Citizens Banking Corporation 2003 Third Quarter Results and Dividend Announcement.Business Editors 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. 16, 2003 Citizens Banking Corporation (Nasdaq:CBCF CBCF Canadian Breast Cancer Foundation CBCF Congressional Black Caucus Foundation CBCF Community Based Corrections Facilities CBCF Commander, Base Communications Facility ) announced net income of $19,605,000 or $0.45 per 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 for the three months ended September September: see month. 30, 2003, compared to a net loss of $45,929,000 or $1.03 per diluted share in the same quarter of 2002 and net income of $13,214,000 or $0.30 per share in the second quarter of 2003. Returns on average assets and average equity during the third quarter were 1.00% and 12.55%, respectively, compared with negative returns of (2.39)% and (25.63)% in the third quarter of 2002. For the nine months ended September 30, 2003, net income was $47,877,000 or $1.10 per diluted share, compared to $3,513,000 or $0.08 per diluted share for the same period of 2002. The improvement in net income in the third quarter of 2003 compared to the second quarter of 2003 and the third quarter of 2002 resulted primarily from a lower loan loss provision. The prior year third quarter results were also negatively impacted by a special charge of $13.8 million ($9.0 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) to restructure Citizens' consumer, business and wealth management lines of business and other charges of $9.4 million ($6.1 million after-tax) for various items Citizens considered unusual in nature. Net interest income was charged $0.7 million, noninterest income was charged $1.6 million and noninterest expense was charged $7.1 million. The provision for losses declined to $10.3 million in the third quarter of 2003 compared to $25.7 million in the second quarter and $89.3 million in the third quarter of 2002. The lower loan loss provision resulted from a decline in 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. , lower net charge-offs and fewer risk rating downgrades within the commercial loan portfolio. "We're we're Contraction of we are. we're we are pleased that the projected and continued improvement in our credit quality has enabled us to increase earnings this quarter," stated William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack R. Hartman Hartman may refer to: Surname
The collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although field audits which were initiated in late March are essentially complete, with the remainder to be completed by the end of October October: see month. 2003. Based upon results of these audits, there have been no additional reserves or charge-offs although a small number of commercial customers have been requested to seek alternative financing because they were unwilling or unable to accommodate Citizens' reporting requests. "We are continuing our strategy of performing an ongoing conservative risk evaluation of the portfolio in order to maintain reserves commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the continued sluggish economy Sluggish Economy A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts. in the markets which we serve," remarked John D. Schwab Schwab is a German name meaning "man from Swabia" and may refer to:
EVP EGR (Exhaust Gas Recirculation) Valve Position Sensor EVP Electronic Voice Phenomenon EVP Europäische Volkspartei (Germany) EVP Employee Value Proposition and chief credit officer. Key Highlights of the Quarter: -- As previously anticipated, the provision for loan losses and net charge-offs were down in the third quarter. Provision for loan losses declined by 60% to $10.3 million and net charge-offs were down by 14% to $10.3 million for the third quarter compared to the second quarter 2003. Nonperforming assets were down $5.4 million or 5.5% from second quarter 2003 levels. -- Citizens' Board of Directors approved a new stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. plan today that provides for the 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. of up to 3,000,000 shares of Citizens Banking Corporation common stock on the open market. At present, there are 43,227,348 shares issued and outstanding. -- A three week Home Equity campaign during the third quarter produced favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results with minimal advertising expense. Over $54 million in new commitments were booked resulting in $26 million of new balances. -- Citizens' executive management team is now complete as a result of the hiring of a commercial banking head for 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). , a new head of Citizens' mortgage company (both announced today), a commercial products head for the Corporation, a head of wealth management, and several other key additions. -- Citizens Bank Wealth Management, N.A., through an arrangement with EPIC Advisors, Inc., announced plans to increase and grow its retirement plan business by offering its clients advanced state-of-the-art online employee account access, online retirement plan design and consulting options, and access to industry experts. -- Citizens formed an agricultural lending group and appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. a senior credit officer and others to the group with broad experience in agricultural lending. This initiative is intended to grow our agricultural business and deliver superior service to clients while providing more consistent 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. , risk rating and adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something. immune adherence to structure for loans made to customers in this unique industry. Balance Sheet Citizens' total assets at September 30, 2003 were $7.784 billion, a decrease of $2.0 million compared with June June: see month. 30, 2003 and an increase of $262 million or 3.5% compared with December December: see month. 31, 2002. Loans declined $61 million or 1.2% from June 30, 2003 and $206 million or 3.8% compared with December 31, 2002. The decline in loans from year end 2002 reflected a decrease in commercial and mortgage portfolio loans, partially offset by an increase in consumer loans. Investment security balances increased $537.8 million or 36.9% from year end 2002 as Citizens began to expand its investment securities portfolio near the end of the first quarter of 2003 to offset the effects of weak loan demand and the prospect of net interest margin pressure from continued low interest rates. Increases in short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings and FHLB FHLB Federal Home Loan Bank advances have funded the expansion of the investment portfolio. Commercial loans decreased $264 million or 8.0% at September 30, 2003 compared with December 31, 2002 resulting from increased activity in fixed-rate loan Fixed-rate loan A loan whose rate is fixed for the life of the loan. refinancing Refinancing An extension and/or increase in amount of existing debt. and paydowns, lower demand for commercial credit and earlier identification and reduction of exposure on credits with the potential to deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. . This decline in loan demand occurred primarily in Citizens' Michigan and Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee markets. Mortgage loans declined $134 million or 21.5% at September 30, 2003 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. 2002 resulting from high refinancing activity causing prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. of existing portfolio loans and the continued sale of most new mortgage loan production into the secondary market. Consumer loans increased $192 million or 12.7% at September 30, 2003 compared to December 31, 2002 due to the success of the spring and summer home equity campaigns. Home equity loans increased 23.1% from year end 2002 and comprised $127 million of the $192 million increase in consumer loans. An $87 million increase in indirect consumer loans at September 30, 2003 compared with year end 2002 was due primarily to increased market share with the existing dealer base. Other consumer loans were down $22 million or 7.3% at September 30, 2003 from year end 2002. Total deposits decreased $455 million or 7.7% to $5.482 billion at September 30, 2003 compared with $5.937 billion at December 31, 2002. The decline in deposits occurred largely within time deposits, and to a lesser extent, savings deposits Savings deposits Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand. as clients sought higher yielding investment alternatives in the low interest rate environment. In the third quarter of 2003, Citizens completed a successful marketing campaign promoting its "Perfect Fit" checking account products to increase growth in core interest bearing and non-interest bearing checking accounts. During the 12 week "Perfect Fit" campaign, over 10,600 new accounts were opened representing nearly $61 million in new deposit balances. "Our consumer banking sales campaigns Noun 1. sales campaign - an advertising campaign intended to promote sales ad blitz, ad campaign, advertising campaign - an organized program of advertisements sales campaign n → campaña de venta are certainly generating results. During the quarter we concentrated our sales efforts on a Home Equity Loan campaign, introduced branch merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. focused on consumer loan products, and completed our 'Perfect Fit' checking campaign. All three programs yielded successful results in new business and fee income," commented Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. G. Schaeffer Schaeffer can refer to:
