Centerbank earnings up sharply; dividend resumed.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)--Jan. 26, 1995--Centerbank (NASDAQ/CTBX) today announced net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $4.3 million or 35 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 fourth quarter of 1994. This represents a 49 percent increase over net operating income of $2.9 million or 24 cents per share for the fourth quarter of 1993. For the year ended Dec. 31, 1994, normalized earnings Normalized Earnings 1. Earnings adjusted for cyclical ups and downs in the economy. 2. On the balance sheet, earnings adjusted to remove unusual or one-time influences. Notes: An example would be removing a land sale in which a large capital gain was realized. before the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. loss resulting from the first quarter sale 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. were $13.3 million or $1.06 per share. This represents an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. increase of 45 percent over net operating income (before the cumulative effect of the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 109) of $9.2 million, or 75 cents per share, for the year ended 1993. For the year ended Dec. 31, 1994, Centerbank posted net operating income of $6.6 million, or 53 cents per share. Commenting on the results, Centerbank Chairman 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 company's continuing focus on reducing expenses and increasing efficiency contributed substantially to the positive results announced here today. Although I am gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. with our progress to date, we will further intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: our efforts to achieve the earnings of a high performing company." Narkis continued, "Also bolstering the company's quarterly results was a gain on the sale of 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 by Centerbank Mortgage Company. The industry-wide practice of selling originated mortgage servicing rights to enhance revenue is routine to CMC (Common Messaging Calls) A programming interface specified by the XAPIA as the standard messaging API for X.400 and other messaging systems. CMC is intended to provide a common API for applications that want to become mail enabled. 1. and was done in the quarter to partially counter the effects of sluggish loan volume. Additionally, adjustments in market focus and staffing over the year have helped the mortgage company maintain stability in this adverse interest rate environment for mortgage banking." Centerbank 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 5 cents per share, payable Feb. 28, 1995, to shareholders of record on Feb. 10. Centerbank dividends were suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. in the first quarter of 1990. In making the announcement, Narkis stated, "In 1990, I told our shareholders that a sound dividend policy must be based on both earnings capacity and balance sheet strength. At that time, we resolved to return the company to profitability and improve the quality of the balance sheet. With the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of a regular quarterly dividend we are confirming the progress we have made over the past five years. Indeed it is a personal pleasure for me to see a dividend now being paid to those shareholders who stood by patiently while supporting our efforts to bring the company back to health. "Also, I am happy to report that Centerbank made further progress in the resolution of its problem assets, as reflected by the company's lowest provision for REO reo Noun NZ a language [Maori] losses since 1989," Narkis concluded. The company's level of nonperforming assets stood at $88.2 million at the close of the fourth quarter, a 35 percent reduction from $135.5 million a year ago. As a percent of total assets, NPAs dropped to 2.88 percent at Dec. 31, 1994. The allowance for loan and lease losses at Dec. 31, 1994 was $40.7 million or 80.70 percent of nonaccruing loans and leases. Book value per share was $14.30 at Dec. 31, 1994. 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 $180.9 million, or 5.91 percent of total assets, compared with $171.5 million at the end of 1993. Total assets amounted to $3.1 billion, a 7 percent increase over year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1993. -0- CENTERBANK AND SUBSIDIARIES SELECTED CONSOLIDATED FINANCIAL DATA (UNAUDITED) (Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
1994 1993 1994 1993
