Central Bank announces corporate restructuring and projects resulting costs and savings.SOMERVILLE, Mass.--(BUSINESS WIRE)--March 14, 1996--Central Bank (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 : CEBK) today announced a restructuring plan intended to improve the bank's profitability and enhance stockholder value. The plan resulted from a comprehensive review of the bank's business strategies begun in July 1995. Upon the implementation of the plan, three branch banking offices as well as an operations facility and a 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. center are to be closed, and the bank's staff will be reduced accordingly. In connection with the office closures and staff reductions, based on the expectation that the restructuring will be fully effectuated within three to nine months, management projects that the bank will recognize a one-time restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and related expenses of approximately $700,000 to $900,000 (pre-tax) in the fiscal quarter and year ending March 31. Looking forward, the restructuring is projected to result in the reduction of the bank's annual operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by more than $1,000,000 (pre-tax), which will substantially enhance the bank's profitability measures, such as return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). and equity and earnings per share. Actual costs and savings in connection with the restructuring will depend on whether any of the offices to be closed can be sold, and the results of the regulatory review of the branch closure notices, the length of time necessary for the implementation of the restructuring and future circumstances affecting the financial markets, the banking industry or the bank in particular. Central Bank's restructuring resulted from management's ongoing review of the bank's strategic plan, in light of the bank's mission of serving the banking needs of the communities in its market area while serving the interests of its shareholders in a safe, sound and efficient manner. John Doherty John Doherty is the name of:
Central Bank's offices in Boston, on Innerbelt Road, Somerville and in Wakefield and its Elm Street operations facility and Stoneham loan origination center currently are expected to close by the end of the calendar year. Members of the bank's staff displaced in connection with the restructuring will be offered special severance benefits, including payments based on their seniority with the bank. The planned branch closings are subject to prior review by applicable regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . Central Bank also announced that the board of directors intends to form a holding company for the bank and, promptly thereafter, to adopt a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. A holding company structure would provide greater flexibility than is currently enjoyed by the bank and would permit the implementation of the intended stock repurchase program without the recognition of unfavorable federal income tax consequences that could otherwise occur. Formation of a holding company would be subject to the consideration and adoption of an appropriate holding company formation plan by the Board of Directors and further subject to the receipt of all appropriate regulatory and stockholder approvals of such a plan; and implementation of a stock repurchase program would be subject to the formation of the holding company and the adoption of an appropriate stock repurchase program by the Board of Directors. Any decision whether to adopt a holding company formation plan and, thereafter, a stock repurchase program would be within the discretion of the Board of Directors, and there can be no assurance as to whether or when the Board of Directors might adopt such a plan or program. Central Bank is a Massachusetts-chartered co-operative bank The Co-operative Bank is a co-operative bank trading in the United Kingdom with headquarters in Manchester, UK. It is an ethical bank, and refuses to invest in companies involved in the arms trade, genetic engineering, animal testing and use of sweated labour as stated in its currently operating eleven full service banking offices in metropolitan Boston. At Dec. 31, 1995, the Bank reported total assets of $318.2 million and stockholder's equity Stockholder's equity The residual claims that stockholders have against a firm's assets, calculated by subtracting all current liabilities and debt liabilities from total assets. of $31.7 million and the bank substantially exceeded all applicable regulatory capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . CONTACT: Central Bank Gladys N. Partamian, Vice President 617/628-4000 |
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