Net Interest Margin and Net Interest Income Net interest margin declined to 4.03% in the third quarter of 2003 compared to 4.17% in the second quarter of 2003 and 4.40% in the third quarter of 2002. The decrease in net interest margin in the third quarter of 2003 compared to the second quarter is the result of high levels of investment security and fixed rate commercial loan prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. being reinvested at lower yields, and accelerated purchase premium amortization on mortgage related securities. The very low levels of longer-term rates during June and July July: see month. fueled above normal prepayment volume versus the prior quarter. The 25 basis point decrease in the Federal Funds Rate Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. on June 25, 2003 had no significant impact on net interest margin. For the nine months ended September 30, 2003 net interest margin declined to 4.15% from 4.43% compared to the same period of the prior year. This decline is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the asset sensitive position held prior to the second quarter of 2003, accelerated prepayments in both the fixed rate commercial loan portfolio and the mortgage related securities portfolio, plus a mix shift in 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 from loans to lower yielding securities. Fourth quarter 2003 net interest margin is expected to show additional compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. due to the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of fixed rate asset prepayments at current market rates. Net interest income decreased $1.8 million in the third quarter of 2003 compared to the second quarter of 2003, due to the lower net interest margin. Average earning assets increased $24.1 million in the third quarter compared with the previous quarter as growth in the investment portfolio and money market investments of $42.9 million more than offset a decline in loan balances. Compared to the third quarter of 2002, net interest income declined $4.0 million in the current quarter due to a decrease in the net interest margin partially offset by an increase of $221.6 million in earning assets. For the first nine months of 2003, net interest income declined $10.0 million from the same period a year ago due to a 28 basis point decline in net interest margin partially offset by an increase of $100.9 million in earning assets. Noninterest Income Noninterest income for the third quarter of 2003 was $25.1 million, up $0.2 million or 0.8% from the second quarter of 2003 and $5.3 million or 27.0% from the third quarter of 2002. The increase from the second quarter of 2003 reflected higher service charges on deposits and brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and investment fees partially offset by losses from the sale of equipment. Compared to the third quarter of 2002, the increase was due to higher service charges on deposit accounts and mortgage banking revenue. Also contributing to the increase was a charge of $1.6 million recorded in the third quarter of 2002, which included market valuation adjustments of $662,000 to an equity investment and $650,000 to life insurance cash surrender values The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. , and write-offs of $200,000 for obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. assets and $75,000 for cash management fees accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. but not collectible collectible An asset of limited supply that is sought for a variety of reasons including, it is hoped, an increase in value. Stamps, antiques, coins, and works of art are among the many things usually classified as collectibles. . Noninterest income for the nine months ended September 30, 2003 was $73.2 million, down $1.9 million or 2.5% from $75.1 million in the first nine months of 2002. The decline was largely due to gains recorded in 2002 of $5.4 million from the sale of Citizens' merchant services Merchant services is the name given in the United States to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment by use of the customer's credit or business and $2.4 million from the sale of securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. mortgages partially offset by the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $1.6 million. The other components of noninterest income increased $4.4 million period over period as higher service charges on deposits, mortgage banking revenue and income from bank owned life insurance more than offset lower trust, brokerage and investment fees 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. Service charges on deposit accounts increased $1.1 million and $2.1 million for the three and nine month periods ended September 30, 2003 compared to the same periods in 2002. These increases reflect higher overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers revenue due to the implementation of additional fees, a new overdraft monitoring system and fewer waived fees. Bankcard fees declined $3.0 million or 56.9% for the nine month period ended September 30, 2003 and were $0.1 million or 13.2% higher than the comparable quarter of 2002. The decline for the first nine months of 2003, compared to the same period in 2002, was a result of the sale of the merchant services business in the second quarter of 2002. Trust fees for the quarter were unchanged compared to the third quarter of 2002 and were down $1.3 million or 9.5% for the nine months ended 2003 compared to the same period in 2002. These fees are based primarily on the market value of assets under administration. For the nine months ended September 30, 2003, the decline in trust fees was due to lower financial markets and to a lessor One who rents real property or Personal Property to another. A lessor of land is a landlord. Cross-references Landlord and Tenant. lessor n. the owner of real property who rents it to a lessee pursuant to a written lease. extent attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: . Trust fee revenue, however, grew by $44,000 or 1.0% in the third quarter of 2003 compared to the second quarter of 2003 primarily due to the recent improvement in the financial markets. Total trust assets under administration were $2.61 billion at September 30, 2003, an increase of $123.0 million from September 30, 2002, and a decline of $13.0 million from June 30, 2003. Brokerage and investment fees were unchanged for the quarter and declined $1.0 million or 14.3% during the nine months ended September 30, 2003 compared to the same periods of 2002. The decline for the first nine months of 2003 reflects slower retail sales of fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. products. Brokerage and investment fees were up $0.4 million in the third quarter of 2003 from the previous quarter due to a recent campaign promoting the sale of such products. Mortgage and other loan income increased $2.5 million or 84.6% in the third quarter of 2003 and $6.1 million or 62.5% in the nine months ended September 30, 2003 compared to the same periods of 2002 as a result of higher mortgage 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. volume during 2003. The majority of all new mortgage loan origination along with the related servicing was sold in the secondary market resulting in higher revenue. Other noninterest income increased $1.7 million for the quarter and $3.0 million for the nine months ended September 30, 2003, compared to the same periods of 2002. The increase in both periods was principally due to the aforementioned charge of $1.6 