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SOUTHWEST BANCSHARES, INC. ANNOUNCES RECORD FIRST QUARTER EARNINGS OF $1.7 MILLION AND STOCK REPURCHASE APPROVAL

 HOMETOWN, Ill., April 8 /PRNewswire/ -- Southwest Bancshares, Inc. (NASDAQ: SWBI), the parent company of Southwest Federal Savings and Loan Association of Chicago, today announced record income for first quarter 1993 of $1,675,000 as compared to $966,000 for the comparable quarter in 1992, an increase of $709,000 or 73.40 percent.
 Earnings per share equaled $0.60 for the first quarter of 1993 as compared to $0.59 for the fourth quarter of 1992. Earnings per share is not applicable for the first quarter of 1992 since the stock conversion took place on June 23, 1992.
 The substantial increase in comparable quarterly earnings resulted primarily from improved interest margins in 1993. Net interest income increased $1,187,000, or 43.50 percent, to $3,916,000 for the first quarter of 1993 as compared to the first quarter of 1992. The Association's net interest margin was 5.28 percent for the first quarter of 1993, an increase from a margin of 4.03 percent for the first quarter of 1992.
 Returns on average assets and average equity were 2.14 percent and 13.25 percent, respectively, for the quarter ended March 31, 1993.
 Richard E. Webber, president and chief financial officer, stated, "Our continued good earnings are the result of our savings and lending operations including a strong local mortgage loan volume and favorable interest margins which we fully expect to continue through the second quarter of 1993." Southwest Federal Savings substantially exceeds all fully phased in capital requirements as established by Federal Regulations.
 Total interest income for the first quarter 1993 of $6,167,000 equaled the interest income of the first quarter 1992. The yield on earning assets decreased 0.79 percent to 8.32 percent for the quarter ended March 31, 1993 as compared to 9.11 percent yield for the same period in 1992. This drop in the yield on earning assets was more than offset by a significant decrease in interest expense for the first quarter. Total interest expense dropped $1,191,000, or 34.60 percent, to $2,251,000 for the first quarter ended March 31, 1993 as compared to $3,442,000 for the same period in 1992. The reduction in interest expense is directly related to a decrease of 1.88 percent, or 34.81 percent in the cost of funds, to 3.52 percent for the quarter ended March 31, 1993 as compared to a cost of funds of 5.40 percent for the same period in 1992. Upon management review of the current loan portfolio, additional loan loss provisions were not deemed necessary for the first quarter of 1993 as compared to a provision of $20,000 in the first quarter of 1992. Non-interest income increased $259,000, or 107.47 percent, to $500,000 for the quarter ended March 31, 1993, as compared to $241,000 for the same period in 1992. This change is primarily the result of an unrealized gain in trading account securities of $235,000. Non-interest expense increased $272,000, or 18.67 percent, to $1,729,000 for the quarter ended March 31, 1993 as compared to $1,457,000 for the same period in 1992, primarily as a result of increases in compensation, employee benefits and related expenses. A portion of this increase relates to the repayment of the Southwest Federal Savings ESOP loan obtained in connection with the conversion.
 Federal and State income taxes increased $485,000, or 92.03 percent, to $1,012,000 for the quarter as compared to $527,000 for the same period in 1992, due to the increase in net income.
 Total assets increased to $317.3 million at quarter end and savings deposits at March 31, 1993, decreased to $239.0 million from $245.2 million at Dec. 31, 1992. Federal Home Loan Bank advances increased $14.0 million to $19.4 million at March 31, 1993 as compared to $5.4 million at Dec. 31, 1992. These borrowed funds were used to provide liquidity and to fund new locally originated mortgage loans and other investments. Stockholders' equity totalled $51,880,000 or 16.35 percent of assets at March 31, 1993.
 Webber also stated that Southwest Bancshares, Inc. has received the necessary regulatory clearance to repurchase up to 5 percent of its 2,661,650 outstanding shares of common stock. This second repurchase program will commence after April 13 and will be completed in open-market transactions, subject to availability, during the next six months.
 Southwest Federal Savings and Loan Association of Chicago is a federally chartered stock savings institution. Southwest Federal Savings is a community oriented thrift which received an "Outstanding" in its Community Reinvestment Act Compliance Examination in 1992. The savings institution offers traditional deposit and mortgage loan products. It operates four offices, one of which is located in Southwest Chicago, with the other three located in the Chicago
