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FIRST PEOPLES ANNOUNCES STRONG FOURTH QUARTER AND ANNUAL EARNINGS

 FIRST PEOPLES ANNOUNCES STRONG FOURTH QUARTER AND ANNUAL EARNINGS
 HADDON TOWNSHIP, N.J., Jan. 22 /PRNewswire/ -- First Peoples Financial Corporation (NASDAQ: FPNJ), parent company of First Peoples Bank of New Jersey, today reported strong earnings for both the fourth quarter and the year ended Dec. 31, 1991.
 For 1991, the corporation reported net income per share of $3.17, a 26.8 percent improvement over the per share result of $2.50 for 1990. Total reported net income for 1991 was $8.1 million which represents a $1.5 million, or 22.7 percent, improvement over the comparable amount in 1990.
 For the fourth quarter of 1991, net income was $2.2 million or $.83 per share. Total earnings for the fourth quarter of 1990 were $150,000 or $.05 per share.
 Jerome S. Goodman, chairman, president and chief executive officer of the bank holding company, commented: "We are pleased that our earnings reflect steady improvement despite the continued recessionary environment. The fourth quarter results represent our fourth consecutive quarter where the net income per share has improved over the prior quarter. This trend, however, should not be viewed as an indication of continued earnings growth in the future. Overbuilding in the real estate market, the continued reduction in manufacturing jobs, poor consumer confidence, high levels of consumer and corporate debt, the huge governmental budget deficit, continued high trade imbalances and weak loan demand do not appear to be easily overcome within the foreseeable future. These weaknesses could continue to have an adverse effect on the credit quality of our customers. As a result, we have and will continue to devote considerable time and effort to credit quality. This includes the management of our loan portfolio and the careful monitoring of the adequacy of the allowance for possible loan losses."
 Goodman noted: "The current recessionary environment also presents certain opportunities for a strongly capitalized and well managed bank to expand its core banking business. First Peoples intends to take advantage of all of these opportunities."
 The $1.5 million improvement in net income in 1991 as compared to 1990 was primarily due to a $1.3 million reduction in operating expenses and to a $4.1 million decrease in the provision for possible loan losses from $6.7 million in 1990 to $2.6 million in 1991. This provision for possible loan losses in 1991 resulted in increasing the allowance for possible loan losses at Dec. 31, 1991, to $10 million as described further below. These improvements were partially offset by a $3.5 million decrease in non-interest income, a $0.3 million increase in the provision for income taxes and a $0.1 million reduction in the bank's net interest income. The significant decrease in non-interest income was attributable to a $4.3 million non-recurring gain in the fourth quarter of 1990 related to the sale of the bank's credit card portfolio.
 Total assets were $1.1 billion as of Dec. 31, a small increase of $0.1 billion from total assets of one year earlier. Gross loans, excluding term federal funds sold, were $730.1 million as of Dec. 31, an increase of $36.6 million or 5.3 percent, over $693.5 million at Dec. 31, 1990. The increase in gross loans outstanding was attributable to growth related to Small Business Administration loans fully guaranteed by the U.S. Government.
 At the end of the fourth quarter nonperforming assets (nonaccruing loans plus other real estate and troubled debt restructurings) totaled $39.8 million as compared to $31.1 million at the end of the previous year. The allowance for possible loan losses was increased to $10 million, or 2.19 percent of gross loans, excluding term federal funds sold and Small Business Administration loans fully guaranteed by the U.S. Government. This compares to $9.8 million, or 2.14 percent of gross loans, excluding term federal funds sold and fully guaranteed Small Business Administration loans, as of Dec. 31, 1990.
 Total deposits were $947.5 million at Dec. 31, a decrease of $1.3 million, or 0.1 percent, from deposits at Dec. 31, 1990.
 The corporation continues to be strongly capitalized, with Tier I capital of 12.14 percent and total capital of 13.64 percent of total assets on a risk adjusted basis. These levels compare with 1991 federal regulatory minimum requirements of Tier I capital of 3.6 percent and total capital of 7.3 percent. Additionally, the corporation's Tier I (core) capital ratio equals 7.10 percent.
 First Peoples Financial Corporation, the parent company of First Peoples Bank of New Jersey, remains the largest and most profitable bank holding company headquartered in southern New Jersey. The bank's 31 offices serve Burlington, Camden, Cumberland and Gloucester counties.
