Commercial Federal Reports Net Income of $89.0 Million for 2003.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)--Jan. 29, 2004 Adjusts accounting treatment for Bank Owned Life Insurance and Announces $5.6 million award in Goodwill Lawsuit lawsuit: see procedure; tort. Commercial Federal Corporation (NYSE NYSE See: New York Stock Exchange :CFB CFB Canadian Forces Base ), 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 $89.0 million, or $2.02 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 year ended December December: see month. 31, 2003. Fourth quarter net income totaled $22.2 million, or $0.52 per diluted share. "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the unprecedented environment, we accomplished a great deal. Interest rates that fell to levels not seen in over 40 years, created a challenging operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. that drove earning asset Earning asset An asset that generates income, e.g., income from rental property. yields and margins well below forecasted levels this past year. The Company's core banking operation produced solid results including double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth in deposits and commercial operating loans," stated 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. "We also significantly strengthened the 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 and growth potential of Commercial Federal's franchise by adding new branches in our fast-growing adj. 1. tending to spread quickly; - used mostly of plants. Adj. 1. fast-growing - tending to spread quickly; "an aggressive tumor" strong-growing, aggressive markets, increasing automation of processes, upgrading technology, expanding our sales force, strengthening our management team and repurchasing shares of our common stock." "I would like to thank our employees for their efforts in producing another good year for our shareholders. As we enter 2004 with signs of an improving economy, Commercial Federal remains focused on growing our core banking business and building long-term value for our investors. Our continuing objective is to expand share in our vibrant Midwest markets by growing deposits and expanding our commercial and consumer loan portfolios," Mr. Fitzgerald concluded. Key Growth Indicators: -- Core deposits, excluding custodial escrows, grew $412.5 million during the year. This is a 13% increase year-over-year consisting mainly of strong growth in checking and money market savings deposits Savings deposits Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand. . -- Commercial operating average outstanding loan balances increased 61% for the year, as we continue to successfully grow our commercial banking relationships. -- Home equity outstanding balances were up 5% year-over-year. -- Retail checking accounts growth for the year was 5%, while commercial checking accounts were up 16%. Growth in the number of checking accounts continues to be one of our key strategies to build our customer base and enhance revenue. Results for the Year Net Interest Income Net interest income totaled $69.4 million for the fourth quarter, compared with $60.3 million for the quarter ended September September: see month. 30, 2003. For the year, net interest income totaled $275.6 million, compared with $327.7 million for 2002. The net interest spread for the quarter increased 39 basis points to 2.54% for the quarter, compared with 2.15% for the third quarter. For the full year, net interest spread was 2.43% compared with 2.76% in 2002. The improvement in net interest spread for the quarter was in part due to a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. on loans and investments and certain debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: transactions that resulted in a lower cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . It is expected that the spread will continue to improve during future quarters, if interest rates and the slope of the yield curve remain at or near current levels. Noninterest Income Commercial Federal's retail banking operations continued to generate strong results in the fourth quarter. Retail fees and charges totaled $14.5 million, compared with $14.8 million for the quarter ended September 30, 2003, and $14.3 million for the same period a year ago. For the year, retail fees and charges totaled $57.8 million, compared with $55.3 million for the previous year, a 5% increase year-over-year. Noninterest income in the third and fourth quarters of 2003 included the impact of reduced revenue from interchange