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PALFED, INC. ANNOUNCES SECOND QUARTER EARNINGS FOR 1993

 AIKEN, S.C., July 29 /PRNewswire/ -- As a result of corporate initiatives announced earlier, PALFED, Inc. (NASDAQ-NMS: PALM), the holding company for Palmetto Federal Savings Bank of South Carolina ("Palmetto"), reported a net loss of $4.9 million or $3.29 per common share for the second quarter of 1993 compared to net earnings of $195,000 or $0.13 per common share for the same quarter in 1992 and a net loss of $4.6 million or $3.07 per common share for the six months ended June 30, 1993, which compares to net earnings of $1.7 million or $1.19 per common share for the same period of 1992. Earnings for the six months ended June 30, 1992, included the cumulative effect of a change in accounting principle of $1,086,000 or $0.76 per common share.
 The decrease in net earnings was principally related to the second quarter provision for estimated loan losses of $3.6 million, provision for estimated losses on foreclosed real estate of $0.5 million, and a reduction of $4.0 million in the carrying value of the real estate at Woodside Plantation. The second quarter provision for estimated loan losses of $3.6 million and the provision for estimated losses on foreclosed real estate of $0.5 million relates to management's initiation of a strategy to manage more aggressively certain nonperforming loans, real estate owned, restructured loans, as well as management's estimate of current local economic conditions.
 In conjunction with ongoing corporate strategic planning, PALFED is exploring various alternatives for the disposition of Woodside Plantation, including a possible sale of the entire Woodside project. A sale of the entire project would likely result in a sales price that is lower than the current carrying value of the project, which assumes the continued sale of developed homesites in accordance with PALFED's historical marketing strategy. As a result, PALFED reduced the carrying value of its investment in Woodside Plantation by approximately $4.0 million, which reflects management's current estimate of the charge to earnings that would be realized upon such a sale in the current market.
 The reduction in the carrying value of the Woodside Plantation project and the addition to the loan loss provision caused Palmetto Federal to not meet its risk based regulatory capital requirement as of June 30, 1993. The Bank exceeds current core and tangible capital requirements as prescribed by the regulators. Management anticipates the Bank will pass and exceed fully phased-in capital requirements upon successful completion of its proposed rights offering.
 PALFED, Inc. is a South Carolina corporation whose principle subsidiary, Palmetto Federal Savings Bank of South Carolina, is a federally chartered stock savings bank. Palmetto Federal operates 14 full-service banking offices in western and southern South Carolina. The bank also operates two limited service retail branches and four mortgage lending offices. At June 30, 1993, PALFED, Inc. had consolidated assets of $676.2 million and deposits of $486.0 million.
 PALFED, INC.
 Unaudited Financial Information
 (Dollars in thousands)
 Three months ended Six months ended
 June 30, June 30,
 1993 1992 1993 1992
 Net interest income $3,876 $4,593 $7,993 $8,746
 Provision for loan losses (3,598) (1,046) (4,585) (1,717)
 Non-interest income (2,699) 917 (1,030) 2,224
 Non-interest expense (4,071) (4,111) (8,323) (8,132)
 Pre-tax income (loss)
 before the cumulative
 effect of a change in
 accounting principle (6,492) 353 (5,945) 1,121
 Income tax expense (benefit) (1,613) 158 (1,367) 504
 Income before the cumulative
 effect of a change in
 accounting principle ($4,879) $195 ($4,578) $ 617
 Cumulative effect of a change
 in accounting principle 1,086
 Net income (loss) ($4,879) $195 ($4,578) $1,703
 Earnings per share:
 Income (loss) before
 cumulative effect ($3.29) $0.13 ($3.07) $0.43
 Cumulative effect 0.00 0.00 0.76
 Net income (loss) ($3.29) $0.13 ($3.07) $1.19
 June 30, Dec. 31, June 30,
 1993 1992 1992
 Total assets $676,214 $746,362 $767,369
 Loans receivable net 448,114 452,820 496,979
 Deposits 485,996 520,613 534,148
 Goodwill & intangibles 13,476 13,955 14,433
 Stockholders' equity 34,873 39,375 38,213
 Tangible equity per common share $14.48 $17.33 $16.54
 Nonperforming Assets and
 Restructured Loans
 Restructured loans $17,282 $25,511 $23,322
 Nonaccrual loans 14,538 7,197 13,690
 Foreclosed real estate (including
