Commercial Federal's 2001 Earnings Exceed Expectations.Business Editors OMAHA Omaha, city, United States Omaha (ō`məhä, –hô), city (1990 pop. 335,795), seat of Douglas co., E Nebr., on the west bank of the Missouri River; inc. 1857. , Neb.--(BUSINESS WIRE)--Feb. 7, 2002 Commercial Federal Corporation (NYSE NYSE See: New York Stock Exchange :CFB CFB Canadian Forces Base ), the parent company of Commercial Federal Bank, one of the largest financial institutions in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , today announced net income of $25.1 million, or $0.53 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, for the quarter ended December December: see month. 31, 2001. For the fiscal year ended December 31, 2001, net income totaled $97.7 million, or $1.93 per diluted share. The above results compare to a net loss of $47.7 million, or $0.88 loss per share, for the quarter ended December 31, 2000, and a net loss of $18.7 million, or $0.33 loss per share, for the corresponding pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma twelve-month period ended December 31, 2000. Earnings for the twelve-month period ended December 31, 2000 were impacted by nonrecurring charges Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". totaling $96 million on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. . Other highlights: -- Earnings exceeded consensus estimates for each quarter of 2001 -- 16.30 percent return on tangible equity for the year 2001 -- The Company remains comfortable with earnings estimates of $2.15 to $2.25 per share for 2002 William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack A. Fitzgerald, chairman of the board and chief executive officer stated, "Commercial Federal had an outstanding year with strong and consistent earnings growth; beating street expectations all four quarters. This consistent performance validates our strategy. Mr. Fitzgerald concluded, "Our focus is to continue core earnings improvement by expanding existing relationships and acquiring new customers in our growth markets in the Midwest. This is the Company's model to enhance long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value. We are confident we will build upon the successes achieved over the past four quarters and continue to post strong earnings growth in 2002." Chief Financial Officer David S. Fisher fisher, name of a large North American marten, Martes pennanti. This carnivorous, largely arboreal mammal is found in hardwood forests of Canada, the extreme N United States, and mountain ranges of the W United States. stated, "We continue to be pleased with the Company's financial results. From an investor's point of view, one of the key measures of our success is the return on 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. equity of 16.3 percent. This demonstrates the Company's ability to effectively deploy capital in the consistent execution of our business plan. By growing revenues, managing credit risk, controlling expenses, and improving operating efficiencies we will continue to improve this performance measurement and provide consistent earnings growth. "The weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. national economy has not materially affected our
credit risk profile. Net charge-offs for the year were substantially
below the industry average. Nonperforming assets Nonperforming assetAn asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. were down slightly in the fourth quarter. Adjusting to the shifting mix of our loan portfolio, the Company has significantly strengthened our loan loss reserves over the past year, while maintaining a very strong tangible capital position. "Given the strong 2001 bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results, we are confident in our ability to continue this momentum. We are comfortable with earnings estimates of $2.15 to $2.25 per share for 2002," Mr. Fisher concluded. Highlights of the Quarter Net Interest Income Net interest income totaled $82.1 million for the fourth quarter, an improvement of $3.9 million or five percent over the prior quarter. The net interest spread for the quarter increased to 2.82 percent, compared with 2.46 percent for the same period last year and 2.70 percent in the prior quarter, primarily reflecting the Company's reduced cost of borrowings. Credit Risk Management Overall credit quality is strong and continues to be closely monitored by the Company, given current economic conditions. Total nonperforming assets were down to $142.2 million at December 31, 2001, verses $142.8 million at September September: see month. 