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CITFED BANCORP FISCAL YEAR EARNINGS UP 40 PERCENT

 DAYTON, Ohio, May 6 /PRNewswire/ -- CitFed Bancorp, Inc. (NASDAQ/NMS: CTZN), the holding company of Citizens Federal Bank, F.S.B., today announced net income of $8.6 million, or $2.03 per share, for the fiscal year ended March 31, 1993. This represents a 40 percent increase over the $6.1 million net income for fiscal 1992. Net income for the fourth quarter was $2.2 million or $.52 per share, compared to $1.7 million for the previous year, an increase of 28 percent. Both the annual and quarterly results were in line with analysts' forecasts.
 "We are pleased to report this increase in earnings in our first complete fiscal year as a public company," stated Chairman and President Jerry L. Kirby.
 Kirby further stated, "Fiscal year results reflect both the benefits from a favorable rate environment for mortgage lending and from results of the bank's marketing efforts to increase checking, savings and money market deposits which helped lower costs of funds and add to fee income. These conditions added to the strength of our core earnings growth."
 The bank's wholly owned subsidiary, CitFed Mortgage Corporation, hit another milestone in fiscal 1993 with its second consecutive record year in mortgage loan originations.
 "Our reputation for superior product line and service in Dayton, Columbus and Cincinnati positioned us for substantial gains in both refinancings and new originations. We closed loans totaling $1.1 billion, compared to $707 million in fiscal 1992, representing a second record-breaking year for our mortgage company," Kirby stated.
 On Feb. 1, 1993, in its Community Reinvestment Act review, the Office of Thrift Supervision (OTS) rated the bank as "outstanding" in meeting community credit needs. This was the bank's second consecutive "outstanding" rating.
 In line with trends in the banking industry, certificates of deposit (CDs) at the bank's 21 retail offices declined as customers with maturing CDs turned to alternative higher yielding instruments. This resulted in a decrease in total deposits from $1.4 billion to $1.3 billion for the year. However, while time deposits decreased, the bank increased core deposits by $37.1 million. This represented a 6.9 percent growth in checking, savings and money market deposits during fiscal 1993.
 "In addition, we were well positioned to meet the needs of customers with alternative investment products offered through our Trust Department. As a result, our Trust Department experienced one of its best years to date with an increase in assets under management of 19.2 percent, to $321.7 million at March 31, 1993," Kirby stated.
 The bank generated net interest income for the year ended March 31, 1993, of $48.0 million as compared with $37.7 million for fiscal 1992.
 "Our net interest margin widened to 2.98 percent for the fiscal year as compared to 2.55 percent for the previous year," Kirby said.
 CitFed's non-performing asset levels remain substantially below the industry average. Total non-performing assets decreased from $26.8 million, or 1.53 percent of total assets at March 31, 1992, to $23.8 million, or 1.39 percent of total assets at March 31, 1993.
 CitFed's provision for loan losses was $5.9 million for fiscal 1993 as compared to $2.1 million for fiscal 1992. During the fourth quarter of fiscal 1993, the bank increased its general valuation allowances by $2.1 million as a result of incorporating new policy guidelines proposed by the OTS for determining the adequacy of general valuation allowances for loan losses into its asset classification policies.
 "We believe that our loan loss allowance was adequate," Kirby said. "These proposed guidelines suggest, but do not require, somewhat higher levels of general valuation allowances than the bank has historically maintained. However, given the changing regulatory environment, we believe that it is prudent to adopt these proposed guidelines. We have also established a policy requiring a minimum ratio of general valuation allowances to total loans of one percent."
 Loan loss allowances were $9.3 million at March 31, 1993, or 1.12 percent of total loans, and 71.9 percent of non-performing loans.
 Return on average assets for the year ended March 31, 1993, was .50 percent, up from .36 percent for fiscal 1992. At March 31, 1993, total assets were $1.7 billion and shareholders' equity stood at $107.9 million, or 6.3 percent of assets.
 Citizens Federal Bank F.S.B., the corporations thrift subsidiary, continues to exceed all fully phased-in capital requirements imposed by the OTS as well as being deemed a "well capitalized" institution under the provisions of the Federal Deposit Insurance Corporation Improvement Act.
 CitFed Mortgage, one of the area's largest mortgage lenders, sells substantially all fixed-rate mortgage loans it originates in the secondary market but retains the servicing rights to these loans. During the fourth quarter of fiscal 1993, CitFed Mortgage sold approximately $400 million of these servicing rights and generated a net gain of $4.9 million. There were no major servicing sales in fiscal 1992. At March 31, 1993, CitFed Mortgage serviced $3.4 billion of mortgage loans, of which $1.8 billion were serviced for other investors. CitFed Mortgage's amortization of purchased servicing was about $6.6 million for fiscal 1993 as compared to $2.3 million for fiscal 1992. This increase is directly attributable to mortgage loan refinancings.
 A recent change in the accounting standards with respect to the accounting for income taxes will result in additional non-recurring net income of approximately $1.0 million, or $.24 per share, for the three months ending June 30, 1993. The change results from the adoption by the corporation of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." It was issued by the Financial Accounting Standards Board, which sets national standards for accounting and regulates the components of generally accepted accounting principles.
 The new standard puts thrift institutions on parity with commercial banks and allows loan loss provisions to be included as a component of income tax expense when they are recorded. Previously, thrift institutions were not able to deduct provisions for possible loan losses until a loss was actually incurred and the loan was charged-off.
 "This standard is beneficial to CitFed because we have paid taxes on core earnings during the past two years, while adding non-deductible loan loss provisions," said Kirby.
 On Jan. 29, 1992, the bank completed its conversion from a mutual to a stock charter and initial public offering. Because the conversion and stock offering did not occur until Jan. 29, 1992, financial information for fiscal 1992 through that date pertains solely to the bank. Net income was $.36 per share for fiscal 1992, which reflects earnings from the date of conversion to fiscal 1992 year end.
 CitFed Bancorp, Inc. is the holding company of Citizens Federal Bank, F.S.B., the largest financial institution headquartered in Dayton, with assets of $1.7 billion. It operates 21 retail offices in a five county area. The bank's subsidiary, CitFed Mortgage Corporation, operates seven mortgage origination offices in Dayton, Cincinnati and Columbus.
 CitFed Bancorp, Inc.
 Highlights
 (in thousands except per share data)
 Balance Sheet March 31, March 31,
 1993 1992
 Total Asset $1,710,779 $1,754,907
 Loans Receivable, net 813,255 887,059
 Mortgage-backed securities 594,046 541,530
 Interest-earning deposits 74,507 55,492
 Investment securities 122,764 145,903
 Deposits 1,263,661 1,348,973
 Borrowings 319,329 290,834
 Stockholders' Equity 107,922 98,926
 Shareholders'
 Equity/Assets (percent) 6.31 5.64
 Tangible Equity/
 Assets (percent) 5.19 4.40
 Book Value per Share $26.08 $23.92
 Tangible Book Value per Share $21.47 $18.68
 Market Closing Price $17-3/4 $11-7/8
 Price/Earnings multiple 8.74x 8.05x
 Operating Data Three Months Ended Fiscal Year Ended
 March 31, March 31,
 1993 1992 1993 1992
 Interest Income $29,372 $34,503 $123,730 $140,879
 Interest Expense 17,098 22,589 75,691 101,112
 Provision for Loan
 Losses 2,859 652 5,858 2,104
 Non-Interest Income 7,552 3,141 17,239 14,879
 Non-Interest Expense 11,545 10,729 42,972 41,964
 Net Income 2,196 1,711 8,560 6,100
 Earnings per common
 and common stock
 equivalent $0.52 $0.36(A) $2.03 $0.36(A)
 Returns on average
 assets (annualized)
 (percent) .51 .40 .50 .36
 Return on average
 equity (annualized)
 (percent) 8.25 8.31 8.29 8.70
 (A) Earnings per share information for fiscal 1992 reflects earnings from Jan. 29, 1992, the date of conversion to a public company, to year end.
 -0- 5/6/93
 /CONTACT: Diana Schoenberger of CitFed Bancorp, Inc., 513-229-8319/
 (CTZN)


CO: CitFed Bancorp, Inc. ST: Ohio IN: FIN SU: ERN

AR -- CL021 -- 5613 05/06/93 16:04 EDT
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