ICBC Independence Community Bank (MM)

Independence Community Bank Corp. Reports a 57% Increase in Net Income for the First Quarter of 2005 BROOKLYN, N.Y., April 18 /PRNewswire-FirstCall/ -- Independence Community Bank Corp. (NASDAQ:ICBC) reported today that net income increased 57% to $59.8 million for the three months ended March 31, 2005 as compared to $38.1 million for the three months ended March 31, 2004. Diluted earnings per share were $0.72 for both quarterly periods. The three month earnings and per share data for 2005 reflect the inclusion of the operations of Staten Island Bancorp, Inc. ("Staten Island") which merged with the Company on April 12, 2004 and the related issuance of 28.2 million shares of the Company's common stock in connection with the merger. On a linked quarter basis, diluted earnings per share, including the other than temporary impairment charge incurred during the fourth quarter of 2004, increased from $0.63 for the fourth quarter of 2004 to $0.72 for the first quarter of 2005. However, excluding the effects of the impairment charge, our diluted earnings per share would have decreased by $0.01 per share. Alan H. Fishman, President and Chief Executive Officer, commented, "The first quarter has been challenging as we navigate through a very difficult interest rate environment. During the quarter we remained disciplined and committed to our business model and did not make business decisions that we believe will expose the long-term value of the franchise. As such, we have taken a conservative posture with regard to asset growth and market exposure." Highlights * Net interest margin remained constant at 3.38% for the quarter ended March 31, 2005 as compared to the quarter ended December 31, 2004. However, during the first quarter, the rise in the cost of funds slightly outpaced the upward repricing of our interest-earning assets as general market rates continued their upward trend. We expect the flattened yield curve to continue to put pressure on net interest margin in the short-term. * The Company originated loans totaling $1.11 billion, excluding mortgage warehouse lines of credit, during the quarter ended March 31, 2005, of which $862.3 million were retained for portfolio with the remainder being originated for sale in the secondary market. * Commercial real estate and commercial business loans continue to grow and comprised, in the aggregate, $4.06 billion or 35.7% of the Company's total loan portfolio at March 31, 2005 as compared to $3.84 billion or 34.2% at December 31, 2004. * The Company introduced the Independence RewardsPlus Checking(TM) product and opened three de novo branches during the first quarter of 2005 which resulted in increasing core deposits by $128.0 million to $7.16 billion at March 31, 2005 compared to December 31, 2004. * As part of its long-term asset/liability management strategy, the Company selectively chose to utilize certain certificates of deposit promotions as an alternative funding source, reducing its dependence on wholesale borrowings. Borrowings as a percentage of assets declined to 29.8% at March 31, 2005 compared to 33.3% at December 31, 2004. * Income from mortgage-banking activities declined as the Company continued to refrain from originating loans at below market rates. * The Company continues to focus on expense control which has resulted in a $3.9 million reduction in non-interest expense from the prior quarter. The efficiency ratio improved to 42.79% for the first quarter of 2005 compared to 43.58% for the fourth quarter of 2004. * Asset quality continues to improve; the Company recorded a $1.1 million net recovery for the quarter ended March 31, 2005. * Non-performing assets as a percentage of total assets were 0.24% for the first quarter of 2005 as compared to 0.29% for the fourth quarter of 2004. The allowance for loan losses as a percentage of total loans remained stable, amounting to 0.90% for both periods; no provision for loan losses was required for the first quarter of 2005. * The Company resumed its open market stock repurchase program during the first quarter of 2005, repurchasing of 825,791 shares of common stock at a total cost of $32.8 million. Post Earnings Announcement Conference Call The Company will conduct a conference call on April 19, 2005 at 9:00 a.m., Eastern Time, to discuss highlights of its first quarter 2005 earnings. The call will be simultaneously webcast on the Company's investor relations web page at http://investor.myindependence.com/. The conference call will also be available via dial-in at 800-811-0667 for domestic callers and at 913-981-4901 for international callers. There will be a replay of this conference call beginning April 19, 2005 at 12:00 Noon, Eastern Time. The replay will remain