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POUGHKEEPSIE SAVINGS BANK ANNOUNCES SECOND QUARTER EARNINGS AND THE TERMINATION OF REGULATORY DIRECTIVE

 POUGHKEEPSIE, N.Y., July 26 /PRNewswire/ -- Poughkeepsie Savings Bank, FSB, (NASDAQ: PKPS) today reported net income of $328 thousand, or $.07 per share, for the quarter ended June 30, 1993 compared with a net loss of $2.4 million, or $.67 per share, for the second quarter of 1992. For the six months ended June 30, 1993, net income of $4.7 million, or $1.14 per share is reported compared with a net loss of $5.9 million, or $1.63 per share, for the first six months of 1992.
 The bank also reported that it was notified by the Office of Thrift Supervision, by letter dated July 22, 1993, that, as a result of the bank's substantially improved capital position, the Prompt Corrective Action Directive issued April 13, 1993 was terminated. The bank's core, tangible and risk-based capital ratios at June 30, 1993 were 6.74 percent, 6.74 percent and 11.48 percent, respectively, all of which substantially exceed regulatory and statutory requirements and which have resulted in the bank being designated by the OTS as "well capitalized." The termination of the PCA Directive will significantly reduce certain regulatory and compliance obligations. The bank, however, does not expect the termination to have a substantial effect on its plan of operations since it anticipates that it will generally operate in a manner consistent with its capital plan even though the OTS has relieved the bank from complying with the capital plan.
 In addition to the second quarter and year-to-date earnings reported, the recapitalization of the bank and the termination of the PCA Directive, the bank continued to improve its level of non-performing assets which were $48.6 million at June 30, 1993. Commenting on the results for the second quarter, Joseph B. Tockarshewsky, chairman, president and chief executive officer, said, "I am pleased that we have generated operating earnings, a strong capital position and have shown another strong performance in the resolution of non-performing assets. These events and the lifting of the PCA Directive should augur well for the balance of 1993 and beyond."
 Total assets at June 30, 1993 were $710 million and book value per share was $3.88. The shares outstanding at June 30, 1993 were 12,407,475 which reflects an increase of approximately 8.5 million shares resulting from the recently completed rights offering.
 Non-performing assets, which include loans delinquent 90 days or more as to interest, non-accrual loans, loans in foreclosure, other real estate owned and investments in joint ventures, were $28.5 million (net of $20.1 million of reserves) at June 30, 1993, or 4.0 percent of total assets (6.85 percent of total assets before reserves). The June 30, 1993 levels indicate improvements from the levels of non-performing assets at March 31, 1993 which were $44.7 million (net of $20.3 million of reserves), or 6.3 percent of total assets (9.15 percent of total assets before reserves). The reduced levels of non-performing assets were primarily the result of the return to performing status of two commercial real estate loans aggregating $4.9 million, the reduction of other real estate owned of $10.3 million through the sale of several properties as well as net cash received on other properties, the sale of the remaining joint venture interest and a moderate reduction in residential non-performing assets.
 Net interest income was $4.6 million for the quarter ended June 30, 1993 compared with $3.0 million for the same quarter of 1992. For the year-to-date periods of 1993 and 1992, net interest income was $8.5 million and $6.5 million, respectively. Net interest margins for the second quarter of 1993 were 2.75 percent compared with 1.41 percent in the second quarter of last year. The improvement was due to the significant resolution of non-performing assets and to substantial reductions in the cost of deposits and the cost of and amount of borrowings. Average interest earning assets exceeded average interest bearing liabilities for the quarter ended June 30, 1993 by $5.9 million as compared with substantial deficiencies in prior quarters.