30, 2001. Total NPAs represented 1.10 percent of total assets at the end of the fourth quarter of 2001. The allowance for losses to non-residential nonperforming assets at December 31, 2001 was 242 percent, compared to 229 percent at September 30, 2001. During the fourth quarter, the Company continued to build reserves adding $8.3 million to the loan loss allowance for all nonperforming loans. Net loan charge offs for the fourth quarter were $5.5 million, verses $4.9 million for the previous quarter. For the year, net loan charge offs were $19.8 million, compared to $26.1 million for the twelve-month period ended December 31, 2000. At December 31, 2001, the allowance for loan losses totaled $102.5 million, compared to $99.8 million on September 30, 2001 and $83.4 million on December 31, 2000. Balance Sheet and Capital Ratios Total assets at December 31, 2001 were $12.9 billion, compared to $13.0 billion at September 30, 2001 and $12.5 billion at December 31, 2000. Total deposits declined $300 million for the quarter, including $93 million in deposits sold through the branch divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). initiative. The decline in deposits included a planned run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → in the higher costing certificate of deposit portfolio. The Company's efforts have been focused on achieving deposit growth in the core deposit products, including checking, money market and savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: . For the year, core deposits were up $305 million, net of deposits sold through branch divestitures. Stockholder's equity Stockholder's equity The residual claims that stockholders have against a firm's assets, calculated by subtracting all current liabilities and debt liabilities from total assets. at December 31, 2001 was $735 million, compared to $746 million at September 30, 2001. The capital ratios of the Company's banking subsidiary continued to exceed regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. for classification as "well-capitalized," the highest 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. standard. Noninterest Income The Company's retail and mortgage banking operations continued to generate positive results in the fourth quarter. Retail banking fees is a major portion of 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. noninterest income. For the quarter, retail fees totaled $14.4 million, compared to $13.4 million for the previous quarter. For the year, retail fees totaled $53.5 million, compared to $48.1 million for the twelve months ended December 31, 2000, representing an 11 percent increase. The primary components of this income include deposit-related fees and charges, debit card debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. and transaction-related revenues, and other retail fees. The mortgage banking business includes activities associated with the Company's mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. and mortgage banking operations, offset by the amortization of its mortgage servicing rights asset. Strong refinancing Refinancing An extension and/or increase in amount of existing debt. activity in residential mortgages has been reflected in near record loan volumes for the quarter. Mortgage servicing fees and the gain on the sale of originated loans for the quarter totaled $5.0 million and $7.1 million, respectively. For the quarter ended September 30, 2001, mortgage servicing fees totaled $4.7 million and the gain on the sale of loans was $3.4 million. 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. For the quarter, total administrative expenses, excluding exit costs and termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. benefits, totaled $67.5 million, compared to $60.6 million for the previous quarter. The primary reason for the increase was the realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.2 million in legal expenses associated with the Company's goodwill lawsuit lawsuit: see procedure; tort. against the U.S. government. These costs were expensed in the fourth quarter given the current status of the lawsuit in the court system. The remaining increase in overall expenses included advertising fees associated with the Company's core deposit growth strategy and other expenses. Branch Divestiture At the end of the fourth quarter, the Company operated 196 branch offices, compared to 255 offices as of June June: see month. 