Chesterfield Financial Corp. Reports Fourth Quarter Earnings.Business Editors CHICAGO--(BUSINESS WIRE)--July 22, 2002 Chesterfield Chesterfield, city (1991 pop. 73,352) and district, Derbyshire, central England. An important industrial center, Chesterfield produces mining equipment, railroad cars, metal products, glass, and pottery. Financial Corp. (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 :CFSL CFSL Cavitation-Field Sonoluminescence ), the parent company of Chesterfield Federal Savings and Loan Association Federal Savings and Loan Association An institution chartered by the federal government whose primary function is to collect savings deposits and to provide mortgage loans. of Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , today reported net income of $741,000, or $0.19 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter ended June June: see month. 30, 2002. Net income for the quarter was $2,000 less than the quarter ended June 30, 2001 net income of $743,000. Net income for the year ended June 30, 2002 was $3.3 million, or $0.83 diluted earnings per share, compared to net income of $2.7 million for the year ended June 30, 2001. On May 13, 2002, the Company announced its intent to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to 207,200 shares of the Company's common stock. During the quarter ended June 30, 2002, the Company repurchased 65,000 shares at an average cost of $17.95 per share. Chesterfield Financial Corp. ("the Company") was organized in January January: see month. 2001 at the direction of the Board of Directors of Chesterfield Federal Savings and Loan Association of Chicago ("the Association") for the purpose of owning all of the outstanding capital stock of the Association following the completion of the Association's mutual-to-stock conversion. The Company sold 4,304,738 shares of its outstanding common stock at $10.00 per share in a public offering to eligible depositors and members of the general public, which was completed on May 2, 2001. Comparison of Operating Results for the Quarters Ended June 30, 2002 and 2001 Total interest income decreased by $801,000, or 15.4%, to $4.4 million for the quarter ended June 30, 2002, from $5.2 million for the quarter ended June 30, 2001. An increase in average interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin of $16.8 million between periods was offset by a decrease in yield on interest earning assets to 5.05% for the quarter ended June 30, 2002, from 6.27% for the same quarter last year, because of the general decline in market interest rates and management's decision to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. funds from recently called or matured securities short term. Interest expense on deposits decreased by $984,000, or 36.5%, to $1.7 million for the quarter ended June 30, 2002, from $2.7 million for the same period in 2001. The decrease was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the general decline in market interest rates for 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. deposits, with the average 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. decreasing to 2.47% for the current period, from 4.21% for the same period last year, offset to some extent by a $21.0 million increase in the average balances of deposit accounts as depositors sought a safer haven for their investments. Net interest income increased by $183,000, or 7.3%, to $2.7 million for the quarter ended June 30, 2002, from $2.5 million for the same period in 2001. The net interest rate spread and the net interest margin increased during the period as the result of the drop in market interest rates. The net interest rate spread was 2.58% for quarter ended June 30, 2002, compared to 2.06% for the same quarter last year, while the net interest margin increased to 3.09% from 3.02%. The ratio of average interest-earning assets to average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities decreased to 126.0% for the quarter in 2002, from 129.7% for the same period in 2001. Non-interest income increased $78,000, to $632,000, or 14.1% for the quarter ended June 30, 2002, compared to $554,000 for the same period in 2001. Insurance commissions generated by the Association's insurance subsidiary increased $83,000, to $530,000 in 2002, compared to $447,000 in 2001. Total non-interest expenses increased $253,000, or 13.2%, to $2.2 million for the quarter ended June 30, 2002, from $1.9 million for the quarter ended June 30, 2001. The primary causes for the increase were a $210,000, or 19.0% increase in salaries and employee benefits, which included a $144,000 expense for the Company's 2001 Recognition and Retention Plan (the "RRP RRP n abbr (= recommended retail price) → PVP m "), and a $33,000, or 