Chesterfield Financial Corp. Reports Third Quarter Earnings.Business Editors CHICAGO--(BUSINESS WIRE)--April 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 $718,000, 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 March 31, 2002. Net income for the quarter was 10.3% higher than the quarter ended March 31, 2001 net income of $651,000. Net income for the nine months ended March 31, 2002 was $2.5 million, or $0.64 diluted earnings per share, compared to net income of $1.9 million for the nine months ended March 31, 2001. 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 March 31, 2002 and 2001 Total interest income decreased by $442,000, or 8.9%, to $4.5 million for the quarter ended March 31, 2002, from $5.0 million for the quarter ended March 31, 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 $56.8 million between periods was offset by a decrease in yield on interest earning assets to 5.18% for the quarter ended March 31, 2002, from 6.80% for the same quarter last year, because of the general decline in market interest rates. Interest expense on deposits decreased by $934,000, or 34.5%, to $1.8 million for the quarter ended March 31, 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, 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 2.57% for the current period, from 4.19% for the same period last year, offset to some extent by a $16.6 million increase in the average balances of deposit accounts. Net interest income increased by $493,000, or 21.8%, to $2.8 million for the quarter ended March 31, 2002, from $2.3 million for the same period in 2001. The net interest rate spread stayed the same and the net interest margin increased during the period as the result of the drop in market interest rates, partially offset by the increase in interest-earning assets resulting from investment of the proceeds from the mutual-to-stock conversion. The net interest rate spread was 2.61% for both periods, while the net interest margin increased six basis points to 3.15% from 3.09%. The ratio of average interest-earning assets to average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities improved to 126.8% for the quarter in 2002, from 113.0% for the same period in 2001. Non-interest income remained stable at $585,000 for the quarter ended March 31, 2002, compared to $587,000 for the same period in 2001. Insurance commissions generated by the Association's insurance subsidiary decreased $5,000, to $481,000 in 2002, compared to $486,000 in 2001. Total non-interest expenses increased $400,000, or 21.9%, to $2.2 million for the quarter ended March 31, 2002, from $1.8 million for the quarter ended March 31, 2001. The primary causes for the increase were a $203,000, or 18.9% increase in salaries and employee benefits, which included a $139,000 expense for the Company's 2001 Recognition and Retention Plan (the "RRP RRP n abbr (= recommended retail price) → PVP m "), and a $91,000, or 27.7% increase in other expenses, which included a $55,000 increase in administrative expenses attributable to the newly formed holding company. Equipment expense increased $101,000, or 82.8%, to $223,000 in 2002, compared to $122,000 in 2001, primarily because of a $90,000 reserve for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. 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 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 2.47% in 2002, compared to 2.42% in 2001, while the Company's efficiency ratio was 66.7% for the current quarter, compared to 64.2% for the same period last year. The provision for income taxes of $392,000 for the quarter ended March 31, 2002, resulted in an effective tax rate of 35.3%, compared to a provision of $351,000 and a 35.0% effective tax rate for the same quarter last year. Comparison of Operating Results for the Nine Months Ended March 31, 2002 and 2001 Total interest income decreased by $570,000, or 3.7%, to $14.6 million for the nine months ended March 31, 2002, from $15.2 million for the nine months ended March 31, 2001. An increase in average interest earning assets of $53.4 million between periods was offset by a decrease in yield on interest earning assets to 5.65% for the nine months ended March 31, 2002, from 6.94% for the same period last year, because of the general decline in market interest rates. Interest expense on deposits decreased by $1.9 million, or 23.1%, to $6.4 million for the nine months ended March 31, 2002, from $8.3 million for the same period in 2001. The decrease was primarily attributable to the general decline in market interest rates, with the average cost of funds decreasing to 3.15% for the current period, from 4.29% for the same period last year. Net interest income increased by $1.3 million, or 19.6%, to $8.2 million for the nine months ended March 31, 2002 from $6.9 million for the same period in 2001. The net interest rate spread decreased and the net interest margin increased during the period as the result of the drop in market