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LEADER FINANCIAL CORPORATION REPORTS THIRD QUARTER 1993 EARNINGS

 MEMPHIS, Tenn., Oct. 19 /PRNewswire/ -- Leader Financial Corporation (NASDAQ: LFCT) announced Tuesday third quarter 1993 earnings of $4.1 million, compared to a net loss of $1.0 million for the third quarter of 1992.
 Earnings per common share has been omitted because the company's recent stock offering and the conversion of its subsidiary, Leader Federal Bank for Savings, from a mutual association to a stock savings bank was completed on Sept. 30, 1993, and per share earnings information would not be comparable due to significant differences in the company's level of capital.
 Ronald W. Stimpson, president and chief operating officer, said he is pleased with Leader's improvement in asset quality, loan growth, and operating margins. "Non-performing assets and loan charge-offs continue to decline," said Stimpson, "and our interest margin continued to widen during the third quarter."
 Third Quarter 1993 Results
 Net interest income for the third quarter rose 19.6 percent to $16.2 million compared to the third quarter of 1992. The increase can be attributed to a higher level of average earning assets combined with an increased level of high rate FHA/VA delinquent loans repurchased from Government National Mortgage Association (GNMA) pools serviced by Leader.
 Total non-interest income for the three months ended Sept. 30, 1993, increased by $5.1 million over the same period in 1992. Loan servicing losses declined during the third quarter 1993, as compared to the same period in 1992 due to a large write-down of Leader's purchased mortgage servicing rights in the third quarter of 1992. Leader continued to experience a significant level of loan pay-offs during the third quarter 1993 in their portfolio of loans serviced for others. Net loan servicing revenue for the third quarter 1993 was ($756,000) as amortization of purchased mortgage servicing rights continued to exceed servicing revenues. Fees and gains from loans originated for sale led the growth in non-interest revenue as origination volumes grew 32.0 pn?t as compared with those of a year ago. Income from service charges on deposit accounts was flat and other non-interest revenue increased $2.4 million over the third quarter of 1992 as the company incurred lower losses from securities sales and real estate activities.
 Total non-interest expense was up 7.5 percent for the third quarter compared to a year ago. The increase was primarily attributable to an increase in expenses of Leader's mortgage lending division relating to increases in loan origination volumes.
 Non-performing assets (excluding FHA/VA loans) decreased 30.2 percent to $15.3 million at Sept. 30, 1993, from $21.9 million at Dec. 31, 1992. Net charge-offs for the third quarter 1993 were $80,900, as compared to $1.3 million for the same period a year ago. The provision for loan losses for the quarter ended Sept. 30, 1993, was $1.7 million, a reduction of $1.5 million from the previous year. The allowance for loan and real estate losses was $21.7 million at Sept. 30, 1993.
 With the addition of net proceeds of the stock conversion ($99.5 million), the company ended the quarter with total assets of $2.0 billion, $1.3 billion in loans, $1.5 billion in deposits, and $179 million in stockholders' equity. At Sept. 30, 1993, the company's equity to assets ratio was 9.17 percent.
 Leader Financial Corporation is the holding company for Leader Federal Bank for Savings, Tennessee's largest savings bank. It engages in mortgage, commercial, and consumer lending, insurance brokerage, leasing, and mortgage banking.
 LEADER FINANCIAL CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Financial Position
 (In thousands)
 Sept. 30, Dec. 31,
 1993 1992
 ASSETS
 Cash on hand and in banks 37,884 30,720
 Federal funds sold 150,000 65,000
 Short-term investments 8,396 14,996
 Investment securities 48,341 68,819
 Investment securities held for sale 11,576 25,559
 Investment in Federal Home Loan Bank 13,155 13,468
 Cash surrender value of life insurance 14,971 13,486
 Mortgaged-backed securities 297,079 327,462
 Loans receivable, net 1,253,320 1,160,355
 Loans held for sale 37,498 27,892