available through April 29, 2005. The replay can be accessed by dialing 888-203-1112 for domestic callers and 719-457-0820 for international callers. The replay passcode is 2403267. Independence Community Bank Corp. is the holding company for Independence Community Bank. The Bank, originally chartered in 1850, currently operates 123 branches located in the greater New York City metropolitan area, which includes the five boroughs of New York City, Nassau and Suffolk Counties and New Jersey. At its banking offices located on Staten Island, the Bank conducts business as SI Bank & Trust, a division of Independence Community Bank. The Bank has three key business divisions, Commercial Real Estate Lending, Consumer Banking and Business Banking, and actively targets small and mid-size businesses. The Bank maintains its community orientation by offering its diverse communities a wide range of financial products and by emphasizing customer service, superior value and convenience. The Bank's web address is http://www.myindependence.com/. Note: This news release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"), in particular, diluted earnings per share and certain performance ratios, in each case adjusted to exclude the effects of the impairment charge incurred during the quarter ended December 31, 2004. The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of significant gains or losses that are unusual in nature or non-recurring. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Statements contained in this release which are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Words such as "expect," "feel," "believe," "will," "may," "anticipate," "plan," "estimate," "intend," "should," and similar expressions are intended to identify forward- looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) growth opportunities may not be fully realized or may take longer to realize than expected; (2) operating costs may be greater than expected; (3) competitive factors which could affect net interest income and non-interest income and general economic conditions which could affect the volume of loan originations, deposit flows and real estate values; (4) the levels of non-interest income and the amount of provisions for loan losses as well as other factors discussed in the documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. INDEPENDENCE COMMUNITY BANK CORP. Consolidated Statements of Financial Condition (Dollars in thousands) March 31, December 31, March 31, 2005 2004 2004 (Unaudited) (Audited) (Unaudited) ASSETS: Cash and due from banks $405,746 $360,877 $225,929 Securities available-for-sale: Investment securities 389,245 454,305 304,462 Mortgage-related securities 3,514,405 3,479,482 2,158,314 Total securities available-for-sale 3,903,650 3,933,787 2,462,776 Loans available-for-sale 87,629 96,671 11,950 Mortgage loans 9,587,016 9,315,090 4,985,214 Other loans 1,785,006 1,933,502 1,616,526 Total loans 11,372,022 11,248,592 6,601,740 Less: allowance for possible loan losses (102,554) (101,435) (79,193) Total loans, net 11,269,468 11,147,157 6,522,547 Premises, furniture and equipment, net 162,169 162,687 103,438 Accrued interest receivable 67,763 64,437 37,919 Goodwill 1,193,677 1,155,572 185,161 Intangible assets, net 76,128 79,056 47 Bank owned life insurance ("BOLI") 324,511 321,040 175,988 Other assets 390,605 432,146 249,155 Total assets $17,881,346 $17,753,430 $9,974,910 LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits $9,839,120 $9,305,064 $5,401,440 Borrowings 4,926,373 5,511,972 2,866,300 Subordinated notes 396,527 396,332 395,818 Escrow and other deposits 188,044 104,304 127,021 Accrued expenses and other liabilities 240,986 131,715 139,856 Total liabilities 15,591,050 15,449,387 8,930,435 Stockholders' equity: Common stock ($.01 par value, 250,000,000, 250,000,000 and 125,000,000 shares authorized at March 31, 2005, December 31, 2004, and March 31, 2004, respectively; 104,243,820, 104,243,820 and 76,043,750 shares issued at March 31, 2005, December 31, 2004 and March 31, 2004, respectively; 84,493,166, 84,928,719 and 54,739,776 shares outstanding at March 31, 2005, December 31, 2004, and March 31, 2004, respectively) 1,042 1,042 760 Additional paid-in-capital 1,901,667 1,900,252 763,932 Treasury stock at cost; 19,750,654, 19,315,101 and 21,303,974 shares at March 31, 2005, December 31, 2004, and March 31, 2004, respectively (367,099) (341,226) (375,843) Unallocated common stock held by ESOP (63,031) (64,267) (67,975) Unvested restricted stock awards under stock benefit plans (13,575) (9,701) (8,246) Retained earnings, partially restricted 860,351 821,702 705,337 Accumulated other comprehensive (loss) income: Net unrealized (loss) gain on securities available-for-sale, net of tax (29,059) (3,759) 26,510 Total stockholders' equity 2,290,296 2,304,043 1,044,475 Total liabilities and stockholders' equity $17,881,346 $17,753,430 $9,974,910 INDEPENDENCE COMMUNITY BANK CORP. Consolidated Statements of Income (In thousands, except per share data) (Unaudited) For the Three Months Ended March 31, December 31, March 31, 2005 2004 2004 Interest income: Mortgage loans $124,832 $122,150 $72,124 Other loans 27,240 26,739 18,430 Loans available-for-sale 1,457 1,793 183 Investment securities 4,509 6,532 3,461 Mortgage-related securities 39,826 36,992 22,849 Other 2,316 1,641 568 Total interest income 200,180 195,847 117,615 Interest expense: Deposits 26,931 22,549 12,526 Borrowings 36,780 37,816 21,890 Subordinated notes 3,903 3,731 1,690 Total interest expense 67,614 64,096 36,106 Net interest income 132,566 131,751 81,509 Provision for loan losses -- -- -- Net interest income after provision for loan losses 132,566 131,751 81,509 Non-interest income: Net gain (loss) on securities 3,110 (10,348) 2,771 Net gain on loans 205 106 94 Mortgage-banking activities 3,959 5,560 4,492 Service fees 15,609 15,873 13,595 BOLI 3,774 4,402 2,636 Other 2,902 7,061 3,865 Total non-interest income 29,559 22,654 27,453 Non-interest expense: Compensation and employee benefits 36,227 36,611 26,975 Occupancy costs 12,340 12,858 7,933 Data processing fees 3,867 4,855 3,131 Advertising 2,175 2,464 1,847 Other 13,349 14,967 9,567 Total general and administrative expenses 67,958 71,755 49,453 Amortization of identifiable intangible assets 2,928 2,983 143 Total non-interest expense 70,886 74,738 49,596 Income before provision for income taxes 91,239 79,667 59,366 Provision for income taxes 31,478 27,300 21,223 Net income $59,761 $52,367 $38,143 Basic earnings per share $0.74 $0.65 $0.76 Diluted earnings per share $0.72 $0.63 $0.72 INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) At or For the Three Months Ended March 31, December 31, March 31, 2005 2004 2004(1) Unadjusted (3) Adjusted (3) Performance Ratios: Return on average assets (2) 1.34% 1.18% 1.37% 1.57% Return on average equity (2) 10.34% 9.24% 10.72% 14.99% Return on average tangible assets (2) 1.44% 1.27% 1.47% 1.60% Return on average tangible equity (2) 22.19% 20.11% 23.31% 18.32% Non-interest expense to average assets 1.59% 1.68% 1.68% 2.05% Efficiency ratio(4) 42.79% 43.58% 43.58% 46.61% Average Balances: Average shares outstanding - basic 80,433,732 80,513,692 50,254,851 Average shares outstanding - diluted 83,208,182 83,410,532 52,880,112 March 31, December 31, March 31, 2005 2004 2004 Capital and Other Ratios: Book value per share $27.11 $27.13 $19.08 Tangible book value per share $12.08 $12.59 $15.70 Average equity to average assets 12.98% 12.77% 10.50% Tangible equity to tangible assets 6.14% 6.47% 8.78% Leverage ratio (Bank only) 5.62% 5.51% 8.00% Tier 1 risk-based (Bank only) 7.39% 7.36% 9.41% Total risk-based capital (Bank only) 11.44% 11.47% 15.19% Deposits: Core deposits: Savings $2,519,627 $2,630,416 $1,631,720 Money market 1,407,410 1,701,287 952,922 Interest-bearing demand 1,776,493 1,214,190 743,016 Non-interest-bearing demand 1,458,096 1,487,756 762,127 Total core deposits 7,161,626 7,033,649 4,089,785 Certificates of deposit 2,677,494 2,271,415 1,311,655 Total deposits $9,839,120 $9,305,064 $5,401,440 INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) March 31, December 31, March 31, 2005 2004 2004 Loan Portfolio Composition: Mortgage loans on real estate: Single-family residential $1,967,934 $2,071,074 $180,057 Cooperative apartment loans 400,113 418,988 82,809 Multi-family residential 3,991,842 3,800,649 2,953,104 Commercial real estate 3,237,405 3,034,254 1,774,955 Total principal balance - mortgage loans 9,597,294 9,324,965 4,990,925 Less net deferred fees 10,278 9,875 5,711 Total mortgage loans on real estate 9,587,016 9,315,090 4,985,214 Commercial business loans, net of deferred fees 817,748 809,392 656,889 Other loans: Mortgage warehouse lines of credit 496,743 659,942 624,930 Home equity loans and lines of credit 430,033 416,351 310,891 Consumer and other loans 40,482 47,817 23,912 Total principal balance - other loans 967,258 1,124,110 959,733 Less net deferred fees -- -- 96 Total principal balance - other loans 967,258 1,124,110 959,637 Total loans receivable 11,372,022 11,248,592 6,601,740 Less allowance for loan losses 102,554 101,435 79,193 Loans receivable, net $11,269,468 $11,147,157 $6,522,547 Loans Available-for-Sale Composition: Single-family residential $59,994 $74,121 $4,450 Multi-family residential 27,635 22,550 7,500 Total loans available-for-sale $87,629 $96,671 $11,950 March 31, December 31, March 31, 2005 2004 2004 Asset Quality: Non-performing loans: Non-accrual loans $39,305 $43,644 $35,835 Loans