Center Financial announces strong earnings for third quarter.WATERBURY Waterbury, industrial city (1990 pop. 108,961), New Haven co., W Conn., on the Naugatuck River; settled 1674, inc. as a city 1853. The city, once famous for its brass industry, is a financial and commercial center of W Connecticut. , Conn.--(BUSINESS WIRE)--Oct. 19, 1995--Center Financial Corporation (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 : CFCX), the holding company for Centerbank, today reported net income of $5.2 million, or $.41 per share, for the quarter ended Sept. 30, 1995, an increase of 49% over net income of $3.5 million, or $.28 per share, for the third quarter of 1994. Net income for the nine months ended Sept. 30, 1995 was $14.9 million, or $1.18 per share, compared with net income of $2.3 million, or $.18 per share, for the comparable 1994 period. Net income for the quarter ended Sept. 30, 1995 included a $1.0 million reduction in the FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). insurance assessment, which is expected to continue. Net income for the nine month period ended Sept. 30, 1995 included gains of $4.9 million from the sale of two Centerbank branches and $.8 million from the adoption of Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. Rights." The results also include a total charge of $6.7 million related to "High Performance '97." Net income for the nine month period ended Sept. 30, 1994 included the results of a bulk sale of $108.9 million of subperforming and 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. . Excluding the effects of the sale, net income for the nine month period ended Sept. 30, 1994 would have been $8.9 million, or $.71 per share. In making the announcement, Center Financial President and Chief Executive Officer 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. J. Narkis noted improvement in noninterest income for the quarter resulting from increased activity at the company's mortgage banking subsidiary, Centerbank Mortgage Company. "Closing volume for the third quarter of 1995 was one of the highest seen at Centerbank Mortgage Company in the past five years, with new applications more than double that of one year ago. In an industry where competition is fierce and margins are thin, particularly in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. , the mortgage company's national scope provides the opportunity to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. loans in other, more profitable markets." Narkis continued, "On the bank side, noninterest income was relatively unchanged from the third quarter of 1994, with noninterest expense moving in a positive direction on a quarter to quarter basis. Generating new sources of fee income both internally and through acquisition, and further reducing the company's noninterest expense, remains our primary focus in pursuing our high performance objectives." Net interest margin for the quarter ended Sept. 30, 1995 was 3.42%, down from 4.01% a year earlier. Total 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. at Sept. 30, 1995 was $196.6 million or 6.11% of total assets. This represents a $22.7 million increase from the $173.9 million reported at Sept. 30, 1994. Total assets were $3.2 billion at the close of the third quarter, a 9.9% increase over the third quarter of 1994. Book value at Sept. 30, 1995 was $15.33 per share. Centerbank's third quarter subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. note offering further enhanced the company's capital ratios. The bank's Leverage ratio was 5.53%; Total capital ratio was 10.81%; and Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. ratio was 8.38% at Sept. 30, 1995, all well above the levels ascribed to well-capitalized financial institutions. Center Financial's Leverage ratio was 5.55%; Total capital