Colonial BancGroup Announces Earnings.Business Editors MONTGOMERY, Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. .--(BUSINESS WIRE)--April 15, 2003 The Colonial BancGroup, Inc. (NYSE NYSE See: New York Stock Exchange :CNB CNB Czech National Bank CNB Centro Nacional de Biotecnologia CNB City National Bank CNB Citizens National Bank CNB Croatian National Bank CNB Chloronitrobenzene CNB Corresponsales No Bancarios (Spanish, Colombia) ) Chairman 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. , Robert E. Lowder, announced net income for the first quarter ended March 31, 2003 of $35.6 million, a 3% increase over the $34.7 million recorded for the fourth quarter of 2002, and a 4% increase over the same period of the previous year. 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 for the quarter ended March 31, 2003 were $0.29 per share compared to $0.29 for the quarter ended March 31, 2002 and $0.28 for the quarter ended December 31, 2002. Colonial experienced marked improvement in asset quality with non-performing assets for the first quarter of 2003 totaling $78 million or 0.68% of loans and other real estate compared to $91.3 million or 0.78% at December 31, 2002. The Company also had net charge-offs of 0.20% of average loans for the first quarter compared to 0.44% for the fourth quarter 2002 and 0.25% for the first quarter of 2002. For banks with assets over $10 billion, the most recent FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). Quarterly Banking Profile reports the average net charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. ratio was 1.28%. Colonial's ratio compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with this average. The $18.9 million credit that went on non-accrual status, previously mentioned in the Company's fourth quarter 2002 earnings announcement, has been paid current and returned to accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. status. "Colonial continues to compare favorably with peers on asset quality statistics. We believe this is due to sound 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. standards, the involvement of our local directors and the collateralized structure of our credits," said Mr. Lowder. Loan provision expense for the quarter was $8,060,000 compared to $11,203,000 in the fourth quarter of 2002. The impact of the November 2002 reduction in the Fed Funds fed funds See federal funds. rate was felt mostly in the fourth quarter of 2002 when the net interest margin declined to 3.35% and mortgage backed investments experienced significant prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. . During the first quarter of 2003 the net interest margin increased seven basis points to 3.42% as prepayments on mortgages decreased and more liabilities were repriced at lower rates. Total loans declined $188 million from December 31, 2002 to March 31, 2003, primarily reflecting a decrease of $203 million in the Company's mortgage warehouse lending unit. This unit's loan volume has a high degree of correlation with mortgage prepayments. Colonial's non-residential bank loans increased $45 million while residential loans retained in the Company's loan portfolio decreased $45 million. Additionally, the Company began a program during the first quarter emphasizing consumer equity lines and experienced 23% 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. growth in equity line loan balances. Colonial experienced strong core (non-time) deposit growth of $281 million, or 23% annualized during the first quarter with core deposits reaching $5.2 billion at March 31, 2003. In Colonial's growing Florida franchise, core deposits increased 37% annualized from the fourth quarter of 2002. These deposits also increased 37% from the first quarter of 2002, including the impact of the acquisition of Palm Beach National, without which Florida deposits increased 27% over March 31, 2002. Colonial now has $4.2 billion, or 45%, of its total bank deposits in the Sunshine State. As of the quarter ended December 31, 2002, Colonial was the sixth largest bank in the state as measured by both total deposits and number of branches. Total noninterest income, excluding securities gains, increased 29%, annualized, or $1.9 million for the March 31, 2003 quarter compared to the December 31, 2002 quarter and 21%, or $4.9 million for the first quarter 2003 compared to the first quarter 2002. "Our first quarter results reflect our commitment to provide outstanding service to our customers through our retail banking franchise," said Mr. Lowder. "We are achieving record results in 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 income, 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 and electronic banking." For the quarter, mortgage origination income increased $2,435,000 or 113% over the first quarter 2002 and financial planning services increased $1,596,000, or 60%. "In addition to the licensed personnel we are adding to our branches, we are also licensing our commercial loan officers to support the platform annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. program through referrals." Colonial's annuity agents achieved 65% sales penetration during