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FRANKLIN BANK ANNOUNCES THIRD-QUARTER RESULTS, CORE EARNINGS UP 33.5 PERCENT

 SOUTHFIELD, Mich., Oct. 19 /PRNewswire/ -- Franklin Bank, N.A. (NASDAQ: FSVB) announced net income of $763,314 for the quarter ended Sept. 30, 1993 compared to $759,274 for the same quarter in 1992. Net income per common share for the quarter ended Sept. 30, 1993 and 1992 was $0.38 ($0.34 fully diluted) and $0.50 ($0.49 fully diluted), respectively. The per share figures reflect 1,466,495 average common shares outstanding for the period ended Sept. 30, 1993 while 1,100,419 average common shares were outstanding for the period ended Sept. 30, 1992.
 For the nine months ended Sept. 30, 1993 net income was $1,872,950 compared to $1,672,726 for the same period last year, a 12 percent improvement. Net income per share fell from $0.96 ($0.93 fully diluted) to $0.87 ($0.76 fully diluted) per share due to the increase in the number of shares outstanding.
 Core income is an important measurement of any bank's sustainable performance. Core banking income, defined as net interest income and fee income, excluding gains on securities transaction or other non- recurring income items, rose 33.5 percent in quarter-to-quarter comparisons. Core income for the quarter ending Sept. 30, 1993 was $3,646,629 up from $2,731,032 at Sept. 30, 1992. Net interest income increased 34.2 percent from $2,378,938 to $3,193,232 for the quarters ending Sept. 30, 1992 and 1993, respectively.
 This increase in core earnings resulted primarily from a significant decrease in interest expense compared to the lesser decline in interest income. As a result, Franklin's net interest margin for the quarter improved 33.7 percent from 2.58 percent to 3.45 percent in year-to-year comparisons. In addition, deposit service charges jumped 108.6 percent in quarter-to-quarter comparisons due to strong growth in business checking accounts.
 "Franklin's efforts produced a 34 percent increase in business checking account balances during this quarter, which continues to positively affect both net interest income and deposit service charges," said President and CEO Read P. Dunn. "As planned, increases in the zero interest business checking balances are helping to replace decreases in higher interest bearing certificates of deposit," Dunn continued.
 Aggregate thd? quarter earnings figures for 1992 and 1993 both included gains on sales of securities and mortgages and the 1992 quarterly figures also include gains recognized on trading account assets. The total of all such gains were $764,268 and $687,692 for the quarters ending Sept. 30, 1992 and 1993, respectively.
 Non-performing assets held relatively constant in consecutive quarters at $5,314,549 and $5,368,919 for the quarters ending Sept. 30, 1993 and June 30, 1993, respectively. This is down 28.8 percent from $7,459,988 at Dec. 31, 1992. Total non-performing assets as a percentage of total assets was 1.37 percent at Sept. 30, 1993. Net charge-offs during the quarter were less than 0.001 percent.
 Total operating expenses for the quarter ended Sept. 30, 1993 were $3,126,418 compared to $2,237,930 for the quarter ended Sept. 30, 1992. Franklin's staff increased from 113 to 135 employees in year-to-year comparisons, accounting for a large portion of the increase in operating expenses. Further significant staff increases are not anticipated for the remainder of 1993 or in 1994. Additionally, the Bank sold a foreclosed property resulting in a $389,784 gain in the quarter ending Sept 30, 1992, which favorably impacted total operating expenses. This one-time gain on the sale of foreclosed property in 1992 accounts for approximately 50 percent of the difference in total operating expenses in year-to-year comparisons.
 Total shareholders' equity at Sept. 30, 1993 was $24,743,231 up 5.8 percent from $23,393,399 at Dec. 31, 1992. Total assets were $387.0 million at Sept. 30, 1993 down slightly from $391.0 million at year end.
 Franklin Bank is the only independently owned bank in Oakland County with assets between $200 million and $10 billion. The Bank's executive office and one regional branch is located in Southfield, with additional regional branches in Birmingham and Grosse Pointe Woods. Franklin also has a Business Center in Southfield, exclusively designed to serve its growing business customer base.
 FRANKLIN BANK, N.A.
 Financial Summary
 (Unaudited; dollars in thousands, except share data)
 Quarter ended Sept. 30, 1993 Sept. 30, 1992
 Interest income $6,963 $7,600
 Interest expense 3,725 5,111
 Net interest income 3,238 2,489
 Provision for loan losses 45 110
 Net income (loss) 763 759
 Net income (loss) per common
 share $0.38 $0.50
 Net income (loss) per common
 share - fully diluted $0.34 $0.49
 (1,370,191 shares outstanding
 at Sept. 30, 1993, and
 1,017,992 at Sept. 30, 1992)
 At Sept. 30, 1993 Dec. 31, 1992
 Assets $387,954 $391,029
 Investment securities 31,919 20,352
 Loans 312,656 327,313
 Allowance for loan losses 4,126 4,199
 Nonperforming assets 5,315 7,460
 Advances and borrowings 17,100 16,600
 Deposits 333,815 340,910
 Common stockholders' equity 24,743 23,393
 Per share 18.06 17.81
 Common shares outstanding 1,370,191 1,313,544
 Capital levels
 Tier 1 leverage
 Ratio 6.35 pct 5.57 pct
 Allowance for loan losses/
 total loans 1.32 1.28
 Allowance/nonperforming assets 77.64 56.29
 Nonperforming assets/total assets 1.37 1.91
 Other information Sept. 30, 1993 Sept. 30, 1992
 Return on average common
 stockholders' equity 14.50 pct 16.00 pct
 Return on average assets before
 preferred stock dividend 0.79 0.75
 Net interest margin 3.45 2.58
 Operating expense/average assets 3.23 2.21
 Net charge-offs/average loans (A) 0.04
 Cash dividends per share $0.05 $0.00
 Full-time employees and
 equivalents 135 113
 Branches 4 3
 (A) Less than 0.001 percent.
 FRANKLIN BANK, N.A.
 Consolidated Statements of Financial Condition
 (Unaudited; dollars in thousands, except share data)
 Sept. 30, 1993 Sept. 30, 1992
 Assets
 Cash $7,529 $5,078
 Interest bearing deposits 529 2,662
 Time deposits with FHLB 19,387 13,427
 Securities held for sale --- 6,879
 Investment securities (at cost,
 market equals $16,223
 at 6/30/93) 31,919 20,352
 Loans receivable, net 312,656 327,313
 Accrued interest receivable 2,813 2,771
 Real estate 2,863 3,108
 Premises and equipment, net 3,645 2,819
 FHLB stock - cost 3,464 3,464
 Federal Reserve stock - cost 633 563
 Prepaid expen?d other assets 2,516 2,593
 Total assets $387,954 $391,029
 Liabilities
 Deposits $333,815 $340,910
 Advances from FHLB 16,600 16,600
 Customer repurchase agreements 500 ---
 Subordinated capital notes 7,490 7,500
 Advance payments by borrowers
 for taxes and insurance 1,538 473
 Accrued interest payable 656 702
 Other liabilities 2,612 1,450
 Total liabilities 363,211 367,635
 Stockholders' equity
 Common stock - par value $1;
 authorized 6 million shares;
 issued and outstanding 1,370,031
 shares at June 30, 1993, and
 1,313,544 at Dec. 31, 1992 1,370 1,314
 Preferred stock - stated value
 $10; authorized 3 million shares;
 issued and outstanding 908,000
 shares at March 31, 1993, and
 920,000 shares at Dec. 31, 1992 9,080 9,200
 Additional paid-in capital 10,652 10,362
 Retained earnings 3,641 2,518
 Total stockholders' equity 24,743 23,394
 Total liabilities and
 stockholders' equity $387,954 $391,029
 FRANKLIN BANK, N.A.
 Consolidated Statements of Operations
 (Unaudited; dollars in thousands, except share data)
 Nine Months Ended Quarter Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Interest income
 Interest on loans $19,794 $21,546 $6,417 $6,914
 Interest on investment
 securities 862 1,342 285 104
 Other interest and dividends 715 1,044 261 582
 Total interest income 21,371 23,932 6,963 7,600
 Interest expense
 Interest on deposits 10,695 13,802 3,403 4,403
 Interest on FHLB advances,
 subordinated capital notes,
 and reverse repurchase
 agreements 1,072 2,377 322 708
 Total interest expense 11,767 16,179 3,725 5,111
 Net interest income 9,604 7,753 3,238 2,489
 Provision for possible
 loan losses 135 230 45 110
 Net interest income after
 provision for possible
 loan losses 9,469 7,523 3,193 2,379
 Other income
 Deposit service charges 546 251 239 115
 Loan fees and servicing
 charges 378 613 114 181
 Gain on sale of participation
 certificates, mortgages,
 and securiti --- 297 --- 297
 Other 245 98 100 56
 Total other income 2,067 1,948 1,141 1,116
 Other expenses
 Compensation and benefits 4,256 3,083 1,518 1,141
 Occupancy and equipment 1,242 1,108 408 389
 Advertising 550 424 243 135
 Professional fees 173 216 65 79
 Federal insurance premiums 589 565 189 190
 Defaulted loan expense 238 (87) 99 (297)
 Community development
 expenses 126 178 14 73
 Other 1,714 1,389 590 528
 Total other expenses 8,888 6,876 3,126 2,238
 Income before provision for
 federal income taxes 2,648 2,595 1,208 1,257
 Provision for federal
 income tax 953 923 445 498
 Income before cumulative
 effect of an accounting
 change 1,695 1,672 763 759
 Cumulative effect of an
 accounting change 178 --- --- ---
 Net income $1,873 $1,672 $763 $759
 Preferred stock dividends 408 414 204 207
 Net income applicable to
 common stock $1,465 $1,258 $559 $552
 Average shares outstanding:
 Primary 1,451,073 1,101,043 1,466,495 1,100,419
 Fully diluted 1,650,281 1,126,786 1,666,909 1,123,191
 Net income per common
 share:
 Primary $0.87 $0.96 $0.38 $0.50
 Fully diluted $0.76 $0.93 $0.34 $0.49
 -0- 10/19/93
 /CONTACT: Rebecca J. Christian or Lisa Hudy of Franklin Bank, 313-358-6462/
 (FSVB)


CO: Franklin Bank, N.A. ST: Michigan IN: FIN SU: ERN

SB-CJ -- DE008 -- 3829 10/19/93 10:06 EDT
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