suburbs of Hometown, Cicero and Oak Lawn. Also, Southwest Federal plans to open a fifth office, which will be a second location in Oak Lawn, and is expected to be in operation in May of 1993.
 SOUTHWEST BANCSHARES, INC.
 Consolidated Statements of Financial Condition
 (In Thousands)
 3/31/93 12/31/92
 (Unaudited) (Audited)
 Assets:
 Cash and amounts due from depositories $ 4,914 5,193
 Interest-bearing deposits 1,966 2,139
 U.S. Government and agency obligations 34,130 27,130
 Mortgage-backed securities 52,198 52,783
 Trading account securities 10,029 9,829
 Loans receivable, net 186,929 183,828
 Foreclosed real estate 146 146
 Stock in Federal Home Loan Bank of Chicago 2,210 2,210
 Other investments 13,074 12,889
 Investment in joint ventures 5,051 4,993
 Accrued interest receivable 2,214 2,113
 Office property and equipment 837 867
 Prepaid expenses and other assets 3,598 4,236
 Total assets $ 317,296 308,356
 Liabilities:
 Deposits $ 238,951 245,225
 Federal Home Loan Bank advances 19,400 5,400
 Other borrowed funds 1,840 1,920
 Advance payments by borrowers for taxes 1,513 2,413
 and insurance -- --
 Other liabilities 3,712 3,409
 Total liabilities 265,416 258,367
 Stockholders' Equity:
 Preferred stock, $.01 par value; authorized
 1,000,000 shares; none outstanding 0 0
 Common stock, $.01 par value; authorized
 5,000,000 shares; issued 2,801,650 shares
 and outstanding 2,661,650 shares 28 28
 Additional paid-in capital 26,727 26,711
 Retained earnings, substantially restricted 30,074 28,399
 Unrealized loss on marketable equity securities (54) (106)
 Treasury stock, at cost (140,000 shares) (1,905) (1,905)
 Common stock acquired by Employee Stock
 Ownership Plan (1,840) (1,920)
 Common stock awarded by Management Recognition
 Plans (1,150) (1,218)
 Total stockholders' equity 51,880 49,989
 Total liabilities and stockholders' equity $ 317,296 308,356
 Consolidated Statements of Earnings
 (Unaudited, in thousands)
 Three months ended March 31 1993 1992
 Interest Income:
 Interest on loans $ 4,475 4,366
 Interest on mortgage-backed securities 887 1,343
 Interest on investment securities 598 367
 Interest on other financial assets 24 66
 Interest on trading account securities 153 0
 Dividends on FHLB stock 30 29
 Total interest income 6,167 6,171
 Interest Expense:
 Interest on deposits 2,115 3,353
 Interest on borrowings 136 89
 Total interest expense 2,251 3,442
 Net interest income before provision for loan losses 3,916 2,729
 Provision for loan losses 0 20
 Net interest income after provision for loan losses 3,916 2,709
 Non-interest Income:
 Fees and service charges 90 123
 Insurance commissions 61 56
 Income from joint ventures 58 17
 Gain on sale of investments-net 0 1
 Unrealized gain on trading account securities 235 0
 Miscellaneous income 56 44
 Total non-interest income 500 241
 Non-interest Expense:
 Compensation, employee benefits & related expenses 1,034 829
 Advertising and promotion 31 20
 Occupancy and equipment expense 192 216
 Data processing 54 57
 Insurance premiums 181 203
 Legal, audit and examination services 69 32
 Other operating expenses 168 100
 Total non-interest expense 1,729 1,457
 Income before income taxes 2,687 1,493
 Provision for federal and state income taxes 1,012 527
 Net income $ 1,675 966
 Highlights
 (Unaudited, in thousands, except per share data)
 March 31 1993 1992
 Selected asset quality ratios (As a percent):
 Non-performing loans to total loans 0.40 0.60
 Non-performing assets to total assets 0.29 0.44
 Allow. for loan losses to non-perform. loans 104.82 69.20
 Allow. for loan losses to non-perform. assets 88.07 59.59
 Common shares outstanding 2,661,650 N/A
 Book value per share
 (Actual shares outstanding) $ 19.49 N/A
 Three months ended March 31 1993 1992
 SELECTED FINANCIAL RATIOS (as a percent):
 Return on average assets 2.14 1.36
 Interest rate spread during period 4.80 3.71
 Net interest margin 5.28 4.03
 Operating exp. to average assets 2.21 2.05
 Net interest income to operating expense 2.26x 1.87x
 Average interest-earning assets
 to average interest-bearing liabs. 1.16 1.06
 Loan originations $ 10,428 $ 12,400
 Net income per share (primary) 0.60 N/A
 Net income per share (fully diluted) 0.60 N/A
 -0- 4/8/93
 /CONTACT: Ronald D. Phares, vice president of Southwest Bancshares, 708-636-2700/
 (SWBI)


CO: Southwest Bancshares, Inc. ST: Illinois IN: FIN SU: ERN

TS -- NY010 -- 4060 04/08/93 08:28 EDT
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