Chesterfield Financial Corp. Reports Third Quarter Earnings Declares Quarterly Dividend.Business Editors CHICAGO--(BUSINESS WIRE)--April 22, 2004 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 $557,000, or $0.15 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 March 31, 2004, compared to net income of $626,000, or $0.18 diluted earnings per share for the quarter ended March 31, 2003. Net income for the nine months ended March 31, 2004 was $1.6 million, or $0.44 diluted earnings per share, compared to net income of $2.2 million, or $0.60 diluted earnings per share for the nine months ended March 31, 2003. On April 20, 2004, the Board of Directors of the Company 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 third quarter dividend of $0.08 per share, to be paid on June June: see month. 1, 2004, to stockholders of record as of May 14, 2004. Comparison of Operating Results for the Quarters Ended March 31, 2004 and 2003 Total interest and dividend income decreased by $410,000, or 10.7%, to $3.4 million for the quarter ended March 31, 2004, from $3.8 million for the quarter ended March 31, 2003. A decrease in yield on interest-earning assets to 3.94%, from 4.41% for the same quarter last year, and a change in the mix of interest-earning assets caused the decline in interest income. The average balance of securities for the quarter ended March 31, 2004, increased $19.5 million compared to the average balance for the quarter ended March 31, 2003, while the average balances of loans and of interest-earning deposits decreased $9.8 million and $11.4 million, respectively. Interest expense on deposits decreased by $343,000, or 26.7%, to $942,000 for the quarter ended March 31, 2004, from $1.3 million for the same period in 2003. The decrease was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to reductions in deposit rates paid, 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 1.34% for the current period, from 1.83% for the same period last year, and a shift of $6.4 million in average balances from time deposits to regular savings and transaction accounts. Net interest income decreased by $67,000, or 2.6%, to $2.47 million for the quarter ended March 31, 2004, from $2.53 million for the same period in 2003. The net interest rate spread increased two basis points, to 2.60% in 2004, from 2.58% in 2003, while the net interest margin decreased seven basis points, to 2.85% in 2004, from 2.92% in 2003. The ratio of average interest-earning assets to average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities was 123.0% in 2004, compared to 123.5% in 2003. Non-interest income increased $25,000, or 4.0%, to $653,000 for the quarter ended March 31, 2004, from $628,000 for the same period in 2003. Insurance commissions generated by the Company's insurance subsidiary decreased $21,000, or 3.6%, to $566,000 in 2004, compared to $587,000 in 2003. Other income of $21,000 for the quarter ended March 31, 2004, includes a $14,000 loss on the Company's equity investment in a community development company. For the quarter ended March 31, 2003 other non-interest income (which is reported as a loss of $26,000 for the quarter) included a $78,000 loss on the same equity investment. Total non-interest expense remained approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. the same at $2.2 million for the quarters ended March 31, 2004 and 2003. 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 was 2.45% in 2004, compared to 2.47% in 2003, and the Company's efficiency ratio was 71.2% for the current quarter, compared to 70.4% for the same period last year. The provision for income taxes of $342,000 for the quarter ended March 31, 2004, resulted in an effective tax rate of 38.0%, compared to a provision of $384,000 and a 38.0% effective tax rate for the same quarter last year. The Company's return on average assets for the quarter ended March 31, 2004, was 0.61%, compared to 0.69% for the quarter ended March 31, 2003. Return on average equity for the current quarter was 3.03%, compared to 3.48% for the same quarter last year. Comparison of Operating Results for the Nine Months Ended March 31, 2004 and 2003 Total interest and dividend income decreased by $2.0 million, or 16.1%, to $10.3 million for the nine months ended March 31, 2004, from $12.3 million for the nine months ended March 31, 2003. A decrease in yield on interest-earning assets to 3.97% for the nine months ended March 31, 2004, from 4.74% for the same period last year, and a change in the mix of interest-earning assets caused the decline in interest income. The average balance of loans for the nine months ended March 31, 2004, decreased $15.7 million compared to the average balance of loans for the nine months ended March 31, 2003, while the average balance of interest-earning deposits and securities increased $14.5 million and $2.4 million, respectively. Interest expense on deposits decreased by $1.4 million, or 