ratio was 10.85%; and Tier 1 capital ratio was 8.42% at Sept. 30, 1995. It was also announced that 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 dividend of $.05 per share, payable Nov. 13, 1995, to shareholders of record on Nov. 3. This is the company's fourth consecutive quarterly dividend since restoring the dividend in the first quarter of this year, with the payment of $.05 per share on Feb. 28, 1995. Center Financial Corporation is the holding company for Centerbank, Centerbank Mortgage Company, Center Capital Corporation, and Affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: Business Credit Corporation. Upon completion of its acquisitions of Ansonia-based Great Country Bank and Watertown-based Heritage Bank, Center Financial Corporation will have assets of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.5 billion. Established in 1850, Centerbank delivers banking services throughout central Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). and is insured The person who obtains or is otherwise covered by insurance on his or her health, life, or property. The insured in a policy is not limited to the insured named in the policy but applies to anyone who is insured under the policy. insured n. by the FDIC. Centerbank Mortgage Company is a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. mortgage banking company with a residential servicing portfolio of over $6.0 billion, operating through a nationwide network of over twenty 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, including partnerships with affinity groups A special interest group. This is a marketing term for a group of people with similar interests. and real estate brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. companies under its subsidiary, The Mortgage Corner Inc., eleven wholesale/correspondent offices, and Center Credit Corporation, a newly-formed national consumer finance company. Center Capital Corporation is an equipment leasing Equipment Leasing is a financing option to lease equipment for a certain amount of time. Leasing Benefits
CENTER FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
(In thousands, except share amounts)
Sept 30, Dec 31, Sept 30,
1995 1994 1994
Assets
Cash and due from banks $ 56,170 $ 57,993 $ 58,562
Federal funds sold 20,000 - -
Securities:
Available for sale
(amortized cost: $37,939,
$81,796, and $99,220) 41,261 82,184 100,487
Held to maturity (fair
value: $314,950,
$396,814 and $402,524) 315,741 412,309 411,666
Total securities 357,002 494,493 512,153
Assets held for bulk sale,
at fair value:
Loans 2,273 - -
Total assets held for
bulk sale 2,273 - -
Loans and leases:
Residential first mortgage
loans available for
sale 191,960 115,581 163,612
Residential first mortgage
loans held for
investment 1,449,161 1,305,397 1,106,192
Consumer home equity
loans 251,460 267,980 267,612
Other consumer loans 105,219 76,458 70,359
Commercial first mortgage
loans:
Permanent 275,769 257,609 253,312
Construction 26,567 12,213 11,486
Other commercial loans 102,200 101,444 96,701
Leases 202,756 203,869 204,467
Allowance for loan and
lease losses (36,878) (40,745) (44,333)
Total loans and leases,
net 2,568,214 2,299,806 2,129,408
Real estate owned, net 24,070 31,605 34,680
Premises and equipment, net 41,006 42,712 43,165
Accrued interest receivable 18,858 16,957 16,503
Purchased mortgage
servicing rights 64,666 54,335 54,730
Excess servicing fees
receivable 14,552 12,614 16,078
Deferred tax assets, net 14,195 18,900 19,715
Other assets 37,125 32,683 43,331
$3,218,131 $3,062,098 $2,928,325
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 182,801 $ 177,136 $ 171,203
Savings 661,777 764,277 792,836
Money market 126,355 118,653 127,531
Time 1,205,053 1,077,920 1,059,441
Total deposits 2,175,986 2,137,986 2,151,011
Escrow on first mortgage
loans 57,697 57,389 58,036