million recorded in the third quarter of 2002 and increases in life insurance income and title insurance fees. Higher life insurance income reflects the purchase of $78.0 million of separate account bank owned life insurance in the third quarter of 2002. Title insurance fees increased due to higher mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real volume. Based on the current economic and interest rate environment, noninterest income is expected to decline somewhat in the fourth quarter of 2003 from third quarter levels due to lower mortgage income as mortgage origination and sale volume is expected to decline in the fourth quarter. Noninterest Expense Noninterest expense for the third quarter was $59.6 million compared with $79.5 million for the third quarter of 2002 and $56.4 million for the second quarter of 2003, a decrease of $19.9 million or 25.0% from the third quarter of 2002 but up $3.2 million or 5.7% from second quarter 2003. For the nine months ended September 30, 2003, total noninterest expense decreased $29.7 million or 14.7% to $172.5 million compared to the same period in 2002. The decline in both the three and nine month periods reflect a special charge of $13.8 million and other charges of $7.1 million recorded in the third quarter of 2002 for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other initiatives as well as decreases in most other major components of noninterest expense offset, in part, by increased professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. , system implementation costs and other expense. Noninterest expense in the current quarter was up over the second quarter of 2003 primarily due to higher professional services expense, advertising and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most costs, other real estate expenses and system implementation costs. Salaries and employee benefits decreased $1.2 million or 3.7% for the quarter and $3.7 million or 3.9% for the nine months ended September 30, 2003 compared to the same periods of 2002. Salary and benefit costs were down due to lower staffing levels resulting from the restructuring initiatives announced during the third quarter of 2002 and normal attrition. Higher incentive-based compensation associated with mortgage loan origination and sales activity and increased medical costs partially offset the decline. Citizens had 2,353 full time equivalent employees at September 30, 2003, down from 2,650 at September 30, 2002. Equipment expenses decreased $1.1 million or 21.4% for the quarter, and $2.9 million or 19.2% for the nine month period ended September 30, 2003, compared to the same periods of 2002. The decrease resulted from lower depreciation and improved pricing from new or renegotiated maintenance contracts. A $0.4 million charge in the third quarter of 2002 for additional depreciation on equipment to be retired early also contributed to the decrease. Professional services expense increased $1.4 million or 40.4% for the quarter and $2.9 million or 29.9% for the nine months ended September 30, 2003, compared to the same periods of 2002. The increases reflect $0.6 million incurred for the collateral field audit initiative begun in March of 2003, higher legal costs related to loan collection efforts, increased executive recruiting and relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. costs, implementation costs for Citizens' new INEA INEA Istituto Nazionale di Economia Agraria (Italian: National Institute of Agricultural Economics) INEA Instituto Nacional de Educación para los Adultos (Spanish: National Institute for Adult Education; Mexico) Performance Management software and additional costs associated with engagement of banking industry consultants who assisted in the restructuring. Advertising and public relations expense decreased $0.5 million or 24.5% for the quarter from the third quarter of 2002 and $1.5 million or 26.5% for the nine months ended September 30, 2003 compared to the same periods a year ago. The decrease reflects less media-intensive marketing campaigns as Citizens adopted a more focused marketing strategy, seeking higher exposure at lower costs. Bankcard expense declined $55,000 or 41.0% for the quarter and $3.5 million or 93.1% for the nine month period ended September 30, 2003 compared to the same periods of 2002 due to the sale of Citizens' merchant services business in the second quarter of 2002. In the third quarter of 2002, Citizens recorded a special charge of $13.8 million for restructuring initiatives within its three major lines of business (consumer banking, business banking and wealth management) to be able to compete more effectively, reduce layers of management, be more customer oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. , and be better positioned to grow core deposits and loans. At the same time, Citizens also charged to noninterest expense $7.1 million of other significant items considered unusual in nature. These charges included a $3.3 million prepayment penalty Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. on high cost FHLB debt, a $2.0 million contribution to the charitable trust The arrangement by which real or Personal Property given by one person is held by another to be used for the benefit of a class of persons or the general public. , $0.4 million of additional equipment depreciation described previously and $1.4 million included in other noninterest expense as described below. Other noninterest expense increased $0.9 million, or 15.4% for the quarter and was virtually unchanged for the nine months ended September 30, 2003 compared to the same periods in 2002. The increase in the third quarter of 2003 compared to same quarter in 2002 was primarily due to a loss of $0.5 million on the sale of other real estate ("ORE"), higher state taxes of $0.6 million due to Citizens' net loss and higher loan charge-offs in the third quarter of 2002, and $0.6 million associated with the implementation of new strategic alliances between Citizens' trust bank subsidiary, Citizens Bank Wealth Management N.A., and two third party vendors, SEI Investments and EnvestnetPMC. Partially offsetting these increases were $1.4 million of other charges recorded in the third quarter of 2002, which included an ORE market valuation adjustment of $1.0 million and other charges of $0.5 million. For the nine months ended September 30, 2003 compared to the same period in 2002, higher ORE expenses of $1.2 million, state taxes of $0.3 million, SEI Investments and EnvestnetPMC implementation costs of $0.8 million were essentially offset by the $1.4 million of other charges in the third quarter of 2002, a contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). fee of $0.6 million in the first half of 2002 as servicing for Citizens' debit card debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. portfolio was brought back in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. and fewer fraud and other losses recorded in 2003. Noninterest expense is expected to remain relatively flat in the fourth quarter of 2003 compared to third quarter 2003 levels as additional marketing expenses targeting selected markets and deposit products are offset by lower mortgage-related compensation. Credit Quality Nonperforming assets totaled $91.2 million or 1.17% of assets, at September 30, 2003, representing a decrease of $5.4 million or 5.5% from second quarter 2003 levels. The allowance for loan losses remained unchanged at $126.0 million or 2.41% of loans at September 30, 2003. Allowance for loan losses as a percent of nonperforming loans increased to 150.16%, compared to 104.17% for third quarter 2002. Net loans charged off during the quarter totaled $10.3 million or 0.8% of average loans (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. ), compared with $12.0 million in the second quarter of 2003 and $65.5 million in the third quarter of 2002. As previously forecasted, Citizens expects provision expense and net charge-offs to each be less than $11 million again in the fourth quarter of 2003. Initiatives Earlier this year, William R. Hartman, chairman, president and CEO, announced Citizens' new vision to staff members along with the elements required to reach the vision, termed "Achieving the Vision." A learning center called "Citizens University" was established to provide staff members with the information they need to understand their personal role in achieving the company's vision. By the end of 2003 all staff members will have attended Citizens University sessions, submitted suggestions for process improvements and made commitments as to their personal contributions. Management and an evaluation team of cross-functional staff members from across the Company reviewed these suggestions during the third quarter and many will be implemented in coming months. A total of more than 60 initiatives fall under the "Achieving the Vision" process. The status of each of these initiatives is overseen by a team of project managers who, in turn, report progress on the initiatives throughout the company. Dividend Announcement The Board of Directors of Citizens Banking Corporation 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 cash dividend of $0.285 per share of common stock. The dividend is payable on November November: see month. 