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FINANCIAL SECURITY CORP. ANNOUNCES INCREASED EARNINGS

 CHICAGO, Feb. 4 /PRNewswire/ -- Financial Security Corp., the parent holding company of Security Federal Savings of Chicago, today announced earnings for the quarter and the year ended Dec. 31, 1992. Net income for the quarter ended Dec. 31, 1992, amounted to $361,000 compared to $129,000 for the comparable quarter in 1991, an increase of $232,000. For the fiscal year ended Dec. 31, 1992, net income amounted to $1,675,000 as compared to a loss of $557,000 for the same period in 1991, an increase of $2,232,000. Earnings per share information is not meaningful for either year as the company did not complete its conversion from a federally chartered mutual savings and loan to a federally chartered stock savings and loan until Dec. 29, 1992.
 The substantial improvement in comparable quarterly and annual net income resulted primarily from improved interest margins in 1992. Net interest income before provision for loan losses increased $894,000, or 44.5 percent, to $2,902,000 for the fourth quarter 1992 as compared to $2,008,000 for the fourth quarter 1991. For fiscal 1992, net interest income before provision for loan losses was $10,314,000, as compared to $7,781,000 for fiscal 1991, an increase of $2,533,000 or 32.6 percent.
 The company's loan loss provision for the quarter ended Dec. 31, 1992, amounted to $450,000, as compared to $90,000 for the fourth quarter of fiscal 1991. For the year ended Dec. 31, 1992, provisions for loan losses amounted to $1,800,000 as compared to $2,256,000 in fiscal 1991. The 1991 and 1992 provisions reflect the association's policy of conservatively evaluating its loan and investment portfolios, levels of non-performing loans and the general state of the economy.
 As of Dec. 31, 1992, non-performing assets totaled $17.3 million compared to $17.5 million, a decrease of $200,000 or 1.1 percent. Non- performing assets at Dec. 31, 1992 and 1991 as a percentage of total assets were 7.17 percent and 7.99 percent respectively. As of Dec. 31, 1992, the association's valuation allowances amounted to $4.7 million as compared to $3.5 million at Dec. 31, 1991, an increase of $1.2 million or 34.3 percent. At Dec. 31, 1992, the valuation allowances amounted to 26.97 percent of non-performing assets as compared to 21.14 percent as of Dec. 31, 1991.
 Non-interest income for the quarter ended Dec. 31, 1992, amounted to $35,000 as compared to $62,000 in the comparable quarter of 1991. For the fiscal year ended Dec. 31, 1992, non-interest income amounted to $363,000 as compared to $263,000 for fiscal 1991, an increase of $100,000, or 38.0 percent. This increase is primarily due to increased gains on sales of investments held for sale and trading account securities. As of Oct. 31, 1992, the association eliminated its securities held for sale and trading portfolios.
 Non-interest expense for the quarter ended Dec. 31, 1992, amounted to $1,666,000 as compared to $1,769,000 for the comparable quarter in 1991. For the fiscal year ended Dec. 31, 1992, non-interest expense amounted to $5,299,000 as compared to $5,414,000 for fiscal 1991, a decrease of $115,000 or 2.1 percent. Increases in compensation and benefits of $161,000 and other general operating expenses were offset by the effect of a 1991 non-recurring charge of $614,000.
 COMMENTS ON STATEMENT OF CONDITION
 Total assets increased $21.9 million, or 10.0 percent, to $241.0 million at Dec. 31, 1992, from $219.1 million at Dec. 31, 1991. A significant component of this increase was the addition of $14.1 million in net proceeds from the sale of common stock in the conversion completed on Dec. 29, 1992. Loans receivable decreased $15.5 million or 8.67 percent while investments in mortgage-backed securities increased $2.9 million or 23.07 percent and other investment securities increased $25.1 million or 272.02 percent. Total deposits increased $13.4 million or 7.12 percent to $201.4 million as compared to $188.0 million at Dec. 31, 1991.
 During the year ended Dec. 31, 1992, interest earning assets were restructured by investing positive cash flows into shorter term investments, mainly U.S. Treasury and federal agency securities; while the deposit base was restructured by the addition of approximately $15 million and $7 million of deposits maturing in five years and seven years, respectively. During this same period, shorter term deposits were reduced by $21 million. This restructuring resulted in a reduction of higher yielding, more volatile brokered certificates of $8.3 million and significantly improved the association's one and three year gap positions.
 Security Federal Savings is a federally chartered savings and loan association. The association currently operates out of offices located in Chicago. The stock of Financial Security Corp., the holding company of Security Federal Savings, is quoted on the NASDAQ National Market System under the symbol FNSC.
 FINANCIAL SECURITY CORP.
 HIGHLIGHTS
 (DOLLARS IN THOUSANDS)
 Dec. 31, Dec. 31,
 1992 1991
 (Unaudited)
 FINANCIAL CONDITION HIGHLIGHTS:
 Total Assets: $240,955 $219,106
 Loans Receivable-Net: 163,605 179,149
 Mortgage Backed Securities: 15,712 12,767
 Investment Securities: 34,352 9,234
 Investment Securities Held
 for Sale: -- 3,601
 Deposits: 201,362 187,986
 Borrowed Fund: 1,160 7,800
 Stockholders Equity 34,745 18,947
 SELECTED ASSET QUALITY RATIOS:
 Non-Performing Loans to Total
 Loans: 6.23 pct 6.66 pct
 Non-Performing Assets to Total
 Assets: 7.17 pct 7.99 pct
 Allowance for Losses to Non-
 Performing Loans: 45.75 pct 27.22 pct
 Allowance for Losses to Non-
 Performing Assets: 26.97 pct 21.14 pct
 FINANCIAL SECURITY CORP.
 CONSOLIDATED STATEMENT OF INCOME
 Dec. 31, 1992
 (In Thousands)
 Three Months Ended Year Ended
 Dec. 31, Dec. 31,
 INCOME: 1992 1991 1992 1991
 Interest Income: $5,345 5,065 $21,056 $20,604
 Interest Expense: 2,443 3,057 10,742 12,823
 Net Interest Income
 Before Provisions for
 Loan Losses: 2,902 2,008 10,314 7,781
 Provision for Loan Losses: 450 90 1,800 2,256
 Non Interest Income: 35 62 363 263
 Non Interest Expense: 1,666 1,769 5,299 5,414
 Income (Loss) Before
 Income Tax Expense: 821 211 3,578 374
 Income Tax Expense: 460 82 1,903 931
 Net Income (Loss): 361 129 1,675 (557)
 -0- 2/4/93
 /CONTACT: Daniel Augustine, president of Financial Security Corp., 312-227-7020/


CO: Financial Security Corp. ST: Illinois IN: FIN SU: ERN

LR -- NY093 -- 3030 02/04/93 13:32 EST
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Date:Feb 4, 1993
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