fees Interchange fee is a term used in the payment card industry to describe a fee that bank card networks such as Visa and MasterCard require merchants to pay card-issuing banks when merchants accept their credit and debit cards for purchases. for 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. purchases that resulted from a third-party settlement of debit card litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with VISA See VESA. Inc. earlier in 2003. The industry-wide settlement, which went into effect August 1, 2003, reduced the Company's 2003 revenue by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.6 million. The Company's commercial banking unit also continued to generate solid gains in its loan portfolio as well as commercial and small business deposits. We finished the year with a 60% increase in the commercial operating loan portfolio and a 16% increase in commercial and small business checking accounts. Growth in these higher-margin products will continue to enhance revenues and net interest spread going forward. The mortgage banking operations include 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 secondary marketing operations. Revenues from these operations are impacted by the amortization of and valuation adjustments related to its mortgage servicing rights asset. During the fourth quarter 2003, the Company recorded a recovery of the valuation allowance of $20.2 million, and amortization expense of $22.5 million related to its mortgage servicing rights asset. Gain on the sale of loans declined to $601,000 in the fourth quarter, compared with $9.3 million in the previous quarter. The decline is due to two factors that impacted mortgage lenders in the second half of 2003; namely, the significant decline in mortgage loan production as interest rates stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. and pricing pressures on loans originated. 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 ended December 31, 2003, general and administrative expenses totaled $66.6 million, compared with $67.1 million for the previous quarter. For the year 2003, expenses totaled $271.4 million, a 4% increase over 2002. The increase was primarily due to costs associated with new branch expansion, higher level of commissions and incentives related to the higher level of mortgage loan production and increased loan expenses associated with higher levels of loan prepayments. Credit Risk Management Credit quality remained strong during the fourth quarter with total nonperforming loans declining to $55.9 million from $57.1 million for the quarter ended September 30, 2003. Total nonperforming loans represented 0.69% of total loans at December 31, 2003, compared with 0.71% for the previous quarter and 0.93% for the quarter ended December 31, 2002. Net loan charge-offs for the fourth quarter were $5.1 million, compared with $5.5 million for the previous quarter. For the year, net charge-offs declined 28% totaling $19.5 million, compared with $27.0 million for the year ended December 31, 2002. Total allowance for losses on loans totaled $108.2 million at December 31, 2003, compared with $106.3 million at December 31, 2002. The allowance for losses to total nonperforming loans at December 31, 2003 was 193.4%, compared with 189.2% at September 30, 2003 and 146.8% at December 31, 2002. Balance Sheet and Capital Ratios Total assets as of December 31, 2003 were $12.2 billion, compared to $12.5 billion and $13.1 billion as of September 30, 2003 and December 31, 2002, respectively. The size of the balance sheet has been managed downward during the quarter and over the year primarily as the size of the mortgage pipeline has declined as reflected in the decrease in the balance of loans held for sale. For the fourth quarter, core deposits, 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: (excluding custodial escrows) remained stable at $3.6 billion, compared with the same number at September 30, 2003 and were up $412.5 million from the year ended December 31, 2002. This represents a 13% increase in core deposits for the year. During the fourth quarter, the Company repurchased 1,003,400 shares under its 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. For the year 2003, a total of 3,992,100 shares were repurchased. As of December 31, 2003, the Company had 4,248,700 shares remaining in repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. authorizations. As of December 31, 2003, shares outstanding totaled 41,452,691. As of December 31, 2003, 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. was $755.4 million, compared with $753.5 million at September 30, 2003 and $750.1 million at December 31, 2002. 