for Fourth Quarter and Fiscal Year 1999
NEW YORK, April 22 /PRNewswire/ -- Independence Community Bank Corp.
(Nasdaq: ICBC), the holding company for Independence Community Bank, reported
net income of $12.3 million, or $0.20 per diluted share, for the quarter ended
March 31, 1999 compared to $6.2 million for the quarter ended March 31, 1998,
excluding the March 1998 contribution to the Independence Community Foundation
(the "Foundation"). Cash earnings for the fourth quarter were $16.1 million,
or $0.26 per diluted share, compared to $9.2 million for the same period in
the prior fiscal year.
For the year ended March 31, 1999 the Company reported net income of
$45.2 million, or $0.66 per diluted share, compared to $27.2 million for the
year ended March 31, 1998, excluding the contribution to the Foundation. Cash
earnings for the fiscal year were $58.5 million, or $0.86 per diluted share,
compared to $36.8 million for the prior fiscal year. The organization
believes the reporting of cash earnings along with traditional GAAP earnings
provides a clearer insight into the Company's operating performance.
Results of operations for the fourth quarter and fiscal year ended March
31, 1998 included the effect of a $56.4 million ($37.2 million net of tax)
non-recurring contribution to the Foundation in connection with the conversion
and reorganization of Independence Community Bank and its mutual holding
company parent in March 1998. As a result of the contribution, the Company
experienced a net loss of $31.0 million and $10.0 million for the quarter and
fiscal year ended March 31, 1998, respectively.
Charles J. Hamm, Chairman, President & Chief Executive Officer, commenting
on the Company's fiscal 1999 performance stated, "Our results of operations
for both the fourth quarter and the fiscal year represent record earnings for
the institution in its first full year as a public company.
"From the start, the organization's corporate strategy has initially
focused upon enhancing shareholder value, appropriately leveraging our capital
base through internal growth and acquisitions and maintaining our
community-based banking philosophy.
"We are meeting these objectives. Shareholder value has improved by
delivering record earnings, strategically repurchasing stock in the open
market, almost 15% to date, and initiating a quarterly dividend policy in the
third quarter of fiscal 1999. Our steps to leverage the institution's capital
base have included entering into definitive agreements to acquire two New
Jersey based financial institutions with combined assets in excess of
$1.3 billion. This urban market expansion into areas not previously served by
the Company allows the organization the opportunity to build on its success as
one of New York's premier multi-family lenders. Both New Jersey institutions
focus growth on small business community lending, a key strategy of
Independence. Additionally, we have restructured and conservatively leveraged
the balance sheet. The increased earnings were directly driven by the rise in
the average balance of interest-earning assets resulting primarily from the
proceeds received in the conversion and reorganization of the Bank, mortgage
loan originations of approximately $1.2 billion and an increase in investment
securities resulting from our leverage activity. However, through all the
change experienced in fiscal 1999, Independence has remained community and
customer focused by providing services, which are fairly priced and relatively
low costing."
Mr. Hamm continued, "Our management team is in place, energized and ready
to build upon the momentum created this year. The organization is
strategically well positioned and looking forward to the challenges of fiscal
year 2000, our 150th Anniversary."
Net Interest Income
Net interest income before provision for loan losses increased to
$43.6 million for the quarter ended March 31, 1999 compared to $38.0 million
for the quarter ended March 31, 1998. The $5.6 million, or 14.8%, increase in
net interest income was primarily the result of a $683.5 million decrease in
average interest-bearing liabilities reflecting in large part the outflow of
deposits accumulated during the subscription offering.
The net interest rate spread and margin were 2.73% and 3.38%,
respectively, for the fourth quarter of fiscal 1999 compared to 2.64% and
2.86%, respectively, for the same period in the prior year. The 9 basis point
increase in interest rate spread was primarily due to the increased yield on
interest-earning assets resulting from the shift from lower yielding
investment securities into mortgage loans. The increase in the margin
reflected the increase in net interest-earning assets resulting from the
investment of the net proceeds of the conversion and reorganization.
For the fiscal year ended March 31, 1999 net interest income before the
provision for loan losses increased $37.1 million, or 28.1%, to $169.2 million
from $132.1 million for the year ended March 31, 1998. Average earning assets
for the year increased by $777.5 million as a result of the net proceeds from
the Company's conversion combined with the implementation of the Company's
leveraging strategy.
