Coast announces fourth-quarter and year-end earnings.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Jan. 23, 1997--Coast Savings Financial Inc. (NYSE/PSE:CSA (1) (Canadian Standards Association, Toronto, Ontario, www.csa.ca) A standards-defining organization founded in 1919. It is involved in many industries, including electronics, communications and information technology. ), the holding company of Coast Federal Bank FSB (FrontSide Bus) See system bus. FSB - front side bus , Thursday Thursday: see week. reported fourth-quarter 1996 net earnings of $9.6 million, or 50 cents per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net earnings of $8.9 million, or 47 cents per fully diluted share, for the fourth quarter ended Dec. 31, 1995. Net earnings for the year ended Dec. 31, 1996, were $10.8 million, or 56 cents per fully diluted share, including an 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. charge of $23.5 million, or $1.22 per fully diluted share, related to the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. special assessment to recapitalize re·cap·i·tal·ize tr.v. re·cap·i·tal·ized, re·cap·i·tal·iz·ing, re·cap·i·tal·iz·es To change the capital structure of (a corporation). re·cap the industry's Savings Association Insurance Fund Savings Association Insurance Fund (SAIF) A government organization that replaced the Federal Savings and Loan Insurance Corporation as the provider of deposit insurance for thrift institutions. . Net earnings for 1995 were $32.8 million, or $1.71 per fully diluted share, including an after-tax gain of $6.3 million, or 33 cents per fully diluted share from the sale of CoastFed Business Credit Corp. "The past year was marked by significant franchise enhancement," stated Ray Martin, chairman and chief executive officer. "The company experienced substantial growth in checking account balances and uninsured product sales resulting in significantly increased retail banking fees. Additionally, 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 and operating results were improved, and asset quality and overall reserves were meaningfully strengthened during the year. During the fourth quarter, the company completed a comprehensive review of its overall tax position and future tax planning Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. strategies. Following this review, the company determined that tax benefits aggregating $17.6 million should be recognized and, accordingly, the provision for income taxes has been adjusted by this amount for the fourth quarter and year ended Dec. 31, 1996. As of Dec. 31, 1996, Coast's core and risk-based capital ratios Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. were 5.33 percent and 10.90 percent, respectively, each of which exceeded the applicable regulatory thresholds necessary to be designated a "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. " institution. 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. (defined as the sum of nonaccrual and modified loans, and foreclosed real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most ) were $124.1 million, or 1.43 percent of assets, compared with $131.0 million, or 1.53 percent of assets, and $113.0 million, or 1.37 percent of assets, at Sept. 30, 1996, and Dec. 31, 1995, respectively. Additionally, the latest quarter's loan loss provision of $40 million enabled the bank to increase its allowance for loan losses by $20 million and to increase the amount of specific valuation allowances for off-balance sheet credit extensions by $10 million. Loan originations for the fourth quarter of 1996 totaled $421 million, essentially all of which were single-family adjustable-rate mortgages Adjustable-rate mortgage (ARM) A mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equivalent to the index value plus a predetermined spread, or tied to the Eleventh In music or music theory an eleventh is the note eleven scale degrees from the root of a chord and also the interval between the root and the eleventh. Since there are only seven degrees in a diatonic scale the eleventh degree is the same as the subdominant and the interval District cost of funds index A Cost of Funds Index or COFI is a regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans. , bringing total originations for the year to $1.5 billion. At Dec. 31, 1996, Coast had 98 percent of its portfolio in adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. loans, and its one-year gap ratio -- a measure of interest rate exposure -- was a positive 5 percent. Coast's net interest rate spread -- the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities -- was 2.35 percent at Dec. 31, 1996, compared with 2.37 percent and 2.56 percent as of Sept. 30, 1996, and Dec. 31, 1995, respectively. Net interest income was $53.8 million for the latest quarter, compared with the $52.7 million and $52.1 million recorded during the quarters ended Sept. 30, 1996, and Dec. 31, 1995, respectively. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $38.1 million for the three months ended Dec. 31, 1996, compared with $39.1 million and $39.0 million for the three-month periods ended Sept. 30, 1996, and Dec. 31, 1995, respectively. The total of loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. fees and charges, retail banking fees and the 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. portion of other income from operations was $12.2 million for the latest three months, compared with $12.4 million for the three months ended Sept. 30, 1996, and to $13.1 million for the year-earlier quarter. As a result of the items detailed above, Coast's pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern core profitability (defined as net interest income before provision for loan losses less operating expenses plus loan servicing fees and charges and the recurring portion of other income) was $27.8 million for the latest quarter, compared with $26.1 million and $26.3 million recorded during the three-month periods ended Sept. 30, 1996, and Dec. 31, 1995, respectively. