Staten Island Bancorp, Inc. Issues Second Quarter Report of Earnings
Business Wire - July 16, 1998 09:14
STATEN ISLAND, N.Y.--(BUSINESS WIRE)--July 16, 1998--Staten Island Bancorp, Inc. (NYSE:SIB), the holding company for Staten Island Savings Bank,
reported net earnings of $10.9 million or $.27 per share for the quarter ended June 30, 1998. This compares to net income of $5.0 million for the quarter ended
June 30, 1997. For the six months ended June 30, 1998, the Company reported earnings of $21.5 million, equivalent to earnings per share of $.52. By comparison,
the Company earned $11.0 million in the six months ended June 30, 1997. Per share amounts are not applicable for the three or six-month periods ended June 30,
1997 since the Company's conversion to a public company closed on December 19, 1997.
"We continue to experience record earnings due to the growth in assets, record loan demand and the investment of net conversion proceeds", stated Harry P.
Doherty, Chairman and CEO. Doherty indicated that approximately 43% of the Company's $367.5 million growth in assets for the first six months of 1998 was
generated through loan growth. As a result of such growth, total assets amounted to $3.0 billion at June 30, 1998. "We are capitalizing on a very favorable
interest rate market for mortgage lending through responsive delivery and service policies", he added.
He also noted that asset quality remains solid. "The enhancements in our credit administration function are enabling us to reduce non-performing loans
through closer monitoring and interaction with our borrowers".
Interest Income
The Company recorded interest income of $48.1 million in the second quarter of 1998, up $14.8 million, or 44.7% from $33.2 million in the second quarter of 1997.
The increase resulted from a $977.0 million rise in the average balance of interest- earning assets to $2.8 billion, with an average yield of 6.99%, down from
7.49% for the comparable period in 1997. The increase in average interest-earning assets was due to the proceeds from the Stock Conversion as well as the
leveraging program utilizing borrowed funds to fund asset growth at acceptable spreads.
Interest Expense
Interest expense rose $5.6 million to $18.9 million in the current second quarter, reflecting a $377.5 million increase in average interest-bearing liabilities to $1.9
billion with an average cost of 4.04% up from 3.56% in the second quarter of 1997. The higher average balance primarily reflects a $403.5 million increase in the
average balance of borrowed funds to $435.9 million with an average cost of 5.73%. The average balance of interest-bearing deposits decreased $26.0 million to
$1.4 billion with an average cost of 3.53% compared to 3.52% for the second quarter of 1997. The average balance of non-interest bearing liabilities, which
consists mainly of checking accounts, increased $67.1 million to $265.8 million. The weighted average cost of total deposits was 3.10% at June 30, 1998.
Net Interest Income
Reflecting the substantial growth in interest-earning assets, net interest income rose to $18.9 million from $13.3 million for the second quarter of 1997. In the
second quarter of 1998, the Company's interest rate spread was 2.95% as compared to 3.93% in the year ago quarter. Similarly, net interest margin was 4.24% in
the current quarter as compared to 4.50% for the same time period last year. These decreases were the result of the current interest rate environment as well as
increased interest costs related to borrowed funds.
Provision For Loan Losses
The provision for loan losses for the second quarter of 1998 was $0.5 million compared with $2.5 million for the quarter ended June 30, 1997. The provision in
the 1997 period contained a non-recurring amount of $2.0 million. The current provision is based on management's assessment of the overall credit quality of
the loan portfolio. Total non-performing assets were $18.3 million at June 30, 1998 compared to $21.9 million at December 31, 1997 and $23.0 million at June 30,
1997. Non-performing assets consist of $17.8 million of non-performing loans and $0.5 million of other real estate owned (OREO) at June 30, 1998.
Non-performing assets as a percentage of total assets were .61% at June 30, 1998, compared to .83% December 31, 1997 and 1.19% June 30, 1997.
The allowance for loan losses was $16.0 million as of June 30, 1998, an increase of $0.3 million since December 31, 1997. The increase was the net result of
provisions of $1.0 million, recoveries of $0.4 million and charge-offs of $1.1 million. For the first six months of 1997 these amounts were $5.0 million, $0.6 million
and $0.9 million, respectively.
