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CRAGIN FIRST QUARTER EARNINGS INCREASE 21 PERCENT TO $10.2 MILLION BEFORE ACCOUNTING CHANGE

 CHICAGO, April 19 /PRNewswire/ -- Cragin Financial Corp. (NASDAQ-NMS: CRGN), the parent holding company of Cragin Federal Bank for Savings, today announced that net income for the quarter ended March 31, 1993 was $10.2 million, or $0.70 per primary share, before the cumulative effect of a change in accounting for income taxes. Including the $3.5 million cumulative effect of a change in accounting for income taxes, net income for the quarter was $13.7 million or $0.94 per primary share. First quarter earnings represent a 21% increase in net income over the comparable 1992 quarter of $8.4 million, or $0.53 per share.
 The improvement in comparable quarterly earnings resulted primarily from continued strong interest margins during 1993 and an increase in non-interest income. Net interest income before provision for loan losses increased $1.2 million to $28.7 million for the 1993 first quarter from $27.5 million for the 1992 first quarter.
 Although the company's net interest margin remained relatively stable at 4.43 percent for the first quarter of 1993 compared to 4.42 percent during the comparable 1992 first quarter, net interest-earning assets were $3.6 million higher in the 1993 period. Although interest spreads have been increasing steadily, some deterioration in spreads is likely in the future as higher-yielding assets are reinvested or refinanced at lower rates.
 Returns on average assets and average equity were 1.47 percent and 12.84 percent, respectively, for the 1993 first quarter before the cumulative effect of the accounting change. This compares to returns of 1.24 percent and 10.8 percent, for the comparable 1992 quarter. After reflecting the $3.5 million cumulative effect of the accounting change, these 1993 ratios are 1.98 percent and 17.28 percent, respectively.
 Adam A. Jahns, chairman and chief executive officer, commented, "We are pleased to report such strong earnings for the quarter. Even excluding the $3.5 million in earnings relating to the change in accounting for income taxes, our earnings surpassed last quarter's earnings and significantly exceeded the comparable 1992 period earnings. We feel that we are well poised for another successful year." Jahns also noted that the capital of Cragin Federal Bank continues to substantially exceed all fully phased-in capital requirements set by the Financial Institutions Reform, Recovery and Enforcement Act.
 Provisions for loan losses of $750,000 were recorded in the first quarter of both 1993 and 1992. The provisions reflect the bank's policy of conservatively evaluating its loan and investment portfolios, levels of non-performing loans, and the general state of the economy. The provisions recorded in the first quarter of 1993 bring the cumulative allowance for loan losses to $21.5 million, which covered 105.62 percent of non-performing loans at March 31, 1993. The ratio of non performing loans to net loans receivable was 1.35 percent at March 31, 1993, as compared to 1.50 percent at Dec. 31, 1992. Non-performing assets decreased to $26.0 million, or 0.92 percent of total assets, at March 31, 1993, from $27.5 million, or 1.15 percent of total assets, at Dec. 31, 1992. There was one charge-off totaling $975,000 during the first quarter of 1993.
 Non-interest income was $2.5 million in the current quarter, an increase of $1.2 million from the $1.3 million recorded in the comparable 1992 quarter. Income from real estate operations contributed $511,000 to 1993 first quarter earnings, compared to a loss of $317,000 for the 1992 comparable quarter. The bank also recorded gains of $307,000 on sales of assets during the quarter ended March 31, 1993, compared to losses of $71,000 during the quarter ended March 31, 1992.
 Non-interest expense totaled $12.6 million in the current quarter compared to $13.4 million in the comparable 1992 quarter. The decrease of $800,000 was


primarily due to lower compensation and benefits expenses, provision for losses on securities and foreclosed real estate, and other expenses. Compensation and benefits decreased $401,000 between comparable quarters, primarily due to reduced amortization of stock benefit plans to compensation expense during the 1993 first quarter. The company adopted Statement of Financial Accounting Standards No. 109 (SFAS 109) relating to the method of accounting for income taxes during the first quarter of 1993. SFAS 109 requires companies to take into account changes in tax rates when valuing the deferred income tax amounts recorded on the statement of financial condition. SFAS 109 also requires that deferred taxes be provided for all temporary differences between financial statement and tax income in addition to the timing differences in the recognition of income for financial statement and tax purposes which were covered by prior accounting rules. The cumulative effect of this change in accounting of $3.5 million was recorded in the first quarter of 1993.