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. Earnings Restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. Commercial Federal Corporation also filed today a 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, which included an adjustment to its previously reported financial statements for the accounting related to certain components of a Bank Owned Life Insurance (BOLI BOLI Bank-Owned Life Insurance BOLI Bureau of Labor and Industries ) policy. The Company said the accounting adjustment involved no longer recognizing deferred acquisition costs and a claims stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders reserve in the cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. of the BOLI policy. Commercial Federal reviewed its previously adopted accounting treatment for its BOLI policy in light of similar reviews recently undertaken by a number of financial institutions with similar BOLI assets. As a result of this review, the Company determined that restatement of its financial statements for periods in which it included BOLI as an asset was appropriate. Commercial Federal's approach is consistent with restatements of other BOLI holders. Since the BOLI contracts were signed in the year 2000, the accounting industry has refined its approach in accounting for deferred acquisition costs and the claims stabilization reserve for the policy in question. This approach has resulted in some restatements of the financial statements among BOLI holders. The effects of implementing this adjustment to the financial statements were spread over a 12-quarter period. The impact to net income for the nine-month period ended September 30, 2003 was $1.3 million, or $0.03 per diluted share. Reported net income for fiscal years 2002, 2001 and 2000 was reduced by $1.5 million, $0.9 million and $4.0 million respectively. The total cumulative effect to stockholders' equity of the restatement was a decrease of $7.7 million. The Company will now recognize this cumulative $7.7 million in income in future periods. For additional information about the restatement see the Form 8-K filed today. Goodwill Lawsuit Award The Company also announced today the award of $5.6 million in lost profits damages resulting from a supervisory su·per·vi·sor n. 1. One who supervises. 2. One who is in charge of a particular department or unit, as in a governmental agency or school system. 3. One who is an elected administrative officer in certain U.S. goodwill/breach of contract claim against the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, filed in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Court of Federal Claims by the former Mid-Continent 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 , which was acquired by Commercial Federal in 1998. It is not yet known whether the government will appeal the court's decision. "Commercial Federal and its shareholders are extremely pleased with the court's decision. Throughout this long-struggle we have maintained our position that through the passage and implementation of FIRREA FIRREA See: Financial Institutions Reform, Recovery and Enforcement Act of 1989 FIRREA See Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). , the government took advantage of and breached its contracts with Mid-Continent and others in our industry. The court's recognition that the government violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. the Company's rights and caused major damage to the Bank is both meaningful and rewarding," stated William A. Fitzgerald, chairman and chief executive officer. Commercial Federal Corporation (NYSE:CFB) is the parent company of Commercial Federal Bank, a $12.2 billion federal savings bank 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. and 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). . Commercial Federal operations include
consumer and commercial banking services including mortgage origination OriginationThe 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 and servicing, commercial and industrial lending, small business banking, construction lending, cash management, 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 Web site, http://www.comfedbank.com, will host a live webcast of the investor conference call to discuss fourth quarter and full year results on Thursday Thursday: see week. , January January: see month. 29, 2004 at 10:30 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, changes in interest rates, changes in regulations or accounting methods, and price levels and conditions in the public securities markets generally.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in Thousands)
