Center Financial posts record earnings for second 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)--July 24, 1995--Center Financial Corp. (NASDAQ/CFCX), formerly Centerbank (NASDAQ/CTBX), reported record net income of $5.2 million, or $.41 per share, for the quarter ended June June: see month. 30, 1995, an increase of 41% over net income of $3.7 million, or $.30 per share, for the second quarter of 1994. Net income for the six months ended June 30, 1995, was $9.7 million, or $.76 per share, compared to a net loss of $1.2 million, or $.10 per share, for the comparable 1994 period. Net income for the three month and six month periods ended June 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 charge of $5.7 million related to "High Performance '97," the corporation's downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing and reengineering Using information technology to improve performance and cut costs. Its main premise, as popularized by the book "Reengineering the Corporation" by Michael Hammer and James Champy, is to examine the goals of an organization and to redesign work and business processes from the ground up plan. Net income for the six month period ended June 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 six month period ended June 30, 1994 would have been $5.4 million, or $.43 per share. "Achieving record net income from our core operations while restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). the company proves our strength and flexibility," stated 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. "The ongoing efforts to improve our earnings, and our pending acquisition of Great Country Bank, should increase the probability probability, in mathematics, assignment of a number as a measure of the "chance" that a given event will occur. There are certain important restrictions on such a probability measure. of attaining our `High Performance '97' objectives." On July July: see month. 11, 1995, Center Financial Corp. signed a definitive agreement to purchase Great Country Bank, a $336 million institution with seven branch offices serving the banking needs of Ansonia Ansonia (ănsō`nēə), city (1990 pop. 18,403), New Haven co., SW Conn., on the Naugatuck River; inc. as a city 1893. Its manufactures include brass and copper products, iron castings, foundry products, plastics, and electronic devices. , Shelton Shelton, city (1990 pop. 35,418), Fairfield co., SW Conn., on the Housatonic River opposite Derby; settled 1697, set off from Stratford 1789, inc. as a city 1915. Metal products, furniture, and electronic equipment are among the city's manufactures. , Beacon Beacon, city (1990 pop. 13,243), Dutchess co., SE N.Y., on the E bank of the Hudson River; settled 1663, inc. in 1913 when Fishkill Landing and Matteawan villages were united. Falls, Hamden Hamden, town (1990 pop. 52,434), New Haven co., S Conn.; inc. 1786. The town, settled c.1638, was named for John Hampden, the English Puritan. A residential and manufacturing suburb of New Haven, of which it was once a part, Hamden makes machinery, electrical and and Seymour Seymour. 1 Town (1990 pop. 14,288), New Haven co., SW Conn., on the Naugatuck River; settled c.1678, inc. 1850. The town's manufacturing industries decline since the mid-1900s, but cable and wire, electronic components and hardware, car racks, and , and the surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. areas. The acquisition will increase the company's assets to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.4 billion, bring the total number of Centerbank branches to 43, and establish its presence in south 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). . Net interest margin for the quarter ended June 30, 1995 was 3.57%, down from 3.92% a year earlier; net interest income for the period increased by approximately $1.1 million. At June 30, 1995, 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. stood at $190.9 million or 6.13% of total assets. This represents a $17.3 million increase from the $173.6 million reported at June 30, 1994. Total assets amounted to $3.1 billion at the close of the second quarter, a 12% increase over the second quarter of 1994. Book value at June 30, 1995 was $15.02 per share. It was also announced that the company's Board of Directors has 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 August 14, 1995, to shareholders of record on August 4. The company's dividend was restored in the first quarter of this year, with the payment of $.05 per share on Feb. 28, 1995. Center Financial Corp. is the newly-formed holding company for Centerbank, Centerbank Mortgage Company, Center Capital Corp., 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 Corp. Effective Monday Monday: see