The allowance for loan losses as a percentage of non-performing loans was 89.7% as of June 30, 1998 compared to 73.7% at December 31, 1997 and 67.1% at
June 30, 1997. While no assurance can be given that future charge-offs and or additional provisions will not be necessary, management believes that the
current allowance for loan losses is adequate.
Other Income
Total other income amounted to $2.1 million for the current quarter compared to $1.8 million for the same time period last year. Other income consists of service
and fee income of $2.0 million and net gain on security transactions of $0.1 million. These amounts in the second quarter of 1997 were $1.9 million and a net
loss of $41,000. The increase in service and fee income in the second quarter was primarily due to higher fees collected as a result of the continued growth in
the checking account base.
Other Expenses
Total other expenses for the second quarter were $12.3 million compared with $10.6 million for the second quarter of 1997. The increase of $1.7 million was due
to an increase of $1.0 million in personnel expense primarily reflecting the costs related to: the Employee Stock Ownership Plan (ESOP); staff additions to the
Bank's lending operations to meet current loan demand, to expand commercial lending and to enhance loan administration; and normal merit increases.
Professional fees increased $0.8 million due to costs related to organizing a Real Estate Investment Trust (REIT) and increased audit and legal fees related to
operation as a public company. The REIT was formed as part of the Bank's tax planning and capital management strategy.
Earnings summary for the six months ended June 30, 1998
In the six months ended June 30, 1998 the Company recorded net interest income of $57.5 million compared with $39.3 million for the first six months of 1997.
Interest income increased to $92.5 million from $65.1 million primarily due to an increase of $871.1 million in the average balance of interest-earning assets
which was partially offset by a decrease of 38 basis points to 7.13% in the average yield on interest-earning assets. Interest expense was $35.0 million for the
six months ended June 30, 1998 compared with $25.8 million for the same period of last year. The increase of $328.8 million in the average balance of borrowed
funds was the primary reason for the increase, along with an increase in the rate on total interest-bearing liabilities from 3.54% to 3.97%. The Company's
interest rate spread and interest rate margin for the first six months of 1998 were 3.15% and 4.43%, respectively. These ratios for the same time period in 1997
were 3.97% and 4.54%, respectively. The reasons for these decreases were discussed previously.
The provision for loan losses year-to-date was $1.0 million compared with $5.0 million, for the respective period last year. In 1997 there was a non-recurring
adjustment of $4.0 million in the provision.
In addition to the increase in net interest income, earnings growth was also driven by an increase of $1.8 million in other income. This was primarily due to a
net security gain of $0.7 million in 1998 compared to a net security loss of $0.6 million in 1997 due to restructuring of our investment portfolio. Service and fee
income increased $0.5 million due to higher fees collected resulting from increased transactions on our growing checking account deposit base.
Other expenses for the first six months of 1998 increased $3.0 million to $24.4 million. This was primarily due to an increase in personnel costs of $2.3 million
and professional fees of $0.8 million offset by a decrease in other expenses of $0.3 million. The reasons for the increases in personnel costs and professional
fees are the same as discussed above for the second quarter of 1998. These increases were partially offset by a decrease in other expenses primarily due to
decreased costs related to non-performing assets.
Financial Condition
Total assets at June 30, 1998 were $3.0 billion, an increase of $367.5 million or 13.9% from December 31, 1997. Loans receivable net increased by $160.1 million
or 14.8% and investment securities increased by $284.4 million or 21.1%. These increases were funded by a $360.0 million increase in borrowed funds, a $31.1
million increase in deposits and a $24.7 million increase in stockholders' equity.
Stockholders' equity totaled $710.6 million or 23.53% of total assets at June 30,1998 compared to $685.9 million or 25.87% of total assets at December 31, 1997.
The $24.7 million increase was primarily due to net income of $21.5 million, an increase in unrealized appreciation on securities available for sale, net of taxes, of
$3.7 million, and an allocation of ESOP shares, resulting in an increase of $2.6 million, reduced by aggregate cash dividend payments of $3.2 million. Tangible
book value per share was $15.35 and the tangible equity to asset ratio was 22.42% at June 30, 1998. The Bank's capital ratios are well in excess of all regulatory
requirements as of June 30, 1998.
Statements contained in this news 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, which include, but are not limited to, factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time.