The interest rate spread and net interest margin were 2.79% and 3.50%,
respectively, for the year ended March 31, 1999 compared to 3.05% and 3.26%,
respectively, for the year ended March 31, 1998. The interest rate spread
decreased 26 basis points as a result of generally lower yields on loan and
investments originated or purchased in fiscal 1999 combined with the downward
repricing of adjustable rate instruments while the cost of interest-bearing
liabilities remained stable. The increase in net interest margin was due to
an increase in net interest-earning assets resulting from the investment of
the proceeds of the conversion offset by a decline in yield on
interest-earning assets.
Non-Interest Income
Total non-interest income decreased slightly to $3.2 million for the
quarter ended March 31, 1999 compared to $3.3 million for the fourth quarter
of fiscal 1998. For the year ended March 31, 1999 non-interest income was
$11.3 million compared to $10.3 million for the same period in fiscal 1998.
The $1.0 million increase in the current fiscal year compared to the prior
year was primarily due to increased mortgage prepayment fees associated with
the refinancing of mortgage loans which was partially offset by a decrease in
banking and service fees.
Non-Interest Expense
For the quarter ended March 31, 1999 non-interest expense amounted to
$24.4 million compared to $25.9 million for the final quarter of fiscal 1998
(exclusive of the $56.4 million contribution to the Foundation for the quarter
ended March 31, 1998). The $1.5 million decrease is due to lower costs
associated with data processing services partially offset by an increase in
compensation and benefit costs. For the year ended March 31, 1999,
non-interest expense amounted to $98.2 million, an increase of $8.7 million or
9.8%, compared to $89.5 million for fiscal 1998 (exclusive of the $56.4
million contribution to the Foundation). The increase in fiscal 1999 was
primarily attributable to an $8.7 million increase in compensation and benefit
expense which increased for the fiscal year (as well as the quarter) as a
result of the combined effects of staff additions, benefits related to the
implementation of the Company's Employee Stock Ownership Plan and the 1998
Recognition and Retention Plan, as well as normal merit increases.
Financial Condition
Total assets at March 31, 1999 were $5.54 billion, an increase of
$314.0 million, or 6.0%, from $5.22 billion at March 31, 1998. Total loans
and investment securities increased approximately $879.5 million which was
funded by increased Federal Home Loan Bank borrowings in conjunction with
implementation of the Company's leveraging strategy. This increase was
partially offset by a $701.2 million decrease in cash and cash equivalents
related to securities lending activities. In response to the increased demand
for mortgage loans during fiscal 1999, the Company began changing its asset
mix by systematically shifting its investments from U.S. Treasury securities
into higher yielding mortgage loans and mortgage-related securities, and, as a
result, reduced its securities lending activities. There were no securities
lending transactions outstanding at March 31, 1999 compared to $701.2 million
at March 31, 1998.
The Company's stockholders' equity totaled $825.0 million at March 31,
1999 compared to $949.1 million at March 31, 1998. The $124.2 million
decrease was primarily due to a $126.0 million reduction in capital due to the
purchase of shares in connection with the Company's stock repurchase program,
a $33.9 million adjustment to capital as a result of the issuance of grants
and purchase of shares to fund the 1998 Recognition and Retention Plan, a
$4.0 million decrease due to dividend payments and an $8.2 million decrease in
the unrealized gain on securities available-for-sale. Such reductions were
partially offset by net income of $45.2 million for fiscal 1999. Tangible
book value per share was $11.46 and the tangible equity to assets ratio was
14.05% at March 31, 1999. At March 31, 1999, the Bank's capital was well in
excess of all regulatory requirements.
Asset Quality
The overall quality of the Company's assets remained strong with
non-performing assets as a percentage of total assets amounting to 71 basis
points at March 31, 1999 compared to 57 basis points at March 31, 1998.
Non-performing assets (consisting of non-performing loans and other real
estate owned ("OREO")) totaled $39.4 million at March 31, 1999 compared to
$29.9 million at March 31, 1998. The increase of $9.5 million was primarily
due to an increase in loans which are contractually past due as to maturity
although current as to principal and interest payments which partially offset
a decrease in non-accrual loans.
