Colonial BancGroup Announces Record Earnings Per Share of $0.39, Eighth Consecutive Quarter of Margin Expansion.MONTGOMERY Montgomery, city, United States Montgomery, city (1990 pop. 187,106), state capital and seat of Montgomery co., E central Ala., near the head of navigation on the Alabama River just below the confluence of the Coosa and Tallapoosa rivers, and in the rich , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- 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) ): THIRD QUARTER 2005 COMPARED WITH THIRD QUARTER 2004: --Record EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.39, up 15% --Net interest income increased 25% on expanded net interest margin - Eighth consecutive quarter of increased margin --Noninterest income, excluding nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. items, increased 34% --Strong organic average deposit growth of 17% --Solid organic period end loan growth of 9.7% --Continued outstanding credit quality - 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. Ratio of 0.24%; Net Charge-Offs of 0.10%, 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. The Colonial BancGroup, Inc. Chairman, 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. and President, 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. E. Lowder, announced today that the Company had record earnings for the quarter ended September 30, 2005 of $0.39 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, a 15% increase over the $0.34 recorded for the third quarter of 2004. Net income for the quarter was a record $61.3 million, a 34% increase over the $45.7 million recorded in the third quarter of 2004. For the nine months ended September 30, 2005, earnings per diluted share were $1.15 compared to $0.98, a 17% increase over the corresponding period of the prior year. The Company earned net income of $171 million in the first nine months of 2005 compared to $128 million for the same period of the prior year, a 34% increase. "I am pleased to report record earnings in the third quarter. Our strong results demonstrate that our strategies of locating in high growth markets and sticking to our conservative lending philosophy are paying off for our shareholders," said Mr. Lowder. Colonial's net interest income for the quarter and the nine months ended September 30, 2005 increased 25% over the corresponding periods in the prior year. Net interest margin increased to 3.83%, a 19 basis point increase over the third quarter of 2004 and a five basis point increase over the second quarter of 2005, representing the eighth consecutive quarter of net interest margin expansion. The bank's average deposits, excluding brokered deposits, grew internally by $581 million, or 18% annualized, from the second quarter of 2005, and by $1.9 billion, or 17%, from the third quarter of 2004. Total deposits at period end increased by $3.9 billion, or 34% ($1.8 billion, or 16%, excluding acquisitions, sale of branches and brokered deposits) from September 30, 2004. "Colonial's retail franchise accelerated its deposit generating momentum in the third quarter. I am particularly pleased with our Florida franchise which grew average deposits by 23%, annualized, over the second quarter. This excludes any impact from acquisitions," said Mr. Lowder. Total loans, excluding mortgage warehouse loans, grew $333 million, or 9.6% annualized, from June 30, 2005 to September 30, 2005 and grew organically $1.1 billion, or 9.7%, from September 30, 2004 to September 30, 2005. Mortgage warehouse loans decreased $186 million from June 30, 2005 to September 30, 2005 as a result of sales of loans to a third party commercial paper conduit conduit /con·du·it/ (kon´doo-it) channel. ileal conduit the surgical anastomosis of the ureters to one end of a detached segment of ileum, the other end being used to form a stoma on the . Colonial's nonperforming assets ratio was 0.24% compared to 0.20% at June 30, 2005 and 0.33% at September 30, 2004. Annualized net charge-offs were 0.10% of average loans for the third quarter of 2005. The allowance for loan losses was 1.14% of total loans and represented 468% of nonperforming assets at September 30, 2005. "Credit quality continues to be a hallmark hallmark, mark impressed on silverwork or goldwork to signify official approval of the standard of purity of the metal, also called plate mark. The hallmark was introduced by statute in England in 1300 and enforced by the Goldsmiths' Hall, London. of Colonial with another quarter of excellent credit quality metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. . We believe it is important to never loosen 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, even during good times, but especially with the current uncertainties in the economy," said Mr. Lowder. Colonial's noninterest income for the third quarter of 2005, excluding securities gains and losses, grew 34% over the same period in 2004. "Our relationship building and income diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. efforts are reflected in the increase in noninterest income. We are very pleased to have marked improvement in revenues from 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 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 activities and an increase in mortgage warehouse fees," said Mr. Lowder. Noninterest expense, excluding net losses related to the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt and merger related expenses, was $131.5 million in the current quarter which was a $7.4 million increase over the second