Citizens Banking Corp. reports higher third quarter 1996 earnings.FLINT flint, mineral flint, variety of quartz that commonly occurs in rounded nodules and whose crystal structure is not visible to the naked eye. Flint is dark gray, smoky brown, or black in color; pale gray flint is called chert. , Mich.--(BUSINESS WIRE)--Oct. 11, 1996--Citizens Banking Corp. earned net income of $9,603,000 for the three months ended Sept. 30, 1996, up 6.9 percent from the same period of 1995. Fully 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 were 65 cents, up 6.6 percent. Returns on average equity and average assets during the third quarter of 1996 were 12.50 percent and 1.11 percent, respectively, compared with 12.66 percent and 1.05 percent, respectively, in the same period of 1995. Net interest margin increased to 4.85 percent in the third quarter, up from 4.83 percent in the second quarter. Average loan balances increased by 2.3 percent from the prior quarter and 6.9 percent from the third quarter of 1995. 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. Vitito, president and chief executive, commented, "The improved earnings reflect loan growth in our core markets and continued efforts to control expenses." During the third quarter, Citizens sold the servicing rights on its mortgage portfolio and pipeline. "This will help us improve efficiency while maintaining high customer service levels," noted Vitito. Management anticipates expense reductions and productivity gains as a result of this action. "Using quality outside service processors will allow us to focus more time and resources on our sales and relationship building efforts," Vitito added. The sale resulted in a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain of $984,000 (net, after taxes) in the third quarter. An additional after tax gain of $3,218,000 was deferred and will be recognized over the estimated term of the loans. During the third quarter of 1996, net loan charge-offs amounted to 0.46 percent of average loans, up from 0.22 percent in the previous quarter. The increase was due primarily to the charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. of a single commercial credit. A corresponding amount was added to the provision for loan losses. Citizens' overall credit quality remains strong; excluding this isolated item, loan charge-offs would have been more consistent with recent levels. 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. comprised 0.54 percent of total assets, down from 0.55 percent at the end of the previous quarter and from 0.74 percent a year ago. For the nine months ended Sept. 30, 1996, net income was $27,604,000, up 15.8 percent from the same period in 1995. Earnings per share amounted to $1.88 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, up 15.3 percent from 1995. Citizens acquired Banc One Corp.'s four Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). banking subsidiaries on Feb. 28, 1995. The transaction was accounted for as a purchase; Citizens' 1996 earnings include nine months of results from those banks, vs. seven months of results in 1995. Returns on average equity and average assets for the first nine months of 1996 were 12.23 percent and 1.07 percent, respectively, compared with 11.66 percent and 0.99 percent, respectively, in the same period of 1995. Net interest margin was 4.78 percent, compared with 4.80 percent in 1995. For the nine months ended Sept. 30, 1996, total operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. increased by 4.1 percent over 1995 levels. This increase was offset by growth in noninterest income. Total trust fees increased by 9.5 percent, while deposit service charges and bankcard bank·card n. A card issued by a bank authorizing the holder to receive bank services and often functioning as a debit card. fees grew by 5.1 percent and 13.4 percent, respectively. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: assets as of Sept. 30, 1996, were $3.468 billion, an increase of 0.1 percent from Dec. 31, 1995. Total loans increased 6.6 percent from 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. 1995, while total deposits declined by 0.6 percent. 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. on Sept. 30, 1996, was $309,787,000, compared with $297,186,000 as of year-end 1995. During the third quarter of 1996, Citizens repurchased 49,000 shares of its common stock in the open market as part of a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program initiated in 1987. Citizens Banking Corp. provides a full range of 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. to a broad customer base. Citizens operates 92 offices throughout Michigan and suburban 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. . -0-
