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MUTUAL SAVINGS BANK ANNOUNCES THIRD QUARTER EARNINGS

 MUTUAL SAVINGS BANK ANNOUNCES THIRD QUARTER EARNINGS
 BAY CITY, Mich., Oct. 27 /PRNewswire/ -- Mutual Savings Bank, f.s.b.


(NASDAQ: MSBK) announced earnings of $0.77 per share for the quarter ending Sept. 30, 1992, according to Wendell L. Evans Jr., chairman of the board and chief executive officer.
 Evans said, "We are very pleased to announce these favorable earnings because they represent our first quarter as a public company, and they exceed the projections of the bank's offering circular."
 The company reported net income of $1.120 million for the third quarter, as compared to $1.305 million for the same quarter one year earlier. Net income for the first nine months amounted to $2.366 million. During the same period one year ago, net income amounted to $3.595 million.
 Earnings for the prior year were greater because the bank realized substantial gains on the sale of securities, according to Mr. Evans. He added, "The 1991 sale of the securities was part of new management philosophy directed toward increasing the bank's profitability through an aggressive, well-managed mortgage lending operations."
 Year to date, the bank increased its mortgage lending volume 371 percent. During the first nine months of 1992, Mutual originated $238.6 million in mortgage loans as compared to the same period one year earlier when a total of $50.6 million in loans was originated.
 Loan originations during the third quarter amounted to $87 million, up 274 percent from $23.5 million from the same quarter one year ago.
 Mr. Evans pointed out, "The bank is insulating itself from interest rate change risk which has plagued the industry since the early 1980s. This is accomplished by matching interest rate income and changes produced by loans and investments with the cost and repricing of deposits. This helps the bank to maintain a constant profitable interest rate spread and is being achieved by retaining adjustable rate and short term mortgages and by selling all long term fixed rate loans in the secondary market."
 During the most recent quarter, the bank reduced foreclosed real estate owned to $494,053. Real estate owned as a percentage of assets amounted to .07 percent as compared to .34 percent on the same date one year ago.
 Compared to last year deposits in the bank increased to $520.88 million from $518.79 million and assets rose to $740.83 million from $695.96 million.
 In July 1992, the bank issued 1,437,500 shares of stock at $8.75 per share and increased the bank's capital to $37.64 million as of Sept. 30, 1992, as compared to $25 million one year earlier.
 Mutual Savings Bank serves central and southern Michigan with 25 full service offices and several loan production offices. It is the seventh largest savings bank headquartered in the State.
 MUTUAL SAVINGS BANK, FSB AND SUBSIDIARY
 Consolidated Balance Sheets
 9/30/92 12/31/91
 (Unaudited)
 ASSETS
 Cash and cash equivalents $ 21,805,757 $ 18,623,630
 Investment securities (market
 value of $37,194,393 in 1992
 and $146,996,622 in 1991) 37,940,256 147,221,678
 Mortgage-backed securities
 (market value of $412,408,556
 in 1992 and $237,749,292 in 1991) 408,152,438 231,560,746
 Loans, net of allowance for loan
 losses of $2,653,849 in 1992
 and $2,986,641 in 1991 248,354,875 283,168,197
 Real estate owned, net 494,053 2,411,913
 Federal Home Loan Bank stock,
 at cost 6,379,600 6,379,600
 Premises and equipment, net 8,113,799 8,565,975
 Accrued interest receivable, net 3,949,358 4,744,086
 Security sales and payments
 receivable 990,030 446,880
 Prepaid expenses and other assets 1,733,182 663,395
 Excess of cost over net assets
 acquired 2,921,061 3,538,314
 Total assets 740,834,409 707,324,414
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Deposits (net of deferred losses
 on hedge transactions of $4,868,920
 in 1992 and $6,210,584 in 1991) 516,011,751 522,676,394
 Securities sold under agreements to
 repurchase (net of deferred losses
 on hedge transactions of $31,082
 in 1992 and $5,290,497 in 1991) 173,400,918 149,651,502
 Other borrowed money 862,500 0
 Advance payments by borrowers for
 taxes and insurance 2,793,207 1,987,536
 Accrued interest payable, net 3,620,744 4,243,649
 Other liabilities 6,503,482 3,327,233
 Total liabilities 703,192,602 681,886,314
 Commitments and contingencies -- --
 Common stock ($.01 par value, 20 million
 shares authorized, 1,437,500 shares
 issued and outstanding) 14,375 0
 Additional paid-in capital 10,895,669 0
 Employee stock ownership plan
 loan guarantee (862,500) 0
 Unearned compensation (209,636) 0
 Retained earnings 27,803,899 25,438,100
 Total stockholders' equity 37,641,807 25,438,100
 Total liabilities and stockholders'
 equity 740,834,409 707,324,414
 (Dollars in thousands) As of Sept. 30, 1992
 GAAP/Regulatory Capital: Amount Ratio Required
 Tangible Capital $34,721 4.71 pct. 1.50 pct.
 Core Capital 37,642 5.10 pct. 3.00 pct.
