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AMFED FINANCIAL EARNS $1.8 MILLION OR 38 CENTS PER SHARE IN THIRD QUARTER; NINE MONTH NET INCOME INCREASES 28 PERCENT TO $6.6 MILLION

 RENO, Nev., Oct. 25 /PRNewswire/ -- AMFED Financial, Inc. (NASDAQ: AMFF), the holding company for American Federal Savings Bank, today reported third quarter net income of $1.8 million or 38 cents per share compared to $2.0 million in the third quarter of 1992. For the first nine months of 1993, AMFED earned $6.6 million or $1.37 per share compared to $5.1 million in the first nine months a year ago. All per share figures have been adjusted to reflect a 10 percent stock dividend paid on Sept. 10, 1993.
 Earnings per share are not relevant in the year ago periods as American Federal was a mutual institution that converted to stock form and created a holding company on Nov. 20, 1992. Earnings in the first quarter of this year were boosted $787,000 or 17 cents per share by a one-time benefit from a change in accounting principle relating to income taxes in accordance with SFAS No. 109.
 "Because of our current posture regarding interest rate risk, our interest rate spread decreased to 3.26 percent from 3.98 percent. Nevertheless, net interest income, after provision for loan losses, increased 3.3-percent to $6.4 million this quarter compared to $6.2 million in the third quarter a year ago," said E. R. Houston, chairman and chief executive officer. The interest rate spread is the difference between what the bank earns on its loans and investments and what is pays for deposits.
 Loan originations increased 48-percent to $58.9 million in the third quarter compared to $39.9 million in the third quarter a year ago. Total loans originated and purchased during this quarter were $67.4 million, compared to $39.9 million originated and purchased during the third quarter a year ago. In the first nine months of 1993, AMFED's loan originations increased 54-percent to $188.4 million compared to $122.4 million in the first nine months of 1992.
 "We are continuing to employ the capital raised from our stock offering last year through loan originations and purchases," Houston noted. Year-to-date, AMFED's loan portfolio has grown by $20.1 million, investments and mortgage-backed securities have grown $28.0 million and our cash position has decreased $27.3 million. "As we work to more efficiently employ our capital, the shift from lower-yielding cash investments to higher yielding mortgage loans and securities should help support yields and net interest margin.
 Operating (non-interest) expense totaled $5.2 million, which was exceeded by AMFED's net interest income after loan loss provision of $6.4 million. Non-interest expense in the third quarter a year ago was $4.2 million. "Several factors caused 1993's third quarter general and administrative expense to rise almost $1 million. Costs associated with increasing loan volume, employee benefits, primarily management recognition plans and the employee stock ownership plan, and corporate expenses associated with being a publicly traded company, were obligations which did not impact last year's third quarter," Houston stated. American Federal's efficiency ratio (non-interest expense as a percentage of net interest income and non-interest income) was 63.7 percent for the first nine months of 1993 compared to 60.4 percent for the same period a year ago.
 Non-interest income totaled $1.5 million in the third quarter compared to $975,000 in the third quarter a year ago. Gains on sales of investments, loans and mortgage-backed securities totaled $157,000 in the third quarter this year compared to $46,000 in the third quarter of 1992.
 Total non-performing assets, including real estate owned through foreclosure, were $13.2 million or 1.81 percent of assets at Sept. 30, 1993, compared to $6.9 million, or 0.97 percent of assets at Dec. 31, 1992. The increase in non-performing assets is due to loans totaling $8.6 million to a single party that were returned to non-accrual status this year. "As we discussed in the offering prospectus, loan loss provisions were augmented in 1992 when these loans were originally placed into the problem category," Houston stated.
 Currently AMFED has a positive one-year gap of 19.8 percent. Gap represents the difference between the interest earning assets and interest bearing liabilities that mature or reprice within one year. In a rising interest rate environment, a positive gap usually leads to increasing portfolio yields. Conversely, in a declining interest rate environment, a positive gap constrains portfolio yields.
 At Sept. 30, 1993, AMFED's shareholder equity was $93.2 million; book value was $20.25 per share and tangible book value was $20.16 per share. American Federal's tangible capital ratio is 9.98 percent and its risk-based capital ratio is 20.53 percent, both substantially above regulatory minimums. At Sept. 30, 1993, AMFED's assets totaled $729.7 million compared to $708.2 million at the end of 1992.
 AMFED Financial is the holding company for American Federal Savings Bank, which operates 26 full-service offices throughout Nevada. Twenty offices are in Northern Nevada, which includes the Reno/Sparks /Lake Tahoe region and six are in Southern Nevada (Las Vegas). AMFED closed its initial public offering of common stock on Nov. 20, 1992. Friday, Oct. 22, AMFED's stock closed the trading day at $23.25 per share.
 FINANCIAL HIGHLIGHTS
 (Unaudited, dollars in thousands except per share)
 Third quarter ended Nine months ended
 Sept. 30, 1993 1992 1993 1992
 Interest income $12,333 $12,544 $37,878 $38,245
 Interest expense $ 5,799 $ 6,281 $17,572 $19,845
 Provision for loan
 losses $ 99 $ 32 $ 368 $ 912
 Net interest income
 After provision for
 loan losses $ 6,435 $ 6,231 $19,938 $17,488
 Non-interest income $ 1,529 $ 975 $ 4,010 $ 3,381
 Non-interest expense $ 5,226 $ 4,237 $15,190 $12,886
 Income tax $ 928 $ 993 $ 2,970 $ 2,853
 Net operating income $ 1,810 $ 1,976 $ 5,788 $ 5,130
 Benefit from change in
 accounting principle $ 0 $ 0 $ 787 $ 0
 Net income $ 1,810 $ 1,976 $ 6,575 $ 5,130
 Earnings per share
 from change in
 accounting principle $ 0 N/A $ 0.17(A) N/A
 Fully diluted earnings
 Per share $ .38(A) N/A $ 1.37(A) N/A
 Weighted average
 shares outstanding 4,602 N/A 4,597 N/A
 Fully diluted average
 shares outstanding 4,810 N/A 4,808 N/A
 Sept. 30, 1993 Dec. 31, 1992 Sept. 30, 1992
 Total assets $729,718 $708,156 $648,472
 Loans receivable,
 net $422,886 $402,798 $402,542
 Mortgage-backed
 securities $184,370 $176,091 $142,835
 Investment securities $ 74,252 $ 54,498 $ 21,462
 Deposits $626,408 $612,282 $595,414
 Borrowings $ 0 $ 0 $ 0
 Shareholders' equity $ 93,222 $ 85,722 $ 43,383
 Book value per share(A) $ 20.25 $ 18.67 N/A
 Tangible book value
 per share(A) $ 20.16 $ 18.55 N/A
 (A) Adjusted to reflect 10 percent stock dividend paid Sept. 10, 1993.
 ADDITIONAL FINANCIAL HIGHLIGHTS
 (Ratios annualized)
 Nine months ended
 Sept. 30, 1993 1992
 Return on average assets before
 change in accounting principle
 (percents) 1.08 1.11
 Return on average equity before
 change in accounting principle
 (percents) 8.53 16.46
 Efficiency ratio
 (operating expense/revenue)
 (percents) 63.72 60.40
 Operating expense/assets
 (percents) 2.78 2.78
 Net interest margin (percents) 3.93 4.18
 Interest earning assets/interest
 bearing liabilities (percents) 114.03 105.79
 Average equity/average assets
 (percents) 12.61 6.73
 Tangible capital ratio
 (Savings Bank only) (percents) 9.98 6.62
 Core capital ratio
 (Savings Bank only) (percents) 9.98 6.62
 Risk-based capital ratio
 (Savings Bank only) (percents) 20.53 13.32
 LOANS:
 (Dollars in thousands)
 LOAN ORIGINATIONS:
 Third quarter First nine months
 1993 1992 1993 1992
 Originated $58,893 $39,859 $160,866 $119,685
 Purchased $ 8,538 $ 0 $ 27,570 $ 2,691
 Total $67,431 $39,859 $188,436 $122,376
 ALLOWANCE FOR LOAN LOSSES:
 Nine months ended
 Sept. 30
 1993 1992
 Balance at beginning of year $ 4,147 $ 3,157
 Provision for loan losses $ 368 $ 912
 Charge offs (net of recoveries) $ 168 $ 84
 Balance at end of quarter $ 4,347 $ 3,985
 Loan loss allowance/total loans
 (percents) 1.01 1.00
 Loan loss allowance/non-performing
 loans (percents) 41.91 104.80
 NON-PERFORMING ASSETS:
 Nine months ended Full year ended
 Sept. 30, 1993 Dec. 31, 1992
 Accruing loans - 90 days
 past due $ 0 $ 0
 Non-accrual loans $ 10,371 $ 4,026
 Total non-performing loans $ 10,371 $ 4,026
 REO $ 2,850 $ 2,853
 Total non-performing assets $ 13,221 $ 6,879
 Total non-performing
 assets / total assets (percents) 1.81 0.97
 -0- 10/25/93
 /CONTACT: E. R. Houston, chairman and chief executive officer, of AMFED Financial, 702-785-8500/
 (AMFF)


CO: AMFED Financial Inc. ST: Nevada IN: FIN SU: ERN

RB -- SE007 -- 6098 10/25/93 07:51 EDT
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Date:Oct 25, 1993
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