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CITADEL HOLDING REPORTS THIRD QUARTER RESULTS

 GLENDALE, California, Nov. 4 /PRNewswire/ -- Citadel Holding Corporation (AMEX: CDL), holding company of Fidelity Federal Bank, FSB, today reported a net loss of $14.7 million, or $2.23 per share (6,595,624 average shares outstanding), for the third quarter ended September 30, 1993. This compares to a loss of $14.9 million, or $4.51 per share (3,297,812 average shares outstanding), for the third quarter 1992, and a loss of $15.2 million, or $2.31 per share (6,595,624 average shares outstanding), for second quarter 1993. For the nine months ended September 30, 1993, net losses were $29.8 million, or $5.38 per share (5,544,673 average shares outstanding), compared with net losses of $4.3 million, or $1.32 per share (3,297,812 average shares outstanding), for the comparable period in 1992.
 The third quarter loss resulted primarily from the continued high costs associated with the management of problem assets. Net interest income decreased to $25.4 million in the third quarter of 1993 from $26.9 million in the second quarter of 1993 and $30.4 million in the third quarter of 1992 as a result of a decrease in the average level of interest earning assets as well as a decrease in the net interest margin. Operating expenses associated with the company's real estate owned (REO) properties were $6.4 million during the third quarter of 1993, $4.4 million for the second quarter of 1993 and $1.3 million for the third quarter of 1992. These were partially offset by a decrease in the provision for loan and real estate losses to $23.5 million for the third quarter of 1993 from $30.5 million for the second quarter of 1993 and $39.0 million for the third quarter of 1992.
 "Our third quarter results reflect our continued strategy of accelerated disposition of foreclosed real estate and focus on the management of our problem assets," said Richard M. Greenwood, president and chief executive officer. "We believe we are taking appropriate steps to address the continued problems created by the weakened Southern California economy. However, its effect on our portfolio continues to be a significant concern to the company, and may require us to make additional loss provisions as we resolve our problem assets."
 The company maintained its general valuation allowance (GVA) for losses on loans and REO at approximately $71 million, $4 million below the year-end 1992 level. At September 30, 1993, total GVA as a percentage of nonperforming assets was 29 percent; GVA for loans as a percentage of nonperforming loans (inclusive of in-substance foreclosed real estate) was 51 percent; and GVA for REO to total REO was 8 percent. Total allowances and write-downs taken against REO as a percentage of REO was 35 percent. At year-end 1992, these same four ratios were 30 percent, 38 percent, 15 percent and 35 percent, respectively.
 Several of the company's asset performance ratios showed modest improvement during the third quarter. Nonperforming assets (NPAs), which decreased from $271.7 million at March 31, 1993, to $253.9 million at June 30, 1993, continued their decline to $240.0 million at Sept. 30, 1993. Additionally, the share of NPAs represented by nonperforming loans as opposed to REO, declined from 47 percent at March 31, 1993, to 38 percent at June 30, 1993, and 37 percent at September 30, 1993. On the other hand, certain asset performance ratios showed some deterioration during the third quarter. Delinquency ratios (loans 30 days or more delinquent compared to total assets) increased to 3.54 percent at September 30, 1993, from 3.16 percent at June 30, 1993, and decreased from 4.02 percent at September 30, 1992.
 While certain of these statistics suggest that the company's problem assets may work their way through the system toward eventual resolution, the Southern California economy and real estate markets remain weak, and no assurances can be given that any positive asset quality related results will continue.
 Net interest income for the third quarter was $25.4 million, and $81.1 million for the first nine months of 1993, compared to $30.4 million for the third quarter of last year, $101.2 million for the first nine months of last year, and $26.9 million for the second quarter of 1993. The decline primarily reflects a narrowing of the net interest margin and a reduced balance sheet size.
 Other income declined from a loss of $1.7 million in the first nine months of 1992 to a loss of $19.4 million for the same period this year, due primarily to higher losses and operating expenses related to REOs. The $6.8 million loss for the quarter ended September 30, 1993, compares to a $3.5 million loss in the third quarter 1992, and a $13.2 million loss in the second quarter 1993, reflecting a decrease in the provision for estimated real estate losses during the third quarter 1993. Fee and other income in the third quarter of 1993 was $2.7 million, and gains of $0.9 million were recognized from the sale of securities.
 Operating expenses in the third quarter 1993 increased to $23.5 million, up from $22.7 million in the second quarter of this year. For the first nine months of 1993, operating expenses were $67.7 million, compared to $59.3 million for the corresponding period of 1992. The increase was due to the addition of staff to manage NPAs and strengthen the asset review function, as well as to support the company's strategic focus on retail financial services and expansion of origination and sales of residential mortgages. Also, significant training and process conversions were completed during the third quarter of 1993.
 At September 30, 1993, the company had a tangible capital ratio of 4.3 percent, a core capital ratio of 4.4 percent of adjusted assets, and a risk-based capital ratio of 9.7 percent. These ratios exceed all current federally mandated capital requirements.
 Total assets at Sept. 30, 1993, were $4.5 billion, compared with $4.8 billion at Sept. 30, 1992. Stockholders' equity totaled $224.7 million, or $34.07 per share (6,595,624 shares outstanding) at September 30, 1993, compared to $216.8 million, or $65.74 per share (3,297,812 shares outstanding) at September 30, 1992.
 Citadel Holding's subsidiary, Fidelity Federal Bank, offers a range of retail financial products and services through its 42 retail branches and 10 mortgage lending offices throughout Southern California.
 CITADEL HOLDING CORPORATION AND SUBSIDIARIES
 Financial Highlights
 Condensed Consolidated Statements of Operations
 (Dollars in thousands, except per share amounts)
 Quarter Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 (Unaudited)
 INTEREST INCOME:
 Loans $64,915 $83,463 $206,916 $278,123
 Mortgage-backed
 securities 2,337 1,205 8,511 2,483
 Investment securities
 and other 1,935 2,075 5,626 7,893
 Total interest income 69,187 86,743 221,053 288,499
 INTEREST EXPENSE:
 Deposits 30,806 41,997 95,298 137,336
 FHLB Advances 3,771 4,312 13,729 16,502
 Other borrowings 7,347 8,184 25,356 27,929
 Subordinated notes 1,843 1,844 5,529 5,530
 Total interest expense 43,767 56,337 139,912 187,297
 NET INTEREST INCOME 25,420 30,406 81,141 101,202
 Provision for estimated
 loan losses 19,500 32,660 41,500 47,286
 NET INTEREST INCOME
 AFTER PROVISION FOR
 ESTIMATED LOAN LOSSES 5,920 (2,254) 39,641 53,916
 NONINTEREST INCOME (EXPENSE):
 Loan and other fees 1,432 2,077 4,719 5,613
 Gains (losses) on sales of
 loans, net (34) 403 586 1,040
 Fee income from investment
 products 590 891 3,556 2,305
 Fee income on deposits and
 other income 744 843 2,422 2,570
 2,732 4,214 11,283 11,528
 Provision for estimated real
 estate losses (4,000) (6,340) (21,000) (10,714)
 Real estate operations on
 specific properties (6,433) (1,331) (14,128) (2,487)
 (10,433) (7,671) (35,128) (13,201)
 Gains on sale of mortgage-
 backed securities, net 917 --- 2,460 ---
 Gains on sale of investment
 securities, net 17 --- 1,963 ---
 934 --- 4,423 ---
 Total noninterest
 income (expense) (6,767) (3,457) (19,422) (1,673)
 OPERATING EXPENSE:
 Personnel and benefits 11,533 9,263 34,032 28,315
 Occupancy 3,325 3,182 9,484 9,457
 FDIC insurance 2,427 2,015 6,200 6,375
 Professional services 2,371 1,421 6,635 4,108
 Office-related expense 1,776 1,273 4,637 3,717
 Marketing 850 811 2,395 2,038
 Other general and
 administrative 1,207 1,521 4,293 5,262
 Total operating expense 23,489 19,486 67,676 59,272
 EARNINGS (LOSS) BEFORE
 INCOME TAXES (24,336) (25,197) (47,457) (7,029)
 Income tax expense (benefit) (9,611) (10,327) (17,622) (2,686)
 NET EARNINGS (LOSS) ($14,725) ($14,870) ($29,835) ($4,343)
 NET EARNINGS (LOSS) PER SHARE ($2.23) ($4.51) ($5.38) ($1.32)
 FINANCIAL DATA FOR THE PERIOD:
 Real estate loans funded $103,009 $99,124 $254,805 $283,780
 Increase (decrease)
 in deposits $77,963 ($59,823)($154,426)($274,282)
 Operating expenses
 to average assets 2.09 pct 1.62 pct 1.98 pct 1.61 pct
 Operating efficiency
 ratio (a) 83.44 pct 56.29 pct 73.22 pct 52.58 pct
 Average common and
 common equivalent shares
 outstanding 6,595,624 3,297,812 5,544,673 3,297,812
