California Financial earns $2.9 million or $.60 per share in second quarter; Checking accounts, assets, net interest margins all posted gains.STOCKTON Stockton, city (1990 pop. 210,943), seat of San Joaquin co., central Calif., on the San Joaquin River; inc. 1850. One of the fastest-growing U.S. cities during the late 20th cent., Stockton is an inland seaport located at the head of the San Joaquin delta. , Calif.--(BUSINESS WIRE)--July 11, 1996--California Financial Holding Co. (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 :CFHC CFHC California Family Health Council CFHC Caritas Francis Hsu College CFHC Chinatrust Financial Holding Company CFHC Central Florida Health Care CFHC Concord Feminist Health Center CFHC Central Florida Hurricane Center CFHC Community Family Health Center ), the holding company for Stockton 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. , today reported net income surged to $2.9 million or $.60 per share for the second quarter of 1996 compared to a net loss of $794,000 or $.17 per share for the like quarter of 1995. The bank earned $2.5 million, or $.54 per share, for the first quarter of 1996. Net income for the first six months of 1996 climbed to a record $5.5 million or $1.14 per share, strongly recovering from the depressed first half of 1995, when net income totaled $39,000 or $.01 per share. "Not only was this our best six months ever, but the quality of earnings has greatly improved. Solid asset growth and wider margins have led to a 25% increase in our core earnings over year ago levels," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. Kavanaugh, 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. . "Company operations continue to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective . We established very aggressive corporate goals for this year, and we are meeting or exceeding them across the board. Net interest income rose, loan volume has grown, margins and fee income have increased, and the level of nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. has declined. We are confident we are back on track." Net interest income, after provision for loan losses, increased to $9.9 million for the second quarter of 1996 from $6.2 million in the year ago quarter, and $9.2 million in the preceding quarter of this year. "Improvement in our interest rate spread (yield, less 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. ) and asset quality significantly aided results," Kavanaugh added. "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). Financial's spread grew to 3.08% for the second quarter of 1996, from 2.36% one year ago, and 2.90% in the first quarter of this year. "Nonperforming assets continue to improve over year ago levels and this year's first quarter. Total nonperforming assets declined to just 1.26% of total assets (or $16.7 million) at June June: see month. 30, 1996, from 1.66% (or $21.7 million) a year ago and 1.48% (or $18.9 million) at the end of March 1996," Kavanaugh noted. "As nonperforming assets continue to decline, more of the bank's assets are now earning interest, which is improving net interest margins. Net interest margin grew to 3.25% in 1996's second quarter from 2.47% one year ago. "We are delighted with the consumer loan products we began offering earlier this year," he added. "Our Equity Credit Line volume in the first six months of 1996 was nearly double that for all twelve months of 1995. "More than 3,600 net new checking accounts were opened during the first six months of 1996, nearly double our goal, as we continue to win accounts from institutions involved in mergers," Kavanaugh said. "Fee income generated by this success is benefiting noninterest income and should continue to add to future income. "Our first full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. , in-store branch will open in the Richland Richland, city (1990 pop. 32,315), Benton co., S Wash., at the confluence of the Columbia and Yakima rivers, in an irrigated farm and vineyard region; inc. 1958. It is the headquarters of the U.S. Market in Modesto Modesto (mōdĕs`tō), city (1990 pop. 164,278), seat of Stanislaus co., central Calif., on the Tuolumne River, near the northern end of the San Joaquin valley; inc. 1884. at the end of July July: see month. ," he noted. "This will be the first full-service, in-store branch for both Stockton Savings and Stanislaus County." Total noninterest income climbed to $1.7 million in the second quarter from a negative $2.4 million in the like quarter a year ago. In the second quarter of 1995, the bank set aside a significant loss reserve for real estate held for investment. "Loans and investment sale gains, as well as an increase in fee income, were primarily responsible for noninterest earnings improvement," noted Jane Butterfield, senior vice president and treasurer. Noninterest expense was $6.6 million during the second quarter of 1996, versus $5.1 million a year ago, which was well covered by California Financial's net interest income after provision for losses of $9.9 million. In last year's second quarter, California Financial redesigned its pension plan, which resulted in a one-time expense reduction of $1.3 million. Total mortgage loan originations 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. in the second quarter of 1996 continued to improve, rising to $97.4 million, from $78.6 million in the first quarter of this year and sharply above the $67.6 million reported in last year's depressed second quarter. California Financial's loan portfolio at June 30, 1996 