quarter of 2005. The third quarter reflected the first full quarter of expenses from the First Federal Savings Bank Noun 1. federal savings bank - a federally chartered savings bank FSB savings bank - a thrift institution in the northeastern United States; since deregulation in the 1980s they offer services competitive with many commercial banks of Lake County (FFLC) acquisition, additional expenses for advertising, new hires in retail mortgage banking and financial planning services, incentive compensation, commissions paid for increased revenues and other 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. . Colonial BancGroup, with over $21 billion in assets, operates 310 branches in Florida, 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). , 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 and Texas. The Company's common stock 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. Colonial management will host a conference call on October 19, 2005 at 3:00 PM/ET to discuss the earnings results for the third quarter. Individuals are encouraged to listen to the live webcast of the presentation as well as view a slide presentation by visiting Colonial's web site at www.colonialbank.com. The webcast will be hosted under "Conference Calls and Presentations" located under the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section of the website. To participate in the Q&A session of the conference call dial (888) 208-1812 (Leader: Glenda Allred). A replay of the conference call will be available beginning at 6:00 PM/ET on October 19, 2005 and ending at midnight on October 26, 2005 by dialing (719) 457-0820 (Passcode: 3025141). This release and the above referenced 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. 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 2005 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 and future 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," "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 Sept 30, June 30, Sept 30, Sept 30,
(Dollars in millions) 2005 2005 2004 '04 to '05
-------------------------------- ------- ------- ------- ----------
Total assets $21,115 $20,984 $18,191 16%
Total loans, net:
Mortgage warehouse loans 527 713 1,051 -50%
All other loans 14,197 13,864 11,511 23%
Securities available for sale
and investment securities 2,970 3,081 3,527 -16%
Non-time deposits 8,949 8,887 7,339 22%
Total deposits 15,266 14,147 11,380 34%
Shareholders' equity 1,902 1,920 1,374 38%
-------------------------------- ------- ------- ------- ----------
Nine Months Ended % Change
Earnings Summary ------------------
(In thousands, except per share Sept 30, Sept 30, Sept 30,
amounts) 2005 2004 '04 to '05
-------------------------------------- -------- -------- ----------
Net Income:
Net interest income $532,080 $426,577 25%
Provision for loan losses 20,946 21,606 -3%
Noninterest income excluding security
(losses)gains and gain on sale of
branches 123,278 96,590 28%
Security (losses)gains, net (4,642) 7,417 -163%
Gain on sale of branches 9,608 - -
Noninterest expense excluding net
losses related to
extinguishment of debt and merger
related expenses 368,739 306,738 20%
Merger related expenses 3,822 1,934 98%
Net losses related to the early
extinguishment of debt 9,550 6,183 54%
Net Income $171,240 $128,121 34%
EARNINGS PER SHARE:
--------------------------------------
Net Income
Basic $ 1.16 $ 0.98 18%
Diluted $ 1.15 $ 0.98 17%
Average shares outstanding 147,450 130,267
Average diluted shares outstanding 149,171 131,405
-------------------------------------- -------- -------- ----------
KEY RATIOS:
--------------------------------------
Net interest margin 3.78% 3.61% 5%
Book value per share $ 12.34 $ 10.28 20%
Dividends paid per share $ 0.4575 $ 0.4350 5%
-------------------------------------- -------- -------- ----------
Three Months Ended % Change
Earnings Summary -------------------
(In thousands, except per share Sept 30, Sept 30, Sept 30,
amounts) 2005 2004 '04 to '05
-------------------------------------- --------- -------- ----------
Net Income:
Net interest income $ 188,015 $149,835 25%
Provision for loan losses 6,007 7,153 -16%
Noninterest income excluding security
(losses)gains and gain on sale of
branches 43,884 32,693 34%
Security (losses)gains, net - 367 -100%
Gain on sale of branches - - -
Noninterest expense excluding net
losses related to
extinguishment of debt and merger
related expenses 131,463 105,879 24%
Merger related expenses 613 662 -7%
Net losses related to the early
extinguishment of debt 1,673 - -
Net Income $ 61,275 $ 45,673 34%
EARNINGS PER SHARE:
--------------------------------------
Net Income
Basic $ 0.40 $ 0.34 18%
Diluted $ 0.39 $ 0.34 15%
Average shares outstanding 153,721 133,568
Average diluted shares outstanding 155,510 134,730
-------------------------------------- --------- -------- ----------
KEY RATIOS:
--------------------------------------
Net interest margin 3.83% 3.64% 5%
Book value per share $ 12.34 $ 10.28 20%
Dividends paid per share $ 0.1525 $ 0.1450 5%
-------------------------------------- --------- -------- ----------
Sept 30, June 30, Sept 30,
Asset Quality 2005 2005 2004
---------------------------------------- -------- -------- --------
Allowance as a percent of net loans 1.14% 1.14% 1.17%
Total non-performing assets ratio 0.24% 0.20% 0.33%
Allowance as a percent of nonperforming
assets 468% 563% 353%
Net charge-offs ratio:
Quarter to date (annualized) 0.10% 0.15% 0.23%
Year to date (annualized) 0.15% 0.18% 0.22%
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