----------------------------------------------------------------------
December 31, September 30, December 31,
ASSETS 2003 2003 2002
----------------------------------------------------------------------
(Restated) (Restated)
Cash (including short-term
investments of $1,334, $1,137
and $505) $158,133 $168,111 $200,581
Investment securities available
for sale, at fair value 1,055,055 1,050,040 1,296,050
Mortgage-backed securities
available for sale, at fair
value 1,337,805 1,130,463 1,632,622
Loans held for sale, net 351,539 732,494 914,474
Loans receivable, net of
allowances of $108,154,
$107,995 and $106,148 7,956,743 7,894,337 7,703,016
Federal Home Loan Bank stock 243,332 241,206 283,193
Foreclosed real estate 49,744 48,350 40,008
Premises and equipment, net 147,365 144,170 148,374
Bank owned life insurance 234,111 230,981 222,537
Other assets 475,483 696,367 466,995
Core value of deposits, net of
accumulated amortization of
$64,217, $62,999 and $58,684 16,832 18,050 22,365
Goodwill 162,717 162,717 162,717
----------------------------------------------------------------------
Total Assets $12,188,859 $12,517,286 $13,092,932
----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
----------------------------------------------------------------------
Liabilities:
Deposits $6,454,610 $6,592,859 $6,439,041
Advances from Federal Home
Loan Bank 4,484,708 3,959,906 4,848,997
Other borrowings 215,243 620,452 621,192
Other liabilities 278,945 590,607 433,602
----------------------------------------------------------------------
Total Liabilities 11,433,506 11,763,824 12,342,832
----------------------------------------------------------------------
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; 41,452,691,
42,381,367 and 45,270,360
shares issued and
outstanding 415 424 453
Additional paid-in capital - - 61,712
Retained earnings 833,638 841,391 791,357
Accumulated other
comprehensive loss, net (78,700) (88,353) (103,422)
----------------------------------------------------------------------
Total Stockholders' Equity 755,353 753,462 750,100
----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $12,188,859 $12,517,286 $13,092,932
----------------------------------------------------------------------
Certain amounts in prior periods have been reclassified for
comparative purposes to conform to the December 31, 2003 presentation.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
----------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
----------------------------------------
2003 2003 2002
----------------------------------------------------------------------
(Restated) (Restated)
Interest Income:
Investment securities $13,802 $16,233 $18,554
Mortgage-backed
securities 12,063 8,688 19,885
Loans receivable 125,408 128,291 151,573
----------------------------------------------------------------------
Total interest income 151,273 153,212 190,012
Interest Expense:
Deposits 31,955 36,547 42,043
Advances from Federal
Home Loan Bank 46,808 51,545 60,989
Other borrowings 3,160 4,830 6,597
----------------------------------------------------------------------
Total interest expense 81,923 92,922 109,629
Net Interest Income 69,350 60,290 80,383
Provision for Loan Losses (5,109) (5,475) (9,731)
----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 64,241 54,815 70,652
Other Income (Loss):
Retail fees and charges 14,481 14,805 14,344
Loan servicing fees 11,143 10,911 10,394
Amortization of mortgage
servicing rights (22,539) (21,989) (10,712)
Mortgage servicing rights
valuation adjustment 20,199 51,800 (9,585)
Gain (loss) on sales of
securities and changes
in fair values of
derivatives, net (70) (31,294) 12,268
Gain on sales of loans 601 9,329 14,537
Bank owned life insurance 3,131 2,771 3,296
Other operating income 7,262 7,398 4,593
----------------------------------------------------------------------
Total other income 34,208 43,731 39,135
Other Expense:
General and administrative
expenses -
Compensation and
benefits 30,960 30,233 28,116
Occupancy and
equipment 10,071 10,188 10,448
Data processing 4,418 4,460 4,614
Advertising 2,595 3,742 4,446
Communication 3,312 3,505 3,581
Item processing 3,202 3,210 3,560
Outside services 3,429 3,410 3,078
Loan expenses 1,979 3,909 1,621
Foreclosed real
estate, net 1,250 289 2,105
Other operating
expenses 5,413 4,141 11,090
----------------------------------------------------------------------