8.9% increase in other expenses, which included a $23,000 increase in administrative expenses attributable to the newly formed holding company. The 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. ratio of non-interest expense to average assets increased to 2.39% in 2002, compared to 2.24% in 2001, while the Company's efficiency ratio was 65.0% for the current quarter, compared to 62.3% for the same period last year. The provision for income taxes of $423,000 for the quarter ended June 30, 2002, resulted in an effective tax rate of 36.3%, compared to a provision of $397,000 and a 34.8% effective tax rate for the same quarter last year. Comparison of Operating Results for the Years Ended June 30, 2002 and 2001 Total interest income decreased by $1.4 million, or 6.7%, to $19.0 million for the year ended June 30, 2002, from $20.4 million for the year ended June 30, 2001. An increase in average interest earning assets of $27.7 million between periods was offset by a decrease in yield on interest earning assets to 5.50% for the year ended June 30, 2002, from 6.41% for the same period last year, because of the general decline in market interest rates and management's decision to reinvest funds from recently called or matured securities short term. Interest expense on deposits decreased by $2.9 million, or 26.4%, to $8.1 million for the year ended June 30, 2002, from $11.0 million for the same period in 2001. The decrease was primarily attributable to the general decline in market interest rates for insured deposits, with the average cost of funds decreasing to 2.98% for the current period, from 4.02% for the same period last year. Net interest income increased by $1.5 million, or 16.3%, to $10.9 million for the year ended June 30, 2002 from $9.4 million for the same period in 2001. The net interest rate spread and the net interest margin increased during the period as the result of the drop in market interest rates, and helped by the increase in interest-earning assets resulting from investment of the proceeds from the mutual-to-stock conversion. The net interest rate spread increased to 2.52% from 2.39% while the net interest margin increased to 3.16% from 2.95%. The ratio of average interest-earning assets to average interest-bearing liabilities improved to 127.3% for the year ended June 30, 2002, from 116.6% for the same period last year. Non-interest income increased $197,000, or 8.6%, to $2.5 million for the year ended June 30, 2002, from $2.3 million for the same period in 2001. The increase was primarily attributable to insurance commissions at the Association's insurance subsidiary. Insurance commissions increased $191,000, or 10.3%, to $2.0 million in 2002, compared to $1.9 million in 2001. Total non-interest expenses increased $867,000, or 11.5%, to $8.4 million for the year ended June 30, 2002, from $7.5 million for the year ended June 30, 2001. The primary causes for the increase were a $515,000, or 11.8% increase in salaries and employee benefits, which included a $346,000 expense for the Company's RRP, and a $214,000, or 14.9% increase in other expenses, which included a $134,000 increase in administrative expenses attributable to the newly formed holding company. Equipment expense increased $116,000, or 23.0%, to $621,000 in 2002, compared to $505,000 in 2001, primarily because of a $90,000 change in estimate of the useful life of computers. The computers are being replaced earlier than expected because they will not support rapidly improving software being provided by the Association's outside data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a service. The annualized ratio of non-interest expense to average assets was 2.35% in 2002, compared to 2.29% in 2001, while the Company's efficiency ratio improved to 62.6% for the current year, from 64.4% for the same period last year. The provision for income taxes of $1.8 million for the year ended June 30, 2002, resulted in an effective tax rate of 35.2%, compared to a provision of $1.4 million and a 34.7% effective tax rate for the same period last year. The Company's return on average assets for the quarter ended June 30, 2002, was 0.82%, compared to 0.87% for the quarter ended June 30, 2001. The Company's return on average assets for the year ended June 30, 2002, was 0.91%, compared to 0.81% for the same period last year. The improved 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). in 2002 was primarily due to investment of proceeds from the mutual-to-stock conversion, while the related increase in average equity resulted in a decrease in return on equity to 3.88% and 4.26% for the quarter and year ended June 30, 2002, compared to 5.23% and 5.76% for the same periods last year. At June 30, 2002, total assets were $363.3 