30, 2000 and 241 as of December 31, 2000. During the quarter, the Company recorded a nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $2.7 million on the sale of seven branch offices. This gain is included in exit costs and termination benefits. These sales effectively complete the previously announced branch right-sizing initiative, with only four branches representing $20 million in deposits remaining to be sold. Capital Management The five million-share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program announced in May 2001 was completed in January January: see month. 2002. As of December 31, 2001, shares outstanding totaled 45,974,648. During the fourth quarter, the Company issued through it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have banking subsidiary $50 million in subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". . The proceeds from this offering were used to retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. other higher costing debt and to complete the stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. program. Commercial Federal Corporation is the parent company of Commercial Federal Bank, a $12.9 billion 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 that currently operates branches located in Nebraska Nebraska (nəbrăs`kə), Great Plains state of the central United States. It is bordered by Iowa and Missouri, across the Missouri R. (E), Kansas (S), Colorado (SW), Wyoming (NW), and South Dakota (N). , Iowa, Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , Kansas, Oklahoma Kansas is a town in Delaware County, Oklahoma, United States. The population was 685 at the 2000 census. Geography Kansas is located at (36.202423, -94.795122)GR1. , Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , and Minnesota Minnesota, state, United StatesMinnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces . Commercial Federal operations include consumer and commercial banking, mortgage banking, agricultural lending, insurance and investment services, and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the banking. Commercial Federal's website, http://www.comfedbank.com, will host a live webcast of the investor conference call to discuss fourth quarter results on Thursday Thursday: see week. , February February: see month. 7, 2002 at 10:00 a.m. Central Time. The site also includes access to company news releases, annual reports, quarterly financial statements, and SEC filings. Certain statements contained in this release are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. in nature. These statements are subject to risks and uncertainties that could cause Commercial Federal's actual results or financial condition to differ materially from those expressed in or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such statements. Factors of particular importance to Commercial Federal include, but are not limited to, changes in general economic conditions, and price levels and conditions in the public securities markets generally.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in Thousands)
----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
ASSETS 2001 2001 2000
----------------------------------------------------------------------
(Unaudited) (Unaudited) (Audited)
Cash (including short-term
investments of $590,
$887 and $1,283) $206,765 $162,903 $192,358
Investment securities available
for sale, at fair value 1,150,345 1,075,632 771,137
Mortgage-backed securities
available for sale, at fair
value 1,829,728 1,780,174 1,514,510
Loans and leases held for
sale, net 470,647 404,121 242,200
Loans receivable, net of
allowances of $102,359,
$99,665 and $82,263 7,932,778 8,230,164 8,651,174
Federal Home Loan Bank stock 253,946 238,846 251,537
Real estate, net 57,476 59,624 38,331
Premises and equipment, net 158,691 158,433 167,210
Bank owned life insurance 214,585 211,100 200,713
Other assets 435,174 465,776 303,707
Intangible assets, net of
accumulated amortization of
$85,827, $82,213 and $70,502 191,450 195,251 207,427
----------------------------------------------------------------------
Total Assets $12,901,585 $12,982,024 $12,540,304
----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------
Liabilities:
Deposits $6,396,522 $6,696,718 $7,694,486
Advances from Federal Home
Loan Bank 4,939,056 4,728,515 3,565,465
Other borrowings 520,213 414,567 175,343
Other liabilities 311,140 396,565 241,271
----------------------------------------------------------------------
Total Liabilities 12,166,931 12,236,365 11,676,565
----------------------------------------------------------------------
Commitments and Contingencies -- -- --
----------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, $.01 par
value; 10,000,000 shares
authorized; none issued -- -- --
Common stock, $.01 par value;
120,000,000 shares
authorized; 45,974,648,
48,027,251 and 53,208,628
shares issued and outstanding 460 480 532