Total general and
administrative
expenses 66,629 67,087 72,659
Amortization of core
value of deposits 1,218 1,218 1,549
----------------------------------------------------------------------
Total other expense 67,847 68,305 74,208
----------------------------------------------------------------------
Income Before Income Taxes 30,602 30,241 35,579
Income Tax Provision 8,404 8,378 9,861
----------------------------------------------------------------------
Net Income $22,198 $21,863 $25,718
----------------------------------------------------------------------
Net Income Per Basic Share $.53 $.50 $.57
Net Income Per Diluted Share $.52 $.50 $.57
----------------------------------------------------------------------
Dividends Declared Per Common
Share $.125 $.100 $.090
----------------------------------------------------------------------
Weighted Average Shares
Outstanding Used in Basic EPS 42,007,052 43,523,639 45,184,720
Weighted Average Shares
Outstanding Used in Diluted
EPS 42,678,004 43,933,969 45,486,282
----------------------------------------------------------------------
Certain amounts in prior periods have been reclassified for
comparative purposes to conform to the December 31, 2003 presentation.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
----------------------------------------------------------------------
Year Ended
December 31,
-----------------------
2003 2002
----------------------------------------------------------------------
(Restated)
Interest Income:
Investment securities $64,457 $76,636
Mortgage-backed securities 49,836 93,047
Loans receivable 536,451 607,370
----------------------------------------------------------------------
Total interest income 650,744 777,053
Interest Expense:
Deposits 147,090 179,596
Advances from Federal Home Loan Bank 210,045 243,710
Other borrowings 18,039 26,019
----------------------------------------------------------------------
Total interest expense 375,174 449,325
Net Interest Income 275,570 327,728
Provision for Loan Losses (22,003) (31,002)
----------------------------------------------------------------------
Net Interest Income After Provision for Loan
Losses 253,567 296,726
Other Income (Loss):
Retail fees and charges 57,798 55,279
Loan servicing fees 45,049 39,124
Amortization of mortgage servicing rights (75,044) (31,025)
Mortgage servicing rights valuation
adjustment 28,678 (60,417)
Gain on sales of securities and changes
in fair values of derivatives, net 26,767 40,583
Gain on sales of loans 23,916 36,173
Bank owned life insurance 11,574 12,654
Other operating income 27,943 28,067
----------------------------------------------------------------------
Total other income 146,681 120,438
Other Expense:
General and administrative expenses -
Compensation and benefits 123,847 114,022
Occupancy and equipment 41,190 38,956
Data processing 18,157 17,861
Advertising 16,073 15,171
Communication 13,663 13,071
Item processing 13,718 14,225
Outside services 12,456 13,833
Loan expenses 10,981 5,236
Foreclosed real estate, net 3,924 6,805
Other operating expenses 17,400 20,890
----------------------------------------------------------------------
Total general and administrative
expenses 271,409 260,070
Amortization of core value of deposits 5,533 6,368
----------------------------------------------------------------------
Total other expense 276,942 266,438
----------------------------------------------------------------------
Income Before Income Taxes 123,306 150,726
Income Tax Provision 34,286 43,723
----------------------------------------------------------------------
Net Income $89,020 $107,003
----------------------------------------------------------------------
Net Income Per Basic Share $2.04 $2.36
Net Income Per Diluted Share $2.02 $2.33
----------------------------------------------------------------------
Dividends Declared Per Common Share $.415 $.350
----------------------------------------------------------------------
Weighted Average Shares Outstanding Used in
Basic EPS 43,731,410 45,289,967
Weighted Average Shares Outstanding Used in
Diluted EPS 44,153,890 45,850,204
----------------------------------------------------------------------
Certain amounts in prior periods have been reclassified for
comparative purposes to conform to the December 31, 2003 presentation.
COMMERCIAL FEDERAL CORPORATION
MORTGAGE SERVICING RIGHTS AND MORTGAGE BANKING OPERATIONS
(Dollars in Thousands)
----------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
---------------------------------------
2003 2003 2002