 FINANCIAL DATA AT END OF THE PERIOD:
 Total assets $4,453,229 $4,793,631
 Total loans and
 mortgaged-backed securities $3,866,133 $4,177,052
 General valuation allowance
 to loans, real estate owned
 and in-substance foreclosures 1.81 pct 1.86 pct
 Deposits $3,303,492 $3,610,425
 Borrowings $830,701 $847,950
 Subordinated notes $60,000 $60,000
 Stockholders' equity $224,729 $216,797
 Stockholders' equity per share $34.07 $65.74
 Common shares outstanding 6,595,624 3,297,812
 FIDELITY FEDERAL BANK REGULATORY CAPITAL RATIOS:
 Tangible capital 4.34 pct 4.12 pct
 Core capital 4.41 pct 4.21 pct
 Risk-based capital 9.65 pct 9.48 pct
 WEIGHTED AVERAGE YIELD FOR THE PERIOD:
 Loans and mortgage-backed securities 6.91 pct 8.39 pct
 Investments 3.91 pct 3.90 pct
 Combined loans and investments 6.78 pct 8.13 pct
 WEIGHTED AVERAGE COST FOR THE PERIOD:
 Deposits 3.94 pct 4.99 pct
 Borrowings 5.63 pct 7.16 pct
 Combined deposits and borrowings 4.36 pct 5.43 pct
 INTEREST RATE MARGIN FOR THE PERIOD 2.42 pct 2.70 pct
 EFFECTIVE YIELD FOR THE PERIOD 2.48 pct 2.85 pct
 (a) The efficiency ratio is computed by dividing total noninterest by net interest income and noninterest income, excluding nonrecurring items, provision for loan and real estate losses, real estate operations a(losses) on sales of securities.
 FIDELITY FEDERAL BANK, FSB Sept. 30, June 30, Sept. 30,
 1993 1993 1992
 NONPERFORMING ASSETS (NPAs): (Unaudited)
 Nonaccruing loans $88,412 $96,419 $118,832
 In-substance foreclosures 31,289 23,822 41,983
 Foreclosed real estate 130,130 148,033 75,438
 REO GVA (9,845) (14,389) ---
 Total NPAs $239,986 $253,885 $236,253
 NPAs to total assets 5.40 pct 5.61 pct 4.93 pct
 NPAs AND TROUBLED DEBT RESTRUCTURINGS (TDRs):
 NPAs $239,986 $253,885 $236,253
 Classified TDRs 35,152 29,504 43,730
 Nonclassified TDRs 6,804 16,131 34,644
 Tota NPAs and TDRs $281,942 $299,520 $314,627
 NPAs and TDRs to total assets 6.35 pct 6.62 pct 6.56 pct
 CLASSIFIED ASSETS:
 NPAs $239,986 $253,885 $236,253
 Performing loans with increased risk 103,769 95,975 133,218
 Real estate held for investment 11,371 10,702 12,253
 Total Classified Assets $355,126 $360,562 $381,724
 Classified assets to total assets 7.99 pct 7.97 pct 7.96 pct
 Loan Delinquencies by Property Type:
 Single Family:
 30-59 days $3,148 $5,507 $6,416
 60-89 days 1,468 4,013 1,958
 90 days and over 12,880 13,353 12,671
 17,496 22,873 21,045
 Multifamily (2-4 units):
 30-59 days 2,367 1,204 1,351
 60-89 days 3,195 2,003 1,079
 90 days and over 14,840 12,316 5,087
 20,402 15,523 7,517
 Multifamily (5-36 units)
 30-59 days 12,767 5,779 13,823
 60-89 days 8,495 15,293 8,983
 90 days and over 45,321 42,260 29,681
 66,583 63,332 52,487
 Multifamily (37 units and over):
 30-59 days 3,104 2,286 13,439
 60-89 days 4,416 - 6,157
 90 days and over 5,090 13,405 27,566
 12,610 15,691 47,162
 Commercial & Industrial:
 30-59 days 10,824 351 12,086
 60-89 days 2,290 - -
 90 days and over 4,668 5,284 25,341
 17,782 5,635 37,427
 Total Loan Delinquencies, Net $134,873 $123,054 $165,638
 As a Percent of Total Net
 Loan Portfolio 3.54 pct 3.16 pct 4.02 pct
 -0- 11/4/93
 /CONTACT: Albert J. Clemens, Senior Vice President and Marketing Director, Fidelity Federal Bank, 818-549-3630/
 (CDL)


CO: Citadel Holding Corp. ST: California IN: FIN SU: ERN

LM-JL -- LA038 -- 1021 11/04/93 19:07 EST
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