 insubstance foreclosures) 17,766 9,575 17,024
 Specific valuation allowances (3,488) (1,030) (1,545)
 Total $46,098 $41,253 $52,491
 Allowance for loan losses to
 Loans Receivable, Net 2.37pct 1.82pct 1.29pct
 Nonperforming assets and
 restructured loans to Loans
 Receivable, Net 10.29pct 9.11pct 10.56pct
 Nonperforming assets and
 restructured loans
 to Total Assets 6.82pct 5.53pct 6.84pct
 PALFED, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Quarters Ended Six Months Ended
 June 30 June 30 June 30 June 30
 1993 1992 1993 1992
 (In thousands, except per share data)
 Interest income:
 Loans and mortgage-
 backed securities $11,341 $14,406 $23,626 $28,513
 Investment securities 301 691 653 1,560
 Other interest income 124 93 285 245
 Total interest income 11,766 15,190 24,564 30,318
 Interest expense:
 Savings deposits 5,556 7,464 11,630 15,601
 Other borrowings 2,334 3,133 4,941 5,971
 Total interest expense 7,890 10,597 16,571 21,572
 Net interest income 3,876 4,593 7,993 8,746
 Provision for estimated
 losses on loans 3,598 1,046 4,585 1,717
 Net interest income after
 provision for losses 278 3,547 3,408 7,029
 Other income:
 Profit on sale of loan
 servicing rights 142
 Profit on sales of assets
 held for sale 753 692 1,478 750
 Unrealized loss on mortgage
 derivative securities (940) (58) (940)
 Additional accretion of
 discount on prepayment
 of loans purchased 15 28 35 46
 Late charge and other fees 119 165 278 400
 Real estate operations (4,634) (77) (4,944) (140)
 Checking transaction fees 475 535 980 1,048
 Financial services fees 252 209 446 391
 Other 321 305 613 669
 Total other income (2,699) 917 (1,030) 2,224
 General and administrative expenses:
 Compensation and employee
 benefits 1,771 1,749 3,934 3,508
 Amortization of goodwill 239 239 478 478
 Occupancy and equipment 636 652 1,274 1,342
 Advertising and public relations 118 241 246 428
 Data processing 258 271 516 551
 Federal insurance premium 394 340 799 680
 Professional and outside
 service fees 470 400 714 698
 Other 185 219 362 447
 Total general and
 administrative expenses 4,071 4,111 8,323 8,132
 Income (loss) before provision
 for income taxes and cumulative
 effect of a change in accounting
 principle (6,492) 353 (5,945) 1,121
 Provision (benefit) for
 income taxes (1,613) 158 (1,367) 504
 Income (loss) before cumulative
 effect of a change in
 accounting principle (4,879) 195 (4,578) 617
 Cumulative effect of a
 change in accounting
 principle 1,086
 Net income (loss) ($4,879) $195 ($4,578) $1,703
 Earnings (loss) per share ($3.29) $0.13 ($3.07) $1.19
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 (Unaudited)
 June 30 Dec. 31
 1993 1992
 (dollars in thousands)
 ASSETS
 Cash $11,086 $33,865
 Interest-bearing deposits
 in other banks 3,962 5,032
 Investment securities held for sale
 (Market value of $20,128 and
 $52,675, respectively) 20,074 52,675
 Investment securities, at cost
 (Market value of $5,548 and
 $5,343, respectively) 5,200 5,199
 Loans and mortgage-backed
 securities held for sell
 (Market value of $18,660
 and $30,328, respectively) 17,612 29,798
 Mortgage-backed securities, at
 cost (Market value of $101,055
 and $96,563, respectively) 99,657 96,402
 Loans receivable 448,114 452,820
 Investment in real estate 29,130 26,033
 Investment in Federal Home Loan
 Bank stock 10,458 10,164
 Premises and equipment, net 4,717 5,074
 Goodwill and intangible value
 of branch network, net 13,476 13,955
 Accrued interest 3,863 4,746
 Other assets 8,865 10,599
 $676,214 $746,362
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Savings deposits $485,996 $520,613
 Federal Home Loan Bank advances 148,100 180,100
 Advance payments by borrowers
 for taxes and insurance 1,244 416
 Other borrowed money 1,503 1,164
 Other liabilities 4,498 4,694
 Total liabilities 641,341 706,987
 Commitments and contingencies
 Stockholders' equity:
 Common stock, $1.00 par value;
 authorized 10,000,000 shares;
 1,467,896 and 1,466,896 shares
 issued and outstanding, respectively 1,478 1,467
 Additional paid-in capital 12,151 12,086
 Retained earnings, substantially
 restricted 21,244 25,822
 Total stockholders' equity $ 34,873 $ 39,375
 $676,214 $746,362
 -0- 7/29/93
 /CONTACT: Darrell R. Rains, Executive Vice President and Chief Financial Officer, PALFED, Inc., 803-642-1328/
 (PALM)


CO: PALFED, Inc.; Palmetto Federal Savings Bank of South Carolina ST: South Carolina IN: FIN SU: ERN

CM-JM -- CH002 -- 7177 07/29/93 09:55 EDT
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