Citizens Banking Corporation Announces Third Quarter Results.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. 13, 1999-- Citizens Banking Corporation earned net income of $13,902,000 for the three months ended September September: see month. 30, 1999, compared with $14,589,000 for the same quarter in 1998. Earnings per share were $.51 compared with $.50 per share for the same quarter of 1998. Third quarter earnings reflect a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge resulting from a check-kiting scheme and other non-recurring items as previously reported. Excluding these items, net income would have been $15,524,000 or $.57 per share, a 14% increase from the same quarter of 1998. "We are currently pursuing legal remedies A legal remedy is the means by which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes some other court order to impose its will. In Commonwealth common law jurisdictions and related jurisdictions (e.g. to recover the funds," commented 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, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "In addition, we have strengthened internal controls to diminish the risk of future occurrences." For the first nine months of 1999, net income increased to $43,391,000 from $41,794,000 for the same period of 1998. Earnings per share were $1.56, 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 compared with $1.45 per diluted share for 1998, an increase of 7.6%. Returns on average assets and average equity during the first nine months of 1999 were 1.25% and 13.78%, respectively, compared with 1.26% and 13.26%, in the same period of 1998. Excluding the non-recurring items in the third quarter, net income would have been $45,013,000 or $1.62 per diluted share, an 11.7% increase from 1998. Noninterest income increased $11,521,000 to $53,217,000 during the nine months ending September 30, 1999, an improvement of 27.6% over the same period in 1998. This significant increase is attributed to the premium received on the sale of branch deposits in the first quarter and the gain from the sale of Magic Line, Inc. stock in the second quarter. Excluding these non-recurring items noninterest income rose by $4,480,000 or 10.7% due to continued increases in recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. fee income including, brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and investment, trust 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. . Brokerage and investment fees for the nine months ending September 30, 1999, increased 65% to $3,071,000. Trust fees improved to $15,408,000 an increase of 11%. Bankcard fees increased 18% to $6,661,000. Citizens' total assets as of September 30, 1999, were $4.863 billion, an increase of 9% from September 30, 1998. Total loans increased to $3.712 billion at September 30, 1999, up $173 million or 4.9% from September 30, 1998. Asset quality remained strong as non-performing assets declined to $19,496,000 or .40% of total assets at September 30, 1999, and net charge-offs remained stable at .37% of average loans during the quarter. On October October: see month. 8, 1999, Citizens completed its acquisition of seventeen Seventeen novel of young love. [Am. Lit.: Booth Tarkington Seventeen in Magill I, 882] See : Adolescence former Bank One branch offices, located in Northern Michigan This article is about the region; for the university, see Northern Michigan University Northern Michigan - or more properly Northern Lower Michigan - is a region of the U.S. state of Michigan, popular as a tourist destination. . With this acquisition Citizens' assets total a record $5 billion. System conversions of these branches were completed on October 11, 1999. These offices strengthen Citizens' geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. presence in northern Michigan while creating significant market share in four of the five counties in which they are located. Citizens also announced the acquisition of F&M Bancorporation on April 19, 1999. F&M is the fourth largest bank holding company headquartered in 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 with $2.6 billion in assets. Consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the transaction is expected in early November November: see month. . The Corporation announced on September 22, 1999, that its banking subsidiaries, Citizens Bank and Citizens Bank-Illinois N.A., received counterparty Counterparty The other participant, including intermediaries, in a swap or contract. ratings from Standard & Poor's. Both banks are rated A- (long term) and A-2 (short term), and the Corporation's long and 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. ratings are BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. + and A-2, respectively. This independent, third party opinion of the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of the