Citizens Banking Corporation Reports Higher Second Quarter 1998 Earnings.FLINT flint, mineral flint, variety of quartz that commonly occurs in rounded nodules and whose crystal structure is not visible to the naked eye. Flint is dark gray, smoky brown, or black in color; pale gray flint is called chert. , Mich.--(BUSINESS WIRE)--July 10, 1998--Citizens Banking Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CBCF CBCF Canadian Breast Cancer Foundation CBCF Congressional Black Caucus Foundation CBCF Community Based Corrections Facilities CBCF Commander, Base Communications Facility ) earned net income of $13,683,000 for the three months ended June June: see month. 30, 1998, an increase of 20.9% over the second quarter of 1997. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the second quarter were $0.48 in 1998, compared with $0.40 in 1997. Returns on average equity and average assets during the second quarter of 1998 improved to 13.03% and 1.23%, respectively, from 11.37% and 1.04%, respectively, in the second quarter of 1997. Noninterest income increased to $13,967,000 during the second quarter 1998, or an improvement of 20.7% over the same period in 1997. Net interest income was $49,462,000 during the three months ended June 30, 1998, an increase of 2.8% over the corresponding quarter of 1997. Additionally, during the second quarter of 1998, average loans comprised 84% of average 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 , compared with 82% in the second quarter of 1997. As a result, Citizens' net interest margin increased to 4.89% during the second quarter of 1998. For the first six months of 1998, net income was $27,205,000 or $0.95 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 $22,204,000 or $0.79 per diluted share for the first six months of 1997. The increase in net income is primarily the result of higher net interest income and strong increases in fee income. "By placing more strategic emphasis on fee revenue, we have experienced solid growth trends in trust, brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. , insurance, cash management services, and mortgage fees," 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, President & Chief Executive Officer. Returns on average equity and average assets during the first half of 1998 were 13.16% and 1.23%, respectively, compared with 11.29% and 1.03%, respectively, in the same period of 1997. Average assets during the second quarter 1998, were $4.465 billion, an increase of 2.2% from the same period of 1997. Average earning assets increased to $4.171 billion, up 2.5% from the second quarter 1997. Asset quality remains strong. 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. were $26,597,000 or 0.60% of total assets. Average deposits grew in the second quarter to $3.706 billion, an increase of 2.2% from one year ago. During the second quarter of 1998, Citizens completed the integration of its primary data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a systems with those of M&I Data Services of Brown Deer Brown Deer, village (1990 pop. 12,236), Milwaukee co., SE Wis., on the Milwaukee River; inc. 1955. It is a residential suburb N of Milwaukee; consumer goods and machinery are manufactured. , WI. "With the support of advanced technologies provided by M&I, along with the banking expertise of our staff," Mr. Vitito explained, "Citizens has strategically positioned itself to expand the level of services we provide our clients, continue solid growth in fee services, and ensure year 2000 compliance." 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 128 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. . (Financial Highlights Follow) -0-
Consolidated Balance Sheets (Unaudited)
Citizens Banking Corporation and Subsidiaries
June 30, December 31,
(in thousands) 1998 1997
______________________________________________________________________
Assets
Cash and due from banks $182,517 $168,351
Money market investments:
Interest-bearing deposits with banks 29 246