Additional paid-in capital 80,799 133,652 255,870
Retained earnings 705,160 683,715 622,659
Accumulated other
comprehensive loss, net (51,765) (72,188) (15,322)
----------------------------------------------------------------------
Total Stockholders' Equity 734,654 745,659 863,739
----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $12,901,585 $12,982,024 $12,540,304
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
----------------------------------------------------------------------
Three Months Ended
Dec. 31, Sept. 30, Dec. 31,
----------------------------------------
2001 2001 2000
----------------------------------------------------------------------
Interest Income:
Investment securities $19,344 $20,116 $18,478
Mortgage-backed securities 28,800 27,739 28,463
Loans receivable 160,375 170,059 200,076
----------------------------------------------------------------------
Total interest income 208,519 217,914 247,017
Interest Expense:
Deposits 61,688 73,438 95,292
Advances from Federal
Home Loan Bank 59,813 60,716 74,226
Other borrowings 4,926 5,533 3,617
----------------------------------------------------------------------
Total interest expense 126,427 139,687 173,135
Net Interest Income 82,092 78,227 73,882
Provision for Loan Losses (8,265) (19,800) (15,206)
----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 73,827 58,427 58,676
Other Income (Loss):
Retail fees and charges 14,381 13,428 12,910
Loan servicing fees, net 5,040 4,749 6,117
Mortgage servicing rights
valuation adjustment 3,983 (17,385) (583)
Gain (loss) on sales of
securities and changes in
fair values of derivatives,
net (7,315) 15,438 (66,278)
Gain (loss) on sales of
loans 7,130 3,395 (17,930)
Real estate operations (3,805) (1,429) (3,911)
Other operating income 11,480 11,234 8,133
----------------------------------------------------------------------
Total other income (loss) 30,894 29,430 (61,542)
Other Expense:
General and administrative
expenses -
Compensation and benefits 26,646 26,763 26,259
Occupancy and equipment 9,356 9,331 9,652
Data processing 4,595 4,398 4,946
Advertising 4,107 2,793 3,010
Communication 3,639 3,436 3,384
Item processing 3,900 4,216 4,022
Outside services 2,513 2,129 3,597
Other operating expenses 12,756 7,534 7,334
Exit costs and termination
benefits (2,526) (11,043) 2,796
----------------------------------------------------------------------
Total general and
administrative expenses 64,986 49,557 65,000
Amortization of core value
of deposits 1,662 1,692 1,952
Amortization of goodwill 1,951 1,980 2,125
----------------------------------------------------------------------
Total other expense 68,599 53,229 69,077
----------------------------------------------------------------------
Income (Loss) Before
Income Taxes 36,122 34,628 (71,943)
Income Tax Provision
(Benefit) 11,006 10,646 (24,268)
----------------------------------------------------------------------
Net Income (Loss) $25,116 $23,982 $(47,675)
----------------------------------------------------------------------
Per Common Share:
Net Income (Loss) $.53 $.48 $(.88)
----------------------------------------------------------------------
Dividends Declared Per
Common Share $.08 $.08 $.07
----------------------------------------------------------------------
Weighted Average Shares
Outstanding 47,163,740 50,269,384 53,956,067
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
----------------------------------------------------------------------
Twelve Months Ended
December 31,
------------------------------------
2001 2000
----------------------------------------------------------------------
Interest Income:
Investment securities $76,237 $83,936
Mortgage-backed securities 109,657 90,356
Loans receivable 685,480 796,249
----------------------------------------------------------------------
Total interest income 871,374 970,541
Interest Expense:
Deposits 310,367 349,558
Advances from Federal Home
Loan Bank 234,213 283,217
Other borrowings 19,365 15,135
----------------------------------------------------------------------
Total interest expense 563,945 647,910
Net Interest Income 307,429 322,631
Provision for Loan Losses (38,945) (34,854)
----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 268,484 287,777
Other Income (Loss):
Retail fees and charges 53,519 48,146
Loan servicing fees, net 22,680 25,079
Mortgage servicing rights
valuation adjustment (19,058) (583)
Gain (loss) on sales of
securities and changes in fair
values of derivatives, net 15,422 (69,541)
Gain (loss) on sales of loans 8,739 (18,295)
Real estate operations (6,971) (5,035)
Other operating income 46,056 27,946
----------------------------------------------------------------------