 Total assets increased $75.7 million to $2.82 billion at March 31, 1993 from $2.74 billion at Dec. 31, 1992. Loans receivable remained virtually unchanged at $1.50 billion at both March 31, 1993, and Dec. 31, 1992. In the current low interest rate environment, the bank is still experiencing higher than normal levels of loan repayments. The bank's mortgage-backed securities portfolios increased by $148.3 million during the 1993 first quarter, primarily due to the excess liquidity resulting from continued high levels of repayments. The increase in mortgage-backed securities was partially offset by a $37.2 million decrease in the company's investment securities portfolios.
 Deposits increased $20.5 million, or 9.8 percent, to $2.19 billion at March 31, 1993, from $2.10 billion at Dec. 31, 1992. The average cost of deposits declined steadily over the quarter in response to movements in short-term interest rates to average 3.87 percent for the quarter, compared to 4.72 percent for the year ended Dec. 31, 1992.
 Stockholders' equity totaled $322.3 million at March 31, 1993. The number of common shares outstanding was 13,421,159 and book value per common share was $24.01. The company repurchased a total of 130,569 shares of its common stock during the quarter ended March 31, 1993, thereby completing the 5 percent share repurchase (490,917 shares) previously announced in November 1992. These shares were purchased at an average cost of $23.79 per share.
 Cragin Federal Bank for Savings is a federally chartered stock savings bank. The Bank currently operates a network of 27 branch offices primarily located in Chicago and the western and northwestern suburbs of Chicago. The stock of Cragin Financial Corp., the holding company of Cragin Federal Bank for Savings, is quoted on the NASDAQ National Market System under the symbol "CRGN."
 CRAGIN FINANCIAL CORP. AND SUBSIDIARIES
 Highlights
 (Dollars in thousands, except per share data)
 Periods Ended March 31, 1993 Dec. 31, 1992
 Financial Condition Highlights (unaudited)
 Total assets $ 2,819,703 2,744,043
 Interest-earning assets 2,649,012 2,542,366
 Interest-bearing liabilities 2,409,637 2,359,284
 Non-performing assets 25,990 27,521
 Non-performing loans 20,353 22,085
 Stockholders' equity 322,304 311,362
 Shares outstanding-actual 13,421,159 13,551,728
 Shares outstanding-fully diluted 14,612,615 14,997,979
 Selected asset quality ratios:
 Non-performing loans to loans
 receivable, net 1.35 pct 1.50
 Non-performing assets to total assets 0.92 1.15
 Allowance for loan losses to non-
 performing loans 105.62 98.36
 Allowance for loan losses to loans
 receivable, net 1.43 1.44
 Three Months Ended March 31, 1993 1992
 (unaudited)
 Selected Operating Activities (annualized):
 Return on average assets (B) 1.98 pct 1.24
 Return on average equity (B) 17.28 10.80
 Operating expenses to average assets 1.78 1.89
 Interest rate spread during period 4.09 3.96
 Net interest margin 4.43 4.42
 Selected Investing Activities:
 Loans originated and purchased $ 69,711 93,360
 Information Per Common Share:(A)
 Primary and fully diluted earnings:
 Income before cumulative effect of
 accounting change $0.70 0.53
 Cumulative effect of accounting change 0.24 --
 Net income 0.94 0.53
 Book value (actual shares outstanding) 24.01 20.62
 Book value (fully diluted) 22.06 19.49
 Market price (closing) 27-1/8 14-3/8
 P/E ratio (B) 7.21 6.80
 (A) March 31, 1992, information restated to reflect 3 for 2 stock split on Dec. 28, 1992.
 (B) The return on average assets, the return on average equity and the P/E ratio for the three months ended March 31, 1993, all include a $3.5 million cumulative effect of change in accounting for income taxes recorded during the first quarter of 1993. These ratios are 1.47 percent, 12.84 percent and 9.72, respectively, before the effects of the change in accounting.
 CRAGIN FINANCIAL CORP. AND SUBSIDIARIES
 Consolidated Statements of Financial Condition
 (Dollars in thousands)
 March 31, 1993 Dec. 31, 1992
 (unaudited)
 Assets
 Cash and due from banks $ 14,947 27,837
 Interest-earning deposits 1,793 687
 Federal funds sold 4,000 9,700
 Investment securities 290,329 307,245
 Investment securities held for sale 20,021 40,310
 Mortgage-backed securities 741,830 680,641
 Mortgage-backed securities
 held for sale 87,084 --
 Loans receivable, net 1,503,955 1,503,783
 Accrued interest receivable 21,565 21,598
 Foreclosed real estate, net 5,637 5,436
 Real estate held for development
 or sale, net 29,239 30,767
 Premises and equipment 26,615 26,554
 Excess of cost over fair value of
 net assets acquired 28,209 28,513
 Prepaid expenses and other assets 44,479 60,972
 $2,819,703 $2,744,043
 Liabilities and stockholders' equity:
 Liabilities:
 Deposits 2,118,522 2,097,985
 Borrowed funds 291,115 261,299
 Advance payments by borrowers
 for taxes and insurance 14,019 17,299
 Accrued interest payable 21,337 21,620
 Other liabilities 52,406 34,478
 $2,497,399 $2,432,681
 Stockholders' equity
 Preferred stock, $.01 par value;
 authorized 10,000,000 shares;
 none outstanding -- --
 Common stock, $.01 par value;
 authorized 30,000,000 shares;
 issued 15,653,775 and
 outstanding 13,421,159 shares 156 156
 Additional paid-in capital 95,533 95,561
 Retained earnings, substantially
 restricted 272,271 258,577
 Treasury stock, at cost
 (2,232,616 shares) (37,979) (34,861)
 Common stock acquired by Employee
 Stock Ownership Plan (5,115) (5.299)
 Common stock awarded by Bank
 Recognition Plans (2,562) (2,772)
 Total stockholders' equity 322,304 311,362
 Commitments and contingencies
 $2,819,703 $2,744,043
 CRAGIN FINANCIAL CORP. AND SUBSIDIARIES
 Consolidated Statements of Income
 (Dollars in thousands)
 Three Months Ended March 31, 1993 1992
 Interest income $53,396 58,249
 Interest expense 24,667 30,730
 Net interest income before
 provision for loan losses 28,729 27,519
 Provision for loan losses 750 750
 Net interest income after provision
 for loan losses 27,979 26,769
 Non-interest income:
 Gain (loss) on sale of:
 Mortgage-backed securities -- (75)
 Trading account securities 259 (5)
 Gain on sale and writedown
 of investment securities, net 48 9
 Income (loss) from real
 estate operations 511 (317)
 Fees and commissions 1,250 1,133
 Other 444 549
 Total non-interest income 2,512 1,294
 Non-interest expense:
 Compensation & benefits 6,998 7,399
 Office occupancy and
 equipment 1,370 1,339
 Federal deposit
 insurance premiums 1,212 1,411
 Advertising and
 promotion 358 205
 Data processing 415 366
 Professional services 390 227
 Amortization of excess of
 cost over fair value of
 net assets acquired 304 304
 Provision for losses on
 investment and mortgage-
 backed securities -- 355
 Provision for losses on
 foreclosed real estate -- 42
 Other 1,590 1,766
 Total non-interest expense 12,637 13,414
 Income before income tax
 expense and cumulative effect
 of accounting change 17,854 14,649
 Income tax expense 7,680 6,292
 Income before cumulative
 effect of accounting change 10,174 8,357
 Cumulative effect of
 accounting change 3,520 --
 Net income $ 13,694 $ 8,357
 Primary and fully diluted
 earnings per share
 Income before cumulative
 effect of accounting change $0.70 0.53
 Cumulative effect of
 accounting change 0.24 --
 Net income $0.94 0.53
 -0- 4/19/93
 /CONTACT: Adam Jahns, chairman and CEO, 312-804-4500, or Fredric G. Novy, president and COO, 312-804-4501, or Stanley G. Magiera, CFO, 708-773-0027, all of Cragin Financial Corp./
 (CRGN)


CO: Cragin Financial Corp. ST: Illinois IN: FIN SU: ERN

LD -- NY124 -- 7686 04/19/93 19:55 EDT
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