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BOSTON FIVE REPORTS IMPROVED ASSET QUALITY, HIGHER CORE EARNINGS AND RECORD MORTGAGE PRODUCTION FOR 1992

 BOSTON, Nov. 24 ~PRNewswire~ -- The Boston Five Bancorp, Inc. (NASDAQ-NMS: BFCS), holding company for the Boston Five Cents Savings Bank FSB, today reported net income of $464 thousand, or 7 cents per share, for the quarter ended Oct. 31, 1992. This compares with a net loss of $3.0 million, or 42 cents per share, in the fourth quarter of 1991. For the year ended Oct. 31, 1992, The Boston Five reported a net loss of $13.4 million, or $1.90 per share, compared with a net loss of $20.5 million, or $2.91 per share, in 1991. As of Oct. 31, 1992, The Boston Five had a book value of $10.99 per share and exceeded all three current regulatory capital requirements.
 The quarter marked the sixth consecutive quarterly decrease in the level of total nonperforming assets (NPAs). As of Oct. 31, 1992, NPAs totalled $85.1 million, a reduction of $43.8 million, or 33.9 percent, from the Oct. 31, 1991, level of $128.9 million. During the fourth quarter, NPAs decreased $7.6 million, or 8.2 percent. Included in the $85.1 million NPA balance were $7.5 million of restructured loans that were paying according to terms.
 The Boston Five achieved record residential mortgage originations during 1992. These totalled $1,566.5 million for the year and $415.3 million for the fourth quarter. Production totals for the comparable periods of 1991 were $1,020.6 million and $279.4 million, respectively. The Boston Five services almost $3.8 billion in residential mortgages, of which over $2.9 billion are serviced for others.
 The core earnings of The Boston Five increased 142.9 percent in 1992. For fiscal year 1992, core earnings totalled $17.0 million, including $5.4 million for the fourth quarter. Core earnings for the comparable periods of 1991 were $7.0 million and $4.4 million, respectively. Core earnings reflect primarily the Bank's net interest income, components of noninterest income and noninterest expenses. They exclude the provision for loan losses, net results of real estate operations and securities gains and losses.
 The results of the Bank's mortgage banking operations are included in core earnings. This includes gains on sales of mortgages and mortgage servicing rights, servicing fees and loan fees, as well as provisions for prepayments of mortgages serviced for investors. During 1992, accelerated prepayments, reflecting market conditions, resulted in adjustments totalling $3.3 million, including $772 thousand in the fourth quarter. No adjustments were necessary during 1991.
 As of Oct. 31, 1992, the loan loss reserve totalled $19.8 million and a separate general reserve for OREO totalled $5.5 million. During the fourth quarter, the loan loss provision was $1.5 million and the provision for possible OREO writedowns was $1.1 million. For fiscal year 1992, the loan loss provision was $15.7 million and the OREO provision totalled $4.8 million. For the year and quarter ended Oct. 31, 1991, the loan loss provisions were $8.4 million and $2.2 million, respectively and the OREO provisions were $1.2 million and $1.0 million, respectively.
 Real estate operations include primarily writedowns of and provisions for OREO, as well as the net cost of managing real estate. For the year ended Oct. 31, 1992, the Bank recorded a loss on real estate operations of $20.8 million, compared with a $17.0 million loss for 1991. In the fourth quarter of 1992, real estate operations generated a net loss of $3.4 million, compared with a net loss of $4.4 million in the fourth quarter of 1991.
 The $36.2 million current balance in OREO is net of cumulative writedowns of $60.2 million, or 48.5 percent, from a contractual balance of $124.2 million less $27.8 million in sales of OREO units that were part of construction projects.
 The Boston Five was examined by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) during the second and third quarters of 1992. The outcome of the examination was fully reflected in the results reported for the quarter and nine months ended July 31, 1992.
 The results for the year ended Oct. 31, 1992, include extraordinary income of $4.4 million, or 62 cents per share, recognized during the quarter ending April 30, 1992. This resulted from the receipt of a distribution of stock in the Massachusetts Savings Bank Life Insurance (SBLI) company upon its conversion from a mutual to a stock form of ownership.
 The Boston Five Bancorp, Inc. is the holding company of The Boston Five Cents Savings Bank FSB. With total assets of more than $1.7 billion, The Boston Five is one of the largest savings banks headquartered in Massachusetts. The Boston Five operates 25 branch offices in eastern Massachusetts and 15 loan offices in five New England states. It also conducts correspondent lending operations in 12 New England and Middle Atlantic states. Deposits of The Boston Five are insured by the Bank Insurance Fund (BIF) of the Federal Deposit Insurance Corporation (FDIC).
 THE BOSTON FIVE BANCORP, INC. AND SUBSIDIARY
 Consolidated Statements of Operations
 n thousands, except per share amounts)
 Three Months Ended Year Ended
 Oct. 31, Oct. 31,
 1992 1991 1992 1991
 Interest income $31,436 $40,807 $136,873 $177,569
 Interest expense 17,019 29,149 82,579 135,029
 Net interest income 14,417 11,658 54,294 42,540
 Provision for losses
 on loans 1,550 2,170 15,725 8,352
 Net interest income
 after provision for
 losses on loans 12,867 9,488 38,569 34,188
 Non-interest income:
 Loan and other
 related fees 480 539 1,744 1,567
 Mortgage service fees 1,198 2,982 6,122 8,340
 Customer service fees 819 769 3,244 3,115
 Real estate oper., net (3,377) (4,350) (20,797) (16,967)
 Gain (loss) on
 securities, net (11) (394) 749 (904)
 Gain on sale of loans
 and servicing, net 2,348 1,679 6,175 5,392
 Other income 119 271 1,565 979
 Total non-int. income 1,576 1,496 (1,198) 1,522
 Non-interest expenses:
 Salaries and fringe
 benefits 6,200 6,194 25,193 24,998
 Occupancy 1,361 1,282 4,931 6,593
 Data processing 1,109 1,026 4,284 4,167
 Deposit insurance 948 1,018 3,921 3,369
 Other 4,329 4,484 16,811 17,024
 Total non-interest
 expenses 13,947 14,004 55,140 56,151
 Income (loss) before
 income taxes 496 (3,020) (17,769) (20,441)
 Provision for (benefit
 from) income taxes 32 (53) 28 63
 Income (loss) before
 extraordinary item 464 (2,967) (17,797) (20,504)
 Extraordinary item --- --- 4,354 ---
 Net income (loss) $464 $(2,967) $(13,443) $(20,504)
 Earnings (loss) per
 common share:
 Earnings (loss) per
 share before
 extraordinary item 7 cents (42 cents) $(2.52) $(2.91)
 Extraordinary item --- --- 62 cents ---
 Total earnings (loss)
 per share 7 cents (42 cents) $(1.90) $(2.91)
 Earnings (loss) per share were calculated
 using the following number of common shares
 Three Months Ended Nine Months Ended
 Oct. 31, Oct. 31,
 1992 1991 1992 1991
 7,052,022 7,039,122 7,049,493 7,039,122
 Consolidated Statements of Financial Condition
 ($ in thousands)
 Oct. 31, 1992 Oct. 31, 1991
 Assets:
 Cash and due from banks $44,619 $36,542
 Federal funds sold 39,600 ---
 Investment securities at
 cost(market value $129,669
 and $56,040) 127,856 55,147
 Securities held for sale,
 at lower of cost or market 24 137,781
 Mortgage-backed securities,
 at cost (market value
 $1,937 and $1,645) 1,870 1,601
 Federal Home Loan Bank
 and SBLI stock, at cost 16,380 12,026
 Loans 1,154,907 1,357,370
 Loans held for sale 203,206 159,893
 Loans to joint ventures 8,235 20,927
 Allowance for loan losses (19,754) (24,451)
 Real estate acquired by
 foreclosure or substantively
 repossessed, net (allowance of
 $5,477 and $1,644) 36,188 46,979
 Investments in joint
 ventures, net 16,366 16,388
 Bank premises, furniture
 and equipment, net 55,456 57,672
 Accrued income receivable 12,080 14,276
 Goodwill, net 5,845 6,873
 Purchased and excess
 mortgage servicing rights 40,741 34,570
 Refundable federal and
 state income taxes 23 208
 Other assets 14,115 9,527
 Total assets $1,757,757 $1,943,329
 Liabilities and
 Stockholders' Equity
 Liabilities:
 Deposits $1,617,065 $1,748,528
 Borrowed funds 32,360 74,810
 ESOP debt 5,921 6,962
 Advance payments from
 mortgagors 14,524 10,751
 Accrued interest payable 3,439 5,701
 Accrued and deferred
 income taxes 1,489 1,357
 Accrued expenses and
 other liabilities 5,475 5,371
 Total liabilities 1,680,273 1,853,480
 Stockholders' equity
 Serial preferred stock,
 authorized 5 million
 shares, series authorized:
 series A preferred stock,
 200,000 shares, none
 issued and outstanding --- ---
 Common stock, 1 cent par
 value, authorized
 20 million shares;
 issued 7,154,822 and
 7,141,922 shares 72 71
 Paid-in capital 41,550 41,514
 Retained earnings 43,148 56,591
 Treasury stock, 102,800
 shares, at cost (1,365) (1,365)
 ESOP debt (5,921) (6,962)
 Total stockholders' equity 77,484 89,849
 Total liabilities and
 stockholders' equity $1,757,757 $1,943,329
 NET INTEREST MARGIN, RATIOS, AND AVERAGE BALANCES:
 (Annualized Where Appropriate, Dollars in Thousands)
 Three Months Ended Year Ended
 10~31~92 10~31~91 10~31~92 10~31~91
 Net interest margin 3.69pct 2.63pct 3.30pct 2.20pct
 Interest rate spread:
 For the period 3.94pct 2.85pct 3.55pct 2.41pct
 At the end of period 4.05pct 3.02pct 4.05pct 3.02pct
 Net income(loss) as a
 percentage of:
 Average assets 0.10 pct (0.60)pct (0.73)pct (0.97)pct
 Average equity 2.31 pct (12.94)pct (15.44)pct (20.55)pct
 Average equity to
 average assets 4.55pct 4.60pct 4.73pct 4.70pct
 Average assets $1,768,727 $1,992,487 $1,839,106 $2,120,957
 Average earning
 assets 1,570,507 1,806,746 1,642,942 1,933,513
 Average loans 1,358,974 1,566,220 1,444,339 1,616,216
 Average deposits 1,614,602 1,775,865 1,668,145 1,814,358
 Average equity 80,399 91,713 87,068 99,759
 LOAN PRODUCTION
 Residential Mortgages:
 Fixed rate 359,778 248,449 1,370,181 890,901
 Adjustable rate (ARM) 55,553 30,998 196,316 129,691
 Total residential
 mortgages 415,331 279,447 1,566,497 1,020,592
 Commercial real estate 85 1,689 2,052 6,772
 Construction 940 270 5,245 1,102
 Commercial 240 --- 640 114
 Education 5,528 5,582 16,899 17,107
 Other consumer 5,906 5,258 23,685 31,530
 Total loan production $428,030 $292,246 $1,615,018 $1,077,217
 10~31~92 10~31~91
 SELECTED DATA
 Number of:
 Retail banking offices 25 25
 Loan centers 15 15
 Full-time employees 727 720
 Part-time employees 117 87
 Dollar volume of
 residential mortgages
 serviced for others $2,930,893 $2,388,414
 Loans on nonaccrual 41,449 75,873
 Nonaccrual loans as a
 percentage of total
 assets 2.4pct 3.9pct
 Restructured loans 7,500 6,000
 Loan loss reserve as a
 percentage of total loans 1.4pct 1.6pct
 Loan loss reserve as a percentage
 of nonaccrual loans 47.7pct 32.2pct
 Book value per
 common share 10.99 12.76
 Regulatory capital ratios:
 Tangible (1.5pct required) 4.0pct 4.3pct
 Leverage (3.0pct required) 4.2pct 4.5pct
 Risk-weighted (7.2pct required
 until 12~31~92; 8.0pct
 required, effective 12~31~92) 8.3pct 8.1pct
 -0- 11~24~92
 ~CONTACT: Vernon L. Blodgett, Jr., senior vice president of Boston Five Bancorp, 617-742-6000, ext. 2106~
 (BFCS)


CO: Boston Five Bancorp, Inc. ST: Massachusetts IN: FIN SU: ERN

CH -- NE006 -- 1075 11~24~92 12:58 EST
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Date:Nov 24, 1992
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