Term federal funds and other 2,813 11,976
_________ _________
Total money market investments 2,842 12,222
Securities available-for-sale:
U.S. Treasury and federal agency
securities 418,711 390,046
State and municipal securities 161,493 166,877
Other securities 26,925 18,459
_________ _________
Total investment securities 607,129 575,382
Loans:
Commercial 1,367,307 1,317,213
Real estate construction 77,208 71,035
Real estate mortgage 783,187 779,567
Consumer 1,241,914 1,336,120
Lease financing 26,890 37,684
_________ _________
Total loans 3,496,506 3,541,619
Less: Allowance for loan losses (46,956) (45,911)
_________ _________
Net loans 3,449,550 3,495,708
Premises and equipment 72,287 69,415
Intangible assets 57,243 60,016
Other assets 64,354 58,177
__________ ___________
Total assets $4,435,922 $4,439,271
__________ ___________
__________ ___________
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $608,103 $600,498
Interest-bearing 3,044,718 3,093,848
_________ _________
Total deposits 3,652,821 3,694,346
Federal funds purchased and securities
sold under agreements to repurchase 138,526 141,713
Other short-term borrowings 32,381 33,153
Other liabilities 54,800 52,052
Long-term debt 130,611 108,165
_________ _________
Total liabilities 4,009,139 4,029,429
Shareholders' Equity
Preferred stock - No par value --- ---
Common stock - No par value 121,460 120,274
Retained earnings 301,678 285,706
Accumulated other comprehensive income 3,645 3,862
_________ _________
Total shareholders' equity 426,783 409,842
_________ _________
Total liabilities and shareholders'
equity $4,435,922 $4,439,271
_________ __________
_________ __________
Consolidated Statements of Income (Unaudited)
Citizens Banking Corporation and Subsidiaries
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except
per share amounts) 1998 1997 1998 1997
______________________________________________________________________
Interest Income
Interest and fees on loans $75,465 $72,957 $151,140 $142,354
Interest and dividends
on investment securities:
Taxable 7,447 8,698 14,302 16,999
Nontaxable 1,921 2,263 3,844 4,570
Money market investments 637 78 1,391 300
________ ________ ________ ________
Total interest income 85,470 83,996 170,677 164,223
________ ________ ________ ________
Interest Expense
Deposits 32,260 31,931 65,200 62,600
Short-term borrowings 1,576 2,522 3,057 4,728
Long-term debt 2,172 1,405 4,182 2,876
________ ________ ________ ________
Total interest expense 36,008 35,858 72,439 70,204
________ ________ ________ ________
Net Interest Income 49,462 48,138 98,238 94,019
Provision for loan losses 3,510 3,742 7,020 6,952
________ ________ ________ ________
Net interest income
after provision for
loan losses 45,952 44,396 91,218 87,067
________ ________ ________ ________
Noninterest Income
Trust fees 4,635 3,840 9,248 7,814
Service charges on
deposit accounts 3,246 3,076 6,255 6,034
Bankcard fees 1,797 1,700 3,570 3,354
Mortgage and other loan
income 806 336 1,335 631
Investment securities
gains (losses) 4 (33) 54 (57)
Other 3,479 2,623 6,496 5,111
________ ________ ________ ________
Total noninterest income 13,967 11,542 26,958 22,887
________ ________ ________ ________
Noninterest Expense
Salaries and employee
benefits 20,802 20,534 41,199 40,792
Equipment 3,051 3,164 6,158 6,359
Occupancy 2,834 2,851 5,671 5,880
Intangible asset
amortization 1,387 1,663 2,773 3,326
Bankcard fees 1,510 1,148 2,693 2,178
Stationery and supplies 910 1,016 1,920 2,108
Postage and delivery 1,123 1,080 2,212 2,189
Advertising and public
relations 1,203 1,340 2,405 2,440
Other 7,379 6,933 13,860 13,074
________ ________ ________ ________
Total noninterest
expense 40,199 39,729 78,891 78,346
________ ________ ________ ________
Income before income taxes 19,720 16,209 39,285 31,608
Income taxes 6,037 4,894 12,080 9,404
________ ________ ________ ________
Net Income $13,683 $11,315 $27,205 $22,204
________ ________ ________ ________
________ ________ ________ ________
Net Income Per Share:
Basic $0.49 $0.41 $0.97 $0.80