5, 2003, to shareholders of record on October 24, 2003. Other News On October 16, 2003, Citizens announced the appointment of Clinton Clinton. 1 Town (1990 pop. 12,767), Middlesex co., S Conn., on Long Island Sound; settled 1663, set off from Killingworth and inc. 1838. The school that later became Yale opened here in 1702. A. Sampson Samp·son , Deborah 1760-1827. American Revolutionary soldier who fought disguised as a man (1782-1783) and was wounded twice before her secret was discovered. In 1818 she was granted a full veteran's pension. as executive vice president for the Corporation. Sampson will serve as regional chairman and be responsible for commercial banking relationships in Michigan. He is a veteran commercial banker BANKER, com. law. A banker is one engaged in the business of receiving other persons money in deposit, to be returned on demand discounting other persons' notes, and issuing his own for circulation. One who performs the business usually transacted by a bank. with more than 30 years experience in the industry. During this time, he has held leadership roles in the areas of middle market, large corporate and international sales. Randall Randall may refer to the following: In places:
Canadian jazz pianist. A prolific recording artist noted for his technical skill, he is best known for work produced with his own trio (1953-1965). , currently president and CEO of F&M Bank has also been appointed executive vice president for the Corporation and will serve as regional chairman with responsibilities for commercial banking relationships in Wisconsin, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. and Iowa. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. A. Schmelter was appointed to executive vice president and head of Citizens' wealth management line of business on August 28, 2003. Additionally, he will serve in the role of president and chief executive officer of Citizens Bank Wealth Management, N.A., Citizens' wealth management subsidiary. Prior to joining Citizens, Schmelter was senior vice president and head of Private Client Services for Bank One Corporation's Cleveland, Ohio "Cleveland" redirects here. For the Cleveland metropolitan area, see . For other uses, see Cleveland (disambiguation). Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, the most populous county in the state. market. In this position he was responsible for managing private banking, trust, and investment business with high net worth clients throughout Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. Ohio. On October 16, 2003, Citizens named Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. J. Sonego as senior vice president and head of its residential mortgage banking and title services areas. In this position, Sonego is responsible for the performance and origination of retail and wholesale residential mortgages and title services. Prior to joining Citizens, Sonego was with Bank One and its predecessors for nearly 20 years in various positions. In 1998 he became the national mortgage sales manager sales manager n → gerente m/f de ventas sales manager n → directeur commercial sales manager sale n → for Bank One where he designed and implemented national management structure which includes managing originators, sales managers and division managers in 14 states. In 2002 he became a market business manager in Private Client Services responsible for Troy Troy, ancient city, Asian Turkey Troy, ancient city made famous by Homer's account of the Trojan War. It is also called Ilion or, in Latin, Ilium. Its site is almost universally accepted as the mound now named Hissarlik, in Asian Turkey, c.4 mi (6. and Grosse Pointe, Michigan This article is about the incorporated city of Grosse Pointe. For the adjacent area, see Grosse Pointe. Grosse Pointe is a wealthy suburban city bordering Detroit in Wayne County in the U.S. state of Michigan. The population was 5,670 at the 2000 census. offices including private banking, trust advisors, and client advisors as well as estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the , financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against and insurance for clients. Wendy Wendy is a female name which may be used as a short form for Gwendolyn, or in its own right. Its popularity is attributed to the character Wendy Darling from the children's play and novel Peter Pan, by J.M. Barrie. The character Wendy was inspired by a real girl. K. Hemingway Hem·ing·way , Ernest Miller 1899-1961. American writer. A World War I ambulance driver, journalist, and expatriate in Paris during the 1920s, he wrote short stories and novels, such as The Sun Also Rises (1926) and was named senior vice president and director of commercial products and sales for Citizens on July 29, 2003. The appointment of Hemingway to this new position will be instrumental in dramatically upgrading Citizens' treasury management products and services and promoting the sale of these non-credit business products. Prior to joining Citizens, Hemingway's experience includes holding the position of director of public funds See Fund, 3. See also: Public , where she was responsible for growth in the non-profit, municipal and association sectors. She was most recently employed by Fifth Third Bank in South Eastern Michigan. She has extensive experience in Treasury Management product sales. On August 7, 2003, Citizens announced the appointment of Martin E. Grunst as senior vice president and treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. for the Corporation. Grunst will be responsible for the Corporation's investment, asset liability management, funds transfer pricing Funds Transfer Pricing (FTP) is a process used in banking to measure a funding source's contribution to overall profitability. External links
On July 28, 2003, Citizens announced the appointment of Lin Lin , Maya Ying Born 1959. American sculptor and architect whose public works include the Vietnam Veterans Memorial in Washington, D.C. (1982). Noun 1. Abbott Ab·bott , Berenice 1898-1991. American photographer known especially for her series of black-and-white portraits of New York City. Abbott, George 1887-1995. as its new information technology manager. As the IT manager, Abbott is responsible for the overall coordination coordination /co·or·di·na·tion/ (ko-or?di-na´shun) the harmonious functioning of interrelated organs and parts. co·or·di·na·tion n. 1. The harmonious adjustment or interaction of parts. and maintenance of the information technology function for Citizens. These functions include networks, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , microcomputer microcomputer Small digital computers whose CPU is contained on a single integrated semiconductor chip. As large-scale and then very large-scale integration (VLSI) have progressively increased the number of transistors that can be placed on one chip, the processing capacity support, technical help desk, and webmaster A person responsible for the implementation of a Web site. Webmasters must be proficient in HTML as well as one or more scripting and interface languages such as JavaScript and Perl. They may also have experience with more than one type of Web server. See Web administrator and Webmistress. responsibilities. Prior to joining Citizens, Abbott was an infrastructure and operations director with another banking company where he was responsible for the vision, charter and implementation of the enterprise command center's operations and management functions. During the third quarter of 2003, Citizens repurchased a total of 75,000 shares of its stock at an average price of $26.01. Since the stock repurchase program was announced in October 2001, Citizens has repurchased 2,578,200 shares at an average price of $28.13. As of September 30, 2003, 421,800 shares remain to be purchased under the current program. Conference Call Announcement William R. Hartman, chairman, president and CEO, Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by D. Christy chris·ty n. Variant of christie. , CFO See Chief Financial Officer. and John D. Schwab, chief credit officer, will review the quarter's results in a conference call for investors and analysts beginning at 1:00 pm EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , October 17, 2003. To participate in the conference call, please call the number below approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 minutes prior to the scheduled conference time: US/Canada Dial-In Number: (800) 374-2419 International Dial-In Number: (706) 634-1073 Conference ID: 2984001 Conference Name: "Citizens Banking Corporation 3rd Quarter Earnings" R.S.V.P. is not required. A playback Playback could mean:
The process by which the corporation communicates with its investors. section by clicking on Presentations or directly at http://www.snl.com/Interactive/IR/presentations.asp?IID IID Imperial Irrigation District (California) IID Interface Identifier (Component Object Model) IID Ignition Interlock Device (automotive security system) =100175. Corporate Profile Citizens Banking Corporation is a diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services company providing a full range of commercial, consumer, mortgage banking, trust and financial planning services to a broad client base. Citizens operates 176 branch, private banking, and financial center locations throughout Michigan, Wisconsin, Iowa, and in 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. , Illinois. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Discussions in this release that are not statements of historical fact (including statements that include terms such as "believe", "expect", and "anticipate") are 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 involve risks and uncertainties, and the Company's actual future results could materially differ from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, adverse changes in the Company's loan and lease portfolios and the resulting credit risk-related losses and expenses, the Company's future lending and collections experience and the potential inadequacy of the Company's loan loss reserves, interest rate fluctuations and other adverse changes in economic or financial market conditions, the potential inability to hedge certain risks economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: , adverse changes in competition and pricing environments, the Company's potential failure to maintain or improve loan quality levels and origination volume, the Company's potential inability to continue to attract core deposits, the potential lack of market acceptance of the Company's products and services, adverse changes in the Company's relationship with major customers, unanticipated technological changes that require major capital expenditures, adverse changes in applicable laws and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , unanticipated environmental liabilities or costs, the Company's potential inability to integrate acquired operations or complete our restructuring, the effects of terrorist attacks and potential attacks, the Company's success in managing the risks involved in the foregoing, and other risks and uncertainties detailed from time to time in the company's filings with the Securities and Exchange Commission. Other factors not currently anticipated by management may also materially and adversely affect the Company's results of operations. The Company does not undertake, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. (Financial highlights follow) Visit our Web site at http://www.CitizensOnline.com
Consolidated Balance Sheets (Unaudited)
Citizens Banking Corporation and Subsidiaries
September 30, December 31,
(in thousands) 2003 2002(1)
----------------------------------------------------------------------
Assets
Cash and due from banks $180,896 $171,864
Money market investments:
Federal funds sold --- 69,000
Interest-bearing deposits with banks 2,368 2,332
----------- -----------
Total money market investments 2,368 71,332
Securities available-for-sale:
Taxable 1,554,925 1,021,668
Tax-exempt 432,903 435,613
----------- -----------
Total securities available-for-sale 1,987,828 1,457,281
Securities held-to-maturity (fair value of
$7,186 ) 7,262 ---
Mortgage loans held for sale 132,627 160,743
Loans 5,226,386 5,432,561
Less: Allowance for loan losses (125,955) (109,467)
----------- -----------
Net loans 5,100,431 5,323,094
Premises and equipment 112,089 117,704
Goodwill 54,785 54,785
Other intangible assets 17,688 19,862
Bank owned life insurance 79,929 78,434
Other assets 108,461 66,935
----------- -----------
Total assets $7,784,364 $7,522,034
=========== ===========
Liabilities
Noninterest-bearing deposits $878,536 $900,674
Interest-bearing deposits 4,603,657 5,036,239
----------- -----------
Total deposits 5,482,193 5,936,913
Federal funds purchased and securities sold
under agreements to repurchase 610,865 223,289
Other short-term borrowings 41,564 79,062
Other liabilities 74,993 32,988
Long-term debt 940,605 599,313
----------- -----------
Total liabilities 7,150,220 6,871,565
Shareholders' Equity
Preferred stock - no par value
Common stock - no par value 100,425 112,253
Retained earnings 506,318 495,570
Other accumulated comprehensive net income 27,401 42,646
----------- -----------
Total shareholders' equity 634,144 650,469
----------- -----------
Total liabilities and
shareholders' equity $7,784,364 $7,522,034
=========== ===========
----------------------------------------------------------------------
(1) Certain amounts have been reclassified to conform with current
year presentation.
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Citizens Banking Corporation and Subsidiaries
Three Months Ended Nine Months Ended
(in thousands, except September 30, September 30,
per share amounts) 2003 2002(1) 2003 2002(1)
----------------------------------------------------------------------
Interest Income
Interest and fees on loans $80,371 $95,924 $247,394 $292,912
Interest and dividends on
investment securities:
Taxable 14,254 14,150 45,795 41,121
Tax-exempt 5,059 5,319 15,288 16,038
Money market investments 3 165 102 755
-------- --------- --------- ---------
Total interest income 99,687 115,558 308,579 350,826
-------- --------- --------- ---------
Interest Expense
Deposits 18,851 31,725 66,410 99,160
Short-term borrowings 1,463 1,007 3,497 2,876
Long-term debt 8,219 7,644 23,092 23,240
-------- --------- --------- ---------
Total interest expense 28,533 40,376 92,999 125,276
-------- --------- --------- ---------
Net Interest Income 71,154 75,182 215,580 225,550
Provision for loan losses 10,300 89,250 54,942 103,900
-------- --------- --------- ---------
Net interest income (loss)
after provision for loan
losses 60,854 (14,068) 160,638 121,650
-------- --------- --------- ---------
Noninterest Income
Service charges on deposit
accounts 7,703 6,620 21,842 19,767
Trust fees 4,368 4,372 12,912 14,260
Mortgage and other loan
income 5,404 2,928 15,967 9,825
Brokerage and investment
fees 2,333 2,337 6,015 7,020
Bankcard fees 761 672 2,310 5,359
Investment securities gains
(losses) 42 45 101 (12)
Gain on sale of merchant
business --- --- --- 5,400
Gain on securitized mortgages --- --- --- 2,436
Other 4,443 2,760 14,041 11,020
-------- --------- --------- ---------
Total noninterest income 25,054 19,734 73,188 75,075
-------- --------- --------- ---------
Noninterest Expense
Salaries and employee benefits 31,036 32,218 92,548 96,262
Equipment 4,060 5,167 12,098 14,981
Occupancy 4,328 4,307 13,337 13,506
Professional services 4,946 3,524 12,613 9,713
Data processing services 3,225 3,066 9,599 9,441
Postage and delivery 1,739 1,860 5,100 5,375
Advertising and public
relations 1,395 1,848 4,067 5,535
Telephone 1,169 1,268 3,479 4,103
Stationery and supplies 911 907 2,679 3,021
Bankcard expense 79 134 261 3,787
Special charge (370) 13,807 (691) 13,807
Prepayment penalty on FHLB
advances --- 3,300 --- 3,300
Contribution to charitable
trust --- 2,000 --- 2,000
Other 7,082 6,139 17,452 17,426
-------- --------- --------- ---------
Total noninterest expense 59,600 79,545 172,542 202,257
-------- --------- --------- ---------
Income (Loss) Before Income
Taxes 26,308 (73,879) 61,284 (5,532)
Income tax provision (benefit) 6,703 (27,950) 13,407 (9,045)
-------- --------- --------- ---------
Net Income (Loss) $19,605 $(45,929) $47,877 $3,513
======== ========= ========= =========
Net Income (Loss) Per Share:
Basic $0.45 $(1.03) $1.10 $0.08
Diluted 0.45 (1.03) 1.10 0.08
Average Shares Outstanding:
Basic 43,227 44,610 43,326 44,819
Diluted 43,501 44,610 43,574 45,295
---------------------------------------------------------------------
(1) Certain amounts have been reclassified to conform with current
year presentation.
