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CALIFORNIA FEDERAL BANK REPORTS FOURTH QUARTER PROFIT, YEAR-END RESULTS

 LOS ANGELES, Jan. 26 /PRNewswire/ -- California Federal Bank (NYSE: CAL) today announced 1992 fourth quarter earnings from continuing operations of $6.4 million, or $0.15 per fully diluted share, compared to a 1991 fourth quarter loss on continuing operations of $81.0 million, or $3.16 per fully diluted share. The bank's 1992 fourth quarter results come before a one-time charge of $51.4 million relating to the extinguishment of $152 million of debt and for other costs related to the company's successful exchange offer and restructuring in December 1992.
 As a result of the one-time charge, the bank reported a net loss for the fourth quarter of 1992 of $45.0 million, or $1.08 per fully diluted share compared to a reported net loss of $91.2 million, or $3.56 per fully diluted share, for the same 1991 period. For the year ended Dec. 31, 1992, the bank reported a net loss of $97.3 million, or $3.28 per fully diluted share, compared to a net loss of $169.6 million, or $6.62 per fully diluted share, for 1991.
 The bank's earnings per share amounts for 1992 reflect the effect of the exchange offer and restructuring, in which 99.2 million new shares of stock were issued but do not reflect the effect of a 1-for-5 reverse stock split which will take place Feb. 28, 1993.
 The bank's improved 1992 fourth quarter operating results reflect lower provisions for loan and real estate losses, an increase in net interest income and an 18 percent reduction in general and administrative expenses as compared to the same 1991 period. In addition, the bank's non-performing assets (non-accrual, past due and restructured loans and real estate acquired in settlement of loans) grew only $5.9 million during the 1992 fourth quarter, compared to a $44.5 million increase for the same 1991 period.
 "Although the bank's performance in 1992 continued to be negatively affected by weakened real estate markets, we are pleased with the bank's overall progress from an operating standpoint," said Jerry St. Dennis, chairman of Cal Fed. "We are especially pleased that our recent successful restructuring has significantly increased the bank's regulatory capital."
 The successful exchange offer and restructuring added approximately $150 million of equity capital to the bank. As a result, California Federal Bank's tangible, core and risk-based capital ratios at Dec. 31, 1992, were 3.71 percent, 4.71 percent and 9.17 percent, exceeding the bank's minimum regulatory capital requirements of 1.50 percent, 4.00 percent and 8.00 percent, respectively, and well in excess of the FDIC's definition of an "adequately capitalized" bank.
 General and administrative expenses, exclusive of federal deposit insurance premiums, for the fourth quarter of 1992 were $75.6 million compared to $93.2 million for the same 1991 period. For the year ended Dec. 31, 1992, these expenses declined to $303.0 million from $335.6 million for 1991. In the three years since Cal Fed initiated its restructuring program, the bank has reduced general and administrative expenses by approximately $80 million.
 Fee income, an important component of the bank's core earnings, increased to $77.2 million in 1992 from $66.0 million in 1991. The increase is primarily attributable to a 53 percent improvement in fees on sales of alternative investment products, such as mutual funds and annuities. Sales of alternative investments totaled $651.7 million in 1992 compared with sales of $458.7 million in 1991. As a result of customers seeking alternatives to lower-yielding savings instruments, retail core deposits during 1992 declined to $12.5 billion from $13.5 billion at Dec. 31, 1991. Despite the decline, California Federal Bank was successful in establishing new customer relationships, opening nearly 100,000 checking accounts during the year. Checking, money-market and other non-term savings accounts are a low-cost, stable source of funding for the bank, and also provide cross-selling opportunities for other California Federal Bank products and services.
 The bank originated $936.1 million in loans during the fourth quarter of 1992 compared with $785.5 million during the same 1991 period. For 1992, the bank originated $3.4 billion in new loans, slightly exceeding the bank's 1991 origination volume of $3.3 billion. Of the bank's 1992 new originations, 85 percent were residential loans, compared to 86 percent for 1991. Net interest income for the fourth quarter of 1992 increased to $106.9 million compared to $101.0 million for the fourth quarter of 1991. For 1992, net interest income totaled $439.2 million compared to $430.3 million in 1991. The results reflect a 26 basis-point improvement in the bank's interest rate spread to 2.63 percent for 1992 compared to 2.37 percent for 1991. The improved interest rate spread was partially offset by a $2.0 billion reduction in interest-earning assets and an increase in non-performing loans.
 Non-performing assets totaled $1,225.8 million, or 7.11 percent of assets, at Dec. 31, 1992, compared to $1,219.9 million, or 6.98 percent of assets at Sept. 30, 1992, and $1,027.3 million, or 5.64 percent of assets, at Dec. 31, 1991. Of total non-performing assets at Dec. 31, 1992, $310.1 million, or 25.3 percent, continued to perform according to their contractual terms.
 Although the level of the bank's non-performing loans increased during the year, at Dec. 31, 1992, residential loans represented 72 percent of non-performing loans compared to 62 percent at the end of 1991.
 The bank's provision for loan losses in the fourth quarter of 1992 was $20.8 million compared to $99.3 million for the same 1991 period. For 1992, the bank's provision for loan losses was $126.4 million compared to a provision of $175.0 million for 1991. Cal Fed's allowance for loan losses totaled $324.0 million at Dec. 31, 1992, compared to $332.4 million at year-end 1991.
 California Federal Bank recorded provisions for losses on real estate held for investment (REI) of $3.4 million and $41.0 million for the 1992 fourth quarter and year-end, compared to $59.3 million and $97.2 million for the similar periods of 1991. After sales and the effects of the write-downs totalling $107.9 million during the year, the bank's REI decreased to $116.7 million at year-end 1992, down 48 percent from $224.6 million at Dec. 31, 1991, and down 74 percent from $448.0 million at Dec. 31, 1990.
 The bank also recorded provisions on its foreclosed real estate of $7.5 million for the 1992 fourth quarter compared to $16.4 million for the last three months of 1991. For 1992, provisions totalled $64.0 million compared to $70.3 million for 1991.
 California Federal Bank's total assets were $17.2 billion at Dec. 31, 1992, compared to $18.2 billion at the end of 1991. Stockholders' equity increased to $941.9 million at Dec. 31, 1992, from $855.8 million at Dec. 31, 1991; the growth is a result of the company's restructuring which increased shareholders' equity by $183.6 million from the issuance of new shares of common stock, offset by 1992 reported losses of $97.3 million. The bank's equity- to-asset ratio at Dec. 31, 1992, was 5.46 percent compared to 4.70 percent at the end of 1991. At Dec. 31, 1992, the bank's tangible book value was $5.23 per share compared to $21.30 per share at Dec. 31, 1991.
 Los Angeles-based California Federal Bank, FSB, provides retail banking services and home mortgage loans through 170 offices in California, Florida, Nevada and Georgia.
 CALIFORNIA FEDERAL BANK F.S.B. AND SUBSIDIARIES
 Consolidated Statements of Financial Condition
 (Dollars in Millions)
 (Unaudited)
 Dec. 31, Dec. 31,
 1992 1991
 Assets
 Cash $469.4 $450.4
 Certificates of deposit 27.5 55.8
 Federal funds sold 420.0 ---
 Securities purchased under agreements to
 resell 39.8 398.2
 Securities held for sale 546.0 834.3
 Loans receivable held for sale 497.7 209.7
 Mortgage-backed securities held for sale --- 189.7
 Investment securities 507.8 16.9
 Mortgage-backed securities held for
 investment 2,745.3 1,197.6
 Loans receivable held for investment 10,604.4 13,367.0
 Federal Home Loan Bank stock 150.5 146.3
 Interest receivable 91.4 119.8
 Real estate investments 116.7 224.6
 Real estate held for sale acquired in
 settlement of loans 432.6 267.4
 Prepaid expenses and other assets 156.4 230.0
 Deferred federal income tax receivable 11.8 13.1
 Premises and equipment 129.3 149.3
 Goodwill 289.2 309.6
 Assets of discontinued operations --- 34.4
 Total assets $17,235.8 $18,214.1
 Liabilities and Shareholders' Equity
 Deposits $13,465.0 $14,827.7
 Advances from Federal Home Loan Banks 1,839.7 1,566.2
 Securities sold under agreements to
 repurchase 435.1 68.1
 Convertible subordinated debentures 3.2 122.6
 Subordinated debentures 63.6 50.0
 Student Loan Marketing Association advances 275.0 275.0
 Other borrowings 22.8 136.5
 Other liabilities 189.5 304.9
 Liabilities of discontinued operations --- 7.3
 Total liabilities 16,293.9 17,358.3
 Shareholders' equity:
 Common stock 25.0 25.7
 Additional paid-in capital 662.6 478.3
 Net unrealized losses on equity securities (.7) (.5)
 Retained earnings 255.0 352.3
 Total shareholders' equity 941.9 855.8
 Total liabilities and shareholders' equity $17,235.8 $18,214.1
 CALIFORNIA FEDERAL BANK F.S.B. AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Dollars in Millions, Except Per Share Data)
 (Unaudited)
 For the Three Months For the Twelve Months
 Ended Dec. 31, Ended Dec. 31,
 1992 1991 1992 1992
 Interest income:
 Loans receivable $228.1 $331.6 $1,053.0 $1,517.0
 Mortgage-backed
 securities 41.6 28.7 159.4 135.9
 Investment securities 26.5 25.2 93.4 141.5
 Total interest income 296.2 385.5 1,305.8 1,794.4
 Interest expense:
 Deposits 156.0 238.3 708.6 1,096.3
 Borrowings 33.3 46.2 158.0 267.8
 Total interest expense 189.3 284.5 866.6 1,364.1
 Net interest income 106.9 101.0 439.2 430.3
 Provision for loan losses 20.8 99.3 126.4 175.0
 Net interest income
 after provision for
 loan losses 86.1 1.7 312.8 255.3
 Other income:
 Fee income 17.7 18.7 77.2 66.0
 Gain (loss) on sales
 of loans (1.5) 1.7 7.3 11.7
 Gain on sales of mortgage-
 backed securities --- 2.8 1.1 13.1
 Gain (loss) on sales
 of securities .1 9.9 (1.8) 8.1
 City business license
 tax refund --- 35.6 --- 35.6
 Other 12.1 .4 23.7 8.6
 Total other income 28.4 69.1 107.5 143.1
 Other expenses:
 Compensation 34.8 41.3 139.3 165.0
 Office occupancy 13.8 17.8 55.1 62.3
 Other general and
 administrative 27.0 34.1 108.6 108.3
 Federal deposit
 insurance premiums and
 special assessments 8.2 9.3 33.9 38.0
 Total general and
 administrative expenses 83.8 102.5 336.9 373.6
 Operations of real estate
 investments 3.7 56.8 40.7 102.3
 Operations of real estate
 held for sale acquired in
 settlement of loans net
 of FDIC capital loss
 coverage 10.6 20.2 76.3 80.3
 Amortization of goodwill 3.9 3.8 20.4 15.6
 Total other expenses 102.0 183.3 474.3 571.8
 Earnings (loss) from
 continuing operations
 before income tax
 expense (benefit) 12.5 (112.5) (54.0) (173.4)
 Income tax expense
 (benefit) 6.1 (31.5) 7.9 (11.0)
 Earnings (loss) from
 continuing operations 6.4 (81.0) (61.9) (162.4)
 Earnings from discontinued
 operations, net of taxes --- .6 --- 3.6
 (Loss) gain on sale of
 discontinued operations,
 net of taxes --- (10.8) 16.0 (10.8)
 Earnings (loss) before
 extraordinary loss 6.4 (91.2) (45.9) (169.6)
 Extraordinary loss from
 extinguishment of debt (51.4) --- (51.4) ---
 Net earnings (loss) ($45.0) ($91.2) ($97.3) ($169.6)
 Fully diluted earnings
 (loss) per share from
 continuing operations $.15 ($3.16) ($2.09) ($6.34)
 Fully diluted (loss)
 per share ($1.08) ($3.56) ($3.28) ($6.62)
 Fully diluted earnings
 (loss) per share
 from continuing
 operations(a) $.74 ($15.80) ($10.44) ($31.71)
 Fully diluted (loss)
 per share(a) ($5.40) ($17.79) ($16.40) ($33.12)
 (a) The per share amounts presented reflect the impact of the bank's scheduled 1-for-5 reverse stock split which will occur on Feb. 28, 1993.
 -0- 1/26/93
 /CONTACT: James F. Hurley, 213-930-9750, or Frank W. Moore, 213-932-4203, both of California Federal/
 (CAL)


CO: California Federal Bank ST: California IN: FIN SU: ERN

LS-JB -- LA015 -- 8883 01/26/93 08:05 EST
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