.; inc. 1913. Fabric, furniture, paper products, tools, and aircraft parts are manufactured. and San Fernando valleys San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. , the South Bay, and Ventura and Orange counties. In addition to a comprehensive range of commercial and personal banking products and services, the Bank also offers specialty banking expertise in the areas of SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government lending, international trade services, entertainment finance, investment services and private banking services. -0-
CU BANCORP
Selected Financial Data
(Amounts in thousands of dollars)
Sept. 30, Dec. 31, Sept. 30,
1996 1995 1995
Capital Ratios
Total risk-based capital 13.7% 17.3% 17.2%
Tier 1 risk-based capital 12.4% 16.0% 15.9%
Tier 1 leverage capital 9.7% 10.8% 10.7%
Asset Quality
Allowance for loan losses $13,548 $10,043 $10,053
Nonperforming loans 2,705 4,362 5,616
Nonperforming assets 3,814 9,280 11,259
Allowance for loan losses to:
Total loans 2.78% 2.50% 2.59%
Nonperforming loans 501% 230% 179%
Nonperforming assets 355% 108% 89%
Nonperforming loans to loans 0.6% 1.1% 1.4%
Nonperforming assets to assets 0.5% 1.2% 1.5%
Performance Ratios
Return on average shareholders' equity (2.65%) 8.40% 8.03%
Return on average assets (0.29%) 0.91% 0.86%
Common Stock Data
Earnings per share -- Year to Date $ (0.15) $ 0.62 $ 0.44
Book value per share $ 7.65 $ 7.97 $ 7.80
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CU BANCORP
Consolidated Statements of Income
(Amounts in thousands of dollars)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
Revenue from earning assets $15,899 $13,931 $46,515 $41,735
Cost of funds 4,460 4,160 13,044 11,912
Net revenue from earning
assets before provision for
loan losses 11,439 9,771 33,471 29,823
Provision for loan losses 4,050 100 4,400 1,025
Net revenue from earning
assets 7,389 9,671 29,071 28,798
Gain on sale of servicing 0 0 0 383
Gain on sale of securities 0 4 114 46
Other income 1,748 1,815 5,507 5,140
Total noninterest income 1,748 1,819 5,621 5,569
Salaries and related benefits 5,905 4,347 15,614 13,063
Other expense 11,075 4,274 21,022 13,560
Total noninterest expense 16,980 8,621 36,636 26,623
Income before taxes (7,843) 2,869 (1,944) 7,744
Taxes on income (2,725) 1,159 (177) 3,036
Net income $(5,118) $ 1,710 $(1,767) $ 4,708
Earnings per share $ (0.44) $ 0.16 $ (0.15) $ 0.44
Average fully diluted shares
outstanding 11,588 10,669 11,528 10,656
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CU BANCORP
Consolidated Statements of Financial Condition
(Amounts in thousands of dollars)
Sept. 30, Dec. 31, Sept. 30,
1996 1995 1995
Assets
Cash and due from banks $ 81,991 $ 67,173 $ 65,320
Short-term investments 64,717 47,100 50,000
Cash and short-term investments 146,708 114,273 115,320
Investment securities 171,849 206,966 204,672
Gross loans 486,616 401,849 388,297
Reserve for loan losses 13,548 10,043 10,053
Net loans 473,068 391,806 378,244
Other real estate owned 1,109 4,918 5,643
Premises and equipment, net 16,558 15,476 15,707
Accrued interest receivable and
other assets 25,045 15,661 16,852
Total assets $834,337 $749,100 $736,438
Liabilities and Shareholders'
Equity Deposits:
Demand $253,905 $226,307 $217,051
Savings 251,563 228,304 224,974
Certificates of deposit 225,718 198,930 200,560
Total deposits 731,186 653,541 642,585
Accrued interest payable and
other liabilities 16,933 11,137 11,739
Total liabilities 748,119 664,678 654,324
Shareholders' equity:
Common stock 75,347 70,123 67,485
Unrealized gain on securities 41 663 17
Retained earnings 10,830 13,818 14,612
Unearned compensation 0 (182) 0
Total shareholders' equity 86,218 84,422 82,114
Total liabilities and shareholders'
equity $834,337 $749,100 $736,438
CONTACT: CU Bancorp, Encino Patrick Hartman, 818/907-9122 |
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