31.9%, to $3.0 million for the nine months ended March 31, 2004, from $4.4 million for the same period in 2003. The decrease was primarily attributable to reductions in deposit rates paid, with the average cost of funds decreasing to 1.42% for the current period, from 2.11% for the same period last year, offset to some extent by a $3.1 million increase in the average balances of deposit accounts. Net interest income decreased by $574,000, or 7.3%, to $7.3 million for the nine months ended March 31, 2004, from $7.9 million for the same period in 2003. The net interest rate spread decreased eight basis points, to 2.55% in 2004, from 2.63% in 2003, while the net interest margin decreased 23 basis points, to 2.81% in 2004, from 3.04% in 2003. The ratio of average interest-earning assets to average interest-bearing liabilities was 123.0% for the nine months ended March 31, 2004, compared to 124.0% for the same period last year. Non-interest income decreased $137,000, or 6.2%, to $2.1 million for the nine months ended March 31, 2004, from $2.2 million for the same period in 2003. Insurance commissions generated by the Company's insurance subsidiary decreased $215,000, or 11.0% to $1.7 million in 2004, compared to $2.0 million in 2003. The primary cause for this decrease was the loss of renewal commissions of more than $175,000 from a major client due to renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. competition and lower pricing in the condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. association insurance underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. business. Other non-interest income of $118,000 for the nine months ended March 31, 2004, includes a $14,000 loss on the Company's equity investment in a community development company. A loss of $105,000 from this same equity investment was recognized for the nine months ended March 31, 2003. Total non-interest expense decreased $76,000, or 1.1%, to $6.8 million for the nine months ended March 31, 2004, from $6.9 million for the nine months ended March 31, 2003. Salaries and employee benefits increased $79,000, or 1.8%, to $4.5 million for the nine months ended March 31, 2004, compared to $4.4 million for 2003. The $79,000 increase in salaries and employee benefits included a $46,000 increase in ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (ESOP). expense attributed to the increased fair value of Company stock allocated to participants. The $203,000 decrease in insurance agency bad debt expense was primarily the result of last year's $194,000 provision for an insurance premium receivable from a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. commercial client of the Company's insurance agency subsidiary. Parent company administrative expenses increased by $46,000, or 54.1%, to $131,000 for the nine months ended March 31, 2004, compared to $85,000 for the same period last year. The annualized ratio of non-interest expense to average assets was 2.50% in 2004, compared to 2.55% in 2003, and the Company's efficiency ratio was 72.7% for 2004, compared to 68.3% in 2003. The provision for income taxes of $970,000 for the nine months ended March 31, 2004 resulted in an effective tax rate of 37.9%, compared to a provision of $1.3 million and a 37.1% effective tax rate for the same period last year. The Company's return on average assets for the nine months ended March 31, 2004, was 0.58%, compared to 0.81% for the same period last year. Return on average equity for the nine months was 2.89%, compared to 4.02% for the same period last year. Comparison of Financial Condition at March 31, 2004 and June 30, 2003 At March 31, 2004, total assets were $360.9 million, down $8.0 million, or 2.2%, from $368.9 million at June 30, 2003. Cash and cash equivalents decreased $14.8 million, or 10.4%, to $126.9 million at March 31, 2004, compared to $141.6 million at June 30, 2003. Loans receivable at March 31, 2004 were $145.3 million, down $4.7 million, or 3.1%, from $150.0 million at June 30, 2003. Total deposits at March 31, 2004, were $279.5 million, down $2.7 million, or 1.0 %, from $282.2 million at June 30, 2003. 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 $378,000, or 0.26% of loans receivable as of March 31, 2004, compared to $258,000, or 0.17% of loans receivable as of June 30, 2003. The $1.3 million allowance for losses on loans was 0.90% of loans receivable as of March 31, 2004, compared to $1.3 million and 0.87% of loans receivable as of June 30, 2003. 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 March 31, 2004 was $74.8 million, or 20.7% of total assets, compared to $73.3 million, or 19.9% of total assets at June 30, 2003. At March 31, 2004, there were 3,875,521 common shares outstanding with a book value of $19.30 per share, compared to 3,879,558 shares with a book value of $18.90 at June 30, 2003. 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.
CHESTERFIELD FINANCIAL CORP.
CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited)
Dollars in thousands
March 31, June 30,
Assets 2004 2003
----------------------------------------------------------------------
Cash and due from financial institutions $11,734 $8,843
Interest-earning deposits 109,228 127,994
Federal funds sold 5,900 4,800
----------------------------------------------------------------------
Cash and cash equivalents 126,862 141,637
Securities available-for-sale 38,362 26,822
Securities held-to-maturity 25,723 26,117
Loans receivable, net of allowance for loan
losses of $1,303 at March 31, 2004 and
$1,304 at June 30, 2003 145,348 150,022
Federal Home Loan Bank stock 19,504 18,563
Premises and equipment 2,190 2,415
Goodwill 452 452
Accrued interest receivable and other assets 2,458 2,881
----------------------------------------------------------------------
Total assets $360,899 $368,909
----------------------------------------------------------------------
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Liabilities
Deposits $279,482 $282,175
Advance payments by borrowers for taxes and
insurance 1,175 2,203
Accrued expenses and other liabilities 5,462 11,222
----------------------------------------------------------------------
Total liabilities 286,119 295,600
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 3,875,521 and 3,879,558 shares
outstanding at March 31, 2004 and June 30,
2003, respectively 43 43
Additional paid-in capital 42,692 42,399
Retained earnings 44,022 43,263
Unearned ESOP shares (2,668) (2,833)
Unearned RRP shares (1,522) (1,942)
Treasury stock, at cost (7,891) (7,797)
Accumulated other comprehensive income 104 176
----------------------------------------------------------------------
Total stockholders' equity 74,780 73,309
----------------------------------------------------------------------
Total liabilities and stockholders' equity $360,899 $368,909
----------------------------------------------------------------------
CHESTERFIELD FINANCIAL CORP.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited)
Dollars in thousands, except per share data
For the three months For the nine months
ended March 31, ended March 31,
----------------------------------------------------------------------
2004 2003 2004 2003
----------------------------------------------------------------------
Interest income and dividend
income
Loans, including fees $2,232 $2,657 $6,910 $8,343
Securities 581 585 1,586 2,168
Interest-earning deposits 270 332 846 1,012
Federal Home Loan Bank stock
dividends 312 224 941 714
Other interest income 13 20 37 68
----------------------------------------------------------------------
Total interest and dividend
income 3,408 3,818 10,320 12,305
Interest expense on deposits 942 1,285 3,006 4,417
----------------------------------------------------------------------
Net interest income before
provision for loan losses 2,466 2,533 7,314 7,888
Provision for loan losses - (75) - (275)
----------------------------------------------------------------------
Net interest income after
provision for loan losses 2,466 2,608 7,314 8,163
Non-interest income
Insurance commissions 566 587 1,742 1,957
Service charges on deposit
accounts 66 67 210 205
Other 21 (26) 118 45
----------------------------------------------------------------------
Total non-interest income 653 628 2,070 2,207
Non-interest expense
Salaries and employee benefits 1,482 1,451 4,497 4,418
Occupancy 201 199 595 594
Equipment 97 110 304 346
Data processing 99 118 292 286
Federal deposit insurance 33 33 97 99
Insurance agency bad debt
expense 5 14 14 217
Other 303 301 1,024 939
----------------------------------------------------------------------
Total non-interest expense 2,220 2,226 6,823 6,899
----------------------------------------------------------------------
Income before income taxes 899 1,010 2,561 3,471
Income tax expense 342 384 970 1,288
----------------------------------------------------------------------
Net income $557 $626 $1,591 $2,183
----------------------------------------------------------------------
Basic earnings per share $0.16 $0.18 $0.45 $0.62
----------------------------------------------------------------------
Diluted earnings per share $0.15 $0.18 $0.44 $0.60
----------------------------------------------------------------------
Cash dividends per share $0.08 $0.06 $0.24 $0.11
----------------------------------------------------------------------
CHESTERFIELD FINANCIAL CORP.
FINANCIAL HIGHLIGHTS (unaudited)
Dollars in thousands, except share and per share data
March 31, June 30,
2004 2003
--------------------
Selected Financial Highlights:
------------------------------
Total assets $360,899 $368,909
Interest-earning assets 344,065 354,318
Loans receivable, net 145,348 150,022
Deposits 279,482 282,175
Non-performing loans 378 258
Allowance for loan losses 1,303 1,304
Total stockholders' equity 74,780 73,309
Shares outstanding - actual
number 3,875,521 3,879,558
Book value per share $19.30 $18.90
Asset Quality Ratios:
---------------------
Non-performing loans to
loans receivable, net 0.26% 0.17%
Allowance for loan losses
to non-performing loans 3.45x 5.05x
Allowance for loan losses
to loans receivable, net 0.90% 0.87%
----------------------------------------
For the three months For the nine months
ended March 31, ended March 31,
----------------------------------------
2004 2003 2004 2003
----------------------------------------
Selected Operating Ratios:
--------------------------
Return on average assets (1) 0.61% 0.69% 0.58% 0.81%
Return on average equity (1) 3.03% 3.48% 2.89% 4.02%
Interest rate spread (1) 2.60% 2.58% 2.55% 2.63%
Net interest margin (1) 2.85% 2.92% 2.81% 3.04%
Average interest-earning
assets to average
interest-bearing
liabilities 122.96% 123.46% 123.01% 123.99%
Non-interest expense to
average assets (1) 2.45% 2.47% 2.50% 2.55%
Efficiency ratio 71.20% 70.42% 72.71% 68.34%
Dividend payout ratio 50.00% 33.33% 53.33% 17.74%
Stock price this period:
------------------------
High $26.96 $20.95 $26.96 $20.95
Low 23.71 19.80 21.01 17.70
Close 26.12 20.19 26.12 20.19
(1) Ratio annualized
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