Total other income 120,387 7,717
Other Expense:
General and administrative
expenses -
Compensation and benefits 105,120 109,578
Occupancy and equipment 37,726 37,916
Data processing 18,019 19,474
Advertising 11,995 14,264
Communication 13,731 14,753
Item processing 16,413 16,351
Outside services 11,152 10,361
Other operating expenses 33,880 24,454
Exit costs and termination
benefits (15,566) 25,414
----------------------------------------------------------------------
Total general and
administrative expenses 232,470 272,565
Amortization of core value
of deposits 7,211 7,391
Amortization of goodwill 8,134 8,731
----------------------------------------------------------------------
Total other expense 247,815 288,687
----------------------------------------------------------------------
Income Before Income Taxes and
Cumulative Effect of Change
in Accounting Principle 141,056 6,807
Income Tax Provision 43,374 6,372
----------------------------------------------------------------------
Income Before Cumulative Effect
of Change in Accounting
Principle 97,682 435
Cumulative Effect of Change in
Accounting Principle, Net of
Tax Benefit -- (19,125)
----------------------------------------------------------------------
Net Income (Loss) $97,682 $(18,690)
----------------------------------------------------------------------
Per Common Share:
Net Income (Loss) $1.93 $(.33)
----------------------------------------------------------------------
Dividends Declared Per
Common Share $.31 $.28
----------------------------------------------------------------------
Weighted Average Shares
Outstanding 50,492,919 55,818,000
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
MORTGAGE SERVICING RIGHTS AND DEPOSITS
(Dollars in Thousands)
(Unaudited)
----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2001 2001 2000
----------------------------------------------------------------------
Mortgage Servicing Rights:
Beginning balance $108,064 $117,647 $89,076
Purchases of mortgage
servicing rights 7,491 6,401 2,965
Mortgage servicing rights
retained through loan sales 3,640 3,672 1,872
Mortgage servicing rights
retained on securitized
loans sold -- -- 18,551
Valuation adjustment 3,983 (17,385) (583)
Other items, net (principally
derivative activity) (2,270) 2,729 1,693
Amortization expense (3,691) (5,000) (2,464)
----------- ------------ ------------
Ending balance $117,217 $108,064 $111,110
=========== ============ ============
----------------------------------------------------------------------
Deposits by State:
Colorado $2,118,720 $2,171,820 $2,273,970
Nebraska 1,393,912 1,417,092 1,552,969
Iowa 1,033,526 1,071,048 1,437,166
Kansas 714,436 803,813 1,021,814
Oklahoma 631,933 671,978 763,717
Missouri 301,272 349,391 416,151
Arizona 182,826 191,148 212,626
Minnesota/South Dakota 19,897 20,428 16,073
----------- ------------ ------------
Total deposits $6,396,522 $6,696,718 $7,694,486
=========== ============ ============
Deposits by Type:
Checking accounts:
Interest bearing $498,722 $459,962 $503,588
Noninterest bearing 699,924 639,761 562,382
----------- ------------ ------------
Total checking 1,198,646 1,099,723 1,065,970
Money market accounts 304,619 316,960 382,344
Savings accounts 1,939,596 1,954,694 1,861,074
----------- ------------ ------------
Total core deposits 3,442,861 3,371,377 3,309,388
Certificates of deposit
- non core 2,953,661 3,325,341 4,385,098
----------- ------------ ------------
Total deposits $6,396,522 $6,696,718 $7,694,486
=========== ============ ============
Sale of Deposits - Branch
Divestiture Initiative(1):
Checking accounts $10,882 $44,542 $ --
Money market and savings
accounts 20,525 56,258 --
Certificates of deposit 61,776 142,122 --
----------- ------------ ------------
Total $93,183 $242,922 $ --
=========== ============ ============
(1) During calendar year 2001, deposits totaling $446,267 were sold
pursuant to the branch divestiture initiative. The remainder of
these deposits were sold during the quarter ended June 30, 2001.
For the year, certificates of deposit totaling $274,530 and core
deposits totaling $171,737 were sold.
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
ALLOWANCE FOR LOSSES ON LOANS
(Unaudited)
----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
(Dollars in Thousands) 2001 2001 2000
----------------------------------------------------------------------
THREE MONTHS ENDED:
-------------------
Beginning balance $ 99,755 $ 84,898 $ 73,510
Provision charged to
operations 8,265 19,800 15,206
Charges (6,927) (6,272) (5,869)
Recoveries 1,408 1,369 1,157
Change in estimate of
allowance for bulk purchased
loans (50) (40) (41)
Charge-offs to allowance for