 FIRST PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Financial Condition
 (In thousands)
 Dec. 31 1991 1990
 Assets:
 Cash and cash equivalents:
 Cash and due from banks $61,135 $85,346
 Federal funds sold 33,500 6,500
 Total cash and cash equivalents 94,635 91,846
 Time deposits with other banks 5,000 ---
 Investment securities 174,176 146,179
 Loans:
 Loans 730,143 693,470
 Term federal funds 23,000 69,000
 Less: allowance for possible loan losses (10,010) (9,824)
 Net loans 743,133 752,646
 Premises and equipment 22,817 21,847
 Other real estate 18,692 8,632
 Accrued income 12,357 12,272
 Other assets 5,105 5,814
 Total assets 1,075,915 1,039,236
 Liabilities and shareholders' equity:
 Deposits:
 Noninterest-bearing $159,320 $148,466
 Interest-bearing 788,161 800,317
 Total deposits 947,481 948,783
 Federal funds purchased and securities
 sold under repurchase agreements 47,018 10,766
 Other short-term borrowings 830 1,125
 Accrued interest on deposits 5,092 6,478
 Other liabilities 4,380 4,645
 Limited-life preferred stock --- 750
 Total liabilities 1,004,801 972,547
 Shareholders' equity:
 Common stock 20,235 20,208
 Surplus 19,222 19,134
 Undivided profits 58,289 53,938
 Treasury stock (26,400) (26,400)
 Valuation allowance for securities (232) (191)
 Total shareholders' equity 71,114 66,689
 Total liabilities and
 shareholders' equity 1,075,915 1,039,236
 Consolidated Statements of Income
 (In thousands except per-share data)
 Periods ended Three months Year
 Dec. 31 1991 1990 1991 1990
 Interest income:
 Loans, including fees $16,399 $19,649 $69,115 $79,248
 Investment securities:
 Taxable 2,810 2,128 10,343 7,457
 Tax-exempt 842 812 3,388 3,911
 Short-term investments 215 185 992 764
 Total interest income 20,266 22,774 83,838 91,380
 Interest expense:
 Deposits 10,235 12,824 44,128 49,438
 Short-term borrowings 235 566 1,015 2,838
 Long-term borrowings --- --- --- 312
 Total interest expense 10,470 13,390 45,143 52,588
 Net interest income 9,796 9,384 38,695 38,792
 Provision for possible
 loan losses 1,501 4,500 2,601 6,700
 Net interest incovice charges on
 deposit accounts 873 800 3,254 3,065
 Gains on sales of investment
 securities 773 4 1,215 158
 Gain on sale of credit
 card portfolio --- 4,340 --- 4,340
 Other 1,030 827 3,481 3,848
 Total other income 2,676 5,971 7,950 11,411
 Total 10,971 10,855 44,044 43,503
 Operating expense:
 Salaries and employee
 benefits 3,848 4,223 15,816 16,321
 Net occupancy 859 880 3,411 3,143
 Equipment and processing 798 894 3,128 3,353
 Net expense of other
 real estate (7) 1,734 562 2,367
 Federal deposit insurance 500 250 1,869 1,001
 Legal fees and loan
 collection services 291 379 1,199 1,029
 Other operating expenses 1,939 2,054 7,781 7,868
 Total operating expense 8,228 10,414 33,766 35,082
 Income before income taxes 2,743 441 10,278 8,421
 Income taxes 580 291 2,132 1,800
 Net income $2,163 $150 $8,146 $6,621
 Weighted average
 shares outstanding:
 Primary 2,597 2,506 2,556 2,598
 Fully diluted 2,612 2,506 2,568 2,598
 Net income per common share:
 Primary $.83 $.05 $3.17 $2.50
 Fully diluted .83 .05 3.17 2.50
 Certain prior-year amounts have been reclassified to conform with the 1991 presentation.
 Such reclassifications had no effect on income.
 /delval/
 -0- 1/22/92
 /CONTACT: Charles J. Nugent of First Peoples Financial, 609-858-7566/
 (FPNJ) CO: First Peoples Financial Corporation ST: New Jersey IN: FIN SU: ERN


CC-MK -- PH040 -- 2498 01/22/92 17:01 EST
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