 Risk - based capital 39,983 13.18 pct. 7.20 pct.
 MUTUAL SAVINGS BANK, FSB AND SUBSIDIARY
 Consolidated Statements of Income
 (Unaudited)
 Period ended Three months Nine months
 Sept. 30 1992 1991 1992 1991
 Interest Income:
 Interest and fees
 on loans $5,171,493 $8,844,729 $17,315,648 $28,234,323
 Interest on mortgage-
 backed securities 6,715,506 2,122,276 17,607,701 9,228,503
 Interest on investment
 securities 906,800 3,966,356 5,211,273 9,563,228
 Other interest income 325,887 677,305 1,068,687 1,724,144
 Total interest
 income 13,119,686 15,610,666 41,203,309 48,750,198
 Interest Expense:
 Int. on deposits 8,852,558 7,223,473 26,863,519 28,289,727
 Interest on short-
 term borrowings 2,298,564 6,472,890 8,584,541 13,866,643
 Total int. exp. 11,151,122 13,696,363 35,448,060 42,156,370
 Net int. income 1,968,564 1,914,303 5,755,249 6,593,828
 Provision (credit)
 for loan losses: 0 (5,892) 0 (4,344)
 Net interest income
 after provision
 (credit) for loan
 losses 1,968,564 1,920,195 5,755,249 6,598,172
 Other Income (loss):
 Servicing income and
 other fees 1,663,055 1,453,294 4,519,320 3,664,406
 Net loss on sale of
 premises and equipment
 and real estate
 owned (280,044) (4,764) (312,278) (48,115)
 Net gain (loss)
 on sale of investment
 securities (1,803,353) (255,311) (2,121,926) 1,114,480
 Net gain on sale of
 mortgages and mortgages
 and mortgage-backed
 securities 9,039,979 1,278,813 13,259,143 3,705,764
 Loss from financial
 futures
 adjustment (4,381,981) 0 (4,381,981) 0
 Other, net 61,915 410,909 243,293 603,674
 Total other income 4,299,571 2,882,941 11,205,571 9,040,209
 Other Expenses:
 Salaries and employee
 benefits 1,493,644 1,507,435 4,528,074 4,844,130
 Occupancy, equipment
 and supplies 756,986 740,822 2,356,662 2,430,040
 Federal insurance
 premiums 297,978 299,142 883,322 887,609
 Amortization of excess
 of cost over net
 assets acquired 205,752 276,640 617,254 829,918
 Non-recurring reserves
 and charges 1,353,237 0 2,271,708 0
 Other 640,370 644,442 3,505,225 2,975,921
 Total other exp. 4,747,967 3,468,481 14,162,245 11,967,618
 Income before income
 tax expense and
 extraord. item 1,520,168 1,334,655 2,798,575 3,670,763
 Income tax expense 2,819,278 171,800 3,717,278 1,012,000
 Income (loss) before
 extraord. item (1,299,110) 1,162,855 (918,703) 2,658,763
 Extraordinary item -
 utilization of net
 operating loss
 carryforwards 2,419,500 141,800 3,284,500 936,100
 Net income 1,120,390 1,304,655 2,365,797 3,594,863
 Earnings per share:(A)
 Income (loss) before
 extraordinary item 0.00 -- 0.00 --
 Extraordinary item -
 utilization of net
 operating loss
 carryforwards 0.77 -- 0.77 --
 Net income 0.77 -- 0.77 --
 (A) Earnings per share since stock conversion, July 16, 1992
 MUTUAL SAVINGS BANK, FSB
 FINANCIAL HIGHLIGHTS
 (Dollars in thousands, except per share date)
 Yr Ended
 For Three Months Ended 9/30: 1992 1991 Pct Chg 12/31/91
 (Unaudited)
 Net interest income 1,969 1,914 2.9
 Net income 1,120 1,305 (14.2)
 Loans originated:
 Residential real estate 87,771 23,460 274.1
 Return on average assets 0.61 pct 0.76 pct
 Return on average equity 12.46 pct 21.38 pct
 Per Common Share:
 Primary earnings(1) 0.77 --
 For Nine Months Ended 9/30:
 Net interest income 5,755 6,594 (12.7) 8,809
 Net income 2,366 3,595 (34.2) 4,020
 Loans Originated:
 Residential real estate 238,612 50,649 371.1 87,117
 Return on average assets 0.44 pct 0.68 pct 0.57 pct
 Return on average equity 10.73 pct 20.97 pct 16.75 pct
 Per Common Share:
 Primary earnings(1) 0.77 -- --
 Gen'l & admin expenses to
 average assets 2.08 pct 2.11 pct 2.20 pct
 Net interest margin
 before hedge 3.01 pct 2.78 pct 2.95 pct
 Net interest margin
 after hedge 1.13 pct 1.31 pct 1.31 pct
 Loan loss reserves to non-
 performing assets 76.62 pct 65.30 pct 65.43 pct
 Non-performing assets to
 total assets 0.47 pct 0.69 pct 0.65 pct
 At 9/30:
 Total assets 740,834 695,957 6.4 707,324
 Loans receivable 248,355 311,417 (20.3) 283,168
 Deposits 516,012 512,237 0.7 522,676
 Borrowings 173,401 146,196 18.6 149,652
 Stockholders equity(2) 37,642 25,012 50.5 25,438
 Tangible equity 34,721 21,197 63.8 21,274
 Loans services for others 382,261 255,675 49.5 293,149
 Number of common shares
 outstanding 1,437,500 -- --
 Book value at period end 26.19 -- --
 Tangible book value at
 period end 24.15 -- --
 Tangible capital to tangible
 assets 4.71 pct 2.96 pct 3.03 pct
 Core capital to core assets 5.10 pct 3.52 pct 3.53 pct
 Risk-based capital to risk-
 based assets 13.18 pct 7.31 pct 8.24 pct
 (1) Earnings per share since stock conversion, July 16, 1992
 (2) 1991 amount represents retained earnings only.
 -0- 10/27/92
 /CONTACT: Wendell L. Evans Jr., chairman and chief executive officer or Bernard D. Williams, chief financial officer of Mutual Savings Bank, f.s.b., 517-892-3511/
 (MSBK) CO: Mutual Savings Bank, f.s.b. ST: Michigan IN: FIN SU: ERN


LD-OE -- NY112 -- 5654 10/27/92 17:12 EST
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Date:Oct 27, 1992
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