million, up $19.0 million, or 5.5%, from $344.3 million at June 30, 2001. Loans receivable at June 30, 2002, were $169.9 million, up $8.7 million, or 5.4%, from $161.2 million at June 30, 2001. Securities held-to-maturity decreased $37.4 million, or 39.4%, to $57.5 million at June 30, 2002, from $94.8 million at June 30, 2001. The decrease resulted primarily from securities that were called or matured, and the proceeds deposited into interest-earning accounts. The Company's investment in Federal Home Loan Bank stock increased $15.6 million, to $17.3 million as of June 30, 2002, compared to $1.7 million as of June 30, 2001. Total deposits at June 30, 2002, were $278.1 million, up $17.5 million, or 6.7 %, from $260.7 million at June 30, 2001. Asset quality at the Company continues to remain strong. The Company's non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. were $222,000, or 0.13% of loans receivable as of June 30, 2002, compared to $3,100 as of June 30, 2001. The increase in non-performing loans was primarily due to community development loans where the developer has experienced delays in completing the project. The allowance for loan losses to loans receivable was 0.93% as of June 30, 2002 compared to 0.98% as of June 30, 2001. During the year ended June 30, 2002, the Company recorded recoveries on previously charged-off loans of $3,000, and recorded no charge-offs. Total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. as of June 30, 2002, was $76.7 million, or 21.1% of total assets, compared to $76.6 million, or 22.2% of total assets at June 30, 2001. During the year ended June 30, 2002, the Company repurchased a total of 237,189 shares of its stock at a cost of $4.0 million, an average price of $16.90 per share. The Company designated 172,189 shares of Treasury Stock, with an average cost of $16.50 per share, for the RRP. At June 30, 2002, there were 4,088,495 common shares outstanding with a book value of $18.77 per share. This news release contains 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. that are subject to numerous assumptions, risk and uncertainties. Actual results could differ materially from those contained in or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements for a variety of factors including: (1) developments in general economic conditions, including interest rate and currency fluctuations, market fluctuations and perceptions, and inflation; (2) changes in the economy which could materially change anticipated credit quality trends and the ability to generate loans and deposits; (3) a failure of the capital markets to function consistently within customary levels; (4) a delay in or an inability to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution strategic initiatives designed to grow revenues and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. manage expenses; (5) legislative developments, including changes in laws concerning taxes, banking, securities, insurance and other aspects of the industry; (6) changes in the competitive environment for financial services 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. organizations and the Company's ability to adapt to such changes. --TABLES FOLLOW--
CHESTERFIELD FINANCIAL CORP.
CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited)
Dollars in thousands
Assets June 30, June 30,
2002 2001
----------------------------------------------------------------------
Cash and due from financial institutions $ 7,559 $ 4,605
Interest-earning deposits 83,367 60,816
Federal funds sold 3,800 1,500
----------------------------------------------------------------------
Cash and cash equivalents 94,726 66,921
Securities available-for-sale 17,374 13,405
Securities held-to-maturity 57,482 94,846
Loans receivable, net of allowance for loan
losses of $1,576 at June 30, 2002 and
$1,573 at June 30, 2001 169,882 161,203
Federal Home Loan Bank stock 17,342 1,733
Premises and equipment 2,529 2,816
Accrued interest receivable and other assets 4,005 3,386
----------------------------------------------------------------------
Total assets $ 363,340 $ 344,310
======================================================================
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Liabilities
Deposits $ 278,126 $ 260,658
Advance payments by borrowers for taxes
and insurance 2,622 2,778
Accrued expenses and other liabilities 5,851 4,321
----------------------------------------------------------------------
Total liabilities 286,599 267,757
----------------------------------------------------------------------
Stockholders' Equity
Preferred stock, $.01 par value per share,
1,000,000 shares authorized, no
shares issued and outstanding - -
Common stock, $.01 par value per share,
7,000,000 shares authorized; 4,304,738