Diluted 0.48 0.40 0.95 0.79
Average Shares Outstanding:
Basic 28,173 27,824 28,124 27,802
Diluted 28,799 28,280 28,773 28,262
Selected Quarterly Information
Citizens Banking Corporation and Subsidiaries
______________________________________________________________________
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
1998 1998 1997 1997 1997
______________________________________________________________________
Summary of Operations (thousands)
Interest income $ 85,470 $ 85,207 $ 85,992 $ 85,648 $ 83,996
Interest expense 36,008 36,431 36,908 36,903 35,858
Net interest
income 49,462 48,776 49,084 48,745 48,138
Provision for loan
losses 3,510 3,510 3,135 5,245 3,742
Net interest income
after provision
for loan losses 45,952 45,266 45,949 43,500 44,396
Investment
securities gains
(losses) 4 50 25 (755) (33)
Noninterest income 13,963 12,941 12,115 12,422 11,575
Noninterest
expense before
special charge 40,199 38,692 37,475 37,606 39,729
Special charge,
net of tax -- -- -- 17,263 --
Income taxes 6,037 6,043 6,359 5,249 4,894
Net income (loss) 13,683 13,522 14,255 (4,951) 11,315
Net income before
special charge 13,683 13,522 14,255 12,312(1) 11,315
______________________________________________________________________
At Period End
(millions)
Total assets $ 4,436 $ 4,497 $ 4,439 $ 4,413 $ 4,436
Total earning
assets 4,106 4,192 4,129 4,122 4,125
Total loans 3,497 3,486 3,542 3,497 3,380
Total deposits 3,653 3,720 3,694 3,695 3,657
Total shareholders'
equity 427 419 410 399 406
______________________________________________________________________
Average Balances
(millions)
Total assets $ 4,465 $ 4,419 $ 4,401 $ 4,422 $ 4,368
Total earning
assets 4,171 4,137 4,117 4,124 4,071
Total loans 3,511 3,501 3,497 3,431 3,336
Total deposits 3,706 3,695 3,698 3,687 3,628
Total
shareholders'
equity 421 413 402 407 399
Shareholders'
equity/assets 9.43 % 9.34 % 9.14 % 9.21 % 9.13 %
______________________________________________________________________
Credit Quality
Statistics
(thousands)
Nonaccrual loans $23,377 $22,896 $19,989 $20,251 $19,426
Loans 90 or more
days past due and
still accruing 441 568 1,185 662 716
Restructured loans 231 305 446 487 498
_______ _______ _______ ______ _______
Total
nonperforming
loans 24,049 23,769 21,620 21,400 20,640
Other
repossessed assets
acquired (ORAA) 2,548 3,866 3,348 3,766 4,679
_______ _______ _______ ______ _______
Total
nonperforming
assets $26,597 $27,635 $24,968 $25,166 $25,319
_______ _______ _______ ______ _______
_______ _______ _______ ______ _______
Allowance for loan
losses ratio 1.34 % 1.33 % 1.30 % 1.32 % 1.34 %
Allowance for
loan losses
as a percent
of nonperforming
assets 176.55 168.19 183.88 182.95 178.51
Allowance for
loan losses
as a percent
of nonperforming
loans 195.26 195.55 212.35 215.14 218.98
Nonperforming
assets as a
percent of
total loans
plus ORAA 0.76 0.79 0.70 0.72 0.75
Nonperforming
assets as a
percent of
total assets 0.60 0.61 0.56 0.57 0.57
Net loans
charged off
as a percent
of average
loans
(annualized) 0.35 0.34 0.37 0.51 0.28
______________________________________________________________________
Per Common
Share Data(2)
Net Income (loss):
Basic $ 0.49 $ 0.48 $ 0.51 ($ 0.18) $ 0.41
Diluted before
special charge 0.48 0.47 0.50 0.43(1) 0.40
Dividends 0.21 0.19 0.19 0.19 0.19
Market Value:
High $ 37.00 $ 37.13 $ 34.75 $ 29.42 $ 23.83
Low 32.88 27.50 27.17 22.33 20.33
Close 33.63 35.69 34.50 29.33 22.83
Book value 15.14 14.89 14.61 14.30 14.60
Shares
outstanding,
end of
period (000) 28,200 28,135 28,048 27,904 27,841
______________________________________________________________________
Performance Ratios
(annualized)
Net interest
margin (FTE) 4.89 % 4.89 % 4.90 % 4.86 % 4.88 %
Return on
average assets 1.23 1.24 1.29 1.10(1) 1.04
Return on average
shareholders'
equity 13.03 13.28 14.05 11.99(1) 11.37
______________________________________________________________________
(1) Operating income before special charge associated with CB
Financial Corporation merger and information technology operations
reorganization.