Corporation and its banks should reduce future funding costs and give existing and prospective clients additional confidence in their dealings with Citizens. Citizens remains on schedule with achieving Year 2000 compliance. Completion of third party testing and remaining non-critical systems testing is expected later this month, at which time Citizens will be fully Year 2000 compliant a. 1. (Computers) having dates fully and properly represented, and not susceptible to failure due to the year 2000 bug. . "We are pleased with the efforts our staff has made over the past four years in preparing our systems for the Year 2000 and we look forward to another year of providing quality 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 our clients," remarked Mr. Vitito. During the third quarter of 1999 Citizens repurchased a total of 286,800 shares of its common stock in the open market under its stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. programs, at an average price of $29.91. 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 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 services to a broad client base. Citizens operates 140 branch, private banking, and financial center locations throughout 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). 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 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. . Discussions in this release that are not statements of historical fact (including statements in the future tense future tense n. A verb tense expressing future time. Noun 1. future tense - a verb tense that expresses actions or states in the future future of those which 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 Corporation'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, the Corporation's future lending and collections experience, the inability to complete announced acquisition transactions, the effects of acquisitions and the ability to integrate acquired operations, market acceptance of the Corporation's products and services, competition from other institutions, changes in the banking industry and its regulation, needs for technological change, and other factors, including those which are discussed in the Corporation's filings with the Securities and Exchange Commission. (Financial highlights follow) -0-
Financial Summary and Comparison
Citizens Banking Corporation and Subsidiaries
Nine Months Ended
September 30
--------------------------------
1999 1998 % Change
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Summary of Operations
(thousands)
Interest income $254,084 $256,132 (0.8)%
Interest expense 102,901 107,858 (4.6)
Net interest income 151,183 148,274 2.0
Provision for loan losses 11,300 10,530 7.3
Net interest income after
provision for loan losses 139,883 137,744 1.6
Investment securities
gains (losses) 211 103 104.9
Noninterest income 53,006 41,593 27.4
Noninterest expense 130,406 119,160 9.4
Income taxes 19,303 18,486 4.4
Net income 43,391 41,794 3.8
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At Period End (millions)
Total assets $ 4,863 $ 4,463 9.0 %
Total earning assets 4,573 4,158 10.0
Total loans 3,712 3,539 4.9
Total deposits 3,725 3,648 2.1
Total shareholders' equity 407 435 (6.4)
-------------------------------------------------------------------
Average Balances (millions)
Total assets $ 4,628 $ 4,444 4.1 %
Total earning assets 4,331 4,149 4.4
Total loans 3,605 3,506 2.8
Total deposits 3,759 3,694 1.8
Total shareholders' equity 421 421 0.0
Shareholders' equity / assets 9.10 % 9.48 % (4.0)
-------------------------------------------------------------------
Per Common Share Data
Net Income:
Basic $ 1.58 $ 1.49 6.3 %
Diluted 1.56 1.45 7.5
Dividends 0.68 0.61 11.5
Market Value:
High $ 42.25 $ 37.13 13.8
Low 25.19 27.50 (8.4)
Close 26.13 32.88 (20.5)
Book value 15.24 15.46 (1.4)
Shares outstanding,
end of period (000) 26,716 28,119 (5.0)
-------------------------------------------------------------------
Cash Earnings Summary (1)
Net Income $ 46,465 $ 44,869 3.6 %
Diluted earnings per share 1.67 1.56 7.1
Tangible Book value per share 13.36 13.48 (0.9)
Return on average assets 1.36 % 1.37 % (0.7)
Return on average equity 16.85 16.51 2.1
-------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin (FTE) (2) 4.80 % 4.92 % (2.4)%
Return on average assets 1.25 1.26 (0.5)
Return on average
shareholders' equity 13.78 13.26 3.9
Net loans charged off as
a percent of average loans 0.41 0.35 17.3
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(1) Cash earnings exclude the effect of intangible asset amortization
expense arising from previous mergers accounted for as a
purchase.
(2) Average rates are presented on an annual basis and include
taxable equivalent adjustments to interest income of $4,729,000
and $4,406,000 for the nine months ended September 30, 1999 and
1998, respectively, based on a tax rate of 35%.
