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SC BANCORP ANNOUNCES RESTRUCTURINGS AND THIRD QUARTER LOSS

 DOWNEY, Calif., Oct. 22 /PRNewswire/ -- SC Bancorp (AMEX: SCK) and its subsidiary, Southern California Bank, today announced unaudited results for the third quarter Sept. 30, 1993. Citing the addition of reserves for potential loan losses and expenses associated with restructurings to achieve cost savings, the company reported a loss for the third quarter of $4,690,000 and a year-to-date loss of $3,580,000. This compares with 1992 earnings of $557,000 and a loss of $1,978,000 for the third quarter and first nine months of 1992, respectively. Both of these steps were taken to address the continued economic recession which Management anticipates will affect Southern California through 1994 and into 1995 and result in further erosion values of California commercial real estate.
 Larry D. Hartwig, president and chief executive officer, said, "Recent appraisals on property held as collateral for real estate loans and on `Other Real Estate Owned' have shown significant erosion of values and contributed to Management's decision to increase the reserve for possible loan losses. Lower real estate market values caused the bank to re-examine a substantial portion of its commercial real estate loan portfolio and establish a higher reserve. This addition to our reserve for possible loan losses brings reserves to 5.6 percent of total loans, an increase from 3.0 percent of total loans at June 30, 1993, and attempts to anticipate losses the could be incurred during the next 24 months."
 A restructuring of the organization and its staffing has been initiated so that the bank will have a more efficient and lower cost delivery system. A significant portion of the restructuring was previously announced in the form of branch consolidations in Downey and Anaheim, Calif., which are scheduled to be completed by year-end 1993. The final pieces evolve around re-engineering several job functions in the bank's branches and administration. These measures were taken to establish a long-range plan to respond to the prolonged California recession and the changing business environment for banks. Additionally, the bank announced that a recently completed regular examination of the bank by the FDIC will likely result in the bank entering into a Memorandum of Understanding with the FDIC and the California State Banking Department. Although the exact terms of this Memorandum have not yet been determined, Management anticipates that they will include an agreement to achieve and maintain a specified Tier 1 capital ratio that is higher than the bank's current ratio to reduce classified assets to specific levels and to refrain from paying cash dividends without prior regulatory approval.
 For the first nine months, SC Bancorp reported total revenues of $34,716,000, up from the prior year level of $33,476,000. During the third quarter, SC Bancorp took loan loss provisions of $9,235,000 and net of loan losses increased its total reserve to $12,400,000. Additionally, a special charge of $950,000 was taken to cover the estimated costs associated with the restructuring process.
 "We remain optimistic based on the bank's experienced staff and current strong Balance Sheet, plus we have achieved our objective to deliver products and services more cost effectively," Hartwig added. On Sept. 30, 1993, shareholders' equity totaled $27,614,000, and the bank had capital ratios, including a 5.3 percent Tier 1 capital ratio, that continue to exceed all minimum capital requirements that are generally applicable to banks. The company's Management believes that with the additions to the loan loss reserves, the company is now well-positioned to endure the challenges of the recessionary economy and to take advantage of the recover as it occurs. With the anticipated completion of the restructuring, the bank will be well positioned to continue to deliver high quality customer service and to meet consumer and business financing needs for its clients. In addition, the bank intends to begin offering residential mortgage and Small Business Administration (SBA) loan products.
 Southern California Bank currently services 17 branches in Southern Los Angeles County and Northern Orange County.
 SC BANCORP AND ITS SUBSIDIARY
 SOUTHERN CALIFORNIA BANK
 Consolidated Balance Sheets
 ($ in thousands)
 Unaudited Unaudited
 Sept. 30, 1993 Sept. 30, 1992
 Assets
 Cash and due from banks $26,883 $23,233
 Securities held for investment:
 (Market Value: 1993 - $95 95 164,913
 1992 - $168,280)
 Securities available for sale:
 (Market Value: 1993 - $50,008) 49,307 ---
 Federal funds sold 100,100 5,000
 Loans 222,067 269,056
 Less:
 Unearned income (103) (200)
 Deferred fee income (316) (482)
 Allowance for possible loan losses (12,400) (7,380)
 Net loans 209,248 260,994
 Premises, equipment, land and
 leasehold improvements 9,288 7,438
 Real estate owned foreclosure 3,791 4,538
 Other assets 14,076 10,413
 Total Assets $412,788 $476,529
 Liabilities
 Deposits
 Interest bearing $266,958 $334,878
 Non-interest bearing 107,483 92,392
 Total deposits 374,441 427,270
 Treasury tax and loans 6,856 7,044
 Repurchase agreements --- 10,000
 Other liabilities 3,877 1,595
 Total liabilities 385,174 445,909
 Stockholders' Equity
 Common stock, no par or stated
 value; authorized 20,000,000
 shares: shares issued and
 outstanding 3,468,505 23,436 23,436
 Retained earnings 4,178 7,184
 Total stockholders' equity 27,614 30,620
 Total liabilities & stockholders'
 equity $412,788 $476,529
 SC BANCORP AND ITS SUBSIDIARY
 SOUTHERN CALIFORNIA BANK
 Consolidated Income Statements
 Nine Months Ended Sept. 30
 (In thousands)
 except per share amounts
 Nine Months Unaudited
 Sept. 30, 1993 Sept. 30, 1992
 Total revenue on earning assets $22,954 $27,399
 Total cost of funds 7,897 10,637
 Net interest income on
 earning assets 15,057 16,762
 Provision for loan losses 11,761 8,685
 Provision for writedowns/selling
 expenses -- OREO 2,487 ---
 Net interest income after provisions 809 8,077
 Non-interest income 11,762 6,077
 Non-interest expense 17,599 17,733
 Net loss before income taxes
 and cumulative effect of
 accounting change (5,028) (3,579)
 Income tax benefit (1,489) (1,601)
 Net loss before cumulative effect
 of change in accounting principle (3,539) (1,978)
 Cumulative effect of change in
 accounting principle (41) ---
 Net income (loss) ($3,580) ($1,978)
 Earnings Per Share:
 Income before cumulative effect of
 accounting change ($1.02) ($0.57)
 Cumulative effect of change in
 accounting principle (0.01) ---
 Net income (loss) ($1.03) ($0.57)
 Total number of shares outstanding 3,469 3,469
 Three Months Ended Sept. 30
 (in thousands)
 except per share amounts
 Three Months Unaudited
 Sept. 30, 1993 Sept. 30, 1992
 Total revenue on earning assets $7,215 $8,545
 Total cost of funds 2,363 3,146
 Net interest income on earning assets 4,852 5,399
 Provision for loan losses 9,235 2,033
 Provision for writedowns/selling
 expenses -- OREO 575 ---
 Net interest income (loss) after
 provision (4,958) 3,366
 Non-interest income 4,982 3,168
 Non-interest expense 6,964 5,679
 Net income (loss) before
 income taxes (6,940) 855
 Income tax expense (benefit) (2,250) 298
 Net income (loss) ($4,690) $557
 Total number of shares
 outstanding 3,469 3,469
 Earnings (loss) per share ($1.35) $0.16
 -0- 10/22/93
 /CONTACT: Norman A. Morales, CFO, SC Bancorp, 310-923-9811/
 (SCK)


CO: SC Bancorp; Southern California Bank ST: California IN: FIN SU: ERN

LS-LM -- LA007 -- 5865 10/22/93 16:03 EDT
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Date:Oct 22, 1993
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