Staten Island Bancorp, Inc. is the holding company for Staten Island Savings Bank. The Bank was chartered in 1864 and now operates sixteen full service
branches and three limited service branches on Staten Island, and one full service branch in Brooklyn. The Bank also provides Trust services and Savings
Bank Life Insurance.
STATEN ISLAND BANCORP,INC
SELECTED DATA
June 30, December 31,
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------------------------------
1998 1997
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------------------------------
000'S omitted
(unaudited)
Selected Financial Condition Data:
Total assets $ 3,018,685 $ 2,651,170
Cash and cash equivalents 67,355 58,435
Federal funds 11,000 90,500
Securities available for sale 1,634,821 1,350,467
Loans receivable, net 1,243,058 1,082,918
Intangible assets 17,716 18,414
Deposit accounts 1,654,732 1,623,652
Borrowings 610,041 250,042
Stockholders' equity 710,578 685,886
Non-performing assets 18,348 21,934
Allowance for loan losses 15,994 15,709
Common shares outstanding (1)45,130,312 (2) 45,130,312
Three Months Ended Six Months Ended
June 30, June 30,
----------------- -----------------------
----------------- ----------------------
1998 1997 1998 1997
----------------- ----------------------
----------------- ----------------------
000's omitted 000's omitted
(unaudited) (unaudited)
Selected Operating Data:
Interest income $ 48,050 $ 33,210 $ 92,516 $ 65,086
Interest expense 18,883 13,272 34,973 25,788
--------- ------- ---------- ----------
--------- ------- ---------- ----------
Net interest income 29,167 19,938 57,543 39,298
Provision for loan losses 500 2,501 1,001 5,001
--------- ------- ---------- ----------
--------- ------- ---------- ----------
Net interest income after
provision for loan losses 28,667 17,437 56,542 34,297
Other income 2,069 1,840 4,801 3,051
Other expenses 12,277 10,589 24,449 21,436
--------- ------- ---------- ----------
--------- ------- ---------- ----------
Income before provision 18,459 8,688 36,894 15,912
for income taxes
Provision for income taxes 7,516 3,655 15,354 4,951
--------- ------- ---------- ----------
========= ======= ========== ==========
Net income $ 10,943 $ 5,033 $ 21,540 $ 10,961
========= ======= ========== ==========
========= ======= ========== ==========
(1) Includes 3,438,500 shares held by the Company's ESOP of which
3,319,109 are unallocated.
(2) Includes 3,438,500 shares held by the Company's ESOP of which
3,438,500 are unallocated
STATEN ISLAND BANCORP,INC
At or For the At or For the
Three Month Six Months
Ended June 30 Ended June 30
1998 1997 1998 1997
----------------------------------
----------------------------------
(unaudited) (unaudited)
Performance Ratios:
Return on average assets 1.55% 1.33% 1.60% 1.20%
Return on average equity 6.26% 13.93% 6.24% 12.63%
Earnings per share $ 0.27 na $ 0.52 na
Average interest-earning assets to
average interest-bearing liabilities 147.12% 118.93% 147.54% 118.84%
Interest rate spread 2.95% 3.93% 3.15% 3.91%
Net interest margin 4.24% 4.50% 4.43% 4.54%
Noninterest expenses, exclusive of
amortization of intangible assets, to
average assets 1.66% 2.16% 1.73% 2.24%
Efficiency Ratio 37.64% 46.24% 37.55% 48.17%
Asset Quality Ratios:
Non-performing assets to total assets
at end of the period .61% 1.19% .61% 1.19%
Allowance for loan losses to
non-performing loans at end of period 89.73% 67.10% 89.73% 67.10%
Allowance for loan losses to total
loans at end of the period 1.27% 1.43% 1.27% 1.43%
Capital and Other Ratios:
Average equity to average assets 25.58% 9.52% 25.58% 9.52%
Tangible equity to assets at end of
period 22.42% 8.34% 22.42% 8.34%
Total capital to risk-weighted assets 52.03% 19.83% 52.03% 19.83%
Tangible book value per share $ 15.35 na $ 15.35 na
The above financial information is annualized where appropriate.
CONTACT: Staten Island Bancorp Inc.
Donald Fleming, Senior Vice President
(718) 447-7900 ext. 509
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