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FRANKLIN BANK REPORTS RECORD 1991 EARNINGS, $5 MILLION IMPROVEMENT

 FRANKLIN BANK REPORTS RECORD 1991 EARNINGS, $5 MILLION IMPROVEMENT
 SOUTHFIELD, Mich., Jan. 22 /PRNewswire/ -- Franklin Bank, N.A. (NASDAQ: FSVB) today released the following:
 1991 Record Earnings
 Franklin Bank, N.A. announced net income for the year ended Dec. 31, 1991, of $2,599,228, compared to a net loss of $2,564,375 for the 12 months ended Dec. 31, 1990. Net income per share, applicable to common stockholders after declaration of Series A preferred dividends, was $2.26 for the year ended Dec. 31, 1991, compared to a loss of $2.71 per share for the 12 months ended Dec. 31, 1990.
 "This is, by far, Franklin's best 12-month earnings report in our eight-year history," said President and CEO Read P. Dunn. "The bank enjoyed significant improvement in net income largely through improvement in net interest margin, a reduction in non-performing assets and the successful containment of operating expenses."
 Fourth-quarter net income, before the payment of preferred stock dividends, was $570,325, compared to a net loss of $3,169,681 in the fourth quarter of 1990.
 Fourth-quarter net income per share applicable to common stockholders (after declaration of the initial dividend on Franklin's Series A preferred stock), was $0.15, compared to a net loss of $3.35 per share for the quarter ended Dec. 31, 1990.
 Net interest income for the year was $10,355,564, surpassing the previous period net interest income of $8,107,716 by 28 percent. Generally lower interest rates on maturing certificate renewals and Franklin's concentration on lower interest cost deposits accelerated net interest margin improvement during 1991. For the years ended Dec. 31, 1991 and 1990, Franklin's net interest margin was 2.70 percent and 2.04 percent, respectively. The 1991 margin is the highest in Franklin's history.
 Total non-interest income for the year was $1,802,200, compared to $603,773 for the year ended Dec. 31, 1990. Excluding gains on sales of mortgages and securities, non-interest income for the year improved 98 percent, totaling $1,071,340 compared to $539,746 for the prior 12-month period.
 Non-Performing Assets Down Sharply
 Of particular significance, and contrary to general industry trends, Franklin's level of non-performing assets fell substantially in year-to- year comparisons.
 Franklin's total non-performing assets, inclusive of non-accrual loans, restructured loans, in-substance foreclosures, and real estate owned, were $7,666,235 at Dec. 31, 1991, compared to $9,129,376 at Dec. 31, 1990. Expressed as a percentage of total assets, Franklin's non-performing asset ratios at Dec. 31, 1991 and 1990, were 1.92 percent and 2.21 percent, respectively.
 In addition, the level of real estate owned properties was reduced by more than half, falling to $4,295,207 at Dec. 31, 1991, from $9,001,565 at Dec. 31, 1990. During the fourth quarter of 1991, Franklin also entered into purchase agreements to sell three additional commercial properties valued at approximately $3.4 million. Closings of these transactions are scheduled during the first quarter of 1992 and will further reduce the level of Franklin's non-performing assets.
 Operating Expenses; Stockholders' Equity and Assets
 Total non-interest expenses increased nominally by 1.5 percent in year-to-year comparisons. Key areas of cost containment were advertising and professional fees. Franklin's operating efficiency ratio, measured by net interest income plus non-interest income (excluding gains on sales of mortgages and securities), as a percent of non-interest expenses improved to 136 percent in 1991 from 105 percent in 1990.
 Total stockholders' equity at Dec. 31, 1991, was $21,294,625, an increase of 95 percent from Dec. 31, 1990's total of $10,917,513. This increase was primarily the result of Franklin's successful sale of 920,000 shares of Series A Non-cumulative convertible preferred stock in July 1991. Franklin's common stock book value at Dec. 31, 1991, improved 19 percent in year-to-year comparisons, reaching $13.82 per share compared to $11.52.
 At Dec. 31, 1991, Franklin had successfully reduced its assets to $398,506,802, compared to $412,612,050 a year ago. Management anticipates modest asset growth during 1992 with continued attention to improving net income and maintaining regulatory capital compliance. Headquartered in Southfield, Franklin operates three full-service regional branches in Southfield, Birmingham and Grosse Pointe Woods, with 89 employees.
 FRANKLIN BANK, N.A.
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 (Unaudited; dollars in thousands except share data)
 Dec. 31, Dec. 31,
 1991 1990
 Assets
 Cash $1,118 $788
 Interest bearing deposits 391 730
 Time deposits with FHLB 11,153 13,531
 Investment securities
 (at cost, which approximates market) 35,646 5,189
 Loans held for sale --- 13,090
 Loans receivable, net 331,957 357,326
 Accrued interest receivable 3,905 4,855
 Real estate 4,295 9,002
 Premises and equipment, net 2,117 2,342
 FHLB stock - cost 3,464 2,123
 Federal reserve stock - cost 935 ---
 Prepaid expenses and other assets 3,526 3,636
 Total assets $398,507 $412,612
 Liabilities
 Deposits $325,506 $352,154
 Advances from FHLB 40,100 37,200
 Subordinated capital notes 7,274 7,105
 Advance payments by borrowers
 for taxes and insurance 955 1,387
 Accrued interest payable 1,191 2,373
 Other liabilities 2,186 1,475
 Total liabilities $377,212 $401,694
 Stockholders' equity
 Common stock - pare? $1.00 at
 Dec. 31, 1991, and Dec. 31, 1990;
 authorized 3 million shares;
 issued and outstanding 947,861
 at Dec. 31, 1991, and 947,561
 at Dec. 31, 1990 948 948
 Preferred stock - stated value $10.00;
 authorized 3 million shares; issued
 and outstanding 920,000 shares 8,199 ---
 Additional paid-in capital 8,985 8,983
 Retained earnings, restricted 3,163 987
 Total stockholders' equity 21,295 10,918
 Total liabilities and stockholders'
 equity $398,507 $412,612
 FRANKLIN BANK, N.A.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited; dollars in thousands, except share data)
 Year Ended Quarter Ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Interest income
 Interest on loans $35,642 $38,812 $8,126 $9,772
 Interest on investment
 securities 937 764 484 155
 Other interest and dividends 1,404 1,466 272 282
 Total 37,983 41,042 8,882 10,209
 Interest expense
 Interest on deposits 24,063 29,676 5,353 7,729
 Interest on FHLB advances and
 subordinated debentures 3,564 3,258 888 802
 Total 27,627 32,934 6,241 8,531
 Net interest income 10,356 8,108 2,641 1,678
 Provision for possible
 loan losses 170 3,240 60 3,000
 Net interest income (loss)
 after provision for
 possible loan losses 10,186 4,868 2,581 (1,322)
 Other income
 Loan fees and servicing
 charges 950 632 297 57
 Gain (loss) on sale of
 participation certificates,
 mortgages, and securities 731 64 114 (2)
 Other 121 (92) 33 (98)
 Total 1,802 604 444 (43)
 Other expenses
 Compensation and benefits 3,501 3,267 947 967
 Occupancy and equipment 1,415 1,441 332 360
 Advertising 241 570 69 92
 Professional fees 355 495 113 153
 Federal insurance premiums 788 731 191 185
 Defaulted loan expense 286 54 43 45
 Community development expenses 148 50 44 30
 Other 1,647 1,646 420 468
 Total 8,381 8,254 2,159 2,300
 Income (loss) before provision
 for federal income taxes and
 extraordinary item 3,607 (2,782) 866 (3,665)
 Provision (credit) for
 federal income tax 1,007 (269) 296 (546)
 Extraordinary item - prepayment
 premium to FHLB for early
 repayment of advance --- 51 --- 51
 Net income (loss) $2,600 ($2,564) $570 ($3,170)
 Net income (loss) per share $2.70 ($2.71) $0.58 ($3.36)
 Weighted average shares 962,911 947,561 982,025 947,561
 Net income (loss) per share
 after preferred dividend $2.26 ($2.71) $0.15 ($3.35)
 FRANKLIN BANK, N.A.
 FINANCIAL SUMMARY
 (Unaudited; dollars in thousands, except share data)
 Dec. 31, Dec. 31,
 Three Months Ended 1991 1990
 Interest income $8,882 $10,209
 Interest expense 6,241 8,531
 Net interest income 2,641 1,678
 Provision for loan losses 60 3,000
 Net income 570 (3,170)
 Per share $0.58 ($3.35)
 Per share after preferred dividends $0.15 ($3.35)
 Dec. 31, Dec. 31,
 At 1991 1990
 Assets $398,507 $412,612
 Investment securities 35,646 5,189
 Loans 331,957 370,416
 Allowance for loan losses 4,142 4,539
 Non-performing assets 7,666 9,130
 Advances and borrowings 47,374 44,305
 Deposits 325,506 352,154
 Common stockholders' equity 13,096 10,918
 Per share 13.82 11.52
 Weighted average shares 962,911 947,561
 Core (Tier 1) capital/assets 5.24 pct. 2.61 pct.
 Total (Tier 1 + Tier 2) capital/assets 8.11 pct. 5.43 pct.
 Dec. 31, Dec. 31,
 Other Information 1991 1990
 Return on average common
 shareholders' equity 18.12 pct. (21.20 pct.)
 Return on average assets 0.64 pct. (0.62 pct.)
 Net interest margin 2.70 pct. 2.04 pct.
 Operating expense/average assets 2.07 pct. 1.98 pct.
 Allowance for loan losses/total loans 1.25 pct. 1.27 pct.
 Allowance/non-performing assets 54.03 pct. 49.72 pct.
 Non-performing assets/total assets 1.92 pct. 2.21 pct.
 Net charge-offs/average loans 0.14 pct. 0.04 pct.
 Full-time employees and equivalents 89 77
 Branches 3 3
 -0- 1/22/92
 /CONTACT: Rebecca J. Christian of Franklin Bank, 313-358-1615 or 800-356-8910 (outside Michigan)/
 (FSVB) CO: Franklin Bank, N.A. ST: Michigan IN: FIN SU: ERN


SB-ML -- DE009 -- 2236 01/22/92 11:21 EST
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