----------------------------------------------------------------------
Mortgage Servicing Rights:
Beginning balance $197,267 $190,398 $144,687
Mortgage servicing rights
retained through loan
sales 10,465 19,916 18,511
Purchases of mortgage
servicing rights 40 8,942 15,925
Amortization expense (22,539) (21,989) (10,712)
------------ ------------- ------------
Balance before valuation
allowance 185,233 197,267 168,411
------------ ------------- ------------
Valuation allowance
beginning balance 69,665 121,465 70,473
Amounts charged (credited)
to operations (20,199) (51,800) 9,585
Sale of mortgage servicing
rights (127) - -
------------ ------------- ------------
Valuation allowance ending
balance 49,339 69,665 80,058
------------ ------------- ------------
Mortgage servicing rights,
net of valuation
allowance $135,894 $127,602 $88,353
============ ============= ============
Fair value at the periods
ended $143,696 $129,136 $89,078
============ ============= ============
Mortgage servicing rights as a
percentage of servicing
portfolio 1.19% 1.13% 0.77%
============ ============= ============
Mortgage servicing rights as a
multiple of servicing fees 3.49x 3.42x 2.32x
============ ============= ============
----------------------------------------------------------------------
Loans Serviced for Other
Institutions:
Beginning balance $11,307,562 $11,864,111 $9,773,436
Additions to portfolio 910,302 1,562,189 1,412,803
Purchases - 529,639 1,776,291
Loan payments (775,601) (2,195,435) (1,427,804)
Sales, net - 8,054 -
Sub servicing released,
net of payments and other
adjustments - (457,012) -
Other items, net (3,076) (3,984) (2,971)
---------------------------------------
Ending balance $11,439,187 $11,307,562 $11,531,755
============ ============= ============
Weighted average servicing
fee 0.34% 0.33% 0.33%
============ ============= ============
Weighted average coupon
note rate 6.09% 6.18% 6.82%
============ ============= ============
----------------------------------------------------------------------
Certain Components of Mortgage
Banking and Treasury
Activities:
Loan servicing fees $11,143 $10,911 $10,394
Amortization of mortgage
servicing rights (22,539) (21,989) (10,712)
------------ ------------- ------------
Loan servicing fees,
net (11,396) (11,078) (318)
Mortgage servicing rights
valuation adjustment 20,199 51,800 (9,585)
Gain (loss) on sales of
securities and changes in
fair values of
derivatives, net (70) (31,294) 12,268
Gain on sales of loans 601 9,329 14,537
------------ ------------- ------------
Total of certain
components of mortgage
banking and treasury
activities $9,334 $18,757 $16,902
============ ============= ============
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
DEPOSITS AND LOANS
(In Thousands)
----------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
----------------------------------------------------------------------
Deposits by State:
Colorado $2,060,336 $2,042,681 $2,015,845
Nebraska 1,552,135 1,776,262 1,740,421
Iowa 1,102,318 1,061,398 982,714
Kansas 645,752 639,769 659,671
Oklahoma 547,897 538,570 555,275
Missouri 321,396 314,335 287,587
Arizona 224,776 219,844 197,528
------------ ------------- ------------
Total deposits $6,454,610 $6,592,859 $6,439,041
============ ============= ============
Deposits by Type:
Checking accounts -
Interest bearing $546,110 $524,871 $494,847
Noninterest bearing 638,658 658,575 520,564
------------ ------------- ------------
Total checking
excluding
escrow accounts 1,184,768 1,183,446 1,015,411
Money market accounts 1,099,478 1,042,342 505,679
Savings accounts 1,267,916 1,334,492 1,618,593
------------ ------------- ------------
Total core
deposits 3,552,162 3,560,280 3,139,683
Custodial escrow accounts 299,249 443,132 453,919
Certificates of deposit 2,603,199 2,589,447 2,845,439
------------ ------------- ------------
Total deposits $6,454,610 $6,592,859 $6,439,041
============ ============= ============
----------------------------------------------------------------------
Loans Receivable, before
allowance for losses:
Residential real estate $3,441,138 $3,456,176 $3,686,755
Commercial real estate 1,962,834 1,943,384 1,828,063
Construction, net of
loans-in-process 519,596 493,145 492,250
Commercial operating and
other 525,642 519,314 302,992
Consumer home equity 862,886 840,825 820,679
Consumer other 752,801 749,488 678,425
------------ ------------- ------------
Total loans receivable,
before allowance for
losses $8,064,897 $8,002,332 $7,809,164
============ ============= ============
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
ALLOWANCE FOR LOSSES ON LOANS