(2) Adjusted for a three-for-two stock split effected in the form of a
dividend paid to shareholders on November 18, 1997.
______________________________________________________________________
Financial Summary and Comparison
Citizens Banking Corporation and Subsidiaries
Six Months Ended
June 30
__________________________________
1998 1997 % Change
______________________________________________________________________
Summary of Operations (thousands)
Interest income $ 170,677 $ 164,223 3.9 %
Interest expense 72,439 70,204 3.2
Net interest income 98,238 94,019 4.5
Provision for loan
losses 7,020 6,952 1.0
Net interest income
after provision for
loan losses 91,218 87,067 4.8
Investment securities
gains (losses) 54 (57) (c)
Noninterest income 26,904 22,944 17.3
Noninterest expense 78,891 78,346 0.7
Income taxes 12,080 9,404 28.5
Net income 27,205 22,204 22.5
______________________________________________________________________
At Period End
(millions)
Total assets $ 4,436 $ 4,436 -- %
Total earning assets 4,106 4,125 (0.5)
Total loans 3,497 3,380 3.4
Total deposits 3,653 3,657 (0.1)
Total shareholders'
equity 427 406 5.0
______________________________________________________________________
Average Balances
(millions)
Total assets $ 4,442 $ 4,331 2.6 %
Total earning assets 4,154 4,031 3.1
Total loans 3,506 3,296 6.4
Total deposits 3,700 3,601 2.8
Total shareholders'
equity 417 396 5.2
Shareholders'
equity/assets 9.39 % 9.15 % 2.6
______________________________________________________________________
Per Common
Share Data(b)
Net Income:
Basic $ 0.97 $ 0.80 21.3 %
Diluted 0.95 0.79 20.3
Dividends 0.40 0.36 11.1
Market Value:
High $ 37.13 $ 23.83 55.8
Low 27.50 20.00 37.5
Close 33.63 22.83 47.3
Book value 15.14 14.60 3.7
Shares outstanding,
end of period (000) 28,200 27,841 1.3
______________________________________________________________________
Cash Earnings Summary(a)
Net Income $ 29,255 $ 24,807 17.9 %
Diluted earnings per
share 1.02 0.88 15.9
Tangible book value
per share 13.10 12.07 8.5
Return on average assets 1.35 % 1.17 % 15.4
Return on average equity 16.46 15.42 6.7
______________________________________________________________________
Performance Ratios
(annualized)
Net interest
margin (FTE)(d) 4.89 % 4.83 % 1.2 %
Return on average
assets 1.23 1.03 19.4
Return on average
shareholders' equity 13.16 11.29 16.6
Net loans charged
off as a percent of average loans 0.34 0.24 41.7
______________________________________________________________________
(a) Cash earnings exclude the effect of intangible asset amortization
expense arising from previous mergers accounted for as a purchase.
(b) Adjusted for a three-for-two stock split effected in the form of a
dividend paid to shareholders on November 18, 1997.
(c) Not meaningful.
(d) Average rates are presented on an annual basis and include taxable
equivalent adjustments to interest income of $2,909,000 and $3,169,000
for the six months ended June 30, 1998 and 1997, respectively, based
on a tax rate of 35%.
CONTACT: Citizens Banking Corporation John W. Ennest, 810/257-2557 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion