Investors Financial Services Corp. Announces Second Quarter Earnings.Business Editors BOSTON--(BUSINESS WIRE)--July 16, 2003 Investors Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Corp. (Nasdaq: IFIN IFIN Integrated Farming Information Network ) reported second quarter diluted operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before per share of $0.32, an increase of 23% from $0.26 in the second quarter of 2002. Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the second quarter was $21.3 million, up 23% from $17.3 million in the second quarter of 2002. For the six months ended June 30, 2003, the Company reported diluted operating earnings per share of $0.61, an increase of 22% from $0.50 for the same period in 2002. Net operating income for the six months ended June 30, 2003 was $40.6 million, an increase of 22% from $33.4 million for the same period of 2002. Prior year diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of reflect the two-for-one stock split which occurred on June 14, 2002. Diluted operating earnings per share and net operating income for the second quarter of 2003 exclude the partial reversal of a previously recorded tax accrual arising from a retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a change in Massachusetts tax law enacted in the first quarter of 2003. Diluted operating earnings per share and net operating income for the first six months of 2003 exclude the net effect of the first quarter 2003 tax accrual and its later partial reversal resulting from our settlement with the Massachusetts Department of Revenue. The change in tax law disallowed a dividends received deduction taken by Investors Bank & Trust Company on dividends it had received since 1999 from a wholly-owned real estate investment trust. As previously reported, in the first quarter of 2003 the Company accrued approximately $13.9 million, or $0.21 per share, net of federal income tax benefit, as a result of the change in accordance with Accounting Principles Generally Accepted in 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, ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). In the second quarter of 2003, the Company settled this disputed tax issue, agreeing to pay 50% of the liability. As a result, the Company reversed the previous tax accrual by approximately $6.7 million, or $0.10 per share, net of federal income taxes. The Company's income statements for the three and six month periods ended June 30, 2003 each reflect a reversal in the amount of $6.7 million, net of federal income taxes, of the tax accrual previously recorded. This press release includes both an income statement based on GAAP and a 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 operating income statement that excludes the effects of the one-time tax accrual and its partial reversal, measures which management considers a more useful depiction of the Company's actual results of operations. Including the partial reversal of the tax accrual, GAAP net income for the second quarter was $28.0 million and GAAP diluted earnings per share were $0.42. For the six months ended June 30, 2003, the Company recorded GAAP net income of $33.4 million and GAAP diluted earnings per share of $0.50, both of which include the original tax accrual and its partial reversal. Kevin J. Sheehan, Chairman and Chief Executive Officer, commented, "The second quarter of 2003 represented another period of outstanding performance by Investors Financial Services marked with significant accomplishments. Our assets processed increased over 14% during the quarter to approximately $897 billion. We were selected by Barclays Global Investors Barclays Global Investors is a subsidiary of British-based Barclays Bank which is in the investment management industry. It is the largest corporate money manager in the world, with over £936 billion (US$1.77 trillion) under management as of March 2006[1]. Canada Limited ("BGICL BGICL Barclays Global Investors Canada Limited (Toronto) ") to provide outsourcing services for approximately $22 billion in assets. We settled the Massachusetts REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). tax matter and had the Mopex 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. dismissed without payment. Given these achievements, we remain confident in our ability to meet our diluted operating earnings per share target of $1.30 and our GAAP diluted earnings per share target of $1.19 for 2003." Net operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the second quarter grew 11% to $121.3 million from $109.7 million for the same period in 2002. Revenue from core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. such as global custody, multicurrency accounting and mutual fund administration rose to $62.1 million for the second quarter, up 5% from $59.3 million from the same period in the prior year. Revenue from value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. including securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. , foreign exchange, cash management, and investment advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal increased to $20.4 million for the quarter, up 32% from $15.4 million in the second quarter of 2002. Net interest income grew 11% to $38.2 million for the second quarter of 2003 from $34.4 million for the same period in 2002. 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. were $89.7 million for the second quarter of 2003, up 6% from $84.4 million for the same period in 2002. Assets processed for clients totaled approximately $897 billion at June 30, 2003 compared to $784 billion at March 31, 2003. Today the Company also announced that its Board of Directors declared a cash dividend of $0.015 per share on its common stock. The dividend is payable August 15, 2003 to stockholders of record as of July 31, 2003. Investors Financial will broadcast a conference call, via the Internet, today, July 16, 2003 at 9:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The call will be accessible on Investors Financial's home page at http://www.ibtco.com. The conference call will also be available via telephone at (719) 457-2661, confirmation code 426571. Recorded replays of the conference call will be available at www.ibtco.com or by dialing (719) 457-0820, confirmation code 426571. Investors Financial Services Corp. provides services for a variety of financial asset managers such as mutual fund complexes, investment advisors Investment Advisor 1. A person making investment recommendations in return for a flat fee or percentage of assets managed, known as a commission. 2. For mutual fund companies, it is the individual who has the day-to-day responsibility of investing and monitoring the cash and , banks, and insurance companies. Through our wholly-owned subsidiary, Investors Bank & Trust Company, we provide core services including global custody, multicurrency accounting, and mutual fund administration, and value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. services including securities lending, foreign exchange, and cash management. Offices are located 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. , Canada, Cayman Islands Cayman Islands (kā`mən), British dependency (2005 est. pop. 44,300), 100 sq mi (259 sq km), comprising three islands in the West Indies. , and Ireland. Visit Investors Financial on the web at http://www.ibtco.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (statements which are not historical facts). These statements, such as Mr. Sheehan's statements regarding the Company's 2003 operating and GAAP earnings estimates, are based upon certain assumptions and estimates that might not be realized. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include the performance of global financial markets, changes in interest rates, and the Company's ability to continue to manage its costs and sell its services to new and existing customers. Additional factors that could also affect actual results are set forth under the heading "Certain Factors That May Affect Future Results" in the Company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2003 and the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002.
INVESTORS FINANCIAL SERVICES CORP.
CONDENSED BALANCE SHEETS (unaudited)
(in thousands)
June 30, December 31,
ASSETS 2003 2002
Securities purchased under resale
agreements $110,000 $-
Securities held to maturity 4,020,891 3,438,689
Securities available for sale 3,693,905 3,272,465
Loans, net of reserve 126,703 143,737
Non-marketable equity securities 50,000 50,000
Goodwill 79,969 79,969
Other non-earning assets 272,592 229,917
TOTAL ASSETS $8,354,060 $7,214,777
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Interest-bearing deposits $2,712,585 $2,702,822
Non-interest bearing deposits 859,871 630,096
Total deposits 3,572,456 3,332,918
Securities sold under repurchase agreements 3,086,912 2,301,974
Short-term and other borrowings 887,924 741,107
Due to brokers for open trades payable 190,305 286,843
Other liabilities 103,163 85,676
TOTAL LIABILITIES 7,840,760 6,748,518
Minority interest/Trust preferred
securities 23,317 23,303
Stockholders' equity 489,983 442,956
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $8,354,060 $7,214,777
INVESTORS FINANCIAL SERVICES CORP.
SELECTED FINANCIAL DATA (unaudited)
(in thousands, except per share amounts)
GAAP Earnings
Quarter Ended Six Months Ended
June 30, June 30,
Statement of 2003 2002 2003 2002
Income Data:
Net interest income $38,168 $34,380 $77,537 $70,117
Asset servicing and
other fees 83,151 75,334 156,795 145,251
Net operating
revenue 121,319 109,714 234,332 215,368
Operating expenses 89,711 84,364 174,158 166,472
Income before income
taxes and minority
interest 31,608 25,350 60,174 48,896
Provision for income
taxes 3,207 7,636 25,980 14,730
Minority interest
expense, net of
income taxes 381 397 762 794
Net income $28,020 $17,317 $33,432 $33,372
Diluted earnings per
share $0.42 $0.26 $0.50 $0.50
Pro Forma Operating Earnings
Quarter Ended Six Months Ended
June 30, June 30,
Statement of 2003 2002 2003 2002
Income Data:
Net interest income $38,168 $34,380 $77,537 $70,117
Asset servicing and
other fees 83,151 75,334 156,795 145,251
Net operating
revenue 121,319 109,714 234,332 215,368
Operating expenses 89,711 84,364 174,158 166,472
Income before income
taxes and minority
interest 31,608 25,350 60,174 48,896
Provision for income
taxes 9,907 (1) 7,636 18,780 (2) 14,730
Minority interest
expense, net of
income taxes 381 397 762 794
Net operating income $21,320 $17,317 $40,632 $33,372
Diluted operating
earnings per share $0.32 $0.26 $0.61 $0.50
Average Balance Sheet Data:
Interest earning
assets $7,351,686 $5,615,034 $7,043,450 $5,361,479
Total assets 8,112,144 5,953,392 7,646,837 5,694,862
Total deposits 2,906,979 2,008,712 2,785,886 2,086,158
Common stockholders'
equity 473,085 381,723 467,786 372,763
(1) Provision for second quarter 2003 income taxes excludes the
reversal of $6,700 of income tax benefit, net of federal taxes,
due to the Company settling its REIT tax dispute with the
Commonwealth of Massachusetts Department of Revenue. The effect of
the exclusion is a decrease in net income of $0.10 per share.
(2) Provision for the six months ended June 30, 2003 excludes a tax
accrual of $13,900 related to a retroactive tax law change by the
Commonwealth of Massachusetts disallowing a 95% dividends received
deduction on dividends that Investors Bank & Trust Company
received from its wholly-owned real estate investment trust and
excludes the subsequent reversal of $6,700 of the provision, net
of federal taxes, due to the Company settling its REIT tax dispute
with the Commonwealth of Massachusetts Department of Revenue. The
effect of the exclusions is an increase in net income of $0.11 per
share.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion