First Federal Reports Quarterly Earnings -- Record net interest
income, up 52% over previous year -- Operating results impacted by
loan loss provisions and MSR valuation allowance LA CROSSE, Wis.,
April 21 /PRNewswire-FirstCall/ -- First Federal Capital Corp ,
parent company of First Federal Capital Bank, reported net income
for the three months ended March 31, 2004, of $8.04 million or
$0.36 per diluted share, which compares to $8.01 million or $0.40
per diluted share in the same quarter last year. Excluding the
after-tax impact of $1.0 million in loss provisions on two
commercial loan relationships and a $631,000 loss provision on
mortgage servicing rights ("MSRs"), First Federal's earnings would
have been $9.1 million or $0.41 per share in the most recent
quarter, an increase of 14%. Net interest income in the first
quarter reached a record level, increasing $9.5 million or 52% from
the first quarter of 2003. This increase was due in part to a
significant increase in earning assets as a result of loan growth,
security purchases, and the acquisition of Liberty Bancshares,
Inc., in the fourth quarter of last year. Also contributing was a
109 basis point improvement in interest rate spread, from 2.17% in
the first quarter of 2003 to 3.26% in this year's first quarter.
The most recent quarter represented the third straight period in
which the Corporation's interest rate spread has improved,
increasing by another four basis points from the previous quarter.
Jack C. Rusch, First Federal President and CEO noted, "Our net
interest income improved as expected in the most recent quarter.
Looking ahead, we expect market rates to trend higher the rest of
the year as the economy recovers. We believe we will be able to
maintain our interest rate spread at or near current levels in this
environment. As I noted in last quarter's earnings release, the key
to improving our results in 2004 will be our ability to grow loans
and deposits. We are pleased with the growth in both of these areas
in the first quarter and are confident that demand will continue to
improve, which will enable us to meet our asset and earnings growth
goals for the year." During the first quarter, First Federal
purchased $305 million in medium- term collateralized mortgage
obligations ("CMOs") with a weighted average life of 3.0 years.
These purchases were funded by term Federal Home Loan Bank advances
with a weighted average life of 2.4 years. The pre-tax spread on
these transactions was over 200 basis points and is expected to
contribute over $5.0 million to net interest income in 2004. These
purchases were made to maintain the Corporation's capital ratio at
a level deemed appropriate by management. Additional leveraged
purchases of CMOs are not expected in the immediate future,
although there can be no assurances. In addition to the
aforementioned CMO purchases, First Federal acquired $102 million
in shorter-term CMOs during the first quarter. These securities
were funded out of general liquidity and had a weighted average
life of 2.1 years and a yield of approximately 3.5%. Non-interest
income was down $2.3 million or 13% in the first quarter of 2004
compared to the previous year's quarter. Mortgage banking revenue,
which consists of gains on sales of mortgage loans and loan
servicing fees, decreased by $3.8 million or 45%. This decrease was
principally the result of a significant decline in loan
originations and sales in the most recent quarter, due to a more
favorable interest rate environment for loan refinance activity in
the first quarter of last year. Loan sales declined from $666
million in last year's quarter to $205 million in the most recent
quarter, resulting in a $12.4 million or 77% decline in gains on
sales of loans. In addition, the average gain on sale of loans was
2.42% in the first quarter of 2003 compared to 1.83% in the most
recent quarter. This decline, which was in line with expectations,
was caused by a smaller spread between the primary and secondary
markets for mortgage loans. The decline in gains on sales of loans
was partially offset by an $8.5 million improvement in loan
servicing fee income, net of MSR amortization and loss provisions.
MSR amortization in the first quarter of 2003 was significantly
higher than the first quarter of 2004 because of increased loan
refinance activity in 2003. In addition, the first quarter of 2003
included a $1.8 million loss provision on MSRs compared to only
$631,000 in the most recent quarter. Commenting on mortgage banking
revenues, Rusch stated, "The dip in interest rates during the first
quarter resulted in more originations and sales of single-family
mortgage loans than we had anticipated for the period. Rates are up
slightly since the end of the quarter, but the lag effects of the
first quarter dip could sustain mortgage banking revenues into the
second quarter. "Although interest rates remain low by historical
standards, we don't think the mortgage business will see the lows
in rates that we experienced last summer or in the first quarter.
As a result, we continue to expect mortgage banking revenue in 2004
to be significantly lower than it was in 2003. In addition, revenue
mix will shift from gains on sales of loans to loan servicing
fees." The increase in rates since the end of the first quarter
could result in the recapture of most of the $631,000 loss
provision First Federal established on its MSRs in the first
quarter. In addition, amortization of MSRs is expected to be lower
because of reduced refinance activity in a higher rate environment.
Despite management's expectations for interest rates in 2004, a
decline in rates may require First Federal to establish additional
valuation allowances on its mortgage servicing rights as a result
of a likely increase in loan prepayment expectations. Management
anticipates that such valuation allowances would be offset by an
increase in gains on sales of loans, although there can be no
assurances. Community banking revenue, which consists of deposit
account fees, investment services income, and premiums and
commissions on sales of insurance, partially offset the decline in
mortgage banking revenue in the first quarter of 2004, increasing
by $1.5 million or 17% compared to the same quarter in 2003. Rusch
commented, "Community banking revenues continue to experience
double-digit growth at First Federal. This important source of
income increased by 17% over the first quarter of last year and is
running ahead of our budget for the year. Combined with mortgage
banking revenue, this growth resulted in non-interest income equal
to 36% of our total revenue in the first quarter. Although down
quite a bit from 2003, we continue to out-pace our banking peers by
a wide margin in this ratio." Non-interest expense increased by
$6.2 million or 27% in the first quarter compared to the same
period last year. The increase is primarily attributable to an
increase in the number of new banking facilities opened or acquired
in the past year, and an increase in employees. Furthermore, during
the fourth quarter of 2003, the Corporation completed the
acquisition of Liberty, which averaged $2.6 million in non-interest
expense per quarter during 2003. Also contributing was a $341,000
increase in amortization of intangibles due to the Liberty
acquisition. Since March 31, 2003, the number of banking locations
operated by the Corporation has increased by four. The number of
full-time equivalent employees of the Corporation increased by 13%
from 1,240 at March 31, 2003 to 1,396 at the most recent quarter
end. Rusch said, "Our first quarter non-interest expense increased
by only 4% from the fourth quarter and was in line with budget
expectations for the period. We believe increases in non-interest
expense should be seen as a measure of our commitment to build the
infrastructure necessary to support the rollout of our business
banking services to the rest of our major markets. We began
offering business banking products in the Appleton, Wisconsin
market in the most recent quarter and are moving ahead with plans
to extend these product offerings into additional markets in 2004.
With the recent announcement of a market president for the Madison,
Wisconsin market, we expect business services to be available there
during the second quarter of 2004." The Corporation's provision for
loan losses increased from $379,000 in the first quarter of 2003 to
$1.6 million in the first quarter of 2004. During the most recent
quarter, the Corporation charged off $642,000 relating to a $2.6
million loan on a hotel property located in the Twin Cities. The
hotel is currently in bankruptcy and is in process of foreclosure.
Although the Corporation does not expect to incur an additional
loss on this loan, there can be no assurances at this time. In
addition to this loan, the Corporation charged off a $385,000 loan
to another financial institution, which was deemed insolvent during
the period. These two losses reduced after-tax earnings per share
by $0.03. Despite these recent losses, the Corporation's total non-
performing assets have declined since December 31, 2003. In
addition, commercial business loans classified in the Corporation's
three highest risk categories remained stable in the most recent
quarter after improving steadily during the later half of 2003. The
Corporation continues to monitor a $2.7 million loan on an
apartment complex located in Indiana. Although the loan is current,
the property has suffered from low occupancy for an extended period
of time. Although management believes it is possible the
Corporation may incur a loss on the future resolution of this loan,
such loss is not yet probable nor is it estimable at this time.
Asset quality remains strong with the ratio of non-accrual loans to
total loans of 0.37% at March 31, 2004 compared to 0.31% at March
31, 2003. The Corporation's allowance for loan losses to total
non-performing loans stood at 146% as of March 31, 2004 down from
183% one year ago. The Corporation's ratio of allowance for loan
losses to total loans was 0.54% at March 31, 2004, compared to
0.56% on the same date last year. At March 31, 2004, the
Corporation's assets totaled $3.7 billion, up from $3.1 billion a
year ago. Loans held for investment were $2.6 billion compared to
$2.1 billion a year ago, an increase of 25%. Deposits totaled $2.7
billion, an increase of $232 million or 10% over the previous year.
First Federal's first quarter annualized return on average equity
(ROE) was 11.5% compared to 15.4% for the same period a year ago.
Annualized return on average assets (ROA) for the quarter was
0.93%, compared to 1.06% twelve months prior. Stockholders' equity
totaled $284 million, or $12.66 per share. About First Federal
First Federal's banking subsidiary, First Federal Capital Bank, is
headquartered in La Crosse, Wisconsin. Established in 1934, First
Federal is a community bank serving businesses and consumers
through 49 supermarket banks, 42 brick and mortar locations, three
stand-alone loan production offices, a high school banking office
and more than 140 ATMs located in over 45 communities in Wisconsin,
northern Illinois, and Minnesota. The Company serves more than
250,000 households with checking, savings, investment and loan
products. In addition, First Federal provides commercial real
estate lending services and holds a dominant market share position
for residential mortgage lending in many of its markets. The
Company offers business banking products in Rochester and St. Paul,
Minnesota, as well as La Crosse, Wausau, Oshkosh and Appleton,
Wisconsin, and is moving ahead with plans to extend these product
offerings to additional markets in 2004. Certain matters in this
press release are "forward-looking statements" intended to qualify
for the safe harbors from liability as established by the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include words and phrases such as "will likely result,"
"are expected to," "will continue," "is anticipated," "estimate,"
"project," "intends to," or similar expressions. Similarly,
statements that describe First Federal's future plans, objectives
or goals are also forward-looking statements. First Federal wishes
to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date of this
press release, and to advise readers that various factors could
affect First Federal's financial performance and could cause actual
results for future periods to differ materially from those
anticipated or projected. Such factors include, but are not limited
to: (i) general market interest rates, (ii) general economic
conditions, (iii) legislative/regulatory changes, (iv) monetary and
fiscal policies of the U.S. Treasury and Federal Reserve, (v)
changes in the quality or composition of First Federal's loan and
investment portfolios, (vi) demand for loan products, (vii) deposit
flow, (viii) competition, (ix) demand for financial services in
First Federal's markets, and (x) changes in accounting principles,
policies or guidelines. FIRST FEDERAL CAPITAL CORP STATEMENT OF
FINANCIAL CONDITION March 31 December 31 March 31 2004 2003 2003
ASSETS Cash and due from banks $85,782,964 $94,535,753 $88,137,004
Interest-bearing deposits with banks 8,014,625 6,444,374
110,619,132 Mortgage-backed and related securities: Available for
sale, at fair value 448,839,953 386,862,372 580,455,994 Held for
investment, at cost 296,946,310 613,076 9,476,827 Loans held for
sale 37,795,579 16,113,217 48,708,133 Loans held for investment,
net 2,572,865,312 2,518,683,388 2,052,934,722 Federal Home Loan
Bank stock 60,596,000 59,634,800 56,325,100 Accrued interest
receivable, net 17,327,935 15,802,753 16,807,760 Office properties
and equipment 54,222,170 53,020,583 36,934,376 Mortgage servicing
rights, net 37,944,402 36,340,856 27,789,420 Goodwill 78,063,720
78,168,866 38,546,438 Other intangible assets 12,836,291 13,358,976
5,089,842 Other assets 31,861,953 28,745,265 21,294,521 Total
assets $3,743,097,213 $3,308,324,280 $3,093,119,269 LIABILITIES AND
STOCKHOLDERS' EQUITY Deposit liabilities $2,672,071,943
$2,552,837,027 $2,439,880,689 Federal funds purchased 46,200,000
24,500,000 - Federal Home Loan Bank advances 650,200,000
373,075,000 376,250,000 Other borrowings 36,861,913 43,624,308
13,521,180 Advance payments by borrowers for taxes and insurance
4,944,540 1,484,734 4,435,531 Accrued interest payable 2,676,798
2,234,905 2,818,283 Other liabilities 46,045,110 33,979,161
44,953,235 Total liabilities 3,459,000,304 3,031,735,135
2,881,858,918 Common stock, $.10 par value 2,243,867 2,239,477
2,021,593 Additional paid-in capital 87,901,722 87,323,995
46,577,431 Retained earnings 193,508,742 188,319,179 170,956,527
Treasury stock, at cost (80,400) - (10,180,511) Unearned restricted
stock - - (18,333) Accumulated non-owner adjustments to equity, net
522,978 (1,293,508) 1,903,644 Total stockholders' equity
284,096,909 276,589,144 211,260,351 Total liabilities and
stockholders' equity $3,743,097,213 $3,308,324,280 $3,093,119,269
Actual number of shares outstanding at end of period, net of
treasury stock 22,435,114 22,394,773 19,702,712 Average shares
outstanding used to compute: Diluted earnings per share 22,627,330
20,597,675 19,958,412 Basic earnings per share 22,393,370
20,352,640 19,698,621 FIRST FEDERAL CAPITAL CORP RESULTS OF
OPERATIONS (Dollar amounts in thousands, except per share amounts)
Three Months Mar Mar 2004 2003 Interest on loans $35,547 $32,426
Interest on mortgage-backed and related securities 4,921 3,479
Interest and dividends on investments 993 1,253 Total interest
income 41,461 37,158 Interest on deposit liabilities 10,371 13,657
Interest on FHLB advances and other borrowings 3,339 5,220 Total
interest expense 13,709 18,877 Net interest income 27,752 18,281
Provision for loan losses 1,606 379 Net interest income after
provision for loan losses 26,145 17,902 Community banking revenue
10,313 8,828 Mortgage banking revenue 4,674 8,512 Other income 638
601 Total non-interest income 15,626 17,941 Compensation and
employee benefits 18,554 13,996 Occupancy and equipment 3,578 3,125
Communications, postage, and office supplies 1,754 1,848 ATM and
debit card transaction costs 1,349 1,090 Advertising and marketing
780 680 Amortization of intangible assets 523 182 Other expenses
2,740 2,204 Total non-interest expense 29,279 23,125 Income before
income taxes 12,492 12,718 Income tax expense 4,451 4,704 Net
income $8,041 $8,014 Per share information Diluted earnings per
share $0.36 $0.40 Basic earnings per share 0.36 0.41 Dividends paid
per share 0.14 0.13 FIRST FEDERAL CAPITAL CORP INCOME STATEMENT
DETAIL (Dollar amounts in thousands) Three Months Mar Mar 2004 2003
COMMUNITY BANKING REVENUE Overdraft fees $5,117 $4,383 ATM and
debit card fees 3,026 2,547 Account service charges 732 621 Other
fee income 437 408 Total deposit account revenue 9,312 7,959
Consumer loan insurance premiums and commissions 144 170 Other
consumer loan fees 99 106 Total consumer loan revenue 243 276
Investment services revenue 758 593 Total community banking revenue
$10,313 $8,828 MORTGAGE BANKING REVENUE Gross servicing fees $2,905
$2,524 Mortgage servicing rights amortization (1,790) (8,695)
Mortgage servicing rights valuation (loss) recovery (631) (1,800)
Total loan servicing fees, net 484 (7,971) Gain on sale of mortgage
loans 3,759 16,110 Other mortgage-related revenue 431 373 Total
mortgage banking revenue $4,674 $8,512 FIRST FEDERAL CAPITAL CORP
SELECTED FINANCIAL DATA Three Months Mar Mar 2004 2003 Stock price
at end of period $21.32 $20.41 High stock price during period
$23.48 $21.08 Low stock price during period $20.48 $19.13 Book
value per share at end of period $12.66 $10.72 Tangible book value
per share at end of period $8.61 $8.51 Return on average assets
0.93% 1.06% Return on average equity 11.47% 15.37% Equity capital
as percent of total assets at end of period 7.59% 6.83% Tangible
equity capital as percent of tangible assets at end of period 5.29%
5.50% Interest rate spread during period 3.26% 2.17% Net interest
income as a percent of average earning assets during period 3.50%
2.61% Average interest-earning assets to average interest-bearing
liabilities during period 113.84% 116.37% Yields on
interest-earning assets during period: Single-family mortgage loans
5.30% 5.22% Commercial real estate loans 5.98% 7.71% Business loans
5.04% 5.09% Consumer loans 6.20% 6.86% Education loans 3.21% 3.92%
Total loans 5.53% 6.10% Mortgage-backed and related securities
3.75% 3.27% Interest-bearing deposits with banks 1.29% 1.17% Other
earning assets 6.23% 4.94% Total interest-earning assets 5.23%
5.30% Cost of interest-bearing liabilities during period: Regular
savings accounts 0.25% 0.25% Checking accounts 0.47% 0.25% Money
market accounts 1.21% 0.87% Certificates of deposits 2.64% 3.54%
Total interest-bearing deposits 1.87% 2.73% FHLB advances 2.45%
5.28% Other borrowings 1.56% 2.06% Total interest-bearing
liabilities 1.97% 3.14% Non-interest income to total revenue (a)
36.02% 49.53% Ratio of non-interest expense to average assets
during period (b) 3.35% 3.07% Efficiency ratio during period (c)
66.29% 63.34% Banking facilities at end of period 95 91 Full-time
equivalent employees at end of period 1,396 1,240 (a) Total revenue