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was $424.5 million, or $22.84 per share, at Dec. 31, 1996, compared with $417.4 million, or $22.46 per share, at Dec. 31, 1995. Tangible stockholders' equity was $418.3 million, or $22.51 per share, at the end of the latest quarter, compared with $410.1 million, or $22.07 per share, at Dec. 31, 1995. Coast Savings Financial Inc. is the holding company of Coast Federal Bank FSB. With assets of $8.7 billion, Coast is one of the nation's largest thrift institutions Thrift institution An organization formed as a depository for primarily consumer savings. Savings and loan associations and savings banks are thrift institutions. and provides consumer banking services and residential real estate loans through 90 retail banking offices located throughout California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . -0-
COAST SAVINGS FINANCIAL INC. AND SUBSIDIARIES
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)
Financial Condition Dec. 31, Dec. 31,
1996 1995
Assets
Cash and due from banks $ 138,861 $ 119,717
Investment securities 234,628 103,179
Loans receivable 5,856,107 6,466,496
Mortgage-backed securities 2,043,270 2,171,801
Real estate held for sale 41,259 31,696
Federal Home Loan Bank stock 90,882 85,837
Land and depreciable assets 95,010 92,920
Interest receivable
and other assets 198,697 172,702
Goodwill 6,238 7,332
$8,704,952 $8,251,680
Liabilities and Stockholders' Equity
Liabilities:
Deposits $6,356,448 $6,123,472
Federal Home Loan Bank advances 1,104,200 804,250
Other borrowings 699,518 789,086
Income taxes 4,747 12,684
Other liabilities 115,508 104,754
8,280,421 7,834,246
Stockholders' equity:
Common stock 186 186
Additional paid-in capital 265,055 265,018
Unrealized gain on securities
available for sale 2,778 6,554
Retained earnings 156,512 145,676
424,531 417,434
$8,704,952 $8,251,680
Regulatory Capital Ratios
Risk-based 10.90% 10.86%
Core 5.33 5.47
Tangible 5.33 5.47
Weighted average interest rates
Loans receivable and
mortgage-backed securities 7.30% 7.56%
Investment securities 6.25 5.42
Interest-earning assets 7.25 7.51
Deposits 4.59 4.67
Borrowings 6.03 6.40
Interest-bearing liabilities 4.90 4.95
Net spread 2.35% 2.56%
One-year gap (the cumulative
difference between repricing
assets and liabilities) to
total assets 5% 7%
-0-
COAST SAVINGS FINANCIAL INC. AND SUBSIDIARIES
Consolidated Financial Highlights (Unaudited)
(Dollars in thousands)
Three months ended Twelve months ended
Dec. 31, Dec. 31,
Operations 1996 1995 1996 1995
Interest income:
Loans and mortgage-backed
securities $147,973 $148,931 $582,240 $589,493
Investment securities 5,586 5,920 21,210 23,688
153,559 154,851 603,450 613,181
Interest expense:
Deposits 73,027 72,557 285,764 280,895
Borrowings 26,768 30,155 102,886 131,235
99,795 102,712 388,650 412,130
Net interest income 53,764 52,139 214,800 201,051
Provision for loan
losses 40,000 10,000 70,000 40,000
Net interest income
after provision
for loan losses 13,764 42,139 144,800 161,051
Noninterest income:
Loan servicing fees and
charges 3,000 3,343 12,671 13,518
Gain on sale of subsidiary -- -- -- 7,549
Other 9,247 9,775 37,434 36,552
12,247 13,118 50,105 57,619
Noninterest expense:
General and administrative
expenses 38,102 38,956 158,604 161,722
SAIF special assessment -- -- 41,978 --
Real estate operations, net 508 1,142 3,881 4,090
Amortization of goodwill 267 277 1,091 1,221
38,877 40,375 205,554 167,033
Earnings (loss) before
income tax expense
(benefit) (12,866) 14,882 (10,649) 51,637
Income tax expense
(benefit) (22,505) 5,953 (21,485) 18,835
Net earnings $ 9,639 $ 8,929 $ 10,836 32,802
Fully diluted earnings
per share of common stock $ 0.50 $ 0.47 $ 0.56 $ 1.71
Shares of common stock
outstanding at end
of period 18,584,717 18,582,917
-0-
COAST SAVINGS FINANCIAL INC. AND SUBSIDIARIES
Nonperforming Assets
(Dollars in thousands)
Dec. 31, March 31, June 30, Sept. 30,
1994 1995 1995 1995
Nonaccrual loans $96,713 $82,569 $89,693 $80,527
Foreclosed real estate owned 44,168 50,674 39,557 39,412
Modified loans/a 1,020 1,020 1,020 1,020
Nonperforming assets $141,901 $134,263 $130,270 $120,959
General valuation
allowance (GVA) $85,000 $85,000 $85,000 $82,000
Total assets $8,196,517 $8,540,077 $8,585,062 $8,430,406
Ratio of nonperforming
assets to total assets 1.73% 1.57% 1.52% 1.43%
Ratio of GVA to
nonperforming assets 60% 63% 65% 68%
Dec. 31, March 31, June 30, Sept. 30, Dec. 31,
1995 1996 1996 1996 1996
Nonaccrual loans $81,351 $93,288 $74,620 $80,742 $82,804
Foreclosed real
estate owned 31,696 39,999 57,762 50,286 41,259
Modified loans/a -- -- -- -- --
Nonperforming
assets $113,047 $133,287 $132,382 $131,028 $124,063
General valuation
allowance (GVA) $82,000 $82,000 $73,000 $73,000 $93,000
Total assets $8,251,680 $8,239,880 $8,350,710 $8,549,032 $8,704,952
Ratio of
nonperforming
assets to
total assets 1.37% 1.62% 1.59% 1.53% 1.43%
Ratio of GVA to
nonperforming assets 73% 62% 55% 56% 75%
a/ Defined as loans whose terms have been modified such that the
interest rates charged to the borrowers have been reduced to levels
below the original contract rates and below market rates of interest
at both the time of modification and the reporting date.
CONTACT: Coast Savings Financial Inc., Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Mark Neal/Priscilla Finch finch, common name for members of the Fringillidae, the largest family of birds (including over half the known species), found in most parts of the world except Australia. , 213/362-2134 |
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