----------------------------------------------------------------------
Selected Quarterly Information
Citizens Banking Corporation and Subsidiaries
3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
2003 2003 2003 2002 2002
----------------------------------------------------------------------
Summary of Operations
(thousands)
Interest income (1) $99,687 $104,683 $104,209 $112,558 $115,558
Interest expense 28,533 31,763 32,703 36,326 40,376
Net interest income 71,154 72,920 71,506 76,232 75,182
Provision for loan
losses 10,300 25,650 18,992 16,300 89,250
Net interest income
(loss) after
provision for loan
losses 60,854 47,270 52,514 59,932 (14,068)
Noninterest income
(1) 25,054 24,847 23,287 26,701 19,734
Noninterest expense
(1) 59,600 56,361 56,581 57,126 79,545
Income tax provision
(benefit) 6,703 2,542 4,162 7,982 (27,950)
Net income (loss) 19,605 13,214 15,058 21,525 (45,929)
----------------------------------------------------------------------
At Period End (millions)
Total assets $7,784 $7,786 $7,765 $7,522 $7,614
Total earning assets 7,356 7,334 7,285 7,122 7,149
Total loans 5,226 5,287 5,303 5,433 5,524
Total deposits 5,482 5,660 5,812 5,937 5,904
Total shareholders'
equity 634 639 640 650 668
----------------------------------------------------------------------
Average Balances (millions)
Total assets $7,812 $7,809 $7,454 $7,564 $7,616
Total earning assets 7,378 7,387 7,043 7,141 7,194
Total loans 5,183 5,253 5,343 5,470 5,577
Total deposits 5,610 5,723 5,853 5,922 5,951
Total shareholders'
equity 620 639 643 654 711
Shareholders' equity
/ assets 7.94 % 8.18 % 8.63 % 8.65 % 9.34 %
----------------------------------------------------------------------
Credit Quality Statistics
(thousands)
Nonaccrual loans $83,278 $87,928 $84,107 $86,717 $98,732
Loans 90 or more
days past due and
still accruing 601 607 990 860 1,260
Restructured loans --- --- --- --- ---
--------- --------- --------- --------- ---------
Total
nonperforming
loans 83,879 88,535 85,097 87,577 99,992
Other repossessed
assets acquired
(ORAA) 7,350 8,044 8,226 8,094 8,025
--------- --------- --------- --------- ---------
Total
nonperforming
assets $91,229 $96,579 $93,323 $95,671 $108,017
========= ========= ========= ========= =========
Allowance for loan
losses $125,955 $125,992 $112,385 $109,467 $104,158
Allowance for loan
losses ratio 2.41 % 2.38 % 2.12 % 2.02 % 1.89 %
Allowance for loan
losses as a percent
of nonperforming
assets 138.06 130.45 120.43 114.42 96.43
Allowance for loan
losses as a percent
of nonperforming
loans 150.16 142.31 132.07 125.00 104.17
Nonperforming assets
as a percent of
loans plus ORAA 1.74 1.82 1.76 1.76 1.95
Nonperforming assets
as a percent of
total assets 1.17 1.24 1.20 1.27 1.42
Net loans charged
off as a percent of
average loans
(annualized) 0.80 0.92 1.20 0.80 4.70
Net loans charged
off (000) $10,337 $12,043 $16,074 $10,991 $65,539
----------------------------------------------------------------------
Per Common Share Data
Net Income (loss):
Basic $0.45 $0.30 $0.35 $0.49 $(1.03)
Diluted 0.45 0.30 0.34 0.48 (1.03)
Dividends 0.285 0.285 0.285 0.285 0.285
Market Value:
High $28.01 $28.17 $26.05 $26.46 $29.43
Low 24.77 21.72 23.58 21.25 23.35
Close 26.41 27.01 23.62 24.78 24.17
Book value 14.67 14.77 14.79 14.88 14.97
Shares outstanding,
end of period (000) 43,220 43,260 43,299 43,702 44,631
----------------------------------------------------------------------
Performance Ratios
(annualized)
Net interest margin
(FTE) 4.03 % 4.17 % 4.33 % 4.49 % 4.40 %
Return on average
assets 1.00 0.68 0.82 1.13 (2.39)
Return on average
shareholders'
equity 12.55 8.29 9.50 13.06 (25.63)
Efficiency ratio 59.90 55.74 57.58 53.61 80.75
----------------------------------------------------------------------
(1) Third quarter amounts for 2002 include other charges of $701,000
in interest income, $1,587,000 in noninterest income, $7,068,000
in noninterest expense and a special charge of $13,807,000 in
noninterest expense.
---------------------------------------------------------------------
Financial Summary and Comparison
Citizens Banking Corporation and Subsidiaries
For the nine months ended
September 30,
2003 2002 % Change
----------------------------------------------------------------------
Summary of Operations (thousands)
Interest income (1) $308,579 $350,826 (12.0)%
Interest expense 92,999 125,276 (25.8)
Net interest income 215,580 225,550 (4.4)
Provision for loan losses 54,942 103,900 (47.1)
Net interest income after provision for
loan losses 160,638 121,650 32.0
Noninterest income (1) 73,188 75,075 (2.5)
Noninterest expense (1) 172,542 202,257 (14.7)
Income tax provision (benefit) 13,407 (9,045) (248.2)
Net income 47,877 3,513 1,262.9
----------------------------------------------------------------------
At Period End (millions)
Total assets $7,784 $7,614 2.2 %
Total earning assets 7,356 7,149 2.9
Total loans 5,226 5,524 (5.4)
Total deposits 5,482 5,904 (7.1)
Total shareholders' equity 634 668 (5.1)
----------------------------------------------------------------------
Average Balances (millions)
Total assets $7,693 $7,571 1.6 %
Total earning assets 7,271 7,167 1.5
Total loans 5,259 5,578 (5.7)
Total deposits 5,728 5,925 (3.3)
Total shareholders' equity 634 705 (10.1)
Shareholders' equity / assets 8.24 % 9.31 % (11.5)
----------------------------------------------------------------------
Per Common Share Data
Net Income:
Basic $1.10 $0.08 1,275.0 %
Diluted 1.10 0.08 1,275.0
Dividends 0.855 0.845 1.2
Market Value:
High $28.17 $33.88 (16.9)
Low 21.72 23.35 (7.0)
Close 26.41 24.17 9.3
Book value 14.67 14.97 (2.0)
Tangible book value 13.00 13.21 (1.6)
Shares outstanding, end of period (000) 43,220 44,631 (3.2)
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin (FTE) (2) 4.15 % 4.43 % (6.3)%
Return on average assets 0.83 0.06 1,283.3
Return on average shareholders' equity 10.10 0.67 1,407.5
Net loans charged off as a percent of
average loans 0.97 1.91 (49.2)
----------------------------------------------------------------------
(1) Amounts for 2002 include other charges of $701,000 in interest
income, $1,587,000 in noninterest income, $7,068,000 in
noninterest expense and a special charge of $13,807,000 in
noninterest expense. Noninterest income for 2002 also includes net
investment securities gains of $2,379,000 and gain on sale of
merchant business of $5,400,000.
(2) Net interest margin is presented on an annual basis and includes
taxable equivalent adjustments to interest income of $10,120,000
and $10,843,000 for the nine months ended September 30, 2003 and
2002, respectively, based on a tax rate of 35%.
----------------------------------------------------------------------
Noninterest Income and Noninterest Expense (Unaudited)
Citizens Banking Corporation and Subsidiaries
Quarter Ended
----------------------------------------------
Sept 30 June 30 Mar 31 Dec 31 Sept 30
(in thousands) 2003 2003 2003 2002 2002
----------------------------------------------------------------------
NONINTEREST INCOME:
Service charges on deposit
accounts $7,703 $7,549 $6,590 $6,689 $6,620
Trust fees 4,368 4,324 4,220 4,696 4,372
Mortgage and other loan income 5,404 5,409 5,154 7,020 2,928
Brokerage and investment fees 2,333 1,914 1,768 2,482 2,337
Bankcard fees 761 814 735 783 672
Investment securities gains 42 11 48 12 45
Other income:
Writedown of equity investment --- --- --- --- (662)
Cash surrender value
adjustment --- --- --- --- (650)
Other charges --- --- --- --- (275)
Other 4,443 4,826 4,772 5,019 4,347
----------------------------------------
Total other income 4,443 4,826 4,772 5,019 2,760
----------------------------------------
TOTAL NONINTEREST INCOME $25,054 $24,847 $23,287 $26,701 $19,734
========================================
NONINTEREST EXPENSE:
Salaries and
employee benefits $31,036 $31,400 $30,112 $30,585 $32,218
Equipment 4,060 3,869 4,169 4,888 5,167
Occupancy 4,328 4,314 4,695 4,349 4,307
Professional services 4,946 3,959 3,708 5,077 3,524
Data processing services 3,225 3,058 3,316 3,200 3,066
Postage and delivery 1,739 1,683 1,678 1,745 1,860
Advertising and public
relations 1,395 623 2,049 (423) 1,848
Telephone 1,169 1,135 1,175 1,176 1,268
Stationery and supplies 911 873 895 1,011 907
Bankcard expense 79 91 91 92 134
Special charge (370) (221) (100) (405) 13,807
Prepayment penalty on FHLB
advances --- --- --- --- 3,300
Contribution to charitable
trust --- --- --- --- 2,000
Other expense 7,082 5,577 4,793 5,831 6,139
----------------------------------------
TOTAL NONINTEREST EXPENSE $59,600 $56,361 $56,581 $57,126 $79,545
========================================
----------------------------------------------------------------------
----------------------------------------------------------------------
Average Balances, Yields and Rates
Three Months Ended
-------------------------------------------------
09/30/03 06/30/03 09/30/02
-------------------------------------------------
Average Average Average Average Average Average
Balance Rate(1) Balance Rate(1) Balance Rate(1)
(in thousands)
----------------------------------------------------------------------
Earning Assets
Money market
investments $3,927 0.30 % $7,715 0.61 % $41,538 1.55 %
Investment
securities(2):
Taxable 1,526,583 3.73 1,484,937 4.61 1,009,300 5.61
Tax-exempt 401,302 7.76 396,288 7.83 416,550 7.86
Mortgage loans held
for sale 234,793 5.26 183,545 5.70 82,804 8.29
Loans:
Commercial 3,049,878 5.54 3,164,230 5.68 3,368,262 6.21
Real estate 481,337 6.34 548,778 6.19 681,658 7.03
Direct consumer 937,133 6.27 890,033 6.59 848,198 7.63
Indirect consumer 714,302 7.24 649,677 7.43 679,362 8.17
----------- ----------- -----------
Total earning
assets 7,349,255 5.58 7,325,203 5.91 7,127,672 6.65
Nonearning Assets
Cash and due from
banks 183,214 163,210 182,153
Investment security
fair value
adjustment 28,909 62,182 65,960
Other nonearning
assets 375,185 376,946 321,965
Allowance for loan
losses (124,964) (118,463) (82,244)
----------- ----------- -----------
Total assets $7,811,599 $7,809,078 $7,615,506
=========== =========== ===========
Interest-Bearing
Liabilities
Deposits:
Interest-bearing
demand $1,334,765 0.75 $1,289,092 0.96 $1,151,589 1.64
Savings deposits 1,332,519 0.55 1,355,646 0.79 1,374,149 1.19
Time deposits 2,054,257 2.84 2,209,352 3.05 2,539,356 3.57
Short-term
borrowings 561,427 1.03 476,878 1.19 249,531 1.60
Long-term debt 937,941 3.47 877,184 3.58 615,124 4.93
----------- ----------- -----------
Total interest-
bearing
liabilities 6,220,909 1.83 6,208,152 2.05 5,929,749 2.70
Noninterest-Bearing
Liabilities and
Shareholders' Equity
Noninterest-bearing
demand 888,440 869,347 886,387
Other liabilities 82,150 92,470 88,392
Shareholders'
equity 620,100 639,109 710,978
----------- ----------- -----------
Total liabilities
and shareholders'
equity $7,811,599 $7,809,078 $7,615,506
=========== =========== ===========
Interest Spread 3.75 % 3.86 % 3.95 %
Contribution of noninterest
bearing sources of funds 0.28 0.31 0.45
===== ===== =====
Net Interest Income as a
Percent of Earning Assets 4.03 % 4.17 % 4.40 %
---------------------------------------------------------------------
Nine Months Ended
----------------------------------
09/30/03 09/30/02
---------------------------------
Average Average Average Average
(in thousands) Balance Rate Balance Rate
(1) (1)
---------------------------------------------------------------------
Earning Assets
Money market investments $14,137 0.95 % $68,843 1.45 %
Investment securities(2):
Taxable 1,359,305 4.49 943,410 5.81
Tax-exempt 401,022 7.82 418,108 7.87
Mortgage loans held for sale 185,891 5.54 109,458 7.66
Loans:
Commercial 3,155,940 5.64 3,350,474 6.31
Real estate 538,880 6.30 729,941 7.11
Direct consumer 895,155 6.56 832,054 7.86
Indirect consumer 668,772 7.45 665,952 8.19
----------- -----------
Total earning assets 7,219,102 5.86 7,118,240 6.79
Nonearning Assets
Cash and due from banks 172,681 180,701
Investment security fair value
adjustment 51,598 48,796
Other nonearning assets 368,973 304,525
Allowance for loan losses (119,411) (81,146)
----------- -----------
Total assets $7,692,943 $7,571,116
=========== ===========
Interest-Bearing Liabilities
Deposits:
Interest-bearing demand $1,312,898 0.94 $1,112,259 1.61
Savings deposits 1,352,398 0.73 1,364,617 1.18
Time deposits 2,192,473 3.03 2,584,035 3.81
Short-term borrowings 418,967 1.10 231,807 1.66
Long-term debt 835,990 3.65 624,349 4.98
----------- -----------
Total interest-bearing
liabilities 6,112,726 2.02 5,917,067 2.83
Noninterest-Bearing Liabilities
and Shareholders' Equity
Noninterest-bearing demand 870,039 864,238
Other liabilities 76,073 85,273
Shareholders' equity 634,105 704,538
----------- -----------
Total liabilities and shareholders'
equity $7,692,943 $7,571,116
=========== ===========
Interest Spread 3.84 % 3.96 %
Contribution of noninterest bearing
sources of funds 0.31 0.47
===== =====
Net Interest Income as a Percent of
Earning Assets 4.15 % 4.43 %
---------------------------------------------------------------------
(1) Average rates are presented on an annual basis and include taxable
equivalent adjustments to interest income.
(2) For presentation in this table, average balances and the
corresponding average rates for investment securities are based
upon historical cost, adjusted for amortization of premiums and
accretion of discounts.
---------------------------------------------------------------------
Nonperforming Assets
Citizens Banking Corporation and Subsidiaries
Quarter Ended
----------------------------------------
Sept 30 June 30 Mar 31 Dec 31 Sept 30
(in thousands) 2003 2003 2003 2002 2002
---------------------------------------------------------------------
Commercial(1)
Commercial $51,158 $52,760 $49,275 50,231 48,374
Commercial real estate 17,379 19,568 20,433 19,301 28,488
Small business 1,648 1,466 1,459 813 588
-----------------------------------------
Total commercial 70,185 73,794 71,167 70,345 77,450
Consumer:
Direct 3,291 3,208 3,416 3,704 3,512
Indirect 1,625 1,094 1,646 1,803 1,657
Mortgage 8,177 9,832 7,878 10,865 16,113
Loans 90 days or more past
due and still accruing 601 607 990 860 1,260
Restructured loans --- --- --- --- ---
-----------------------------------------
Total Nonperforming
Loans 83,879 88,535 85,097 87,577 99,992
Other Repossessed Assets
Acquired 7,350 8,044 8,226 8,094 8,025
-----------------------------------------
Total Nonperforming
Assets $91,229 $96,579 $93,323 $95,671 $108,017
=========================================
----------------------------------------------------------------------
(1) Changes in commercial nonperforming assets for the quarter (in
millions):
Inflows $21.1 $36.3 $22.7 $27.6 $51.1
Outflows (24.7) (33.7) (21.9) (34.7) (30.3)
-----------------------------------------
Net change $(3.6) $2.6 $0.8 $(7.1) $20.8
=========================================
----------------------------------------------------------------------
Summary of Loan Loss Experience
Citizens Banking Corporation and Subsidiaries
Quarter Ended
--------------------------------------------
Sept 30 June 30 Mar 31 Dec 31 Sept 30
(in thousands) 2003 2003 2003 2002 2002
---------------------------------------------------------------
Allowance for loan
losses -
beginning of
period $125,992 $112,385 $109,467 $104,158 $80,447
Provision for
loan losses 10,300 25,650 18,992 16,300 89,250
Charge-offs:
Commercial 9,539 7,577 14,133 10,058 56,042
Commercial
real estate 1,531 4,321 955 159 5,452
Small business 348 273 264 159 1,596
---------------------------------------------
Total
commercial 11,418 12,171 15,352 10,376 63,090
Real estate
mortgage 213 76 625 1,745 229
Consumer -
Direct 1,628 1,790 1,748 1,474 2,478
Consumer -
Indirect 1,941 2,152 2,511 2,582 2,035
---------------------------------------------
Total charge-
offs 15,200 16,189 20,236 16,177 67,832
---------------------------------------------
Recoveries:
Commercial 2,882 2,115 2,032 3,862 1,004
Commercial
real estate 595 623 465 45 11
Small business 139 93 362 86 50
---------------------------------------------
Total
commercial 3,616 2,831 2,859 3,993 1,065
Real estate
mortgage 27 8 1 --- 11
Consumer -
Direct 504 479 439 400 463
Consumer -
Indirect 716 828 863 793 754
---------------------------------------------
Total
recoveries 4,863 4,146 4,162 5,186 2,293
---------------------------------------------
Net charge-offs 10,337 12,043 16,074 10,991 65,539
---------------------------------------------
Allowance for loan
losses - end of
period $125,955 $125,992 $112,385 $109,467 $104,158
=============================================
--------------------------------------------------------------------
----------------------------------------------
For the Quarter Ended 09/30/03
----------------------------------------------
Real Consumer- Consumer-
Commercial estate Direct Indirect Total
----------------------------------------------
Charge-offs:
Michigan $6,725 $106 $1,282 $1,941 $10,054
Wisconsin 4,293 59 237 --- 4,589
Iowa 150 48 90 --- 288
Illinois 250 --- 19 --- 269
----------------------------------------------
Total
charge-offs 11,418 213 1,628 1,941 15,200
----------------------------------------------
Recoveries:
Michigan 1,599 --- 376 710 2,685
Wisconsin 893 21 90 --- 1,004
Iowa 24 6 34 --- 64
Illinois 1,100 --- 4 6 1,110
----------------------------------------------
Total
recoveries 3,616 27 504 716 4,863
----------------------------------------------
Net charge-offs $7,802 $186 $1,124 $1,225 $10,337
==============================================
----------------------------------------------
For the Nine Months Ended 09/30/03
----------------------------------------------
Real Consumer- Consumer-
Commercial estate Direct Indirect Total
----------------------------------------------
Charge-offs:
Michigan $26,867 $850 $3,557 $6,604 $37,878
Wisconsin 10,631 (70) 1,281 --- 11,842
Iowa 797 134 273 --- 1,204
Illinois 646 --- 55 --- 701
----------------------------------------------
Total
charge-offs 38,941 914 5,166 6,604 51,625
----------------------------------------------
Recoveries:
Michigan 5,009 --- 1,022 2,390 8,421
Wisconsin 2,914 22 296 --- 3,232
Iowa 75 14 74 --- 163
Illinois 1,308 --- 30 17 1,355
----------------------------------------------
Total
recoveries 9,306 36 1,422 2,407 13,171
----------------------------------------------
Net charge-offs $29,635 $878 $3,744 $4,197 $38,454
==============================================
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