Short-term borrowings 385,595 337,817 218,070
Long-term borrowings 365,979 319,399 299,657
Other liabilities 36,254 28,576 24,502
3,021,511 2,881,167 2,751,276
Shareholders' equity:
Preferred stock - voting; no
par value; 1,000,000
authorized shares; issued
and outstanding - none - - -
Preferred stock -
nonvoting; no par value;
10,000,000 authorized
shares; issued and
outstanding - none - - -
Common stock; par value
$1; 75,000,000 authorized
shares; 12,822,323,
12,649,354, and 12,643,183
shares issued and
outstanding at September 30,
1995, December 31, 1994
and September 30, 1994,
respectively 12,822 12,649 12,643
Paid-in capital 138,862 138,063 138,010
Retained earnings 43,025 29,996 25,667
Net unrealized gain on
securities available
for sale, net of tax
effect 1,911 223 729
196,620 180,931 177,049
$ 3,218,131 $ 3,062,098 $ 2,928,325
-0-
CENTER FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
Interest and Dividend Income
Interest and fees on loans
and leases:
Residential first mortgage
loans $29,310 $21,207 $83,053 $67,236
Home equity and other
consumer loans 8,369 6,869 24,473 19,345
Commercial first mortgage
loans 7,656 6,295 21,169 18,277
Other commercial loans 2,403 1,994 7,378 5,927
Leases 4,340 4,099 12,971 12,015
Total interest and fees on
loans and leases 52,078 40,464 149,044 122,800
Interest on mortgage-
backed securities 6,731 5,996 20,205 12,512
Interest and dividends on
other earning assets 565 798 1,713 2,805
Total interest income 59,374 47,258 170,962 138,117
Interest Expense
Interest on deposits 21,019 16,598 59,003 48,093
Escrow on first mortgage
loans 188 206 590 650
Interest on short-term
borrowings 7,136 1,274 18,994 2,968
Interest on long-term
borrowings 5,595 3,794 15,572 11,593
Total interest expense 33,938 21,872 94,159 63,304
Net interest income 25,436 25,386 76,803 74,813
Provision for loan and lease losses 1,248 2,067 3,744 17,340 Net interest income after provision for loan and lease losses 24,188 23,319 73,059 57,473
Noninterest Income
Customer service fees 1,437 1,479 4,256 4,084
Mortgage servicing
income, net 3,103 2,723 8,782 6,078
Gain on sale of loans and
servicing rights, net 2,076 847 6,043 5,997
Gain on sale of securities,
net 453 32 1,715 773
Other income 577 1,144 7,281 3,221
Total noninterest income 7,646 6,225 28,077 20,153
Noninterest Expense
Salaries and employee
benefits 11,099 11,375 34,817 37,312
Occupancy and equipment 3,827 4,393 11,859 12,833
Professional and other
services 2,687 2,700 8,143 7,533
Net cost of real estate
owned 1,843 1,693 4,322 7,365
FDIC and state assessment 88 1,592 3,207 4,481
Advertising and public
relations 855 786 2,650 2,636
Other expense 3,723 1,429 14,112 9,761
Total noninterest expense 24,122 23,968 79,110 81,921
Income (loss) before
income taxes 7,712 5,576 22,026 (4,295)
Income tax expense(benefit) 2,484 2,104 7,094 (6,575)
Net income (loss) $ 5228 $ 3,472 $ 14,932 $ 2,280
Net income (loss) per common share $ 0.41 $ 0.28 $ 1.18 $ 0.18 Average common shares outstanding 12,753,416 12,637,398 12,706,130 12,540,862 -0-
CENTER FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
1995 1994 1995 1994
Statement of Operations Interest and dividend income $ 59,374 $ 47,258 $ 170,962 $ 138,117 Interest expense 33,938 21,872 94,159 63,304 Net interest income 25,436 25,386 76,803 74,813 Provision for loan and lease losses 1,248 2,067 3,744 17,340 Noninterest income 7,646 6,225 28,080 20,153 Noninterest expense 24,122 23,968 79,110 81,921 Income (loss) before income taxes 7,712 5,576 22,029 (4,295) Income tax expense(benefit) 2,484 2,104 7,094 (6,575) Net income (loss) $ 5,228 $ 3,472 $ 14,935 $ 2,280 Net income (loss) per common share $ 0.41 $ 0.28 $ 1.18 $ 0.18 Average Balance Sheet
Loans and leases, net $ 2,513,015 $ 2,092,096 $2,422,710 $2,157,344
Securities and other
interest-earning