(In Thousands)
----------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
----------------------------------------------------------------------
THREE MONTHS ENDED:
-------------------
Beginning balance $108,008 $108,740 $109,724
Provision charged to
operations 5,109 5,475 9,731
Charge-offs (6,243) (6,787) (14,550)
Recoveries 1,119 1,295 1,430
Change in estimate of
allowance for bulk purchased
loans - (715) (44)
Other 161 - -
----------------------------------------------------------------------
Ending balance $108,154 $108,008 $106,291
----------------------------------------------------------------------
YEAR ENDED:
-----------
Beginning balance $106,291 n/a $102,451
Provision charged to
operations 22,003 n/a 31,002
Charge-offs (26,328) n/a (32,693)
Recoveries 6,806 n/a 5,675
Change in estimate of
allowance for bulk purchased
loans (779) n/a (144)
Other 161 n/a -
----------------------------------------------------------------------
Ending balance $108,154 n/a $106,291
----------------------------------------------------------------------
Summary of charge-offs, net
of recoveries:
---------------------------
Three months ended $5,124 $5,492 $13,120
============ ============= ============
Year ended $19,522 n/a $27,018
============ ============
----------------------------------------------------------------------
Allocation of allowance:
------------------------
Specific $5,109 $5,659 $3,561
Special problem 32,195 32,749 35,766
Nonspecific 70,850 69,600 66,964
------------ ------------- ------------
$108,154 $108,008 $106,291
============ ============= ============
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
NONPERFORMING ASSETS AND LOANS
(Dollars in Thousands)
---------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
---------------------------------------------------------------------
Nonperforming Assets:
Nonperforming loans (1):
Residential real
estate $35,907 $33,802 $43,939
Residential
construction 4,158 3,556 2,455
Commercial real
estate 6,286 8,701 15,306
Commercial
construction 1,077 3,160 2,584
All other 8,491 7,861 8,130
------------ ------------- ------------
Total nonperforming
loans 55,919 57,080 72,414
------------ ------------- ------------
Real estate:
Residential 12,152 12,588 14,648
Residential
construction 33,097 30,798 22,810
Commercial 4,495 4,964 -
Commercial
construction - - 2,550
------------ ------------- ------------
Total real estate 49,744 48,350 40,008
------------ ------------- ------------
Troubled debt
restructurings -
commercial 4,712 4,933 1,547
------------ ------------- ------------
Total nonperforming assets $110,375 $110,363 $113,969
============ ============= ============
Total assets $12,188,859 $12,517,286 $13,092,932
============ ============= ============
Nonperforming assets to total
assets .91% .88% .87%
============ ============= ============
Summary of Nonperforming
Assets:
Residential $85,314 $80,744 $83,852
Nonresidential 25,061 29,619 30,117
------------ ------------- ------------
$110,375 $110,363 $113,969
============ ============= ============
---------------------------------------------------------------------
Nonperforming loans to loans
receivable (2) .69% .71% .93%
Nonperforming assets to total
assets .91% .88% .87%
Allowance for loan losses to:
Loans receivable (2) 1.34% 1.35% 1.36%
Total nonperforming
loans (1) 193.41% 189.22% 146.78%
---------------------------------------------------------------------
(1) Excludes loans held for sale.
(2) Ratios are calculated based on the net book value of loans
receivable before deducting allowance for loan losses and excludes
loans held for sale.
COMMERCIAL FEDERAL CORPORATION
SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS AND RATIOS
(Dollars in Thousands Except Per Share Data)
----------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
----------------------------------------------------------------------
(Restated) (Restated)
Cash, investment securities and
FHLB stock $1,456,520 $1,459,357 $1,779,824
Mortgage-backed securities 1,337,805 1,130,463 1,632,622
Loans held for sale, net 351,539 732,494 914,474
Loans receivable, net 7,956,743 7,894,337 7,703,016
Intangible assets 179,549 180,767 185,082
Other assets 906,703 1,119,868 877,914
Total assets 12,188,859 12,517,286 13,092,932
----------------------------------------------------------------------
Deposits 6,454,610 6,592,859 6,439,041
Advances from Federal Home Loan
Bank 4,484,708 3,959,906 4,848,997
Other borrowings 215,243 620,452 621,192
Other liabilities 278,945 590,607 433,602
Stockholders' equity 755,353 753,462 750,100