Selected Quarterly Information
Citizens Banking Corporation and Subsidiaries
---------------------------------------------------------------------
3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
1999 1999 1999 1998 1998
---------------------------------------------------------------------
Summary of Operations
(thousands)
Interest income $89,172 $82,832 $82,080 $83,748 $85,455
Interest expense 37,229 32,611 33,061 34,176 35,419
Net interest income 51,943 50,221 49,019 49,572 50,036
Provision for
loan losses 3,600 4,100 3,600 3,560 3,510
Net interest income
after provision
for loan losses 48,343 46,121 45,419 46,012 46,526
Investment securities
gains 47 89 75 42 49
Noninterest income 15,594 21,283 16,129 14,514 14,689
Noninterest expense 43,901 45,672 40,833 39,131 40,269
Income taxes 6,181 6,755 6,367 6,446 6,406
Net income 13,902 15,066 14,423 14,991 14,589
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At Period End (millions)
Total assets $ 4,863 $ 4,758 $ 4,499 $ 4,501 $ 4,463
Total earning assets 4,573 4,432 4,203 4,224 4,158
Total loans 3,712 3,654 3,538 3,585 3,539
Total deposits 3,725 3,702 3,754 3,764 3,648
Total shareholders'
equity 407 411 429 441 435
---------------------------------------------------------------------
Average Balances (millions)
Total assets $ 4,823 $ 4,534 $ 4,524 $ 4,469 $ 4,448
Total earning assets 4,524 4,236 4,230 4,173 4,138
Total loans 3,680 3,581 3,553 3,536 3,504
Total deposits 3,735 3,744 3,799 3,698 3,682
Total shareholders'
equity 404 426 433 438 430
Shareholders' equity
/ assets 8.38% 9.40% 9.57% 9.80% 9.67%
---------------------------------------------------------------------
Credit Quality
Statistics (thousands)
Nonaccrual loans $17,528 $16,320 $17,691 $21,791 $24,340
Loans 90 or more
days past due and
still accruing 674 1,055 838 801 908
Restructured loans 114 114 114 114 134
------- ------- ------- ------- -------
Total nonperforming
loans 18,316 17,489 18,643 22,706 25,382
Other repossessed
assets acquired
(ORAA) 1,180 1,299 2,037 1,547 2,123
------- ------- ------- ------- -------
Total nonperforming
assets $19,496 $18,788 $20,680 $24,253 $27,505
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Allowance for loan
losses ratio 1.26% 1.27% 1.28% 1.30% 1.33%
Allowance for loan
losses as a percent
of nonperforming
assets 239.41 247.77 219.17 191.52 171.37
Allowance for loan
losses as a percent
of nonperforming
loans 254.84 266.18 243.12 204.57 185.70
Nonperforming assets
as a percent of
total loans plus ORAA 0.53 0.51 0.58 0.68 0.78
Nonperforming assets
as a percent of
total assets 0.40 0.39 0.46 0.54 0.62
Net loans charged
off as a percent
of average loans
(annualized) 0.37 0.32 0.54 0.48 0.38
Net loans charged
off (000) $ 3,476 $ 2,874 $ 4,724 $ 4,247 $ 3,330
---------------------------------------------------------------------
Per Common Share Data
Net Income (loss):
Basic $ 0.52 $ 0.54 $ 0.52 $ 0.53 $ 0.52
Diluted 0.51 0.54 0.51 0.53 0.50
Dividends 0.235 0.235 0.21 0.21 0.21
Market Value:
High $ 31.25 $ 42.25 $ 36.06 $ 35.38 $ 36.13
Low 25.19 28.63 31.00 26.75 28.00
Close 26.13 30.06 36.00 33.75 32.88
Book value 15.24 15.24 15.57 15.70 15.46
Shares outstanding,
end of period (000) 26,716 26,981 27,542 28,100 28,119
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Performance Ratios
(annualized)
Net interest
margin (FTE) 4.70% 4.90% 4.83% 4.92% 4.98%
Return on average
assets 1.14 1.33 1.29 1.33 1.30
Return on average
shareholders' equity 13.65 14.18 13.50 13.58 13.46
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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) 1999 1998 1999 1998
---------------------------------------------------------------------
Interest Income
Interest and fees
on loans $ 76,228 $ 75,848 $222,048 $226,988
Interest and dividends
on investment securities:
Taxable 11,040 7,179 25,572 21,481
Nontaxable 1,816 1,877 5,483 5,721
Money market investments 88 551 981 1,942
-------- -------- -------- --------
Total interest income 89,172 85,455 254,084 256,132
-------- -------- -------- --------
Interest Expense
Deposits 29,081 31,951 88,124 97,151
