Coast announces second quarter earnings.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--July 23, 1996--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 , Tuesday Tuesday: see week. reported that net earnings were $7.8 million for the quarter ended June June: see month. 30, 1996, compared to $5.6 million for the second quarter 1995. 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. net earnings per share were 41 cents for the latest quarter, compared to 30 cents for the year-earlier period. The earnings for the latest quarter include 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 $1.5 million or 8 cents per fully diluted share resulting from the early termination of real estate leases. The company's earnings for the six months ended June 30, 1996, were $17.3 million, compared with $9.1 million for the first six months of 1995. Fully diluted net earnings per share were 90 cents for the six months ended June 30, 1996, compared with 48 cents for the year-earlier period. "The company generated solid core earnings in the second quarter," stated Ray Martin, chairman and chief executive officer. "In addition, the Supreme Court's recent action in the `supervisory goodwill' cases was an extremely positive development for the company. We look forward to pursuing recovery of the substantial damages incurred by Coast following breach of the Bank's Assistance Agreement with the government." As of June 30, 1995, 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 5.62 and 11.27 percent, respectively, each of which exceeded the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. 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 $132.4 million or 1.59 percent of assets at June 30, 1996, compared with $133.3 million or 1.62 percent of assets and $130.3 million or 1.52 percent of assets at March 31, 1996, and June 30, 1995, respectively. Loan originations 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. for the second quarter of 1996 totaled $360.6 million, essentially all of which were single family adjustable rate mortgages This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. . At June 30, 1996, Coast had 97 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 adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants gap ratio -- a measure of interest rate exposure -- was a positive 4 percent. Coast's net interest rate spread -- the difference between the yield on interest-earning assets and the cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities -- was 2.44 percent at June 30, 1996, compared with 2.59 percent and 2.42 percent as of March 31, 1996, and June 30, 1995, respectively. Net interest income was $54 million for the latest quarter, compared with the $54.3 million and $49.1 million recorded during the quarters ended March 31, 1996, and June 30, 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 $41.8 million for the three months ended June 30, 1996, compared with $39.6 million and $40.9 million for the three-month periods ended March 31, 1996, and June 30, 1995, respectively. Operating expenses for the latest quarter include a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of $2.5 million associated with the early termination of real estate leases. 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 $12.4 million for the latest three months, compared with $13 million for the three months ended March 31, 1996, and with $12.5 million for the year-earlier quarter. As a result of the items detailed above, Coast's pretax 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 $27.1 million for the latest quarter (excluding the lease termination charge above), compared with $27.7 million and $20.7 million recorded during the three-month periods ended March 31, 1996, and June 30, 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. increased to $429.9 million or $23.13 per share at June 30, 1996, compared with $389.6 million or $21.05 per share at June 30, 1995. Tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. stockholders' equity was $423.1 million or $22.77 per share at the end of the latest quarter, compared with $378.7 million or $20.46 per share at June 30, 1995. Coast Savings Financial is the holding company of Coast Federal Bank, FSB. With assets of $8.4 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 89 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
June 30, Dec. 31,
1996 1995
Assets
Cash and due from banks $ 153,910 $ 119,717
Investment securities 125,760 103,179
Loans receivable 5,607,659 5,466,496
Mortgage-backed securities 2,021,299 2,171,801
Real estate held for sale 57,762 31,696
Federal Home Loan Bank stock 88,141 85,837
Land and depreciable assets 97,660 92,920
Interest receivable and other assets 191,740 172,702
Goodwill 6,779 7,332
$ 8,350,710 $ 8,251,680
Liabilities and Stockholders' Equity
Liabilities:
Deposits $ 6,208,430 $ 6,123,472
Federal Home Loan Bank advances 601,000 804,250
Other borrowings 968,989 789,086
Income taxes 15,608 12,684
Other liabilities 126,800 104,754
7,920,827 7,834,246
Stockholders' equity:
Common stock 186 186
Additional paid-in capital 265,033 265,018
Unrealized gain on securities
available for sale 1,691 6,554
Retained earnings 162,973 145,676
429,883 417,434
$ 8,350,710 $ 8,251,680
Regulatory Capital Ratios Risk-based 11.27% 10.86% Core 5.62 5.47 Tangible 5.62 5.47 Weighted Average Interest Rates Loans receivable and mortgage-backed securities 7.33% 7.56% Investment securities 5.55 5.42 Interest-earning assets 7.29 7.51 Deposits 4.54 4.67 Borrowings 6.05 6.40 Interest-bearing liabilities 4.85 4.95 Net spread 2.44 2.56 One Year Gap (the cumulative difference between repricing assets and liabilities) to total assets 4% 7% -0-
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Operations
Interest income:
Loans and mortgage-backed
securities $ 144,140 $ 148,807 $ 289,932 $ 287,923
Investment securities 5,036 5,896 10,226 11,814
149,176 154,703 300,158 299,737
Interest expense:
Deposits 70,381 70,456 141,667 134,495
Borrowings 24,767 35,151 50,187 68,736
95,148 105,607 191,854 203,231
Net interest income 54,028 49,096 108,304 96,506
Provision for loan losses 10,000 10,000 20,000 20,000
Net interest income after
provision for loan losses 44,028 39,096 88,304 76,506
Noninterest income:
Loan servicing fees
and charges 3,126 3,363 6,584 6,793
Other 9,258 9,181 18,832 17,343
12,384 12,544 25,416 24,136
Noninterest expense:
General and administrative
expenses 41,826 40,899 81,399 82,811
Real estate operations, net 1,318 1,038 2,940 2,015
Amortization of goodwill 277 315 553 631
43,421 42,252 84,892 85,457
Earnings before income tax expense 12,991 9,388 28,828 15,185 Income tax expense 5,196 3,755 11,531 6,074 Net earnings 7,795 5,633 17,297 9,111 Fully diluted earnings per share of common stock $ 0.41 $ 0.30 $ 0.90 $ 0.48 Shares of common stock outstanding at end of period 18,583,617 18,513,047 -0-
COAST SAVINGS FINANCIAL INC. AND SUBSIDIARIES
NONPERFORMING ASSETS
(dollars in thousands)
Jun 30 Sep 30 Dec 31 Mar 31 Jun 30
1994 1994 1994 1995 1995
Nonaccrual loans $ 137,439 $ 133,724 $ 96,713 $ 82,569 $ 89,693 Foreclosed real estate owned 76,972 74,219 44,168 50,674 39,557 Modified loans (a) 1,020 1,020 1,020 1,020 1,020 Nonperforming assets 215,431 208,963 141,901 134,263 130,270 General valuation allowance (GVA) 114,000 111,000 85,000 85,000 85,000 Total assets $8,029,980 $8,127,985 $8,196,517 $8,540,077 $8,585,062 Ratio of nonperforming assets to total assets 2.68% 2.57% 1.73% 1.57% 1.52% Ratio of GVA to nonperforming assets 53% 53% 60% 63% 65%
Sep 30 Dec 31 Mar 31 Jun 30
1995 1995 1996 1996
Nonaccrual loans $ 80,527 $ 81,351 $ 93,288 $ 74,620 Foreclosed real estate owned 39,412 31,696 39,999 57,762 Modified loans (a) 1,020 - - - Nonperforming assets 120,959 113,047 133,287 132,382 General valuation allowance (GVA) 82,000 82,000 82,000 73,000 Total assets $8,430,406 $8,251,680 $8,239,880 $8,350,710 Ratio of nonperforming assets to total assets 1.43% 1.37% 1.62% 1.59% Ratio of GVA to nonperforming assets 68% 73% 62% 55% (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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