Statement of Operations
Interest income $ 50,242 $ 48,444 $ 188,359 $ 187,626
Interest expense 25,666 21,252 88,970 87,315
Net interest income 24,576 27,192 99,389 100,311
Provision for loan and
lease losses 2,067 4,854 19,407 11,600
Noninterest income 8,485 7,736 28,638 27,929
Noninterest expense 25,056 26,549 106,977 103,012
Income before income
taxes and cumulative
effect of change in
accounting for income
taxes 5,938 3,525 1,643 13,628
Income taxes (benefit) 1,609 618 (4,966) 4,413
Income before cumula-
tive effect of change
in accounting for
income taxes 4,329 2,907 6,609 9,215
Cumulative effect of change
in accounting for income
taxes - - - 4,547
Net income $ 4,329 $ 2,907 $ 6,609 $ 13,762
Per common share:
Income before
cumulative effect of
change in accounting
for income taxes $ 0.35 $ 0.24 $ 0.53 $ 0.75
Net income $ 0.35 $ 0.24 $ 0.53 $ 1.12
Average Balance Sheet
Loans and leases, net $2,195,192 $2,323,686 $2,167,008 $2,180,962
Securities and other earning
assets 519,572 174,378 386,642 173,330
Total average earning
assets 2,714,764 2,498,064 2,553,650 2,354,292
Cash and due from banks 55,005 86,854 59,735 71,538
Other assets 215,473 278,807 261,132 274,667
Total average assets $2,985,242 $2,863,725 $2,874,517 $2,700,497
Deposits $2,144,341 $2,202,923 $2,176,272 $2,183,792
Escrow on first mortgage
loans 54,968 73,195 58,263 63,407
Short-term borrowings 263,618 158,600 171,253 88,681
Long-term borrowings 316,104 219,526 250,995 176,464
Other liabilities 28,615 39,580 43,160 21,030
Shareholders' equity 177,596 169,901 174,574 167,123
Total average liabilities
and shareholders'
equity $2,985,242 $2,863,725 $2,874,517 $2,700,497
Selected Ratios and Other Data Return on average assets (1) 0.58 % 0.41 % 0.23 % 0.34 % Return on average shareholders' equity (1) 9.75 6.84 3.79 5.51 Average shareholders' equity to average assets 5.95 5.93 6.07 6.19 Total shareholders' equity to total assets 5.91 6.01 Leverage ratio 5.44 5.67 Tier 1 capital/risk-weighted assets 8.38 8.68 Total capital/risk-weighted assets 9.64 9.95 Yield on interest-earning assets 7.40 7.78 7.38 7.97 Cost of interest-bearing liabilities 3.94 3.64 3.62 3.79 Net interest spread 3.46 4.14 3.76 4.18 Net interest margin 3.62% 4.35% 3.90% 4.26% Per common share at December 31: Book value $ 14.30 $ 13.88 Market value (close) $ 10.00 $ 11.63 (1) Before cumulative effect of change in accounting for income taxes in 1993. -0- CENTERBANK AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (UNAUDITED) (Dollars in thousands) Summary of Nonperforming Assets
December 31, September 30,
1994 1993 1994 1993
Nonaccruing loans and leases:
Residential first mortgage loans $ 20,740 $17,421 $ 18,924 $ 16,611
Home equity and other consumer
loans 3,026 2,500 2,383 2,788
Commercial first mortgage loans:
Permanent 16,460 40,875 17,120 47,548
Construction - - - 3,734
Other commercial loans 7,044 11,368 7,365 13,339
Leases 3,222 4,799 3,334 4,896
Loan loss sharing (1) -- (14,382) -- (19,903)
Total nonaccruing loans
and leases, net 50,492 62,581 49,126 69,013
Real estate owned ("REO"):
By foreclosure 33,825 50,765 34,834 54,838
In-substance foreclosure 3,898 22,175 7,203 23,859
Total real estate owned 37,723 72,940 42,037 78,697
Total nonperforming assets $ 88,215 $135,521 $ 91,163 $147,710
Net loan and lease charge-offs during the quarter $ 6,110 $ 7,539 $ 1,754 $ 3,158 Allowance for loan and lease losses $ 40,745 $54,191 $ 44,333 $ 57,253 Allowance for losses on REO $ 6,118 $ 6,741 $ 7,357 $ 7,293 Net loan and lease charge-offs to average loans and leases 0.28% 0.32% 0.08% 0.14% Allowance for loan and lease losses to average loans and leases 1.88 2.48 2.05 2.68 Allowance for loan and lease losses to nonaccruing loans and leases 80.70 86.59 90.24 82.96 Allowances for loan, lease and REO losses to nonperforming assets 53.12 44.96 56.70 43.70 Nonperforming assets to related asset categories 3.71 5.54 4.11 6.07 Nonperforming assets to total assets 2.88% 4.75% 3.11% 5.29%
Summary of Restructured Loans
Accruing loans:
First mortgage permanent loans $ - $11,957 $ - $ 11,983
Nonaccruing loans (included above):
Principal balance reduced for
all cash received 159 13,811 - 17,444
Total restructured loans $159 $25,768 $ - $29,427
(1) Represents a reduction to nonperforming assets in accordance with a loan loss sharing agreement entered into with the FDIC that expired immediately after December 31, 1993. -0-
CENTERBANK AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share amounts) December 31, December 31,
1994 1993
Assets
Cash and due from banks $ 57,993 $ 68,944
Federal funds sold - 26,000
Securities:
Available for sale (cost: $81,796) 82,184 -
Held to maturity (fair value: $396,814) 412,309 -
Held for investment (fair value:
$168,849) - 163,752
Total securities 494,493 163,752
Loans and leases:
Residential first mortgage loans
available for sale 153,522 572,546
Residential first mortgage loans held
for investment 1,267,456 862,904
Consumer home equity loans 267,980 286,134
Other consumer loans 76,458 52,326
Commercial first mortgage loans:
Permanent 257,609 308,628
Construction 12,213 12,968
Other commercial loans 101,444 86,929
Leases 203,869 191,627
Allowance for loan and lease losses (40,745) (54,191)
Total loans and leases, net 2,299,806 2,319,871
Real estate owned, net 31,605 66,199
Premises and equipment, net 42,712 37,326
Accrued interest receivable 16,957 15,699
Purchased mortgage servicing rights 54,335 59,758
Other assets 64,197 94,055
Total assets $3,062,098 $2,851,604
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 177,136 $ 293,377
Savings 764,277 807,237
Money market 118,653 136,646
Time 1,077,920 993,789
Total deposits 2,137,986 2,231,049
Escrow on first mortgage loans 57,389 76,134
Short-term borrowings 337,817 126,200
Long-term borrowings 319,399 218,450
Other liabilities 28,576 28,304
Total liabilities 2,881,167 2,680,137
Shareholders' equity: Preferred stock - voting; no par value; 1,000,000 authorized shares; issued and outstanding - none - - Preferred stock - non-voting; no par value; 10,000,000 authorized shares; issued and outstanding - none - - Common stock; par value $1; 75,000,000 authorized shares; 12,649,354 and 12,349,853 shares issued and outstanding at December 31, 1994 and December 31, 1993, respectively 12,649 12,350 Paid-in capital 138,063 135,730 Retained earnings 29,996 23,387 Net holding gains on securities available for sale, net of tax effect 223 -
Total shareholders' equity 180,931 171,467
Total liabilities and shareholders'
equity $3,062,098 $2,851,604
-0-
CENTERBANK AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
1994 1993 1994 1993
Interest and Dividend Income
Interest on loans and leases:
Residential first mortgage
loans $ 21,765 $ 25,863 $ 89,001 $ 96,184
Home equity and other
consumer loans 7,470 6,348 26,815 26,320
Commercial first mortgage
loans 5,889 7,129 24,166 29,048
Other commercial loans 2,708 1,931 8,635 8,562
Leases 4,210 3,982 16,225 15,582
Total interest on loans and
leases 42,042 45,253 164,842 175,696
Interest on mortgage-backed
securities 7,897 2,308 20,409 7,800
Interest and dividends on other
earning assets 303 883 3,108 4,130
Total interest income 50,242 48,444 188,359 187,626
Interest Expense
Interest on deposits 17,096 15,875 65,189 69,450
Escrow on first mortgage loans 210 394 860 915
Interest on short-term
borrowings 3,208 1,413 6,176 2,964
Interest on long-term
borrowings 5,152 3,570 16,745 13,986
Total interest
expense 25,666 21,252 88,970 87,315
Net interest income 24,576 27,192 99,389 100,311
Provision for loan and
lease losses 2,067 4,854 19,407 11,600
Net interest income after
provision for loan and
lease losses 22,509 22,338 79,982 88,711
Noninterest Income
Customer service fees 1,461 1,237 5,545 4,840
Mortgage servicing income, net 3,067 336 9,145 6,054
Gain on sale of loans and
servicing rights, net 2,739 2,258 8,736 8,225
Gain on sale of
securities, net - 2,484 773 2,651
Other income 1,218 1,421 4,439 6,159
Total noninterest income 8,485 7,736 28,638 27,929
Noninterest Expense
Salaries and employee benefits 12,227 13,045 49,539 47,195
Occupancy and equipment 4,411 4,013 17,244 15,093
Advertising and public
relations 824 995 3,460 2,938
Professional and other
services 2,519 2,697 10,052 10,223
Net cost of real
estate owned 1,325 2,331 8,690 9,810
FDIC and state assessment 1,591 1,583 6,072 6,467
Other expense 2,159 1,885 11,920 11,286
Total noninterest
expense 25,056 26,549 106,977 103,012
Income before income
taxes and cumulative
effect of change in
accounting for
income taxes 5,938 3,525 1,643 13,628
Income taxes (benefit) 1,609 618 (4,966) 4,413
Income before cumulative
effect of change in
accounting for
income taxes 4,329 2,907 6,609 9,215
Cumulative effect of change in
accounting for income taxes - - - 4,547
Net income $ 4,329 $ 2,907 $ 6,609 $13,762
Per common share:
Income before cumulative
effect of change in
accounting for income
taxes $ 0.35 $ 0.24 $ 0.53 $ 0.75
Net income $ 0.35 $ 0.24 $ 0.53 $ 1.12
Average shares
outstanding 12,647,418 12,325,751 12,567,720 12,307,894
CONTACT: Centerbank, Waterbury Patricia B. Sweet, 203/578-6296 |
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