 Total operating expenses were $4.6 million for the second quarter of 1993 compared with $8.8 million in the same quarter of 1992. On a year- to-date basis, for 1993 and 1992, total operating expenses were $9.2 million and $20.1 million, respectively. These reduced levels of operating expenses in the 1993 periods not only reflect the sale of the bank's mortgage banking subsidiary, but also resulted from lower operating expenses at the bank of approximately $0.6 million and $1.3 million for the second quarter and year-to-date periods of 1993 as compared with 1992. Lower levels of net cost of operations of other real estate owned for the three and six month periods also contributed to these improvements.
 Poughkeepsie Savings Bank is a community banking institution whose principal market is the Mid-Hudson Valley region of New York, where it operates seven branches. The bank's deposits are insured by the Federal Deposit Insurance Corporation.
 POUGHKEEPSIE SAVINGS BANK, FSB
 Condensed Consolidated Statement of Condition
 (Dollars in thousands, except per share data)
 (Unaudited)
 June December
 1993 1992
 Assets:
 Cash & equivalents $ 13,824 $ 13,824
 Securities 223,280 173,490
 Total loans 454,290 486,563
 Less allowance for loan losses (20,100) (20,293)
 Net loans 434,190 466,270
 Other real estate & joint venture 29,594 55,652
 Other assets 9,105 17,397
 Total assets $709,993 $726,633
 Liabilities and stockholders' equity:
 Savings accounts $156,726 $152,475
 Time deposits 209,358 214,998
 Money market deposits 47,816 57,880
 Demand deposits 32,387 32,002
 Total due depositors 446,287 457,355
 Borrowings 204,435 229,676
 Other liabilities 11,388 16,274
 Total liabilities 662,110 703,305
 Stockholders' equity 47,883 23,328
 Total liabilities and stockholders'
 equity $709,993 $726,633
 Book value per share $3.88 $6.14
 Shares outstanding (less
 ESOP unallocated shares) 12,326,747 3,799,225
 POUGHKEEPSIE SAVINGS BANK, FSB
 Summary of Nonperforming Assets
 (Unaudited; dollars in thousands)
 June March December
 1993 1993 1992
 Loans 90 days or more past
 due as to interest and accounted
 for on a non-accrual basis:
 Residential real
 estate loans $ 9,293 $ 9,244 $ 8,754
 Commercial real
 estate loans 9,034 13,978 10,128
 Commercial business 557 825 1,136
 Loans 90 days or more past
 due as to interest
 and accruing 164 205 576
 Total non-performing loans 19,048 24,252 20,594
 Other real estate 29,594 40,187 55,007
 Investment in joint venture -- 614 645
 Total non-performing assets $48,642 $65,053 $76,246
 POUGHKEEPSIE SAVINGS BANK, FSB
 Condensed Consolidated Statement of Operations
 (Unaudited; dollars in thousands, except per share data)
 Periods ended Three Months Six Months
 June 30 1993 1992 1993 1992
 Interest income $12,128 $16,778 $24,133 $36,490
 Interest expense 7,574 13,784 15,612 29,949
 Net interest income 4,554 2,994 8,521 6,541
 Provision for loan losses 100 675 200 2,925
 Net interest income
 after provision 4,454 2,319 8,321 3,616
 Net securities gains (losses) -- (15) 4,654 3,270
 Net gain (loss) on sale of
 mortgage loans (5) 374 (3) 579
 Prepayment penalty - FHLB
 advances -- -- -- (633)
 Gain on sale of servicing 97 1,731 151 2,963
 Loan servicing income -- 1,230 -- 2,569
 Other income 365 819 701 1,811
 Total other income 457 4,139 5,503 10,559
 Net cost of operation of other
 real estate and joint
 ventures 499 655 901 3,691
 Other operating expenses 4,084 8,185 8,250 16,388
 Total operating expenses 4,583 8,840 9,151 20,079
 Net income (loss) $ 328 $(2,382) $ 4,673 $(5,904)
 Net income (loss) per share $0.07 $(0.67) $1.14 $(1.63)
 Weighted average shares
 outstanding 4,394,193 3,643,210 4,104,285 3,639,511
 Average interest earning
 assets $661,324 $848,720 $655,423 $905,661
 Yield on interest
 earning assets (pct.) 7.34 7.91 7.36 8.06
 Average interest
 bearing liabilities $655,432 $902,952 $661,126 $961,001
 Yield on interest
 bearing liabilities (pct.) 4.63 6.14 4.76 6.27
 Excess or (deficiency) of
 average interest earning assets
 over average interest bearing
 liabilities $ 5,892 $(54,232) $ (5,703) $(55,340)
 Interest rate spread (pct.) 2.71 1.77 2.60 1.79
 Interest rate margin (pct.) 2.75 1.41 2.60 1.44
 -0- 7/26/93
 /CONTACT: Joseph B. Tockarshewsky, chairman, president and chief executive officer, 914-431-6211, or Robert J. Hughes, executive vice president and chief financial officer, 914-431-6386, both of Poughkeepsie Savings Bank/
 (PKPS)


CO: Poughkeepsie Savings Bank, FSB ST: New York IN: FIN SU: ERN

LD-MP -- NY092 -- 5915 07/26/93 17:15 EDT
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Date:Jul 26, 1993
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