Prudential Bancorp, Inc. of Pennsylvania Announces First Quarter Results.PHILADELPHIA -- Prudential Prudential is the name of two different companies and buildings named after them: Companies:
PBIP Positive Behavior Intervention Plan PBIP Pelican Bay Information Project PBIP Pilot Biotechnology Internship Program PBIP Police and Businesses in Partnership PBIP Prepro Bone Inducing Protein ), the "mid-tier" holding company for Prudential Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. (the "Bank"), today reported net income of $896,000 for the quarter ended December 31, 2006 as compared to $1.1 million for the same period in 2005, a decrease of 17.6%. Earnings per share on the Company's outstanding common shares were $0.08 for the quarter ended December 31, 2006 compared to $0.09 for the quarter ended December 31, 2005. Tom Vento, President and Chief Executive Officer, stated "We are pleased to report the operating results for the first quarter of fiscal 2007. Earnings are slightly lower than the same quarter last year due to increased interest rate margin compression. This compression, which is being experienced by the vast majority of financial institutions, is due to the continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. of the relatively flat yield curve Flat Yield Curve A chart that shows that the yields of bonds with short maturities are equal to the yields of bonds with longer maturities. . As always, we will manage our interest rate spread as effectively as possible while striving to maintain our high asset quality. In addition to the release of our operating results, we are excited to have recently announced our third stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program and our plans to open a new branch office this spring." At December 31, 2006, the Company's total assets were $467.0 million, a decrease of $5.4 million from $472.4 million at September 30, 2006. The decrease was primarily attributable to net repayments in the investment and mortgage-backed security Noun 1. mortgage-backed security - a security created when a group of mortgages are gathered together and bonds are sold to other institutions or the public; investors receive a portion of the interest payments on the mortgages as well as the principal payments; portfolios of $5.0 million. Management chose to use the proceeds from these repayments to repay higher cost short-term advances from the Federal Home Loan Bank (FHLB FHLB Federal Home Loan Bank ). Total liabilities decreased $5.5 million to $379.5 million at December 31, 2006 from $384.9 million at September 30, 2006. The decrease was primarily attributable to the repayment of FHLB advances which decreased by $7.0 million, from $31.8 million at September 30, 2006 to $24.8 million at December 31, 2006. Also contributing to the decrease was a $2.3 million decrease in accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. payable as interest on certificates are generally paid annually on December 31. These decreases were partially offset by a $3.3 million increase in deposits, primarily in certificates of deposit. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. increased slightly, by $35,000 to $87.5 million at December 31, 2006 as compared to $87.4 million at September 30, 2006 primarily as a result of the $896,000 in net income for quarter ended December 31, 2006 offset in part by the cost of stock repurchased during the quarter of $626,000 and the declaration of cash dividends of $463,000. Also contributing to the increase was the cumulative adjustment related to the adoption of SAB SAB Spontaneous abortion. See Abortion. 108 effective October 1, 2006 of $172,000 primarily related to amortization of premiums and discounts on our mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. portfolio. Smaller changes were also noted in the amortization of unearned employee stock ownership shares and other comprehensive income. Net interest income decreased $77,000 or 2.4% to $3.1 million for the three months ended December 31, 2006 as compared to $3.2 million for the same period in 2005. The decrease was due to a $974,000 or 37.1% increase in interest expense partially offset by an $897,000 or 15.5% increase in interest income. The increase in interest expense resulted primarily from an 85 basis point increase to 3.86% in the weighted average rate paid on interest-bearing liabilities, reflecting the increase in market rates of interest during the past year. Also contributing to the increase in interest expense was a $24.7 million or 7.1% increase in the average balance of interest-bearing liabilities for the three months ended December 31, 2006, as compared to the same period in 2005. The increase in interest income resulted primarily from a 56 basis point increase in the weighted average yield earned on such assets to 5.89% for the quarter ended December 31, 2006 from the comparable period in 2005 combined with a $20.1 million or 4.6% increase in the average balance of interest-earning assets for the three months ended December 31, 2006, as compared to the same