shares issued; and 4,088,495 and
4,304,738 shares outstanding at June 30,
2002 and June 30, 2001, respectively 43 43
Additional paid-in capital 42,153 41,999
Retained earnings 41,085 37,827
Unearned ESOP shares (3,056) (3,293)
Unearned RRP shares (2,496) -
Treasury stock, at cost (1,167) -
Accumulated other comprehensive income (loss) 179 (23)
----------------------------------------------------------------------
Total stockholders' equity 76,741 76,553
----------------------------------------------------------------------
Total liabilities and stockholders' equity $ 363,340 $ 344,310
======================================================================
CHESTERFIELD FINANCIAL CORP.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited)
Dollars in thousands
For the three months For the year
ended June 30, ended June 30,
----------------------------------------------------------------------
2002 2001 2002 2001
----------------------------------------------------------------------
Interest income
and dividend income
Loans, including
fees $ 2,959 $ 2,968 $ 11,794 $ 11,842
Securities 823 1,291 4,721 4,963
Interest-earning
deposits 392 873 1,628 3,286
Federal Home Loan
Bank stock
dividends 216 28 797 122
Other interest
income 20 51 107 205
----------------------------------------------------------------------
Total interest
and dividend
income 4,410 5,211 19,047 20,418
Interest expense
on deposits 1,714 2,698 8,102 11,005
----------------------------------------------------------------------
Net interest income
before provision
for loan losses 2,696 2,513 10,945 9,413
Provision for
loan losses - 16 - 72
----------------------------------------------------------------------
Net interest income
after provision for
loan losses 2,696 2,497 10,945 9,341
Non-interest income
Insurance commissions 530 447 2,049 1,858
Service charges
on deposit accounts 66 73 288 292
Other 36 34 138 128
----------------------------------------------------------------------
Total non-interest
income 632 554 2,475 2,278
Non-interest expense
Salaries and
employee benefits 1,316 1,106 4,886 4,371
Occupancy 186 181 775 772
Equipment 131 131 621 505
Data processing 91 90 336 324
Federal deposit
insurance 34 30 128 121
Other 406 373 1,650 1,436
----------------------------------------------------------------------
Total non-interest
expense 2,164 1,911 8,396 7,529
----------------------------------------------------------------------
Income before
income taxes 1,164 1,140 5,024 4,090
Income tax expense 423 397 1,766 1,418
----------------------------------------------------------------------
Net income $ 741 $ 743 $ 3,258 $ 2,672
----------------------------------------------------------------------
Basic earnings
per share(a) $ 0.19 $ 0.10 $ 0.84 $ 0.10
----------------------------------------------------------------------
Diluted earnings
per share(a) $ 0.19 $ 0.10 $ 0.83 $ 0.10
----------------------------------------------------------------------
(a) Earnings per share for 2001 were for the two month period ended
June 30, 2001.
----------------------------------------------------------------------
CHESTERFIELD FINANCIAL CORP.
FINANCIAL HIGHLIGHTS (unaudited)
Dollars in thousands, except share data
June 30, June 30,
2002 2001
-------------------------
Selected Financial Highlights:
Total assets $ 363,340 $ 344,310
Interest-earning assets 349,247 333,503
Loans receivable, net 169,882 161,203
Deposits 278,126 260,658
Non-performing loans 222 3
Allowance for loan losses 1,576 1,573
Total stockholders' equity 76,741 76,553
Shares outstanding - actual number 4,088,495 4,304,738
Book value per share $ 18.77 $ 17.78
Asset Quality Ratios:
---------------------
Non-performing loans to loans receivable, net 0.13% 0.00%
Non-performing assets to total assets 0.06% 0.00%
Allowance for loan losses to
non-performing loans 7.1x 524.3x
Allowance for loan losses to loans
receivable, net 0.93% 0.98%
------------------------------------------
For the three months For the year
ended June 30, ended June 30,
------------------------------------------
2002 2001 2002 2001
------------------------------------------
Selected Operating Ratios:
--------------------------
Return on average assets 0.82% 0.87% 0.91% 0.81%
Return on average equity 3.88% 5.23% 4.26% 5.76%
Interest rate spread 2.58% 2.06% 2.52% 2.39%
Net interest margin 3.09% 3.02% 3.16% 2.95%
Average interest-earning
assets to average
interest-bearing
liabilities 125.96% 129.71% 127.33% 116.56%
Non-interest expense to
average assets 2.39% 2.24% 2.35% 2.29%
Efficiency ratio 65.02% 62.31% 62.56% 64.40%
Stock price this period:
------------------------
High $ 18.20 $ 15.90 $ 18.20 $ 15.90
Low 17.26 13.62 13.55 13.62
Close 18.14 14.89 18.14 14.89
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion