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CRAGIN SECOND QUARTER EARNINGS INCREASE 13 PERCENT TO $10.2 MILLION

 CHICAGO, July 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 June 30, 1993, was $10.2 million, or $0.72 per primary share. Second quarter earnings represent a 13 percent increase in net income over the comparable 1992 quarter of $9.0 million, or $0.58 per share. Income before the cumulative effect of a change in accounting for income taxes for the six months ended June 30, 1993, was $20.4 million, or $1.42 per primary share, compared to net income of $17.4 million, or $1.11 per primary share for the six months ended June 30, 1992. 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. The effect of adopting SFAS 109 resulted in an increase in income of $3.5 million in the first quarter of 1993. Including the effect of the accounting change, net income for the six months ended June 30, 1993, was $23.9 million, or $1.66 per primary share.
 On July 6, the company announced that it had entered into a definitive agreement with ABN AMRO North America, Inc. under which ABN AMRO North America, Inc., with approximately $40 billion in U.S. assets, has agreed to purchase all of the outstanding common stock of Cragin Financial Corp. for $38 per share, which reflects the 3 for 2 stock split on Dec. 28, 1992, or $57 per share on a pre-split basis, in an all cash deal. The transaction is expected to close during the first quarter of 1994 and is subject to approval by the appropriate regulatory authorities, the stockholders of Cragin Financial Corp. and satisfactory completion of ABN AMRO North America Inc.'s due diligence investigation. ABN AMRO North America Inc. is the parent holding company for the LaSalle Banks, with assets exceeding $16 billion in over 60 offices in the Chicago area.
 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 $2.7 million to $28.8 million for the 1993 second quarter from $26.1 million for the 1992 second quarter.
 The company's net interest margin increased slightly to 4.37 percent for the second quarter of 1993, compared to 4.27 percent during the comparable 1992 second quarter. Net interest-earning assets were $16.3 million higher in the 1993 period. The yield on average interest- earning assets decreased 93 basis points, from 8.97 percent for the second quarter of 1992 to 8.04 percent for the second quarter of 1993, while the cost of average interest-bearing liabilities decreased 111 basis points from 5.07 percent to 3.96 percent over the same period. Although interest spreads remained steady, 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 1.45 percent and 12.93 percent, respectively, for the 1993 second quarter. This compares to returns of 1.37 percent and 11.78 percent for the comparable 1992 quarter.
 Adam A. Jahns, chairman and chief executive officer, commented, "We are pleased to report such strong earnings for the quarter. These are the type of earnings that attracted ABN AMRO North America to us. We are very excited and look forward to the possibilities which will arise from the acquisition by ABN AMRO North America. We believe this action will be beneficial for both our shareholders and customers."
 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 $500,000 were recorded in the second quarter of 1993, compared to $750,000 during the second quarter of 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 second quarter of 1993 bring the cumulative allowance for loan losses to $21.9 million, which covered 108.01 percent of non-performing loans at June 30, 1993. The ratio of non-performing loans to net loans receivable was 1.38 percent at June 30, 1993, as compared to 1.50 percent at Dec. 31, 1992. Non-performing assets decreased to $25.6 million, or 0.91 percent of total assets, at June 30, 1993, from $27.5 million, or 1.15 percent of total assets, at Dec. 31, 1992. There was one charge-off totaling $47,000 during the second quarter of 1993.
 Non-interest income was $1.6 million in the current quarter, an increase of $373,000 from the $1.2 million recorded in the comparable 1992 quarter.
 Income from real estate operations contributed $323,000 to 1993 second quarter earnings, compared to a loss of $812,000 for the 1992 comparable quarter. The bank also recorded losses of $732,000 on sales and writedowns of assets during the quarter ended June 30, 1993, compared to gains of $369,000 during the quarter ended June 30, 1992. The loss on sales and writedowns of assets during the current quarter was primarily due to unrealized losses recorded on short-term mortgage- backed securities which have experienced an acceleration of prepayments.
 Non-interest expense totaled $12.6 million in the current quarter compared to $11.5 million in the comparable 1992 quarter. The increase of $1.1 million was primarily due to higher compensation and benefits expenses and other expenses. Compensation and benefits increased $953,000 between comparable quarters, primarily due to additional expense relating to the implementation of SFAS No. 106, "Employer's Accounting for Post-Retirement Benefits other than Pensions," and overall increases in other compensation related expenses.
 Total assets increased $65.1 million to $2.81 billion at June 30, 1993 from $2.74 billion at Dec. 31, 1992. Loans receivable decreased slightly to $1.47 billion at June 30, 1993, from $1.50 billion at 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 $198.6 million during the first six months of 1993, primarily due to the excess liquidity resulting from continued high levels of repayments. The increase in mortgage-backed securities was partially offset by a $93.9 million decrease in the company's investment securities portfolios.
 Deposits remained virtually unchanged at $2.10 billion at both June 30, 1993, and Dec. 31, 1992. The average costs of deposits declined steadily over the six months ended June 30, 1993, in response to movements in short-term interest rates to average 3.80 percent for the six months, compared to 4.72 percent for the year ended Dec. 31, 1992.
 Stockholders' equity totaled $319.6 million at June 30, 1993. Common shares outstanding totaled 12,813,909 and book value per common share was $24.94. During the quarter, the company also announced the initiation of its fourth five percent (total 671,058 shares) stock buyback program. As of June 30, 1993, the company had repurchased 607,250 shares of common stock at an average cost of $22.31 per share.
 During the second quarter, options to purchase 39,855 shares of common stock were exercised by officers and employees of the bank. The company reissued shares purchased in the open market to satisfy the option exercises.
 Cragin Federal Bank for Savings is a federally chartered stock savings bank. The bank has a network of 27 branches 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 and Cragin Service Development Corp., is quoted on the NASDAQ National Market system under the symbol "CRGN."
 -0- 7/19/93
 /CONTACT: Adam A. Jahns, chairman and chief executive officer, 312-804-4500; or Fredric G. Novy, president and chief operating officer, 312-804-4501; or Stanley E. Magiera, chief financial officer, 312-773-0027, all of Cragin Financial Corp./ /FIRST AND FINAL ADD TO FOLLOW/
 (CRGN)


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

TM -- NY092 -- 3295 07/19/93 18:13 EDT
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Date:Jul 19, 1993
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