 Premises and equipment, net 14,580 15,101
 Real estate owned, net 7,699 19,723
 Real estate held for development 4,479 7,671
 Investments in limited partnerships 2,154 2,142
 Deferred charges and other assets 29,444 25,846
 Deferred income taxes 3,459 0
 Purchased servicing rights 21,442 31,062
 Total assets 1,955,477 1,849,302
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Liabilities:
 Deposits 1,472,843 1,556,569
 Federal Home Loan Bank advances and
 other borrowings 249,714 164,384
 Advance payments by borrowers
 for taxes and insurance 32,370 31,224
 Deferred income taxes 0 38
 Accrued expenses and other liabilities 21,210 21,926
 Total liabilities 1,776,137 1,774,141
 Stockholders' equity:
 Common stock 10,753 0
 Additional paid in capital 93,478 0
 ESOP debt (4,800) 0
 Retained earnings 84,210 75,161
 Common stock issuable stock awards (4,301) 0
 Total Stockholders' Equity 179,340 75,161
 Total liabilities and stockholders' equity 1,955,477 1,849,302
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands)
 Three months Nine Months
 Ended Sept. 30, Ended Sept. 30,
 1993 1992 1993 1992
 Interest income:
 Loans receivable 26,734 26,795 78,184 83,106
 Mortgage-backed securities 5,716 8,018 18,402 24,917
 Investment securities 1,016 1,248 3,800 3,575
 Federal funds sold 549 489 1,716 1,866
 Short-term investments 20 199 151 505
 Total interest income 34,035 36,749 102,253 113,969
 Interest expense:
 Deposits 14,400 19,284 46,483 64,082
 Federal Home Loan Bank advances
 and other borrowings 3,474 3,954 9,990 11,646
 Total interest expense 17,874 23,238 56,473 75,728
 Net interest income 16,161 13,511 45,780 38,241
 Provision for loan losses 1,709 3,190 3,887 6,160
 Net interest income after
 provision for loan losses 14,452 10,321 41,893 32,081
 Non-interest income (expense):
 Loan fees (109) (107) 239 565
 Loan servicing revenue (756) (2,904) (837) (1,891)
 Gains (losses), net:
 Investment securities 0 (2,234) 0 (2,234)
 Investment securities
 held for sale (374) 0 (998) 0
 Loans originated for sale 1,783 1,214 5,421 3,477
 Mortgage-backed securities 0 0 0 650
 Real estate activities (73) 76 (65) 300
 Provision for real estate losses (99) (709) (3,964) (3,214)
 Deposit account operations 970 955 2,911 2,908
 Other 1,618 1,550 4,616 3,997
 Non-interest income (expense) 2,960 (2,159) 7,323 4,558
 Operating expenses:
 Compensation and benefits 5,670 4,483 16,773 14,080
 Office occupancy and equipment 964 859 2,538 2,458
 Depreciation and amortization 346 399 1,061 1,182
 Advertising 396 418 1,334 1,004
 Federal deposit insurance
 premiums 1,087 886 2,933 2,722
 Professional services 179 381 829 974
 Office supplies, postage
 and telephone 545 569 1,829 1,826
 Data processing rental and
 maintenance 552 686 2,132 2,071
 Amortization of cost in excess
 of fair value of net
 assets acquired 58 131 230 450
 Other 840 1,085 2,819 3,097
 Total operating expenses 10,637 9,897 32,478 29,864
 Income (loss) from continuing
 operations before income taxes 6,775 (1,735) 16,738 6,775
 Income tax expense (credit) 2,652 (847) 6,483 2,300
 Income from continuing operations 4,123 (888) 10,255 4,475
 Discontinued operations:
 Income (loss) on disposal of
 Faxon/Gillis Inc. and Faxon
 Nashville, Inc. including
 provision of $0 for operating
 gains during phase-out period
 net of related income tax
 benefit of $0 for Sept. 30, 1992 0 (72) 0 (101)
 Income before extraordinary item
 and cumulative effect of changes
 in accounting principles 4,123 (960) 10,255 4,374
 Extraordinary item -- early
 extinguishment of debt, net
 of related income taxes of
 ($118), $196 and ($126) for
 the three months ended
 Sept. 30, 1992, and the nine
 months ended Sept. 30, 1993
 and 1992, respectively 0 (84) (321) 123
 Cumulative effect of a change
 in accounting for:
 Income taxes 0 0 0 2,952
 Postretirement benefits, net
 of related income tax credit
 of $542 0 0 (885) 0
 Net income 4,123 (1,044) 9,049 7,449
 -0- 10/19/93
 /CONTACT: Ronald Stimpson of Leader Financial, 901-578-4300/


CO: Leader Financial Corporation; Leader Federal Bank for Savings ST: Tennessee IN: FIN SU: ERN

CM -- CH012 -- 4149 10/19/93 16:06 EDT
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Date:Oct 19, 1993
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