equals net interest income plus non-interest income. (b) Excludes
impact of gains (losses) on real estate owned. (c) Excludes
amortization of intangible assets and gains (losses) on sales of
investment securities and real estate investments, if any. FIRST
FEDERAL CAPITAL CORP SELECTED FINANCIAL DATA (Dollar amounts in
thousands)Three Months Mar Mar 2004 2003 Activity in the allowance
for loan losses during period: Balance at beginning of period
$13,882 $11,658 Provision for losses 1,606 379 Charge-offs:
Single-family mortgage loans - (33) Commercial real estate mortgage
loans (642) - Consumer loans (457) (476) Business loans (533) -
Education loans (14) (12) Total loans charged-off (1,646) (521)
Recoveries 58 14 Charge-offs net of recoveries (1,588) (507)
Balance at end of period $13,901 $11,530 Net annualized charge-offs
as a percentage of average loans outstanding 0.25% 0.10% Ratio of
allowance to total loans held for investment at end of period 0.54%
0.56% Summary of non-performing assets Mar 31 Dec 31 Mar 31 at end
of period: 2004 2003 2003 Non-accrual loans: Single-family mortgage
loans $3,198 $3,148 $2,713 Commercial real estate loans 2,938 2,649
103 Consumer loans 2,794 2,540 2,432 Business loans 571 1,226 1,054
Total non-accrual loans 9,501 9,563 6,302 Real estate owned and in
judgement 3,642 4,068 2,949 Total non-performing assets $13,143
$13,631 $9,251 Ratio of non-accrual loans to loans held for
investment at end of period 0.37% 0.38% 0.31% Ratio of total
non-performing assets to total assets at end of period 0.35% 0.41%
0.30% Ratio of allowance for loan losses to total non-accrual loans
146% 145% 183% Portfolio of loans held for investment Mar 31 Dec 31
Mar 31 at end of period: 2004 2003 2003 First mortgage loans:
Single-family real estate $761,243 $759,490 $663,307
Non-residential real estate 452,975 426,644 274,036 Multi-family
real estate 267,335 284,991 241,669 Construction 125,667 119,196
99,299 Consumer loans: Second mortgage and home equity 414,706
396,581 356,081 Automobile 145,661 146,677 124,668 Other consumer
35,198 36,401 28,023 Education loans 205,352 195,052 201,224
Business loans 171,002 158,761 68,964 Subtotal 2,579,139 2,523,793
2,057,270 Unearned discount, premiums, and net deferred loan fees
and costs 7,627 8,772 7,195 Allowance for loan losses (13,901)
(13,882) (11,530) Total loans held for investment $2,572,865
$2,518,683 $2,052,935 FIRST FEDERAL CAPITAL CORP SELECTED FINANCIAL
DATA (Dollar amounts in thousands) Three Months Mar Mar Loan
origination activity: 2004 2003 Real estate loan originations:
Single-family mortgage loans $91,244 $86,267 Commercial real estate
loans 39,789 32,119 Decrease (increase) in loans in process 16,386
5,385 Total real estate loans originated 147,419 123,771 Consumer
loan originations: Second mortgage and home equity loans 54,802
65,189 Automobile loans 23,930 18,748 Other consumer loans 4,436
5,052 Total consumer loans originated 83,168 88,989 Education loan
originations 23,081 21,514 Business loan originations 24,695 25,114
Total loans originated for investment $278,362 $259,388
Single-family mortgage loans originated for sale $209,062 $633,625
Deposit liabilities at Mar Dec Mar end of period: 2004 2003 2003
Checking accounts: Non-interest bearing $424,309 $345,698 $427,418
Interest bearing 183,975 187,368 137,372 Money market accounts
521,722 469,097 243,334 Regular savings accounts 257,004 256,658
175,713 Time deposits 1,285,061 1,294,016 1,456,044 Total deposit
liabilities $2,672,072 $2,552,837 $2,439,881 Mar 2004 Weighted
Balance Average Rate Time deposits maturing within ..... Three
months $122,421 2.14% Four to six months 205,213 2.72% Seven to
twelve months 333,789 2.44% More than twelve months 623,638 3.21%
Total time deposits $1,285,061 2.83% FHLB advances and all other
borrowings maturing within ..... Three months $286,250 1.39% Four
to six months 58,450 2.78% Seven to twelve months 58,450 2.53% More
than twelve months 330,112 2.91% Total FHLB advances and all other
borrowings $733,262 2.28% DATASOURCE: First Federal Capital Corp
CONTACT: Jack C. Rusch, President and Chief Executive Officer of
First Federal Capital Corp, +1-608-781-4636
Copyright
First Federal Capital (NASDAQ:FTFC)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
First Federal Capital (NASDAQ:FTFC)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024