interest rates, partially offset by the increase in interest-earning assets resulting from investment of the proceeds from the mutual-to-stock conversion. The net interest rate spread decreased 16 basis points to 2.49% from 2.65% while the net interest margin increased three basis points to 3.18% from 3.15%. The ratio of average interest-earning assets to average interest-bearing liabilities improved to 127.9% for the nine months ended March 31, 2002, from 108.5% for the same period last year. Non-interest income increased $119,000, or 6.9%, to $1.8 million for the nine months ended March 31, 2002, from $1.7 million for the same period in 2001. The increase was primarily attributable to insurance commissions at the Association's insurance subsidiary. Insurance commissions increased $108,000, or 7.7% to $1.5 million in 2002, compared to $1.4 million in 2001. Total non-interest expenses increased $614,000, or 10.9%, to $6.2 million for the nine months ended March 31, 2002, from $5.6 million for the nine months ended March 31, 2001. The primary causes for the increase were a $305,000, or 9.3% increase in salaries and employee benefits, which included a $202,000 expense for the Company's RRP, and a $181,000, or 17.0% increase in other expenses, which included a $111,000 increase in administrative expenses attributable to the newly formed holding company. Equipment expense increased $116,000, or 31.0%, to $490,000 in 2002, compared to $374,000 in 2001, primarily because of the $90,000 reserve for impairment of computers. The annualized ratio of non-interest expense to average assets improved to 2.33% in 2002, compared to 2.48% in 2001, while the Company's efficiency ratio improved to 61.8% for the current nine month period, from 65.1% for the same nine month period last year. The provision for income taxes of $1.3 million for the nine months ended March 31, 2002, resulted in an effective tax rate of 34.8%, compared to a provision of $1.0 million and a 34.6% effective tax rate for the same period last year. The Company's return on average assets for the quarter ended March 31, 2002, was 0.80%, compared to 0.86% for the quarter ended March 31, 2001. The Company's return on average assets for the nine months ended March 31, 2002, was 0.94%, compared to 0.85% 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 3.79% and 4.39% for the three and nine months ended March 31, 2002, compared to 7.08% and 7.11% for the same periods last year. At March 31, 2002, total assets were $365.8 million, up $21.5 million, or 6.2%, from $344.3 million at June June: see month. 30, 2001. Loans receivable at March 31, 2002, were $166.2 million, up $5.0 million, or 3.1%, from $161.2 million at June 30, 2001. Securities held-to-maturity decreased $36.6 million, or 38.6%, to $58.2 million at March 31, 2002, from $94.8 million at June 30, 2001. The decrease resulted primarily from securities that were called or matured, and the proceeds temporarily deposited into interest-earning accounts. The Company's investment in Federal Home Loan Bank stock increased $15.4 million, to $17.1 million as of March 31, 2002, compared to $1.7 million as of June 30, 2001. Total deposits at March 31, 2002, were $277.3 million, up $16.6 million, or 6.4 %, 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. remained extremely low at $2,500 at March 31, 2002, compared to $3,100 as of June 30, 2001. The allowance for loan losses to loans receivable, net, was 0.95% as of March 31, 2002 compared to 0.98% as of June 30, 2001. During the nine months ended March 31, 2002, the Company recorded recoveries on previously charged-off loans of $2,400, 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 March 31, 2002, was $76.7 million, or 21.0% of total assets, compared to $76.6 million, or 22.2% of total assets at June 30, 2001. The decrease in stockholders' equity was due primarily to implementation of the RRP. During the nine months ended March 31, 2002, the Company repurchased 172,189 shares of its stock at a cost of $2.8 million, an average price of $16.50 per share. These shares were designated for the RRP. At March 31, 2002, there were 4,144,785 common shares outstanding with a book value of $18.51 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 March 31, June 30,
2002 2001
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Cash and due from financial institutions $ 7,717 $ 4,605
Interest-earning deposits 94,477 60,816
Federal funds sold 3,300 1,500
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Cash and cash equivalents 105,494 66,921
Securities available-for-sale 12,483 13,405
Securities held-to-maturity 58,187 94,846
Loans receivable, net of allowance for
loan losses of $1,576 at
March 31, 2002 and at June 30, 2001 166,206 161,203
Federal Home Loan Bank stock 17,131 1,733
Premises and equipment 2,620 2,816
Accrued interest receivable and other assets 3,649 3,386
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Total assets $ 365,770 $ 344,310
