People's Bancshares, Inc. (PBKB) Reports 1st Quarter Diluted EPS of $0.67
NEW BEDFORD, Mass., April 26 /PRNewswire/ -- People's Bancshares, Inc. (Nasdaq: PBKB - news; PBKB) reported net income of $2.2 million or $0.67 diluted earnings per share for the quarter ended March 31, 2000 compared to $2.3 million or $0.67 diluted earnings per share for the quarter ended March 31, 1999. Basic earnings per share were $0.68 for the first quarter of 2000 compared to $0.68 for the first quarter of 1999. The supplementary financial data table shows the quarterly breakout of operating results on a diluted earnings per share basis.
Gains on sales of securities for the first quarter of 1999 amounted to $73,000 and there were no sales of securities for the first quarter of 2000.
There were no non-recurring expenses in the first quarter of 2000 or 1999. ``Core'' diluted earnings per share (diluted earnings per share less securities transactions and non-recurring items) were $0.67 in the first quarter of 2000 compared to $0.66 in the first quarter of 1999.
Quarterly comparisons have been affected primarily by an increase in earning assets, and the continued growth of the Bank's mortgage banking subsidiary with the purchase of Allied Bancshares Mortgage Group, LLC (``Allied'') in September 1999. Income before income taxes decreased by $152,000 or 4% in the first quarter of 2000 compared to the first quarter of 1999, and income tax expense amounted to $1.1 million in the first quarter of 2000 compared to income tax expense of $1.2 million in the first quarter of 1999.
The decrease in pre-tax income for 2000 was due to an increase of $675,000 or 13% in operating expenses which was partially offset by a $553,000 or an 8% increase in net interest income. The increase in operating expenses was primarily due to a $316,000 increase in salaries and benefits expense and a $393,000 increase in occupancy and equipment expenses, which were partially offset by a $103,000 decrease in professional fees. The higher expenses are primarily due to the acquisition of Allied in September 1999.
The allowance for loan losses at March 31, 2000 totaled $4.1 million or 0.99% of total loans compared to $4.1 million or 0.98% of total loans at year- end 1999. The allowance as a percentage of non-performing loans amounted to 478% at March 31, 2000 compared to 814% at December 31, 1999. Non-performing assets amounted to $1.1 million or 0.10% of total assets at March 31, 2000 compared to $788,000 or 0.07% of total assets at December 31, 1999 and $2.0 million or 0.21% of total assets at March 31, 1999. Net recoveries for the three months ended March 31, 2000 were $28,000 compared to net recoveries of $42,000 for the corresponding period in 1999. Net recoveries were $80,000 for the year ended December 31, 1999.
The Company's total assets were $1.1 billion at March 31, 2000 and December 31, 1999. At March 31, 2000, the Company's book value per share amounted to $12.54 per share compared to $12.27 per share at December 31, 1999. For the quarter ended March 31, 2000, the Company had 3,326,000 average diluted shares outstanding. The Company had 3,391,000 average diluted shares outstanding for the quarter ended March 31, 1999.
Colin Blair, People's Chief Operating Officer and Chief Financial Officer, stated: ``In People's fourth quarter 1999 earnings release we stated that earnings per share for the first quarter of 2000 were expected to be reduced 5% - 10% from the 1999 fourth quarter results of $0.69, which would have indicated a range of $0.62 to $0.66. Thus actual first quarter 2000 results slightly exceeded our expectations. The Bank earned $0.80 per share for the first quarter while People's Mortgage Company (''PMC``) lost $0.13 per share.''
``Entering the first quarter, we expected PMC's earnings would be adversely affected by a low mortgage backlog, seasonal factors, and costs of consolidating our Allied acquisition. We believe that these issues are now behind us. At March 31, 2000, our mortgage backlog was up 48% from the beginning of the quarter and we expect a proportional increase in gains on loan sales as the backlog is closed and loan sales are funded in the second quarter. We currently expect PMC to earn $0.15 to $0.20 for 2000 and double that for 2001 given current levels of application volume.''
``These forecasted earnings for PMC have not been factored into current earnings estimates for 2000 and 2001. Current analysts' estimates are for People's to earn $3.10 diluted earnings per share for 2000. Rather than revise our earnings guidance for fiscal year 2000 upward, the Company intends to use these potential additional earnings from PMC to offset the adverse earnings impact from reducing borrowed funds by a third by the end of 2001. During this transition, the Company expects to maintain double digit earnings per share growth and a return on equity in excess of 20%. The Company also plans to continue to repurchase stock in this depressed market for bank stocks. In the first quarter 2000, the Company repurchased 75,000 shares.''
Richard Straczynski, People's Chief Executive Officer, stated that: ``Over the five years ended December 31, 1999, People's cumulative total stockholder return (price appreciation and dividends) has outperformed the cumulative total stockholder return for banks comprising the NASDAQ bank index by 54% and the cumulative total stockholder return for companies comprising the S&P 500 by 18%. Our net income has almost quintupled during the last 5 years, our earnings per share has more than tripled, and we have gone from paying no dividends to paying out $0.81 per share in 1999. As of December 31, 1999 our allowance for loan losses exceeded 8 times the level of nonaccrual loans and we have had net recoveries of prior charge-offs over the last 10 quarters.''
``We were rated 13th overall out of the top 100 thrifts by SNL Securities in 1999 (3rd in return on equity) and expect to be rated higher in this year's rankings. According to a recent survey of 193 thrift institutions by Sandler O'Neill, the median thrift traded more than 10% below book value as of April 4, 2000. People's traded at 49% above book value. We believe this record of performance will continue into the future.''
People's maintains twelve banking locations in Southeastern Massachusetts and 15 loan production offices in Massachusetts, Rhode Island, Connecticut, Maryland and Virginia. |