Selected Quarterly Information
Citizens Banking Corp. and Subsidiaries
3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
1996 1996 1996 1995 1995
Summary of Operations
(thousands)
Interest income $64,401 $63,912 $62,969 $63,752 $62,779
Interest expense 27,202 27,045 27,724 28,216 27,734
Net interest income 37,199 36,867 35,245 35,536 35,045
Provision for loan
losses 3,021 1,771 1,771 1,937 1,504
Net interest income
after provision for
loan losses 34,178 35,096 33,474 33,599 33,541
Investment
securities gains 21 7 52 79 15
Noninterest income 11,424 9,741 9,488 9,790 9,586
Noninterest expense 32,190 31,853 30,824 29,952 30,587
Income taxes 3,830 3,731 3,449 3,757 3,571
Net income 9,603 9,260 8,741 9,759 8,984
At Period End
(millions)
Total assets $3,468 $3,476 $3,508 $3,464 $3,402
Total earning assets 3,191 3,175 3,209 3,149 3,116
Total loans 2,588 2,551 2,487 2,429 2,424
Total deposits 2,849 2,867 2,916 2,865 2,771
Total shareholders'
equity 310 304 300 297 287
Average Balances
(millions)
Total assets $3,445 $3,460 $3,447 $3,428 $3,392
Total earning assets 3,181 3,180 3,168 3,142 3,103
Total loans 2,575 2,516 2,448 2,431 2,409
Total deposits 2,849 2,874 2,848 2,812 2,780
Total shareholders'
equity 306 300 298 291 282
Shareholders'
equity/assets 8.87% 8.68% 8.66% 8.48% 8.31%
Credit Quality
Statistics
(thousands)
Nonaccrual loans $16,642 $16,212 $17,791 $18,624 $22,450
Loans 90 or more
days past due and
still accruing 637 834 517 432 109
Restructured loans 520 568 502 494 527
_______ _______ _______ _______ _______
Total
nonperforming
loans 17,799 17,614 18,810 19,550 23,086
Other real estate
owned 1,086 1,350 1,532 1,568 1,980
_______ _______ _______ _______ _______
Total
nonperforming
assets $18,885 $18,964 $20,342 $21,118 $25,066
_______ _______ _______ _______ _______
_______ _______ _______ _______ _______
Allowance for loan
losses ratio 1.37% 1.38% 1.40% 1.43% 1.40%
Allowance for loan
losses as a percent
of nonperforming
assets 187.11 185.91 171.27 164.65 135.24
Allowance for loan
losses as a percent
of nonperforming
loans 198.54 200.16 185.23 177.86 146.84
Nonperforming assets
as a percent of
total loans plus
OREO 0.73 0.74 0.82 0.87 1.03
Nonperforming assets
as a percent of
total assets 0.54 0.55 0.58 0.61 0.74
Net loans charged
off as a percent
of average loans
(annualized) 0.46 0.22 0.28 0.18 0.25
Per Common Share Data
Net Income:
Primary $0.65 $0.63 $0.60 $0.67 $0.62
Fully diluted 0.65 0.63 0.60 0.67 0.61
Dividends 0.26 0.26 0.23 0.23 0.23
Market value:
High $29.50 $31.50 $31.50 $32.50 $33.25
Low 27.25 27.50 28.50 29.00 29.25
Close 28.63 29.00 30.50 29.75 30.38
Book value 21.51 21.02 20.85 20.73 20.08
Shares outstanding,
end of period (000) 14,401 14,439 14,395 14,334 14,276
Performance Ratios
(annualized)
Net interest margin
(FTE) 4.85% 4.83% 4.65% 4.70% 4.70%
Return on average
assets 1.11 1.08 1.02 1.13 1.05
Return on average
shareholders' equity 12.50 12.40 11.78 13.32 12.66
Financial Summary and Comparison
Citizens Banking Corp. and Subsidiaries
Nine Months Ended
September 30,
__________________________________
1996 1995 % Change
Summary of Operations (thousands)
Interest income $191,282 $176,848 8.2%
Interest expense 81,971 74,889 9.5
Net interest income 109,311 101,959 7.2
Provision for loan losses 6,563 4,504 45.7
Net interest income after
provision for loan losses 102,748 97,455 5.4
Investment securities gains 80 119 (32.8)
Noninterest income 30,653 26,446 15.9
Noninterest expense 94,867 91,135 4.1
Income taxes 11,010 9,048 21.7
Net income 27,604 23,837 15.8
At Period End (millions)
Total assets $3,468 $3,402 1.9%
Total earning assets 3,191 3,116 2.4
Total loans 2,588 2,424 6.8
Total deposits 2,849 2,771 2.8
Total shareholders' equity 310 287 8.0
Average Balances (millions)
Total assets $3,450 $3,230 6.8%
Total earning assets 3,176 2,961 7.3
Total loans 2,513 2,259 11.2
Total deposits 2,857 2,665 7.2
Total shareholders' equity 301 273 10.3
Shareholders' equity/assets 8.74% 8.46% 3.3
Per Common Share Data
Net Income:
Primary $1.88 $1.64 14.6%
Fully diluted 1.88 1.63 15.3
Dividends 0.75 0.67 11.9
Market value:
High $31.50 $33.25 (5.3)
Low 27.25 24.94 9.3
Close 28.63 30.38 (5.8)
Book value 21.51 20.08 7.1
Shares outstanding, end of
period (000) 14,401 14,276 0.9
Performance Ratios (annualized)
Net interest margin (FTE) 4.78% 4.80% (0.4)%
Return on average assets 1.07 0.99 8.1