week. , July 10, 1995, Center Financial Corp. began trading under the 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 symbol "CFCX." Upon formation of the holding company, each share of Centerbank common stock outstanding automatically became a share of Center Financial Corp. New certificates will not be issued unless requested by the shareholder. Established in 1850, Centerbank delivers banking services throughout central Connecticut 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 FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (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., and eleven wholesale/correspondent offices. Center Capital Corp. is an equipment leasing Equipment Leasing is a financing option to lease equipment for a certain amount of time. Leasing Benefits
Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. . -0- CENTERBANK and SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (Unaudited) (Dollars in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
Statement of Operations
Interest and dividend
income $ 57,020 $ 45,652 $ 111,588 $ 90,859
Interest expense 31,394 21,166 60,221 41,432
Net interest income 25,626 24,486 51,367 49,427
Provision for loan and
lease losses 1,248 1,385 2,496 15,273
Noninterest income 13,572 7,963 20,435 13,928
Noninterest expense 29,966 27,500 54,988 57,953
Income (loss) before
income taxes 7,984 3,564 14,318 (9,871)
Income tax expense
(benefit) 2,739 (179) 4,610 (8,679)
Net income (loss) $ 5,245 $ 3,743 $ 9,708 $ (1,192)
Net income (loss) per common share $ 0.41 $ 0.30 $ 0.76 $ (.10)
Average Balance Sheet
Loans and leases, net $2,425,779 $2,149,644 $2,377,465 $2,190,794
Securities and other
interest-earning
assets 448,748 355,696 468,330 291,393
Total average
interest-earning
assets 2,874,527 2,505,340 2,845,795 2,482,187
Cash and due from banks 51,199 58,773 52,757 63,804
Other assets 198,990 262,047 203,542 264,380
Total average assets $3,124,716 $2,826,160 $3,102,094 $2,810,371
Deposits $2,123,462 $2,195,605 $2,123,121 $2,191,801
Escrow on first
mortgage loans 57,858 68,533 51,928 59,192
Short-term borrowings 381,868 130,138 376,814 135,320
Long-term borrowings 341,910 238,427 332,959 229,500
Other liabilities 31,009 21,933 30,897 24,483
Shareholders' equity 188,609 171,524 186,375 170,075
Total average liabilities
and shareholders'
equity $3,124,716 $2,826,160 $3,102,094 $2,810,371
Selected Ratios and Other Data Return (loss) on average assets 0.67 % 0.53 % 0.63 % (0.08) % Return (loss) on average shareholders' equity 11.12 8.73 10.42 (1.40) Dividend payout ratio 12.09 - 13.06 - Average shareholders' equity to average assets 6.04 6.07 6.01 6.05 Total shareholders' equity to total assets 6.13 6.24 Leverage ratio 5.72 5.63 Tier 1 capital to risk-weighted assets 8.71 8.35 Total capital to risk-weighted assets 9.97 9.62 Yield on interest-earning assets 7.93 7.29 7.84 7.32 Cost of interest-bearing liabilities 4.59 3.58 4.43 3.55 Net interest spread 3.34 3.71 3.41 3.77 Net interest margin 3.57 % 3.92 % 3.61 % 3.99 % Per common share at June 30: Book value $ 15.02 $ 13.76 Market value (close) $ 14.50 $ 17.50 -0- CENTERBANK and SUBSIDIARIES FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands)
Summary of Nonperforming Assets
(June 30, 1994 amounts exclude nonperforming
assets held for bulk sale) (1)
June 30, December 31, June 30,
1995 1994 1994
Nonaccruing loans and leases:
Residential first mortgage loans:
1 - 4 family $ 18,343 $ 20,740 $ 17,627
Other 2,422 - -
Home equity and other
consumer loans 2,717 3,026 2,316
Commercial first mortgage loans 20,757 16,460 18,458
Other commercial loans 6,287 7,044 10,565
Leases 2,619 3,222 3,526
Total nonaccruing loans
and leases, net 53,145 50,492 52,492
Real estate owned ("REO"):
Commercial 27,313 33,227 38,228
Residential 4,263 4,496 3,665
Total real estate owned 31,576 37,723 41,893
Total nonperforming assets $ 84,721 $ 88,215 $ 94,385
Net loan and lease charge-offs during the quarter $ 1,450 $ 6,110 $ 1,713 Allowance for loan and lease losses (2) 41,561 40,745 42,933 Allowance for losses on REO 6,830 6,118 6,289 Net loan and lease charge-offs to average loans and leases 0.06 % 0.28 % 0.08 % Allowance for loan and lease losses to average loans and leases 1.71 1.88 1.96 Allowance for loan and lease losses to nonaccruing loans and leases 78.20 80.70 81.79 Allowances for loan, lease and REO losses to nonperforming assets 57.12 53.12 52.15 Nonperforming assets to related asset categories 3.39 3.71 4.35 Nonperforming assets to total assets 2.72 % 2.88 % 3.39 %
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 $27,044 of impaired loans at June 30, 1995.
The components of the impaired loan balance were as follows: $20,757
of commercial mortgage loans and $6,287 of other commercial loans.