----------------------------------------------------------------------
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Liabilities
Deposits $ 277,272 $ 260,658
Advance payments by borrowers for
taxes and insurance 1,655 2,778
Accrued expenses and other liabilities 10,106 4,321
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Total liabilities 289,033 267,757
----------------------------------------------------------------------
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 4,144,785 and
4,304,738 shares outstanding at March 31,
2002 and June 30, 2001, respectively 43 43
Additional paid-in capital 42,106 41,999
Retained earnings 40,344 37,827
Unearned ESOP shares (3,115) (3,293)
Unearned RRP shares (2,640) -
Accumulated other comprehensive loss (1) (23)
----------------------------------------------------------------------
Total stockholders' equity 76,737 76,553
----------------------------------------------------------------------
Total liabilities and stockholders' equity $ 365,770 $ 344,310
----------------------------------------------------------------------
CHESTERFIELD FINANCIAL CORP.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited)
Dollars in thousands
For the three months For the nine months
ended March 31, ended March 31,
----------------------------------------------------------------------
2002 2001 2002 2001
----------------------------------------------------------------------
Interest income and
dividend income
Loans, including fees $ 2,890 $ 2,947 $ 8,835 $ 8,874
Securities 1,063 1,247 3,898 3,672
Interest-earning deposits 337 691 1,236 2,413
Federal Home Loan Bank
stock dividends 211 29 581 94
Other interest income 18 47 87 154
----------------------------------------------------------------------
Total interest and
dividend income 4,519 4,961 14,637 15,207
Interest expense
on deposits 1,769 2,704 6,388 8,307
----------------------------------------------------------------------
Net interest income before
provision for loan losses 2,750 2,257 8,249 6,900
Provision for loan losses - 17 - 56
----------------------------------------------------------------------
Net interest income after
provision for loan losses 2,750 2,240 8,249 6,844
Non-interest income
Insurance commissions 481 486 1,519 1,411
Service charges on
deposit accounts 71 71 222 219
Other 33 30 102 94
----------------------------------------------------------------------
Total non-interest income 585 587 1,843 1,724
Non-interest expense
Salaries and employee
benefits 1,277 1,074 3,570 3,265
Occupancy 189 192 589 591
Equipment 223 122 490 374
Data processing 83 79 245 234
Federal deposit insurance 34 30 94 91
Other 419 328 1,244 1,063
----------------------------------------------------------------------
Total non-interest expense 2,225 1,825 6,232 5,618
----------------------------------------------------------------------
Income before income taxes 1,110 1,002 3,860 2,950
Income tax expense 392 351 1,343 1,021
----------------------------------------------------------------------
Net income $ 718 $ 651 $ 2,517 $ 1,929
----------------------------------------------------------------------
Basic earnings per share $ 0.19 N/A $ 0.64 N/A
----------------------------------------------------------------------
Diluted earnings per share $ 0.19 N/A $ 0.64 N/A
----------------------------------------------------------------------
CHESTERFIELD FINANCIAL CORP.
FINANCIAL HIGHLIGHTS (unaudited)
Dollars in thousands, except share data
March 31, June 30,
2002 2001
------------------------
Selected Financial Highlights:
Total assets $ 365,770 $ 344,310
Interest-earning assets 351,784 333,503
Loans receivable, net 166,206 161,203
Deposits 277,272 260,658
Non-performing loans 3 3
Allowance for loan losses 1,576 1,573
Total stockholders' equity 76,737 76,553
Shares outstanding - actual number 4,144,785 4,304,738
Book value per share $ 18.51 $ 17.78
Asset Quality Ratios:
Non-performing loans to loans receivable, net 0.00% 0.00%
Non-performing assets to total assets 0.00% 0.00%
Allowance for loan losses to
non-performing loans 525.3x 524.3x
Allowance for loan losses to
loans receivable, net 0.95% 0.98%
------------------------------------------
For the three months For the nine months
ended March 31, ended March 31,
------------------------------------------
2002 2001 2002 2001
------------------------------------------
Selected Operating Ratios:
Return on average
assets (1) 0.80% 0.86% 0.94% 0.85%
Return on average
equity (1) 3.79% 7.08% 4.39% 7.11%
Interest rate
spread (1) 2.61% 2.61% 2.49% 2.65%
Net interest margin (1) 3.15% 3.09% 3.18% 3.15%
Average interest-earning
assets to average
interest-bearing
liabilities (1) 126.8% 113.0% 128.0% 108.5%
Non-interest expense to
average assets (1) 2.47% 2.42% 2.33% 2.48%
Efficiency ratio 66.7% 64.2% 61.8% 65.1%
Stock price this period:
High $ 17.80 N/A $ 17.80 N/A
Low 16.25 N/A 13.55 N/A
Close 17.58 N/A 17.58 N/A
(1) Ratio annualized
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