Total liabilities and
stockholders' equity 12,188,859 12,517,286 13,092,932
----------------------------------------------------------------------
Book value per common share $18.22 $17.78 $16.57
Stock price $26.71 $24.35 $23.35
Common shares outstanding 41,452,691 42,381,367 45,270,360
Weighted average shares
outstanding per basic EPS 42,007,052 43,523,639 45,184,720
Weighted average shares
outstanding per diluted EPS 42,678,004 43,933,969 45,486,282
----------------------------------------------------------------------
Nonperforming assets $110,375 $110,363 $113,969
Nonperforming assets to total
assets .91% .88% .87%
Weighted average interest rates
(durings):
Yield on interest-earning
assets 5.46% 5.26% 6.20%
Rate on deposits and
interest-bearing
liabilities 2.91% 3.11% 3.55%
Net interest rate spread 2.54% 2.15% 2.65%
Net annualized yield on
interest-earning assets 2.50% 2.09% 2.63%
Loans serviced for other
institutions $11,439,187 $11,307,562 $11,531,755
----------------------------------------------------------------------
Three months ended:
-------------------
Return on average assets .73% .68% .77%
Return on average equity 12.18% 12.35% 13.97%
Average equity to average
assets 5.99% 5.53% 5.49%
G & A expenses to average
assets 2.19% 2.09% 2.17%
Operating efficiency ratio 64.34% 64.49% 60.79%
----------------------------------------------------------------------
Year ended:
-----------
Return on average assets .70% n/a .81%
Return on average equity 12.01% n/a 14.10%
Average equity to average
assets 5.79% n/a 5.76%
G & A expenses to average
assets 2.12% n/a 1.97%
Operating efficiency ratio 64.28% n/a 58.03%
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
----------------------------------------------------------------------
December 31, September 30, June 30,
2003 2003 2003
----------------------------------------------------------------------
Three Months Ended: (Restated) (Restated)
-------------------
Average Balances:
Total assets $12,164,465 $12,811,205 $13,155,433
Total loans, net 8,410,129 8,847,035 8,949,160
Total loans, before
allowances for loan
losses 8,518,224 8,955,643 9,057,838
Total mortgage-backed
securities 1,293,949 1,160,610 1,414,739
Total deposits 6,496,315 6,821,942 6,730,636
Total stockholders' equity 729,062 708,267 763,666
Total interest-earning
assets 10,999,591 11,553,340 11,915,975
Total deposits and
interest-bearing
liabilities 11,187,875 11,770,123 12,049,811
----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
----------------------------------------------------------------------
March 31, December 31,
2003 2002
----------------------------------------------------------------------
Three Months Ended: (Restated) (Restated)
-------------------
Average Balances:
Total assets $13,101,428 $13,408,194
Total loans, net 8,714,050 8,894,576
Total loans, before allowances for loan
losses 8,819,881 9,003,495
Total mortgage-backed securities 1,584,690 1,741,933
Total deposits 6,465,854 6,277,235
Total stockholders' equity 765,112 736,489
Total interest-earning assets 11,871,321 12,234,301
Total deposits and interest-bearing
liabilities 11,964,568 12,301,010
----------------------------------------------------------------------
December 31, December 31,
2003 2002
----------------------------------------------------------------------
Year Ended: (Restated)
-----------
Average Balances:
Total assets $12,805,574 $13,175,562
Total loans, net 8,704,321 8,681,401
Total loans, before allowances for loan
losses 8,812,133 8,786,551
Total mortgage-backed securities 1,362,145 1,799,174
Total deposits 6,629,300 6,258,302
Total stockholders' equity 741,337 758,659
Total interest-earning assets 11,557,322 11,974,586
Total deposits and interest-bearing
liabilities 11,697,711 12,044,641
----------------------------------------------------------------------
December September June March December
31, 30, 30, 31, 31,
2003 2003 2003 2003 2002
----------------------------------------------------------------------
Regulatory (Restated) (Restated) (Restated) (Restated)
Capital:
----------
Tangible $710,670 $741,185 $777,031 $761,974 $736,627
Core 704,351 730,186 770,638 753,758 728,499
Total risk-
based 838,437 866,950 905,702 892,438 864,906
Tier 1
risk-based 704,351 730,186 770,638 753,758 728,449
Tangible % 5.93% 6.03% 6.11% 5.82% 5.75%
Core % 5.88% 5.95% 6.06% 5.77% 5.69%
Total risk-
based % 10.87% 10.81% 11.50% 10.95% 10.87%
Tier 1
risk-based % 9.13% 9.10% 9.78% 9.25% 9.15%
----------------------------------------------------------------------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion