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DFSE REPORTS EARNINGS, ANNOUNCES DIVIDEND FOR QUARTER ENDED SEPT. 30

DFSE REPORTS EARNINGS, ANNOUNCES DIVIDEND FOR QUARTER ENDED SEPT. 30
 DECATUR, Ga., Oct. 22 /PRNewswire/ -- DFSoutheastern, Inc. (NASDAQ: DFSE), the Decatur, Ga.-based holding company for Decatur Federal Savings and Loan Association, today announced the results of operations for the third quarter and nine months ended Sept. 30 as well as announced a dividend in the amount of $.05 per share for shareholders of record as of Oct. 31.
 The dividend will be paid on Nov. 13.
 For the third quarter of 1992, DFSE reported net income of $7.8 million, or $1.64 per share, compared with a net loss of $899,000, or $.20 per share, for the same period in 1991. Net interest income for the quarter was $20.5 million compared to $15.5 million for the same quarter last year, a 32 percent increase. Contributing to the increase in noninterest income were gains on sales of loans, investments and mortgage-backed securities of $5.9 million compared to a net loss of $200,000 for the second quarter of 1992 and $4.5 million of gains for the third quarter of 1991. Continued growth in loan fee and servicing income as a result of a significant rise in mortgage loan originations in 1992 as well as more deposit fee income added to the increase in net income.
 Net earnings for the first nine months of 1992 were $20.3 million, or $4.28 per share (fully diluted), compared to $2.0 million, or $.44 per share, after the cumulative effect of a change in method of accounting. During the second quarter, the company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," which generated a cumulative gain of $8 million. Before the cumulative effect of the change in accounting principle, net income for the first nine months of 1992 was $12.3 million, or $2.59 per share (fully diluted). Noninterest income for the first nine months of 1992 included $9.6 million of gains on sales of loans, investments and mortgage-backed securities compared to $4.8 million for the same period in 1991. With the rise in mortgage loan originations, loan fee and servicing income rose 17 percent in the first nine months of 1992 compared to the first nine months of 1991.
 The company's net interest margin continued to widen during the third quarter as the cost of funds decreased faster than the yield on interest earning assets. For the three months ended Sept. 30, the net interest margin was 3.39 percent, compared to 3.17 percent during the second quarter of 1992 and 2.49 percent for the quarter ended Sept. 30, 1991. The net interest margin for the first nine months of 1992 was 3.13 percent compared to 2.55 percent for the same period in 1991.
 "In anticipation of our merger with First Union National Bank, we have been controlling discretionary expenses and focusing on continued asset quality improvement," explained Robert C. McMahan, chairman of the board and chief executive officer of DFSoutheastern, Inc. "This improving trend in asset quality is reflected by lower losses on real estate acquired in settlement of loans which were $1 million in the third quarter of 1992, compared with $2 million in the second quarter of 1992 and $2.6 million in the third quarter of 1991.
 "We are confident our nonperforming assets will continue to decline. We have seen a steady improvement in our delinquency ratios and an acceleration in the sale of foreclosed real estate," added McMahan. Nonperforming assets were $58 million at the end of the third quarter compared with $66 million at the end of the second quarter of 1992 and $77 million a year ago. At Sept. 30, nonperforming assets were 2.22 percent of total assets, compared with 2.55 percent in the second quarter of 1992 and 2.94 percent a year ago.
 The loan loss provision was $2 million for the third quarter of 1992 compared with $7 million for the second quarter of 1992 and $9 million a year ago. The allowance for loan losses was $22 million at Sept. 30, or 1.09 percent of total loans, compared with $22 million at June 30, and $13 million a year ago.
 At Sept. 30, DFSE had consolidated assets of $2.61 billion compared to $2.56 billion at Dec. 31, 1991. Deposits were $2.0 billion at the end of the third quarter of 1992 compared to $2.03 billion at the end of 1991. Decatur Federal, the wholly owned subsidiary of DFSoutheastern, Inc., has 33 branches and six mortgage loan offices serving metropolitan Atlanta and north Georgia. DFSoutheastern Mortgage, Inc., a wholly owned subsidiary of Decatur Federal, has 20 loan offices, some of which operate under the name Fairfield Financial Associates, in Georgia, Tennessee, North Carolina, South Carolina, Alabama and north Florida. DFSoutheastern's common stock is traded in the NASDAQ Over-the-Counter Securities Exchange under the symbol "DFSE."
 FINANCIAL HIGHLIGHTS
 DFSOUTHEASTERN, INC.
 (Holding Company for Decatur Federal Savings and Loan Association)
 At Sept. 30 1992 1991
 (in thousands, except for common shares)
 Shares outstanding 4,584,041 4,506,393
 Book value per share $ 31.51 $ 27.26
 Tangible book value per share $ 30.89 $ 26.53
 Total assets $2,611,505 $2,622,982
 Total deposits $2,003,249 $1,975,038
 Capital ratios:
 Core (min. req. 3.0 pct.) 5.59 pct. 4.74 pct.
 Tangible (min. req. 1.5 pct.) 5.46 pct. 4.58 pct.
 Risk-based (min. req. 7.2 pct.) 10.08 pct. 8.68 pct.
 Risk-based (min. req. 8.0 pct. fully
 phased-in ratio) 9.88 pct. 8.48 pct.
 DFSOUTHEASTERN, INC. AND SUBSIDIARIES
 Consolidated Statements of Operations
 (in thousands except per share data)
 (unaudited)
 3 mos. ended Sept. 30 1992 1991
 Interest income:
 Loans receivable $ 44,842 $ 46,983
 Mortgage-backed securities 6,924 8,196
 Investment securities 1,287 2,222
 Other interest income 297 961
 Total interest income 53,350 58,362
 Interest and dividend expense:
 Deposits 26,067 33,017
 Advances and other borrowings 6,827 9,889
 Total interest and dividend expense 32,894 42,906
 Net interest income 20,456 15,456
 Provision for loan losses 2,277 9,295
 Net interest income after provision for
 loan losses 18,179 6,161
 Other income:
 Loan fees and servicing income 2,272 2,491
 Deposit and other service charges 2,557 1,946
 Loan fee income on sale of loans 652 1,037
 Gain on sale of loans 4,013 2,455
 Gain on sale of investment and mortgage-backed
 securities 1,867 2,038
 Gain on sale real estate held for development
 and sale 255 273
 Unrealized loss on real estate held for
 investment (68) (123)
 Unrealized loss on real estate held for
 development and sale --- ---
 Loss on real estate acquired in settlement
 of loans (1,021) (2,581)
 Other, net 1,381 1,064
 Total other income 11,908 8,600
 General and administrative expenses:
 Compensation and related benefits 7,596 7,277
 Net occupancy expense 1,965 1,854
 Advertising 683 872
 Federal insurance premiums 1,170 1,108
 Amortization of goodwill 113 141
 Other operating expenses 7,088 4,332
 Total general and administrative expenses 18,615 15,584
 Earnings before income tax expense and cumulative
 effect of a change in acctg. principle 11,472 (823)
 Income tax expense 3,704 76
 Earnings before cumulative effect of a change
 in accounting principle 7,768 (899)
 Cumulative effect on prior years of a change
 in method of acctg. for inc. taxes --- ---
 Net earnings $ 7,768 $ (899)
 Earnings (loss) per common and common equivalent share:
 Earnings (loss) before cumulative effect of a
 change in accounting principle:
 Primary 1.64 (0.20)
 Fully diluted 1.64 (0.20)
 Gain from cumulative effect on prior years of a
 change in method of acctng. for inc. taxes:
 Primary 0.00 0.00
 Fully diluted 0.00 0.00
 Net earnings (loss):
 Primary 1.64 (0.20)
 Fully diluted $ 1.64 $ (0.20)
 Wtd. avg. common and common equiv. shares:
 Primary 4,732,604 4,506,393
 Fully diluted 4,732,604 4,506,393
 9 mos. ended Sept. 30 1992 1991
 Interest income:
 Loans receivable $137,237 $144,536
 Mortgage-backed securities 21,773 25,267
 Investment securities 3,931 6,325
 Other interest income 1,051 2,600
 Total interest income 163,992 178,728
 Interest and dividend expense:
 Deposits 85,234 99,772
 Advances and other borrowings 21,440 31,873
 Total interest and dividend expense 106,674 131,645
 Net interest income 57,318 47,083
 Provision for loan losses 12,278 15,339
 Net interest income after provision for
 loan losses 45,040 31,744
 Other income:
 Loan fees and servicing income 7,740 6,610
 Deposit and other service charges 6,857 5,770
 Loan fee income on sale of loans 2,451 3,514
 Gain on sale of loans 4,125 2,512
 Gain on sale of investment and mortgage-backed
 securities 5,489 2,267
 Gain on sale real estate held for development
 and sale 831 827
 Unrealized loss on real estate held for
 investment (531) (601)
 Unrealized loss on real estate held for
 development and sale --- (3)
 Loss on real estate acquired in settlement
 of loans (5,466) (4,902)
 Other, net 4,063 3,469
 Total other income 25,559 19,463
 General and administrative expenses:
 Compensation and related benefits 22,445 23,046
 Net occupancy expense 5,835 5,512
 Advertising 1,960 2,486
 Federal insurance premiums 3,432 3,182
 Amortization of goodwill 336 420
 Other operating expenses 17,837 12,456
 Total general and administrative expenses 51,845 47,102
 Earnings before income tax expense and cumulative
 effect of a change in acctg. principle 18,754 4,105
 Income tax expense 6,495 2,104
 Earnings before cumulative effect of a change
 in accounting principle 12,259 2,001
 Cumulative effect on prior years of a change
 in method of acctg. for inc. taxes 8,000 ---
 Net earnings $ 20,259 $ 2,001
 Earnings (loss) per common and common equivalent share:
 Earnings (loss) before cumulative effect of a change
 in accounting principle:
 Primary 2.61 0.44
 Fully diluted 2.59 0.44
 Gain from cumulative effect on prior years of a
 change in method of acctng. for inc. taxes:
 Primary 1.70 0.00
 Fully diluted 1.69 0.00
 Net earnings (loss):
 Primary 4.31 0.44
 Fully diluted $ 4.28 $ 0.44
 Wtd. avg. common and common equiv. shares:
 Primary 4,700,383 4,506,393
 Fully diluted 4,726,794 4,506,393
 -0- 10/22/92
 /CONTACT: Susan Paul Smith, staff vice president, 404-371-4411, or James R. Wallis, chief financial officer, 404-371-4074, both of DFSoutheastern/
 (DFSE) CO: DFSoutheastern, Inc. ST: Georgia IN: FIN SU: ERN DIV


EA-BN -- AT008 -- 3552 10/22/92 11:56 EDT
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