Colonial BancGroup Announces a 15% Increase in Net Income over the Second Quarter of 2003.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. . -- Record Earnings Per Share of $0.33 and Lowest 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 in the Company's History 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 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 record earnings for the quarter ended June June: see month. 30, 2004 of $0.33 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 and record net income of $43.3 million. Colonial's record earnings per diluted share for the quarter of $0.33 represents a 10% increase over the $0.30 reported for the quarter ended June 30, 2003. Net income for the quarter ended June 30, 2004 increased 15% over the $37.7 million recorded for the same period of the previous year. "Colonial had an outstanding quarter, producing record earnings while improving upon already excellent asset quality. Our nonperforming assets ratio of 0.38% is the lowest in the Company's history. The quarter also marked another significant event in the Company's history when we closed on our largest acquisition, P.C p.c. (post cibum), n a Latin phrase meaning “after meals”; the abbreviation may be used in prescription writing. .B. Bancorp, on May 18th" said Mr. Lowder. At the closing of the merger, PCB PCB: see polychlorinated biphenyl. PCB in full polychlorinated biphenyl Any of a class of highly stable organic compounds prepared by the reaction of chlorine with biphenyl, a two-ring compound. had assets of approximately $688 million, loans of $494 million and deposits of $547 million. PCB's Association Services Unit represents a significant portion of PCB's deposits and brings a substantial base of relationship opportunities to Colonial. The Association Services Unit provides outsourced payment processing services to property management companies and condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. associations. "PCB's 16 full-service locations fit exceptionally well into Colonial's existing Florida market areas. Colonial now has 48% of its assets, 55% of its non-time deposits, 49% of total deposits and 42% of its branches in Florida. Florida represents our largest market and we continue to be enthusiastic about our opportunities there." said Lowder. For the first six months of 2004, Colonial reported $0.64 in net income per diluted share, an 8.5% increase over the same period in 2003. Net income for the first six months was $82.4 million which represents a 12% increase over the $73.4 million reported for the same period in 2003. Net interest income grew 15% from the second quarter of 2003 to the second quarter of 2004. Colonial's net interest margin expanded for the third consecutive quarter to 3.61%, a 19 basis point increase over the second quarter of 2003 and a 4 basis point increase over the first quarter of 2004. 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 grew 9% over the second quarter of 2003 and 7% excluding the impact of the PCB acquisition. Average earning assets grew 20% 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. from the first quarter of 2004 to the second quarter of 2004, excluding the impact of the PCB acquisition. The Company's ongoing emphasis on its sales force and growth markets continues to produce strong results. During the second quarter of 2004, average non-time deposits, excluding the impact of acquisitions, grew 22% from the second quarter of 2003 and 31% annualized from the first quarter of 2004. Total deposits, excluding acquisitions, increased 12% from June 30, 2003 and increased 12% annualized from December 31, 2003. Loan balances, excluding mortgage warehouse loans and acquisitions, increased 5% from June 30, 2003 to June 30, 2004 and grew 3% annualized from December 31, 2003 to June 30, 2004. Mortgage warehouse loans decreased 2.7% from March 31, 2004 to $1.04 billion. As expected, noninterest income, excluding securities gains and losses, for the second quarter of 2004 was even with the second quarter of 2003. The Company posted a 12% increase in deposit service charges, a 14% increase in 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 a 17% increase in electronic banking revenues which were offset by a 61% decline 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 revenues. Noninterest expense increased 13% over the second quarter of the prior year. As part of its continued expansion, Colonial added 30 new locations over the course of the past twelve months - 13 new branches and 17 branches through acquisitions. These new locations and related acquisition expense increased noninterest expense by 6% over the second quarter of 2003. Other increases in noninterest expense relate primarily to salaries and benefits, technology enhancements, advertising and legal. Net charge-offs were 0.23%, annualized, of average net loans for the quarter ended June 30, 2004. The nonperforming assets ratio reached its lowest level in the Company's 23 year history at 0.38% of net loans and other real estate at June 30, 2004. Colonial's loan loss reserve was 1.19% of loans, or 417% of nonperforming loans, at June 30, 2004. Colonial BancGroup currently has $17.6 billion in assets and operates 297 branches in five states - Florida - 124, 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). - 126, 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. - 22, Nevada - 13, and Texas - 12. 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. More detailed information on Colonial BancGroup's quarterly earnings was filed today 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. with the Securities and Exchange Commission and may be obtained from Colonial BancGroup's corporate website at www.colonialbank.com by clicking on the link entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: Colonial BancGroup Announces Record Earnings or under the Investor Relations Investor relations The process by which the corporation communicates with its investors. area of the website in the section labeled Press Releases. 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 2004 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 June 30, Dec. 31, June 30, June 30,
(Dollars in millions) 2004 2003 2003 '03 to '04
------------------------------ -------- -------- -------- ------------
Total assets $17,593 $16,273 $16,208 9%
Total loans, net:
Mortgage warehouse loans 1,041 982 1,621 -36%
All other loans 11,265 10,606 10,148 11%
Total earning assets 16,246 15,094 15,032 8%
Core (non-time) deposits 6,924 5,868 5,244 32%
Total deposits 10,886 9,769 9,141 19%
Shareholders' equity 1,283 1,178 1,122 14%
------------------------------ -------- -------- -------- ------------
Six Months Ended % Three Months Ended %
------------------- Change ------------------- Change
Earnings June 30, June 30, June 30, June 30, June 30, June 30,
Summary 2004 2003 '03 to '04 2004 2003 '03 to '04
------------- -------- --------- --------- -------- -------- ---------
(In thousands, except per share amounts)
Net Income:
Net interest
income
(taxable
equivalent) $277,729 $247,463 12% $144,115 $125,741 15%
Provision
for loan
losses 14,453 18,870 -23% 6,519 10,810 -40%
Noninterest
income
excluding
security
gains
(losses)(1) 63,897 62,610 2% 33,636 33,496 0%
Security gains
(losses), net 7,050 3,717 - (392) 1,947 -
Noninterest
expense
excluding
loss on ext.
of debt(1) 202,131 182,530 11% 104,702 92,589 13%
Loss on early
extinguishment
of debt 6,183 - - - - -
Net Income $82,448 $73,377 12% $43,334 $37,747 15%
------------- -------- --------- --------- -------- -------- ---------
EARNINGS PER SHARE:
-------------------
Net Income
Basic $0.64 $0.59 8% $0.33 $0.30 10%
Diluted $0.64 $0.59 8% $0.33 $0.30 10%
Average shares
outstanding 128,598 123,896 130,130 124,055
Average
diluted shares
outstanding 129,726 124,540 131,228 124,721
------------- -------- --------- --------- -------- -------- ---------
KEY RATIOS:
-----------
Net interest
margin 3.59% 3.42% 5% 3.61% 3.42% 6%
Book value
per share $9.62 $9.03 7% $9.62 $9.03 7%
Dividends
paid per
share $0.290 $0.280 4% $0.145 $0.140 4%
------------- -------- --------- --------- -------- -------- ---------
June 30, Dec. 31, June 30,
Nonperforming Assets 2004 2003 2003
------------------------------------------- -------- -------- --------
Total non-performing assets ratio 0.38% 0.65% 0.71%
Allowance as a percent of nonperforming
loans 417% 240% 210%
Net charge-offs ratio (annualized):
Quarter to date 0.23% 0.30% 0.37%
Year to date 0.22% 0.31% 0.29%
------------------------------------------- -------- -------- --------
(1) Certain reclassifications have been made to the 2003 financial
statements to conform to the 2004 presentations.
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