Return on average shareholders'
equity 12.23 11.66 4.9
Net loans charged off as a
percent of average loans 0.32 0.15 113.3
Consolidated Balance Sheets (Unaudited)
Citizens Banking Corp. and Subsidiaries
September 30, December 31,
(in thousands) 1996 1995
Assets
Cash and due from banks $135,494 $172,754
Money market investments:
Interest-bearing deposits with banks 212 10,090
Federal funds sold 35,000 50,000
Term federal funds and other 3,536 89,744
________ ________
Total money market investments 38,748 149,834
Securities available-for-sale:
U.S. Treasury and federal
agency securities 348,702 346,485
State and municipal securities 200,697 213,491
Other securities 14,252 10,936
________ ________
Total investment securities 563,651 570,912
Loans:
Commercial 964,165 905,947
Real estate construction 34,168 33,984
Real estate mortgage 522,652 457,758
Consumer 1,016,231 970,755
Lease financing 51,107 60,069
_________ _________
Total loans 2,588,323 2,428,513
Less: Allowance for loan losses (35,337) (34,771)
_________ _________
Net loans 2,552,986 2,393,742
Premises and equipment 61,579 63,147
Intangible assets 66,287 70,385
Other assets 49,262 43,148
__________ __________
Total assets $3,468,007 $3,463,922
__________ __________
__________ __________
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $491,622 $506,116
Interest-bearing 2,357,195 2,358,585
_________ _________
Total deposits 2,848,817 2,864,701
Federal funds purchased and
securities sold under agreements
to repurchase 145,311 130,556
Other short-term borrowings 33,022 15,468
Other liabilities 45,714 50,600
Long-term debt 85,356 105,411
_________ _________
Total liabilities 3,158,220 3,166,736
Shareholders' Equity
Preferred stock - No par value --- ---
Common stock - No par value 91,394 91,480
Retained earnings 219,027 202,219
Net unrealized gain (loss) on
securities available-for-sale,
net of tax (634) 3,487
________ ________
Total shareholders' equity 309,787 297,186
________ ________
Total liabilities and
shareholders' equity $3,468,007 $3,463,922
__________ __________
__________ __________
Consolidated Statements of Income (Unaudited)
Citizens Banking Corp. and Subsidiaries
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands) 1996 1995 1996 1995
Interest Income
Interest and fees on loans $55,808 $53,006 $163,590 $147,442
Interest and dividends on
investment securities:
Taxable 5,945 5,919 18,120 16,777
Nontaxable 2,303 2,339 6,864 7,144
Money market investments 345 1,515 2,708 5,485
_______ _______ _______ _______
Total interest income 64,401 62,779 191,282 176,848
_______ _______ _______ _______
Interest Expense
Deposits 23,901 23,448 71,755 64,116
Short-term borrowings 1,981 1,970 5,493 5,255
Long-term debt 1,320 2,316 4,723 5,518
_______ _______ _______ _______
Total interest expense 27,202 27,734 81,971 74,889
_______ _______ _______ _______
Net Interest Income 37,199 35,045 109,311 101,959
Provision for loan losses 3,021 1,504 6,563 4,504
_______ _______ _______ _______
Net interest income
after provision for
loan losses 34,178 33,541 102,748 97,455
_______ _______ _______ _______
Noninterest Income
Trust fees 3,044 2,974 9,274 8,473
Service charges on
deposit accounts 2,707 2,506 7,625 7,256
Bankcard fees 1,546 1,304 4,338 3,824
Investment securities gains 21 15 80 119
Other 4,127 2,802 9,416 6,893
_______ _______ _______ _______
Total noninterest
income 11,445 9,601 30,733 26,565
_______ _______ _______ _______
Noninterest Expense
Salaries and employee
benefits 17,258 16,712 51,217 48,028
Equipment 2,476 2,536 7,335 7,294
Occupancy 2,402 2,282 7,136 6,590
Intangible asset
amortization 1,370 1,330 4,098 3,363
FDIC insurance premiums 1 68 8 2,981
Bankcard fees 1,020 785 2,683 2,122
Stationery and supplies 889 898 2,565 2,602
Postage and delivery 917 891 2,636 2,317
Other 5,857 5,085 17,189 15,838
_______ _______ _______ _______
Total noninterest expense 32,190 30,587 94,867 91,135
_______ _______ _______ _______
Income Before Income Taxes 13,433 12,555 38,614 32,885
Income taxes 3,830 3,571 11,010 9,048
_______ _______ _______ _______
Net Income $ 9,603 $ 8,984 $27,604 $23,837
_______ _______ _______ _______
_______ _______ _______ _______
Net Income Per Share:
Primary $ 0.65 $ 0.62 $ 1.88 $ 1.64
Fully Diluted $ 0.65 $ 0.61 $ 1.88 $ 1.63
_______ _______ _______ _______
_______ _______ _______ _______
Average Shares Outstanding:
Primary 14,676 14,626 14,682 14,545
Fully Diluted 14,679 14,626 14,682 14,590
CONTACT: Citizens Banking Corp., Flint John W. Ennest, 810/257-2557 |
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