period in 2005. For the quarter ended December 31, 2006, the net interest margin was 2.72%, as compared to 2.92% for the comparable period in 2005. The compression in the net interest margin reflected the more rapid increase in the rate charged on the interest-bearing liabilities due to their greater interest rate sensitivity, partially offset by an increase in rates earned on interest-earning assets and by an increase in the volume of interest-earning assets. The Company established a provision for loan losses of $60,000 for the quarter ended December 31, 2006. No provisions were made during the comparable period in 2005. The provision in the 2006 period was established due to growth in the loan portfolio over the past year. At December 31, 2006, the Company's non-performing assets totaled $378,000, or 0.1% of total assets and consisted of four single-family residential real estate loans. The allowance for loan losses totaled $678,000, or 0.3% of total loans and 179.2% of non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. . Non-interest income increased $139,000 for the quarter ended December 31, 2006, as compared to the same period in 2005. The increase was primarily due a successful recovery of $88,000, which represented a portion of our losses and legal fees related to a previously disclosed lawsuit which was settled in 2004. Also contributing to the increase was an increase in income from bank owned life insurance ("BOLI BOLI Bank-Owned Life Insurance BOLI Bureau of Labor and Industries ") of $47,000 for the quarter ended December 31, 2006 compared to the comparable period in 2005. Income from BOLI was minimal during the 2005 period as the BOLI was purchased during December 2005. Non-interest expense increased $194,000 for the quarter ended December 31, 2006 compared to the same quarter in 2005. This was primarily due to an increase in professional fees of $152,000. The preponderance pre·pon·der·ance also pre·pon·der·an·cy n. Superiority in weight, force, importance, or influence. Noun 1. preponderance of the increase in professional fees was related to expenses associated with the defense of a previously disclosed lawsuit commenced in October 2006 by a shareholder, Stilwell Value Partners I, L.P., and increased costs incurred in connection with being a public company. Income tax expense for the quarters ended December 31, 2006 and 2005 was $422,000 in both periods. The effective income tax rate was 32.0% for the quarter ended December 31, 2006 compared to 28.0% for the quarter ended December 31, 2005. The lower effective tax rate in the 2005 period was primarily attributable to certain tax benefits the Company realized as a result of the adjustment of a valuation allowance during the first quarter of 2006 that had previously been established for accrued liabilities Accrued liabilities are liabilities which have occurred, but have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received. related to prior period tax accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. . Prudential Bancorp, Inc. of Pennsylvania is the "mid-tier" holding company for Prudential Savings Bank. Prudential Savings Bank is a Pennsylvania-chartered, FDIC-insured savings bank that was originally organized in 1886. The Bank conducts business from its headquarters and main office in Philadelphia, Pennsylvania as well as five additional full-service branch offices, four of which are in Philadelphia and one of which is in Drexel Hill in Delaware County, Pennsylvania Delaware County (known colloquially as "Delco") is a county located in the U.S. state of Pennsylvania. As of 2000, the population was 550,864. Delaware County was created on September 26, 1789 from part of Chester County and named for the Delaware River. . This news release contains certain 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. , including statements about the financial condition, results of operations and earnings outlook for Prudential Bancorp, Inc. of Pennsylvania. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors, many of which are beyond the Company's control, could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's reports filed from time-to-time with the Securities and Exchange Commission, describe some of these factors, including general economic conditions, changes in interest rates, deposit flows, the cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , changes in credit quality and interest rate risks associated with the Company's business and operations. Other factors described include changes in our loan portfolio, changes in competition, fiscal and monetary policies and legislation and regulatory changes. Investors are encouraged to review the Company's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding the Company at www.prudentialsavingsbank.com under the Investor Relations Investor relations The process by which the corporation communicates with its investors. menu. We undertake no obligation to update any forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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