bulk purchased loans - - (28)
Reduction to allowance on
sale of securitized loans - - (496)
----------------------------------------------------------------------
Ending balance $ 102,451 $ 99,755 $ 83,439
----------------------------------------------------------------------
TWELVE MONTHS ENDED:
--------------------
Beginning balance $ 83,439 $ 79,536
Provision charged to
operations 38,945 34,854
Charges (25,074) (31,401)
Recoveries 5,318 5,331
Change in estimate of
allowance for bulk
purchased loans (172) (4,357)
Charge-offs to allowance
for bulk purchased loans - (28)
Reduction to allowance on
sale of securitized loans (5) (496)
----------------------------------------------------------------------
Ending balance $ 102,451 $ 83,439
----------------------------------------------------------------------
SUMMARY OF CHARGE-OFFS,
NET OF RECOVERIES:
Three months ended
12/31/01 and 12/31/00 $ (5,519) $ (4,712)
Three months ended
9/30/01 and 9/30/00 (4,903) (9,648)
Three months ended
6/30/01 and 6/30/00 (5,361) (6,745)
Three months ended
3/31/01 and 3/31/00 (3,973) (4,965)
----------- -----------
Twelve months ended
12/31/01 and 12/31/00 $ (19,756) $ (26,070)
=========== ===========
----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2001 2001 2000
-----------------------------------------
Reserves:
Specific $ 10,508 $ 11,440 $ 9,299
Nonspecific 91,943 88,315 74,140
----------- =========== -----------
$ 102,451 $ 99,755 $ 83,439
=========== =========== ===========
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
NONPERFORMING ASSETS AND LOANS
(Dollars in Thousands)
(Unaudited)
----------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31,
2001 2001 2000
----------------------------------------------------------------------
Nonperforming Assets:
Nonperforming loans:
Residential real estate $60,616 $60,026 $57,573
Residential construction 2,879 959 23,833
Commercial real estate 23,298 22,722 4,446
Commercial construction 125 1,198 1,331
All other 6,929 7,418 8,688
----------- ----------- -----------
Total nonperforming loans 93,847 92,323 95,871
----------- ----------- -----------
Real estate:
Residential 14,554 14,816 15,261
Residential construction 21,892 23,418 563
Commercial construction 3,870 3,870 --
All other 4,892 5,185 10,198
----------- ----------- -----------
Total real estate 45,208 47,289 26,022
Troubled debt restructurings 3,141 3,159 4,285
----------- ----------- -----------
Total nonperforming assets $142,196 $142,771 $126,178
=========== =========== ===========
Nonperforming assets to
total assets 1.10% 1.10% 1.01%
=========== =========== ===========
Summary of Nonperforming
Assets:
Residential $99,941 $99,219 $97,230
Nonresidential 42,255 43,552 28,948
----------- ----------- -----------
$142,196 $142,771 $126,178
=========== =========== ===========
----------------------------------------------------------------------
Loans receivable,
before allowance for losses:
Single-family fixed $2,193,378 $2,232,141 $2,177,400
Single-family adjustable 2,066,527 2,317,986 3,020,487
----------- ----------- -----------
Total single-family 4,259,905 4,550,127 5,197,887
Commercial real estate 1,354,674 1,326,273 1,164,474
Construction (net of LIP) 571,535 543,674 520,151
Multi-family 324,602 322,273 232,303
Consumer and other 1,524,421 1,587,482 1,590,000
----------- ----------- -----------
Total loans receivable,
before allowance for
losses $8,035,137 $8,329,829 $8,704,815
=========== =========== ===========
----------------------------------------------------------------------
Nonperforming loans
to total loans 1.08% 1.03% 1.05%
Nonperforming assets to
total assets 1.10% 1.10% 1.01%
Allowance for losses to
total loans 1.18% 1.11% .91%
Allowance for losses to
nonperforming assets 72.05% 69.87% 66.13%
Allowance for losses to
nonresidential
nonperforming assets 242.46% 229.05% 288.24%
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS AND RATIOS
(Unaudited)
----------------------------------------------------------------------
(Dollars in Thousands Dec. 31, Sept. 30, Dec. 31,
Except Per Share Data) 2001 2001 2000
----------------------------------------------------------------------
Cash, investment
securities and FHLB
stock $1,611,056 $1,477,381 $1,215,032
Mortgage-backed securities 1,829,728 1,780,174 1,514,510
Loans receivable, net 8,403,425 8,634,285 8,893,374
Intangible assets 191,450 195,251 207,427
Other assets 865,926 894,933 709,961
Total assets 12,901,585 12,982,024 12,540,304
----------------------------------------------------------------------
Deposits 6,396,522 6,696,718 7,694,486
Advances from Federal Home
Loan Bank 4,939,056 4,728,515 3,565,465
Other borrowings 520,213 414,567 175,343
Other liabilities 311,140 396,565 241,271
Stockholders' equity 734,654 745,659 863,739
Total liabilities and
stockholders' equity 12,901,585 12,982,024 12,540,304
----------------------------------------------------------------------
Book value per common
share $15.98 $15.53 $16.23
Tangible book value per
common share 11.82 11.46 12.33
Stock price 23.50 24.27 19.44
Common shares outstanding 45,974,648 48,027,251 53,208,628
Weighted average shares
outstanding 47,163,700 50,269,384 53,956,067
----------------------------------------------------------------------
Nonperforming assets 142,196 142,771 126,178
Nonperforming assets to
total assets 1.10% 1.10% 1.01%
Weighted average interest
rates (durings):
Yield on interest-
earning assets 7.05% 7.37% 7.96%
Rate on interest-bearing
liabilities 4.23% 4.67% 5.50%
Net interest rate spread 2.82% 2.70% 2.46%
Net yield on interest-
earning assets 2.78% 2.65% 2.39%
Loans serviced for other
institutions $9,488,621 $9,602,282 $9,100,938
----------------------------------------------------------------------
Three months ended:
-------------------
Return on average assets .77% .74% -1.40%
Excluding nonrecurring
items, net .72% .52% .24%
Return on average equity 14.10% 11.49% -21.54%
Excluding nonrecurring
items, net 13.18% 8.05% 3.65%
Return on average tangible
equity 19.37% 15.04% -28.21%
Average equity to average
assets 5.49% 6.47% 6.52%
G & A expenses to average
assets 2.00% 1.54% 1.91%
Excluding nonrecurring
charges, net 2.08% 1.88% 1.83%
Operating efficiency ratio 55.55% 54.91% 64.70%
Excluding nonrecurring
items, net 57.71% 67.14% 61.92%
----------------------------------------------------------------------
Twelve months ended:
--------------------
Return on average assets .76% -.14%
Excluding nonrecurring
items, net .68% .57%
Return on average equity 12.23% -2.00%
Excluding nonrecurring
items, net 10.96% 8.29%
Return on average tangible
equity 16.30% -2.64%
Average equity to average
assets 6.21% 6.87%
G & A expenses to average
assets 1.81% 2.01%
Excluding nonrecurring
charges, net 1.93% 1.82%
Operating efficiency ratio 56.61% 64.40%
Excluding nonrecurring
items, net 60.40% 58.40%
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
OPERATING EARNINGS/EPS AND CASH EPS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
----------------------------------------------------------------------
Three Months Ended
Dec. 31, Sept. 30, Dec. 31,
-----------------------------------------
2001 2001 2000
----------------------------------------------------------------------
OPERATING EARNINGS:
Reported net income (loss) $25,116 $23,982 $(47,675)
Exit costs and termination
benefits (pretax $2,526 cr;
$11,043 cr; $2,796;
$15,566 cr; and $25,414) (1,642) (7,178) 1,817
Cumulative effect of change
in accounting principle
(net of tax) -- -- --
Loss on termination of
swaps ($38,209 pre-tax) -- -- 24,836
Restructure loss on sales
of loans ($18,248 pretax)
and -- -- 11,746
securities ($26,704 and
$29,970 pretax) -- -- 17,353
-------------------------------------------
Operating Earnings (Loss) $23,474 $16,804 $8,077
===========================================
Weighted Average Shares
Outstanding 47,163,740 50,269,384 54,236,362
===========================================
Operating Earnings EPS $.50 $.33 $.15
===========================================
EPS - Reported Net Income
(Loss) $.53 $.48 $(.88)
===========================================
----------------------------------------------------------------------
CASH EPS:
Reported net income (loss) $25,116 $23,982 $(47,675)
Amortization of core value
of deposits 1,662 1,692 1,952
Amortization of goodwill 1,951 1,980 2,125
Less tax benefit associated
with amortization expense
of core value of deposits (505) (520) (1,000)
Less tax benefit associated
with amortization expense
of goodwill (32) (32) (36)
-------------------------------------------
Cash Earnings (Loss) 28,192 27,102 (44,634)
Adjustments to derive
operating earnings (net
of tax from above) (1,642) (7,178) 55,752
-------------------------------------------
Cash Operating Earnings
(Loss) $26,550 $19,924 $11,118
===========================================
Cash EPS (Loss) $.60 $.54 $(.82)
===========================================
Cash Operating EPS (Loss) $.56 $.40 $.20
===========================================
EPS - Reported Net Income
(Loss) $.53 $.48 $(.88)
===========================================
----------------------------------------------------------------------
Year Ended
December 31,
--------------------------------------
2001 2000
----------------------------------------------------------------------
OPERATING EARNINGS:
Reported net income (loss) $97,682 $(18,690)
Exit costs and termination
benefits (pretax $2,526 cr;
$11,043 cr; $2,796; $15,566 cr;
and $25,414) (10,118) 20,891
Cumulative effect of change
in accounting principle (net
of tax) -- 19,125
Loss on termination of swaps
($38,209 pre-tax) -- 24,836
Restructure loss on sales of
loans ($18,248 pretax) and -- 11,746
securities ($26,704
and $29,970 pretax) -- 19,404
------------- -------------
Operating Earnings (Loss) $87,564 $77,312
============= =============
Weighted Average Shares
Outstanding 50,492,919 56,026,000
============= =============
Operating Earnings EPS $1.73 $1.38
============= =============
EPS - Reported Net Income
(Loss) $1.93 $(.33)
============= =============
----------------------------------------------------------------------
CASH EPS:
Reported net income (loss) $97,682 $(18,690)
Amortization of core value
of deposits 7,211 7,391
Amortization of goodwill 8,134 8,731
Less tax benefit associated
with amortization
expense of core value of
deposits (2,217) (2,865)
Less tax benefit associated
with amortization expense
of goodwill (131) (149)
------------- -------------
Cash Earnings (Loss) 110,679 (5,582)
Adjustments to derive
operating earnings (net
of tax from above) (10,118) 96,002
------------- -------------
Cash Operating Earnings
(Loss) $100,561 $90,420
=============================
Cash EPS (Loss) $2.19 $(.10)
============= =============
Cash Operating EPS (Loss) $1.99 $1.61
============= =============
EPS - Reported Net Income
(Loss) $1.93 $(.33)
============= =============
COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
(Unaudited)
----------------------------------------------------------------------
December 31, September 30, June 30,
2001 2001 2001
----------------------------------------------------------------------
Three Months Ended:
-------------------
Average Balances:
Total assets $ 12,975,446 $ 12,909,726 $ 12,883,522
Total loans, net 8,561,043 8,747,301 8,886,895
Total loans, before allowances 8,663,042 8,835,764 8,971,107
Total mortgage-backed
securities 1,838,301 1,741,497 1,624,851
Total deposits 6,556,132 6,907,935 7,355,395
Total stockholders' equity 712,325 835,077 814,176
Total interest-earning assets 11,817,199 11,807,685 11,735,291
Total interest-earning
liabilities 11,789,523 11,786,039 11,722,353
----------------------------------------------------------------------
March 31, December 31,
2001 2000
----------------------------------------------------------------------
Three Months Ended:
-------------------
Average Balances:
Total assets $ 12,655,695 $ 13,587,701
Total loans, net 8,974,298 9,985,162
Total loans, before allowances 9,029,882 10,059,683
Total mortgage-backed
securities 1,555,555 1,440,763
Total deposits 7,683,554 7,588,949
Total stockholders' equity 834,932 885,486
Total interest-earning assets 11,542,636 12,391,536
Total interest-earning
liabilities 11,515,863 12,414,943
----------------------------------------------------------------------
Twelve
Year Six Months Year Months
Ended Ended Ended Ended
Year to Date: 12/31/2001 12/31/00 06/30/2000 12/31/2000
------------- -----------------------------------------------
Average Balances:
Total assets $12,857,135 $13,724,748 $13,507,546 $13,575,200
Total loans, net 8,784,154 10,257,240 9,798,198 10,115,120
Total loans, before
allowances 8,873,836 10,330,206 9,877,010 10,190,797
Total mortgage-backed
securities 1,690,967 1,338,706 1,291,061 1,307,837
Total deposits 7,122,069 7,465,924 7,433,114 7,425,921
Total stockholders'
equity 798,889 909,247 958,664 932,642
Total interest-earning
assets 11,726,680 12,659,728 12,328,807 12,573,944
Total interest-earning
liabilities 11,704,421 12,539,841 10,069,053 12,366,876
----------------------------------------------------------------------
December 31, September 30, June 30,
Regulatory Capital: 2001 2001 2001
------------------- ------------------------------------
Tangible $ 706,534 $ 753,914 $ 741,379
Core 709,770 757,607 745,527
Total risk-based 850,713 845,990 822,995
Tier 1 risk-based 709,770 757,607 745,527
Tangible % 5.58% 5.92% 5.97%
Core % 5.60% 5.95% 6.00%
Total risk-based % 11.38% 11.10% 10.80%
Tier 1 risk-based % 9.50% 9.94% 9.78%
----------------------------------------------------------------------
March 31, December 31,
Regulatory Capital: 2001 2000
------------------- ------------------------------------
Tangible $ 785,620 $ 800,630
Core 790,224 805,693
Total risk-based 865,581 879,845
Tier 1 risk-based 790,224 805,693
Tangible % 6.28% 6.51%
Core % 6.32% 6.55%
Total risk-based % 11.41% 11.84%
Tier 1 risk-based % 10.41% 10.84%
----------------------------------------------------------------------
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