Summary of Restructured Loans The total in the "Total nonaccruing loans and leases, net" category listed above includes $158 and $159 of loans that were restructured as of June 30, 1995 and December 31, 1994, respectively. There were no restructured loans at June 30, 1994. (1) Excluded from nonperforming assets at June 30, 1994 was $6,524 real estate owned. This amount appeared as a separate line items on the consolidated balance sheets. (2) The amount reported for June 30, 1995 includes $2,252 as an allowance for credit losses on impaired loans totaling $17,082 in accordance with the adoption of SFAS Nos. 114 and 118. -0-
CENTERBANK AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except per
share amounts)
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
Interest and Dividend Income
Interest and fees on loans
and leases:
Residential first mortgage
loans $ 27,902 $ 22,442 $ 53,743 $ 46,029
Home equity and other
consumer loans 8,361 6,461 16,104 12,476
Commercial first mortgage
loans 7,020 5,468 13,513 11,982
Other commercial loans 2,516 2,106 4,975 3,933
Leases 4,287 3,943 8,631 7,916
Total interest and fees on
loans and leases 50,086 40,420 9,696 82,336
Interest on mortgage-
backed securities 6,286 4,182 13,474 6,516
Interest and dividends on
other earning assets 648 1,050 1,148 2,007
Total interest income 57,020 45,652 111,588 90,859
Interest Expense
Interest on deposits 20,006 16,037 37,984 31,495
Escrow on first mortgage
loans 233 252 402 444
Interest on short-term
borrowings 6,065 456 11,858 1,694
Interest on long-term
borrowings 5,090 4,421 9,977 7,799
Total interest expense 31,394 21,166 60,221 41,432
Net interest income 25,626 24,486 51,367 49,427
Provision for loan and lease losses 1,248 1,385 2,496 15,273 Net interest income after provision for loan and lease losses 24,378 23,101 48,871 34,154
Noninterest Income
Customer service fees 1,420 1,403 2,819 2,605
Mortgage servicing
income, net 2,579 2,663 5,569 3,355
Gain on sale of loans and
servicing rights, net 2,788 2,757 3,968 5,150
Gain on sale of securities,
net 817 1 1,262 741
Other income 5,968 1,139 6,817 2,077
Total noninterest income 13,572 7,963 20,435 13,928
Noninterest Expense
Salaries and employee
benefits 11,745 12,811 23,718 25,937
Occupancy and equipment 3,898 4,297 8,032 8,440
Professional and other
services 2,640 1,058 5,456 1,850
Net cost of real estate
owned 1,191 2,586 2,479 4,833
FDIC and state assessment 1,559 1,732 3,119 5,672
Advertising and public
relations 894 1,465 1,795 2,889
Other expense 8,039 3,551 10,389 8,332
Total noninterest expense 29,966 27,500 54,988 57,953
Income (loss) before
income taxes 7,984 3,564 14,318 (9,871)
Income tax expense(benefit) 2,739 (179) 4,610 (8,679)
Net income (loss) $ 5,245 $ 3,743 $ 9,708 $ (1,192)
Net income (loss) per common share $ 0.41 $ 0.30 $ 0.76 $ (.10) Average common shares outstanding 12,695,108 12,575,220 12,683,347 12,492,483 -0- CENTERBANK and SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) (In thousands, except share amounts)
June 30, December 31, June 30,
1995 1994 1994
Assets
Cash and due from banks $ 81,431 $ 57,993 $ 54,520
Federal funds sold - - 17,000
Securities:
Available for sale
(amortized cost: $51,983,
$81,796, and $91,911) 54,562 82,184 93,594
Held to maturity (fair
value: $350,733, $396,814
and $287,890) 351,935 412,309 294,723
Total securities 406,497 494,493 388,317
Assets held for bulk sale, at
fair value:
Real estate owned - - 6,524
Total assets held for bulk
sale - - 6,524
Loans and leases:
Residential first mortgage
loans available
for sale 138,345 115,581 284,948
Residential first mortgage
loans held for
investment 1,377,080 1,305,397 940,728
Consumer home equity
loans 259,461 267,980 272,162
Other consumer loans 97,266 76,458 64,762
Commercial first mortgage
loans:
Permanent 278,209 257,609 244,461
Construction 11,504 12,213 9,777
Other commercial loans 100,393 101,444 98,696
Leases 204,754 203,869 212,209
Allowance for loan and
lease losses (41,561) (40,745) (42,933)
Total loans and leases,
net 2,425,451 2,299,806 2,084,810
Real estate owned, net 24,746 31,605 35,604
Premises and equipment, net 41,584 42,712 43,570
Accrued interest receivable 16,898 16,957 15,226
Purchased mortgage
servicing rights 56,868 54,335 56,519
Excess servicing fees
receivable 12,248 12,614 16,500
Deferred tax assets, net 15,455 18,900 20,900
Other assets 32,448 32,683 42,772
$3,113,626 $3,062,098 $2,782,262
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 174,461 $ 177,136 $ 191,888
Savings 693,872 764,277 828,894
Money market 121,671 118,653 135,151
Time 1,112,103 1,077,920 1,033,566
Total deposits 2,102,107 2,137,986 2,189,499
Escrow on first mortgage
loans 68,792 57,389 76,453
Short-term borrowings 347,697 337,817 95,616
Long-term borrowings 370,330 319,399 220,620
Other liabilities 33,777 28,576 26,433
2,922,703 2,881,167 2,608,621
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; 12,712,506,
12,649,354, and 12,622,215
shares issued and
outstanding at June 30,
1995, December 31, 1994
and June 30, 1994,
respectively 12,713 12,649 12,622
Paid-in capital 138,291 138,063 137,856
Retained earnings 38,436 29,996 22,195
Net unrealized gain on
securities available for sale,
net of tax effect 1,483 223 968
190,923 180,931 173,641
$3,113,626 $3,062,098 $2,782,262
CONTACT: Center Financial Corp. Patricia B. Sweet, 203/578-6296 |
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