increased to $945 million from $942 million a year ago. "The second quarter of 1996 marks the second consecutive quarter that we have not needed to add material loss provisions for real estate investments or real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most through foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. ," Kavanaugh noted. Throughout 1994 and 1995, the bank's results were severely restricted as it set aside a total of $10.8 million in reserves against its real estate loan portfolio. In just the second quarter of 1995, CFHC set aside approximately $3.5 million to reserves for its real estate portfolios and an additional $1.3 million on loans made to facilitate the sale of real estate investments and real estate owned as a result of foreclosure. Total assets rose $49.6 million during the second quarter, or approximately 15.5% on an 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. basis, to $1.33 billion at June 30 from $1.28 billion at the end of March, following several quarters of no asset growth. Shareholder equity stood at $86.9 million compared to $83.5 million one year ago. Tangible book value was $18.43 per share at June 30, 1996, compared to $17.61 per share at June 30, 1995. California Financial's tangible capital ratio is 6.44% and its 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. is 12.70%, both well above regulatory minimums. The bank pays a cash dividend of $.11 per share per quarter. California Financial is the parent of Stockton Savings Bank, a 22-branch institution that was founded in 1887. The bank serves as the "hometown home·town n. The town or city of one's birth, rearing, or main residence. Noun 1. hometown - the town (or city) where you grew up or where you have your principal residence; "he never went back to his hometown again" bank," offering its customers highly personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. service in many communities throughout the Central San Joaquin Valley Noun 1. San Joaquin Valley - a vast valley in central California known for its rich farmland Calif., California, Golden State, CA - a state in the western United States on the Pacific; the 3rd largest state; known for earthquakes and the Sierra Foothills. CFHC shares closed the trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. yesterday, July 10th, at $21 3/4 per share. -0- Statements concerning future performance, developments or events, concerning expectations for growth and market forecasts, and any other guidance on future periods, 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. which are subject to a number of risks and uncertainties which might cause actual results to differ materially from stated expectations. -0- FINANCIAL HIGHLIGHTS (unaudited) (in thousands except per share)
Second Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Total interest income $ 24,815 $ 22,614 $ 48,392 $ 44,373 Interest expense $ 14,635 $ 15,079 $ 28,979 $ 29,192 Net interest income after provision for losses on loans $ 9,924 $ 6,234 $ 18,892 $ 13,615 Other operating income (loss) $ 1,660 $ (2,442) $ 3,653 $ (1,931) Other operating expense $ 6,600 $ 5,058 $ 13,178 $ 11,499 Income tax expense (benefit) $ 2,086 $ (472) $ 3,917 $ 145 Net income (loss) $ 2,898 $ (794) $ 5,450 $ 39 Earnings (loss) per share $ .60 $ (.17) $ 1.14 $ .01 Weighted average shares outstanding 4,789 4,697 4,782 4,692
June 30, 1996 Dec. 31, 1995 June 30, 1995
Total assets $1,327,178 $1,275,585 $1,305,287 Shareholders' equity $ 86,924 $ 85,602 $ 83,478 Book value per share $ 18.54 $ 18.36 $ 17.97 Tangible book value per share $ 18.43 $ 18.13 $ 17.61
FINANCIAL STATISTICS
(ratios annualized)
First Half Ended, First Half Ended,
June 30, 1996 June 30, 1995
Return on average assets .85% .01% Return on average equity 12.62% .09% Efficiency ratio (operating expense / revenue) 56.85% 61.38% Operating expense / assets 1.97% 1.70% Spread (yield, less cost of funds) 2.99% 2.39% Net interest margin 3.16% 2.50% Avg. financial assets/avg. financial liabilities 103.63% 102.33% Average equity/average loans 9.31% 9.01% Number of full-time equivalent employees 344 345 Equity/Total assets 6.55% 6.40% Core and Tangible regulatory capital ratio 6.44% 5.70% Risk-based capital ratio 12.70% 11.55%
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1995
LOANS:
LOAN ORIGINATIONS: $ 175,946 $ 127,508
LOANS BY COLLATERAL TYPE: Residential real estate $ 746,560 $ 766,926 Multifamily real estate $ 39,089 $ 38,531 Commercial real estate $ 59,246 $ 57,079 Construction $ 97,092 $ 87,910 Land $ 50,003 $ 34,495 Other $ 13,048 $ 2,980 Total loan gross receivables $1,005,038 $ 987,921
FINANCIAL STATISTICS (continued) Second Quarter Ended
($ in thousands) June 30,
1996 1995
ALLOWANCE FOR LOAN LOSSES: Balance at beginning of quarter $ 8,178 $ 7,726 Provision for loan losses $ 256 $ 1,566 Charge offs (net of recoveries) $ 969 $ 305 Balance at end of quarter $ 7,465 $ 8,987 Loan loss allowance / Total net loans (excluding loans held for sales) .70% .78% Loan loss allowance / Non-performing loans 54.38% 52.93% NON-PERFORMING ASSETS: Accruing loans - 90 days past due $ -0- $ -0- Non-accrual loans $ 6,221 $ 6,359 Restructured loans on accrual $ 5,880 $ 7,623 Total non-performing loans $12,101 $13,982 REO $ 4,623 $ 7,726 Total non-performing assets $16,724 $21,708 Total non-performing assets / total assets 1.26% 1.66% Loan and REO loss allowance as a % of non-performing assets 39.35% 36.00% CONTACT: California Financial Jane Butterfield, 209/948-1675 |
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