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CRAGIN REPORTS 61.8 PERCENT INCREASE IN FIRST QUARTER EARNINGS

 CRAGIN REPORTS 61.8 PERCENT INCREASE IN FIRST QUARTER EARNINGS
 CHICAGO, April 20 /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, 1992, increased 61.8 percent to $8.4 million, or $0.80 per primary share, compared to $5.2 million for the comparable 1991 quarter. Earnings per share information is not meaningful for the comparable 1991 quarter, as the company did not complete its conversion from a federally chartered mutual savings bank to a stock savings bank until June 6, 1991.
 The substantial improvement in comparable quarterly earnings resulted primarily from improved interest margins in 1992. Net interest income before provision for loan losses increased $8.8 million, or 47.1 percent, to $27.5 million for the 1992 first quarter from $18.7 million for the 1991 first quarter. The bank's net interest margin was 4.42 percent for the first quarter of 1992, an improvement from a margin of 3.81 percent throughout 1991 and 3.24 percent during the first quarter of 1991.
 The company's interest rate spread increased to an average of 3.96 percent for the 1992 first quarter compared to an annual average of 3.28 percent during 1991 and an average of 3.08 percent during the 1991 first quarter. While the downward trend in long-term interest rates resulted in a 43 basis point decrease in the company's average yield on interest- earning assets to 9.35 percent for the 1992 first quarter from 9.78 percent during 1991, this was more than offset by a 111 basis point decline in the average cost of interest-bearing liabilities to 5.39 percent for the 1992 first quarter from 6.50 percent during 1991. 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 1.24 percent and 10.80 percent, respectively, for the quarter ended March 31, 1992.
 Adam A. Jahns, chairman and chief executive officer, commented, "These excellent earnings are the best kind -- core earnings, generated from our basic savings and lending operations. Our margins are at all- time highs, deposit flows are good and our loan staff is producing very strong mortgage loan volume. The bank is in excellent condition."
 Jahns also noted that capital of Cragin Federal Bank continued 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 1992, compared to $450,000 booked in the first quarter of 1991. The 1992 provisions reflect the bank's policy of conservatively evaluating its loan and investment portfolios, levels of non-performing assets, and the general state of the economy. In addition, the provisions recorded reflect management's view of a regulatory environment which increasingly emphasizes the importance of building general loan loss reserves.
 The provisions recorded in the first quarter of 1992 bring the cumulative allowance for loan losses to $20.2 million, which covered 78.6 percent of non-performing loans at March 31, 1992. The ratio of non-performing loans to total loans receivable was 1.64 percent at March 31, 1992, as compared to 1.41 percent at Dec. 31, 1991, and 1.30 percent at March 31, 1991. Non-performing assets increased to $30.5 million, or 1.15 percent of total assets, at March 31, 1992, from $27.3 million, or 1.03 percent of total assets, at Dec. 31, 1991. Non- performing assets were $21.5 million, or 0.84 percent of total assets, at March 31, 1991. There were no charge-offs recorded during the first quarter of 1992.
 Non-interest income was $1.3 million in the current 1992 quarter, a decrease of $132,000 from the $1.4 million recorded in the comparable 1991 quarter. Income from real estate operations decreased $504,000 from the 1991 and 1992 comparable quarters, primarily due to the establishment by the bank's real estate development subsidiary of provisions for losses on real estate projects of $310,488 during the quarter ended March 31, 1992. The bank recorded losses of $71,000 on sales of assets during the quarter ended March 31, 1992, compared to gains of $31,000 during the quarter ended March 31, 1991.
 Non-interest expense totalled $13.4 million in the current quarter compared to $11.4 million in the comparable 1991 quarter, primarily due to increases in compensation and benefits expense, offset by a decrease in advertising and promotion expense. Compensation and benefits increased $2.2 million between comparable quarters, primarily due to the amortization of stock benefit plans to compensation expense totalling $1.3 million during the 1992 first quarter.
 Total assets remained virtually unchanged at $2.65 billion at both March 31, 1992, and Dec. 31, 1991. Loans receivable decreased $28.1 million to $1.56 billion at March 31, 1992, from $1.59 billion at Dec. 31, 1991 as loan repayments and prepayments exceeded loans originated and purchased. Loans originated and purchased totalled $93.4 million for the quarter ended March 31, 1992, while loan payments and prepayments totalled $118.7 million.
 Deposits increased $16.0 million, or 0.8 percent, to $2.13 billion at March 31, 1992, from $2.11 billion at Dec. 31, 1991, primarily due to interest credited.
 The average cost of deposits declined steadily over the quarter in response to movements in short-term interest rates to average 5.39 percent for the quarter, compared to 6.50 percent for the year ended Dec. 31, 1991.
 Stockholders' equity totalled $307.1 million at March 31, 1992. The number of common shares outstanding was 9,914,058, and book value per common share was $30.97. The company repurchased at total of 250,792 shares during the quarter ended March 31, 1992, thereby completing the five percent share repurchase (521,792 shares) previously announced in November 1991.
 Cragin Federal Bank for Savings is a federally chartered stock savings bank. The bank currently operates out of a network of 28 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 SUBSIDIARY
 HIGHLIGHTS (Dollars in thousands, except per share data)
 March 31, Dec. 31,
 FINANCIAL CONDITION HIGHLIGHTS 1992 1991
 (unaudited)
 Total assets $ 2,650,093 $ 2,650,110
 Interest-earning assets 2,491,449 2,411,820
 Interest-bearing liabilities 2,280,305 2,215,709
 Non-performing assets 30,504 27,296
 Non-performing loans 25,660 22,389
 Stockholders equity 307,071 302,420
 Shares outstanding - actual 9,914,058 10,164,850
 Shares outstanding - fully diluted 10,501,307 10,938,648
 SELECTED ASSET QUALITY RATIOS:
 Non-performing loans to loans
 receivable, net 1.64 pct. 1.41 pct.
 Non-performing assets to total
 assets 1.15 1.03
 Allowance for loan losses to
 non-performing loans 78.61 86.91
 Allowance for loan losses to
 non-performing assets 66.13 71.28
 SELECTED OPERATING ACTIVITIES
 (annualized): Three Months Ended March 31
 (unaudited)
 1992 1991
 Return on average assets 1.24 pct. 0.83 pct.
 Return on average equity 10.80 10.41
 Operating expenses to average assets 1.89 1.69
 Interest rate spread during period 3.96 3.08
 Net interest margin 4.42 3.24
 SELECTED INVESTING ACTIVITIES:
 Loans originated and purchased $ 93,360 $ 66,105
 INFORMATION PER COMMON SHARE:
 Pro forma primary earnings 0.80 N/A
 Pro forma fully diluted earnings 0.80 N/A
 Book value (actual shares
 outstanding) 30.97 N/A
 Book value (fully diluted) 29.24 N/A
 Market price (closing) 21-5/8 N/A
 P/E ratio 6.80 N/A
 CRAGIN FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Financial Condition
 (Dollars in thousands)
 March 31, Dec. 31,
 1992 1991
 ASSETS (unaudited)
 Cash and due from banks $ 21,516 $ 25,173
 Interest-earning deposits 1,118 4,130
 Federal funds sold 26,000 --
 Investment securities 308,950 253,664
 Investment securities held for sale 24,993 1,637
 Trading account securities 5,036 5,000
 Mortgage-backed securities 520,463 589,286
 Loans receivable, net 1,564,771 1,592,838
 Accrued interest receivable 24,382 24,596
 Foreclosed real estate, net 4,844 4,907
 Real estate held for
 development or sale 35,737 37,089
 Premises and equipment, net 26,656 26,334
 Excess of cost over fair value
 of net assets acquired 29,424 29,952
 Prepaid expenses and other
 assets 56,203 55,504
 $2,650,093 $2,650,110
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Liabilities:
 Deposits $2,130,898 $2,114,878
 Borrowed funds 137,115 155,299
 Advance payments by borrowers
 for taxes and insurance 14,026 17,574
 Accrued interest payable 27,118 28,017
 Other liabilities 33,865 31,922
 $2,343,022 $2,347,690
 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 10,435,850 shares and
 outstanding 9,914,058 shares 104 104
 Additional paid-in capital 95,890 95,890
 Retained earnings, substantially
 restricted 230,327 221,970
 Treasury stock, at cost
 (521,792 shares) (10,054) (5,021)
 Common stock acquired by Employee
 Stock Ownership Plan (5,681) (6,799)
 Common stock awarded by Bank
 Recognition Plans (3,515) (3,724)
 Total stockholders' equity 307,071 302,420
 Commitments and contingencies -- --
 $2,650,093 $2,650,110
 CRAGIN FINANCIAL CORP. AND SUBSIDIARY
 Consolidated Statements of Income
 (Dollars in thousands)
 Three Months Ended
 March 31,
 1992 1991
 Interest income $ 58,259 $ 56,560
 Interest expense 30,740 37,848
 Net interest income before
 provision for loan losses 27,519 18,712
 Provision for loan losses 750 450
 Net interest income after
 provision for loan losses 26,769 18,262
 NON-INTEREST INCOME:
 Gain (loss) on sale of:
 Mortgage-backed securities (75) --
 Loans receivable -- (4)
 Trading account securities (5) --
 Gain on sale and writedown of
 investment securities, net 9 35
 Income from real estate operations (317) 187
 Fees and commissions 1,133 975
 Other 549 233
 Total non-interest income 1,294 1,426
 NON-INTEREST EXPENSE:
 Compensation and benefits 7,399 5,239
 Office occupancy and equipment 1,339 1,155
 Federal deposit insurance premiums 1,411 1,215
 Advertising and promotion 205 759
 Data processing 366 343
 Amortization of excess of cost
 over fair value of net assets
 acquired 304 233
 Provision for losses on mortgage-
 backed and investment securities 355 600
 Provision for losses on foreclosed
 real estate 42 --
 Other 1,993 1,810
 Total non-interest expense 13,414 11,354
 Income before income tax expenses 14,649 8,334
 Income tax expense 6,292 3,169
 Net income $ 8,357 $ 5,165
 PRO FORMA EARNINGS PER SHARE:
 Primary $ 0.80 $ N/A
 Fully diluted $ 0.80 $ N/A
 -0- 4/20/92
 /CONTACT: Adam A. Jahns, chairman and CEO, 312-804-4500, Fredric G. Novy, president and COO, 312-804-4501, Stanley E. Magiera, CFO, 708-773-0027, all of Cragin Financial Corp./
 (CRGN) CO: Cragin Financial Corp. ST: Illinois IN: FIN SU: ERN


PS -- NY098 -- 0313 04/20/92 19:54 EDT
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