State Financial Will Record One-Time Charge Related to Strategic Initiatives.Business Editors HALES CORNERS, Wis.--(BUSINESS WIRE)--Sept. 26, 2000 In conjunction with two important strategic initiatives, State 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. Corporation ("State") (Nasdaq: SFSW) today announced that it will record a non-recurring after-tax charge of approximately $3.0 million in the third quarter related to the consolidation of State's five community bank and thrift charters and a restructuring of the company's balance sheet. These initiatives will position the company to benefit from greater returns and higher operating efficiencies in the future. Making the announcement was Michael J. Falbo, President and Chief Executive Officer of State Financial Services Corporation. Consolidation of Bank Charters In October, State Financial will complete the consolidation of its five charters into one nationally chartered bank Chartered Bank A financial institution whose primary roles are to accept and safeguard monetary deposits from individuals and organizations, and to lend money out. The details vary from country to country, but usually a chartered bank in operation has obtained government permission under the name State Financial Bank, National Association. The new bank, headquartered in Hales Corners, Wisconsin Hales Corners is a village in Milwaukee County, Wisconsin, United States. The population was 7,765 at the 2000 census. Geography Hales Corners is located at (42.941264, -88. with $1.0 billion in total assets, will allow State to gain additional financial flexibility, achieve economies in back room operations, and enhance the level of customer service. Approximately $1.4 million of the after-tax charge is related to the charter consolidations. State anticipates that this consolidation will save approximately $725,000 in annual after-tax 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. . Mr. Falbo commented, "Consolidation of our bank charters into one nationally chartered bank will allow our bankers to focus on sales and service, the cornerstone of our operating philosophy, by removing some of the administrative burden associated with separate charters. Operating under one charter also allows us to more effectively disseminate dis·sem·i·nate v. dis·sem·i·nat·ed, dis·sem·i·nat·ing, dis·sem·i·nates v.tr. 1. To scatter widely, as in sowing seed. 2. our broad array of financial products and services corporate wide. We continue to seek ways of improving upon our personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. service, attention to customer needs, and efficient product delivery, and we believe our customers will be the beneficiaries of this consolidation." Balance Sheet Restructuring In response to the rapid rise in interest rates experienced nationwide, State also plans to restructure its balance sheet, selling approximately $75 million in fixed rate mortgage loans and $15 million of investment securities that have yields below current market interest rates. Of the total non-recurring charge, $1.6 million after-tax is due to the balance sheet restructuring. State expects to achieve approximately $500,000 in annual after-tax revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. as a result of the balance sheet restructuring. Company Profile State Financial Services Corporation is a financial services company operating through 23 locations in Southeastern Wisconsin and Northeastern Illinois. Through its banking network, State provides commercial and retail banking products, long-term fixed-rate secondary market mortgage origination and brokerage activities. State also operates State Financial Insurance Agency and Lokken, Chesnut & Cape which provides professional asset management. State's shares are traded on the Nasdaq National Market System under the symbol "SFSW." 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. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Statements of other than historical fact in this press release are forward-looking statements. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to materially differ from those projected, forecasted or estimated in such forward-looking statements include, but are not limited to, State's inability to realize cost savings anticipated from the charter consolidation, higher than anticipated costs or difficulties associated with effectuating the charter consolidation, changes in interest rates including the effect of prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. , general economic and business conditions which are less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than expected, heightened competition, changes in customer loan and deposit preferences, adverse changes in banking regulations, loss of key executives, and unanticipated changes in industry trends. |
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