Short-term borrowings 6,317 1,512 9,379 4,569
Long-term debt 1,831 1,956 5,398 6,138
-------- -------- -------- --------
Total interest expense 37,229 35,419 102,901 107,858
-------- -------- -------- --------
Net Interest Income 51,943 50,036 151,183 148,274
Provision for loan losses 3,600 3,510 11,300 10,530
-------- -------- -------- --------
Net interest income after
provision for loan losses 48,343 46,526 139,883 137,744
-------- -------- -------- --------
Noninterest Income
Trust fees 5,104 4,633 15,408 13,881
Service charges on
deposit accounts 3,751 3,258 10,198 9,513
Bankcard fees 2,303 2,083 6,661 5,653
Mortgage and other
loan income 488 1,534 2,466 2,869
Brokerage and
investment fees 1,239 663 3,071 1,860
Cash management
services 651 583 1,858 1,685
Investment securities
gains (losses) 47 49 211 103
Premium on sale of
deposits -- -- 1,348 --
Other 2,058 1,935 11,996 6,132
-------- -------- -------- --------
Total noninterest income 15,641 14,738 53,217 41,696
-------- -------- -------- --------
Noninterest Expense
Salaries and
employee benefits 21,253 20,145 63,868 61,344
Equipment 2,881 2,921 8,498 9,079
Occupancy 2,920 2,845 8,167 8,516
Intangible asset amortization 1,386 1,386 4,159 4,159
Bankcard fees 2,108 1,680 5,378 4,373
Stationery and supplies 1,179 875 2,858 2,795
Postage and delivery 1,121 953 3,311 3,165
Advertising and
public relations 731 1,072 3,152 3,477
Data processing fees 1,810 1,873 5,452 4,174
Other 8,512 6,519 25,563 18,078
-------- -------- -------- --------
Total noninterest expense 43,901 40,269 130,406 119,160
-------- -------- -------- --------
Income Before Income Taxes 20,083 20,995 62,694 60,280
Income taxes 6,181 6,406 19,303 18,486
-------- -------- -------- --------
Net Income $ 13,902 $ 14,589 $ 43,391 $ 41,794
-------- -------- -------- --------
-------- -------- -------- --------
Net Income Per Share:
Basic $ 0.52 $ 0.52 $ 1.58 $ 1.49
Diluted 0.51 0.50 1.56 1.45
Average Shares Outstanding:
Basic 26,790 28,164 27,389 28,138
Diluted 27,136 28,754 27,833 28,767
Consolidated Balance Sheets (Unaudited)
Citizens Banking Corporation and Subsidiaries
September 30, December 31,
(in thousands) 1999 1998
-------------------------------------------------------------------
Assets
Cash and due from banks $ 151,107 $ 140,543
Money market investments:
Interest-bearing deposits with banks 48 304
Federal funds sold -- 8,500
Term federal funds sold and other 2,669 17,435
----------- -----------
Total money market investments 2,717 26,239
Securities available-for-sale:
U.S. Treasury and federal
agency securities 674,198 430,676
State and municipal securities 152,939 157,551
Other securities 31,538 25,302
----------- -----------
Total investment securities 858,675 613,529
Loans:
Commercial 1,652,016 1,594,113
Real estate construction 89,547 89,623
Real estate mortgage 708,719 741,358
Consumer 1,261,296 1,159,417
----------- -----------
Total loans 3,711,578 3,584,511
Less: Allowance for loan losses (46,675) (46,449)
----------- -----------
Net loans 3,664,903 3,538,062
Premises and equipment 81,678 78,248
Intangible assets 50,311 54,470
Other assets 53,519 50,318
----------- -----------
Total assets $ 4,862,910 $ 4,501,409
----------- -----------
----------- -----------
Liabilities and Shareholders' Equity
Noninterest-bearing deposits $ 620,887 $ 636,059
Interest-bearing deposits 3,103,916 3,128,297
----------- -----------
Total deposits 3,724,803 3,764,356
Federal funds purchased
and securities sold
under agreements to repurchase 199,376 111,336
Other short-term borrowings 384,993 12,971
Other liabilities 46,203 40,727
Long-term debt 100,257 130,937
----------- -----------
Total liabilities 4,455,632 4,060,327
Shareholders' Equity
Preferred stock - no par value: -- --
Common stock - no par value: 69,918 117,525
Retained earnings 344,038 319,500
Other accumulated comprehensive
net income (6,678) 4,057
----------- -----------
Total shareholders' equity 407,278 441,082
----------- -----------
Total liabilities and
shareholders' equity $ 4,862,910 $ 4,501,409
----------- -----------
----------- -----------
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