the first quarter of 2003 versus an industry average of 32%. Electronic banking revenues increased $560,000, or 30%, for the quarter ended March 31, 2003, compared to the same period of the previous year. "We achieved our target of 15% penetration of internet banking to total households and we fully expect to exceed our year-end goal of increasing our cross sell ratio by 13%," Lowder added. Noninterest expense increased $3.1 million, or 15% annualized in the first quarter 2003 compared to the fourth quarter 2002, primarily related to production incentive pay, advertising as a result of the Company's emphasis on deposit growth, as well as increases in other items such as pension and health benefits, insurance costs, and technology enhancements partially offset by cost savings from the Palm Beach acquisition. During the fourth quarter of 2002, Colonial announced plans to open over 40 new offices in the next three years focusing on the fast growing states of Florida, Nevada and Texas. Since that time six new offices have opened in the Cape Coral Cape Coral, city (1990 pop. 74,991), Lee co., SW coastal Fla., located on an estuary of the Caloosahatchee River; inc. 1970. It is mostly a residential city that has grown rapidly along with the southern Florida area. , Ft. Myers, Orlando and St. Augustine areas of Florida and two new offices in the Dallas area. Colonial BancGroup currently operates 272 offices with $15.8 billion in assets in Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , Florida, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , Nevada, Tennessee and Texas and is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol CNB. In most newspapers the stock is listed as ColBgp. More detailed information on Colonial BancGroup's quarterly earnings is available on the company's website at www.colonialbank.com or in the Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed today with the Securities and Exchange Commission. This release and the above referenced Current Report on Form 8-K of which this release forms a part contain "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. " within the meaning of the federal securities laws. The forward-looking statements in this release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: (i) an inability of the company to realize elements of its strategic plans for 2003 and beyond; (ii) increases in competitive pressure in the banking industry; (iii) general economic conditions, either internationally, nationally or regionally, that are less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than expected; (iv) expected cost savings from recent acquisitions are not fully realized; (v) changes in the interest rate environment which may reduce margins; (vi) management's assumptions regarding allowance for loan losses may not be borne by subsequent events; (vii) changes which may occur in the regulatory environment and (viii) other factors more fully discussed in our periodic reports filed with the Securities and Exchange Commission. When used in this Report, the words "believes," "estimates," "plans," "expects," "should," "may," "might," "outlook," and "anticipates" and similar expressions as they relate to BancGroup (including its subsidiaries) or its management are intended to identify forward-looking statements. Forward-looking statements speak only as to the date they are made. BancGroup does not undertake to update forward-looking statements to reflect circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or events that occur after the date the forward-looking statements are made.
THE COLONIAL BANCGROUP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)
% Change
Statement of Condition Summary March December March March
31, 31, 31, 31,
(Dollars in millions, except '02 to '03
per share amounts) 2003 2002 2002
-------- ---------- -------- ----------
Total Assets $15,754 $15,822 $13,184 19%
Loans 11,504 11,692 10,236 12%
Total earning assets 14,682 14,716 12,290 19%
Deposits 9,377 9,320 8,598 9%
Shareholders' equity 1,080 1,071 951 14%
Book value per share $8.72 $8.66 $7.92 10%
Three Months Ended % Change
-------------------
Earnings Summary March 31, March 31, March 31,
(In thousands, except per share '02 to '03
amounts) 2003 2002
--------- --------- ----------
Net interest income
(taxable equivalent) $121,724 $110,368 10%
Provision for loan losses 8,060 9,478 -15%
Noninterest income 29,557 22,927 29%
Noninterest expense 88,614 70,507 26%
Income from continuing operations $35,630 $34,178 4%
Net income $35,630 $34,178 4%
EARNINGS PER SHARE:
-------------------
Income from continuing operations
Basic $0.29 $0.30 -3%
Diluted $0.29 $0.29 0%
Net Income
Basic $0.29 $0.30 -3%
Diluted $0.29 $0.29 0%
Average shares outstanding 123,735 115,382
Average diluted shares outstanding 124,367 116,530
March 31, December 31, March 31,
Nonperforming Assets 2003 2002 2002
-------------------- --------- ------------ ---------
Total non-performing assets ratio 0.68% 0.78% 0.66%
Allowance as a percent of
nonperforming loans 240% 191% 281%
Net charge-offs ratio (annualized):
Quarter to date 0.20% 0.44% 0.25%
Year to date 0.20% 0.29% 0.25%
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