past due 90 days or more as to: Interest and accruing 27 117 34 Principal and accruing (5) 1,323 5,517 1,873 Total non-performing loans 40,655 49,278 37,742 Other real estate owned 2,224 2,512 15 Total non-performing assets $42,879 $51,790 $37,757 Non-performing assets to total assets 0.24% 0.29% 0.38% Allowance for loan losses to non-performing loans 252.25% 205.84% 209.83% Allowance for loan losses to total loans 0.90% 0.90% 1.20% Net charge offs to average loans - quarter ended N/A 0.031% 0.005% Net charge offs to average loans - year-to-date N/A 0.043% 0.005% INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) For the Three Months Ended March 31, December 31, March 31, 2005 2004 2004 Average Rate Average Rate Average Rate Balance (2) Balance (2) Balance (2) Net Interest Margin: Interest-earning assets: Loans receivable: Mortgage loans $9,497,556 5.32% $9,396,521 5.28% $4,919,185 5.88% Commercial business loans 813,216 6.68 815,403 6.13 591,737 6.33 Mortgage warehouse lines of credit 532,536 5.47 638,123 4.87 443,893 4.29 Consumer and other loans 474,002 5.61 458,899 5.41 329,585 5.25 Total loans 11,317,310 5.44 11,308,946 5.32 6,284,400 5.78 Mortgage-related securities 3,610,473 4.41 3,389,042 4.37 2,155,153 4.24 Investment securities 413,217 4.36 572,367 4.56 302,814 4.57 Other interest -earning assets 295,419 3.18 323,793 2.02 206,391 1.11 Total interest -earning assets 15,636,419 5.13 15,594,148 5.02 8,948,758 5.26 Non-interest -earning assets 2,177,059 2,153,305 746,503 Total assets $17,813,478 $17,747,453 $9,695,261 Interest-bearing liabilities: Deposits: Savings deposits 2,582,776 0.38 2,655,796 0.37 1,622,401 0.35 Interest -bearing demand and money market deposits 3,224,266 1.56 3,137,328 1.35 1,731,708 0.94 Certificates of deposit 2,487,108 1.97 2,257,677 1.66 1,347,637 2.11 Total interest -bearing deposits 8,294,150 1.32 8,050,801 1.11 4,701,746 1.07 Non-interest -bearing demand deposits 1,437,109 -- 1,509,413 -- 750,301 -- Total deposits 9,731,259 1.12 9,560,214 0.94 5,452,047 0.92 Subordinated notes 396,453 3.99 396,239 3.75 175,655 3.87 Total borrowings 5,189,591 2.87 5,373,759 2.80 2,890,437 3.05 Total interest -bearing liabilities 15,317,303 1.79 15,330,212 1.66 8,518,139 1.70 Non-interest -bearing liabilities 184,439 151,128 158,995 Total liabilities 15,501,742 15,481,340 8,677,134 Total stockholders' equity 2,311,736 2,266,113 1,018,127 Total liabilities and stockholders' equity $17,813,478 $17,747,453 $9,695,261 Net interest -earning assets $319,116 $263,936 $430,619 Interest rate spread (2) 3.34% 3.36% 3.56% Net interest margin (2) 3.38% 3.38% 3.64% Average interest -earning assets to average interest-bearing liabilities 102.08% 101.72% 105.06% (1) The merger with Staten Island Bancorp, Inc. was completed and incorporated in the Consolidated Statement of Financial Condition and Consolidated Statement of Income effective the close of business on April 12, 2004. (2) Presented on an annualized basis. (3) The Company's results for the quarter ended December 31, 2004 included a $12.7 million ($8.3 million after tax) impairment charge related to a Fannie Mae preferred security the decline in value of which was deemed to be other than temporary. The Company has presented performance ratios on both an adjusted (reflecting the exclusion of the impairment charge) and an unadjusted basis since the Company's management believes such impairment charge is non-recurring in nature. (4) Reflects in each period presented adjusted operating expense (net of amortization of identifiable intangible assets) as a percentage of the aggregate of net interest income and adjusted non-interest income (excluding gains and losses on loans and securities). Amortization of identifiable intangible assets is excluded from the calculation since it is a non-cash expense and gains and losses on loans and securities are excluded since they are generally considered by the Company's management to be non-recurring in nature. The operating efficiency ratio is not a financial measurement required by generally accepted accounting principles in the United States of America. However, the Company believes such information is useful to investors in evaluating the Company's operations. (5) Reflects loans that are 90 days or more past maturity which continue to make payments on a basis consistent with the original repayment schedule. DATASOURCE: Independence Community Bank Corp. CONTACT: Kathleen A. Hanrahan, First Vice President, Investor Relations, +1-718-722-5400, or Frank W. Baier, Executive Vice President, Chief Financial Officer, +1-718-923-3506, both of Independence Community Bank Corp. Web site: http://www.myindependence.com/ http://investor.myindependence.com/

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