assets 464,463 441,114 467,027 341,848
Total average interest-
earning assets 2,977,478 2,533,210 2,889,737 2,499,192
Cash and due from banks 53,646 55,706 52,708 61,074
Other assets 207,962 230,571 204,386 251,932
Total average assets $3,239,086 $ 2,819,487 $3,146,831 $2,812,198
Deposits $ 2,124,278 $ 2,177,879 $2,115,676 $2,187,109
Escrow on first mortgage
loans 53,634 59,730 52,503 59,373
Short-term borrowings 471,224 149,579 408,630 140,126
Long-term borrowings 343,003 228,176 336,344 229,054
Other liabilities 53,412 30,213 43,179 22,635
Shareholders' equity 193,535 173,910 190,499 173,901
Total average liabilities
and shareholders'
equity $ 3,239,086 $ 2,819,487 $3,146,831 $2,812,198
Selected Ratios and Other Data Return (loss) on average assets 0.65% 0.49% 0.63% 0.11% Return (loss) on average shareholders' equity 10.81 7.99 10.48 1.75 Dividend payout ratio 12.20 - 12.76 - Average shareholders' equity to average assets 5.97 6.17 6.05 6.18 Total shareholders' equity to total assets 6.11 6.05 Yield on interest-earning assets 7.98 7.46 7.91 7.39 Cost of interest-bearing liabilities 4.83 3.58 4.58 3.5 Net interest spread 3.15 3.88 3.33 3.89 Net interest margin 3.42 % 4.01 % 3.55 % 4.00 % Per common share at September 30: Book value 15.33 14.00 Market value (close) 19.00 13.75 Regulatory Ratios Centerbank: Leverage ratio 5.53 % 5.48 % Tier 1 capital to risk-weighted assets 8.38 8.42 Total capital to risk-weighted assets 10.81 9.68 Center Financial Corporation: Leverage ratio 5.55 - Tier 1 capital to risk-weighted assets 8.42 - Total capital to risk-weighted assets 10.85 % - -0-
CENTER FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)
Summary of Nonperforming Assets
Sept 30, Dec 31, Sept 30,
1995 1994 1994
Nonaccruing loans and leases:
Residential first mortgage loans:
1 - 4 family $ 18,194 $ 20,740 $ 18,924
Other 2,724 - -
Home equity and other
consumer loans 2,444 3,026 2,383
Commercial first mortgage loans: 17,430 16,460 17,120
Other commercial loans 6,468 7,044 7,365
Leases 3,891 3,222 3,334
Total nonaccruing loans
and leases, net 51,151 50,492 49,126
Real estate owned ("REO"):
Commercial 23,947 33,227 37,703
Residential 4,794 4,496 4,334
Total real estate owned 28,741 37,723 42,037
Total nonperforming assets $ 79,892 $ 88,215 $ 91,163
Net loan and lease charge-offs during the quarter $ 6,179 $ 6,110 $ 1,754 Allowance for loan and lease losses (2) 36,878 40,745 44,333 Allowance for losses on REO 4,671 6,118 7,357 Net loan and lease charge-offs to average loans and leases 0.25% 0.28% 0.08% Allowance for loan and lease losses to average loans and leases 1.47 1.88 2.05 Allowance for loan and lease losses to nonaccruing loans and leases 72.1 80.7 90.24 Allowances for loan, lease and REO losses to nonperforming assets 52.01 53.12 56.7 Nonperforming assets to related asset categories 3.03 3.71 4.11 Nonperforming assets to total assets 2.48% 2.88% 3.11% Summary of Impaired Loans
As a result of the adoption of Statement of Financial Accounting
Standards Nos. 114 and 118 ("SFAS Nos. 114 and 118"), Centerbank
reported $23,898 of impaired loans at September 30, 1995. The
components of the impaired loan balance were as follows: $17,430 of
commercial mortgage loans and $6,468 of other commercial loans.
Summary of Restructured Loans
The total in the "Total nonaccruing loans and leases, net" category
listed above includes $1,067 and $159 of loans that were restructured
as of September 30, 1995 and December 31, 1994, respectively. There
were no restructured loans at September 30, 1994.
(1) The amount reported for September 30, 1995 includes $1,591 as an
allowance for credit losses on impaired loans totaling $7,567 in
accordance with the adoption of SFAS Nos. 114 and 118.
CONTACT: Center Financial Corporation Patricia B. Sweet, 203/578-6296 |
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