The allowance for loan losses was $46.8 million at March 31, 1999, an
increase of $10.5 million from $36.3 million at March 31, 1998. The allowance
for loan losses as a percentage of non-performing loans was 119.7% at March
31, 1999 compared to 122.2% at March 31, 1998. The increase in the allowance
was due to the Company's significant increase in multi-family residential and
commercial real estate loan originations during fiscal 1999, which loans may
be, as a general matter, subject to greater risk of loss. The allowance for
loan losses to total loans at March 31, 1999 was 1.34% as compared to 1.31% at
March 31, 1998. Management believes the allowance for loan losses at March
31, 1999 is adequate.
The Company announced during the fourth quarter of fiscal 1999 and the
first quarter of fiscal 2000, respectively, the proposed acquisition of Broad
National Bancorporation ("Broad") and Statewide Financial Corp. ("Statewide").
The Broad acquisition is currently expected to close in the third quarter of
calendar 1999 while the Statewide acquisition is currently expected to close
in the fourth quarter of calendar 1999 or by January 31, 2000. On a proforma
combined basis, as of December 31, 1998, total assets of the Company, Broad
and Statewide would have been approximately $6.5 billion.
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 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.
Independence Community Bank Corp. is the holding company for Independence
Community Bank. The Bank, originally chartered in 1850, currently operates
32 full service branches located in the greater New York City metropolitan
area including 26 branches located in the boroughs of Brooklyn and Queens.
INDEPENDENCE COMMUNITY BANK CORP.
Consolidated Statements of Financial Condition
(Dollars in thousands)
(unaudited)
March 31, March 31,
1999 1998
ASSETS:
Cash and cash equivalents $279,885 $857,251
Securities available for sale:
Investment securities 331,795 1,282,072
Mortgage-backed and
mortgage-related 1,189,833 84,610
Total securities available
for sale 1,521,628 1,366,682
Mortgage loans on
real estate 2,926,978 2,279,169
Other loans 579,503 502,718
Total loans 3,506,481 2,781,887
Less: allowance for
possible loan losses (46,823) (36,347)
Total loans, net 3,459,658 2,745,540
Intangible assets, net 47,244 55,873
Other assets 228,563 197,650
Total assets $5,536,978 $5,222,996
LIABILITIES AND
STOCKHOLDERS' EQUITY:
Deposits $3,447,364 $3,393,839
Borrowings on securities
loaned -- 701,160
Other borrowings 1,118,364 16,681
Escrow and other deposits 61,003 45,868
Accrued expense and
other liabilities 85,285 116,324
Total liabilities 4,712,016 4,273,872
Stockholders' equity:
Common stock ($.01 par value,
125,000,000 shares authorized,
76,043,750 shares issued;
67,873,876 shares
outstanding) 760 760
Additional paid-in-capital 739,090 741,277
Treasury stock at cost;
8,169,874 shares (125,993) --
Unallocated common stock
held by ESOP (92,693) (97,636)
Non-vested awards under
Recognition and
Retention Plan (33,918) --
Retained earnings,
substantially restricted 340,019 298,876
Net unrealized (loss) gain on
securities available-for-sale,
net of tax (2,303) 5,847
Total stockholders' equity 824,962 949,124
Total liabilities &
stockholders' equity $5,536,978 $5,222,996
INDEPENDENCE COMMUNITY BANK CORP.
Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)
For the For the
Three Months ended Year ended
March 31, March 31,
1999 1998 1999 1998
Interest income:
Mortgage loans on
real estate $53,337 $44,731 $198,003 $175,269
Other loans 10,274 9,684 39,720 38,433
Investment securities 9,059 17,955 46,216 45,689
Mortgage-backed and
mortgage-related
securities 13,260 2,104 28,254 10,992
Other 3,438 15,759 24,222 22,660
Total interest income 89,368 90,233 336,415 293,043
Interest expense:
Deposits 32,872 41,153 133,146 148,966
Borrowings 12,895 11,086 34,075 11,977
Total interest expense 45,767 52,239 167,221 160,943
Net interest income 43,601 37,994 169,194 132,100
Provision for
loan losses 2,934 2,331 10,698 10,011
Net interest income
after provision
for loan losses 40,667 35,663 158,496 122,089
Non-interest income:
Net gain on sales
of loans and
securities 343 52 390 115
Fees, commission
and other income 2,879 3,200 10,933 10,233
Total non-interest
income 3,222 3,252 11,323 10,348
Non-interest expense:
Total general and
administrative
expenses 22,262 23,778 89,574 80,713
Amortization of
intangible assets 2,155 2,169 8,629 8,740
Contribution to
Foundation -- 56,422 -- 56,422
Total non-interest
expense 24,417 82,369 98,203 145,875
Income (loss) before
provision (benefit)
for income taxes 19,472 (43,454) 71,616 (13,438)
Provision (benefit)
for income taxes 7,188 (12,490) 26,441 (3,482)
Net income (loss) $12,284 $(30,964) $45,175 $(9,956)
Basic earnings (loss)
per share (a) $0.20 $(0.52) $0.67 $(0.52)
Diluted earnings (loss)
per share (a) $0.20 $(0.52) $0.66 $(0.52)
(a) Independence converted to stock form on March 13, 1998. Accordingly,
earningsper share for the quarter and fiscal year ended March 31,
1998 are presented from March 13, 1998 to March 31, 1998. Includes
the one time non-recurring charge of $56.4 million ($37.2 million net
of tax) for funding of the Independence Community Foundation in the
periods ending March 31, 1998.
INDEPENDENCE COMMUNITY BANK CORP.
Selected Financial Ratios and Other Data
(In thousands, except ratios and per share amounts)
At or For the At or For the
Three Months Ended Year Ended
March 31, March 31,
1999 1998 1999 1998
Performance Ratios:
Return on average
assets (a)(b) 0.91% 0.45% 0.90% 0.64%
Return on average
equity (a)(b) 5.68% 5.27% 4.87% 7.59%
Basic earnings per
common share (c) $0.20 $(0.52) $ 0.67 $(0.52)
Diluted earnings per
common share(c) $0.20 $(0.52) $ 0.66 $(0.52)
Average shares
outstanding-basic 62,099 72,443 67,709 72,443
Average shares
outstanding-diluted 62,865 72,443 68,001 72,443
Interest rate
spread (b) 2.73% 2.64% 2.79% 3.05%
Net interest
margin (b) 3.38% 2.86% 3.50% 3.26%
Non-interest expense,
to average assets
(a)(d)(e) 1.65% 1.70% 1.78% 1.90%
Efficiency
Ratio (a)(e) 47.90% 57.72% 49.73% 56.71%
Average interest-earning
assets to average
interest-bearing
liabilities 116.69% 103.98% 120.66% 105.17%
March 31, 1999 March 31, 1998
Asset Quality:
Non-performing loans:
Non-accrual loans $7,107 $11,335
Loans past due 90 days
or more as to:
Interest and accruing 1,197 1,607
Principal and accruing (f) 30,805 16,804
Total non-performing loans 39,109 29,746
Other real estate owned 273 192
Total non-performing assets 39,382 29,938
Non-performing assets to
total assets at end of
period 0.71% 0.57%
Allowance for loan losses
to non-performing loans
at end of period 119.72% 122.19%
Allowance for loan losses to
total loans at end of period 1.34% 1.31%
Capital and Other Ratios:
Average equity to average assets 18.41% 8.45%
Tangible equity to assets
at end of period 14.05% 17.10
Tangible book value per share $11.46 $11.75
INDEPENDENCE COMMUNITY BANK CORP.
Selected Financial Ratios and Other Data
(In thousands, except ratios and per share amounts)
For the For the
Three Months ended Year ended
March 31, March 31,
1999 1998 1999 1998
Cash earnings
and ratios:
Cash earnings (g) $16,080 $9,175 $58,459 $36,754
Efficiency
ratio (e)(g) 42.30% 54.68% 45.63% 55.83%
Diluted earnings
per share(g)$0.26 N/M $0.86 N/M
(a) Excludes the one time non-recurring charge of $56.4 million
($37.2 million net of tax) for funding of the Independence Community
Foundation in the periods ending March 31, 1998.
(b) Presented on an annualized basis.
(c) Independence converted to stock form on March 13, 1998. Accordingly,
earnings per share for the quarter and fiscal year ended March 31,
1998 are presented from March 13, 1998 to March 31, 1998. Includes
the one time non-recurring charge of $56.4 million ($37.2 million net
of tax) for funding of the Independence Community Foundation in the
periods ending March 31, 1998.
(d) Excludes amortization of intangible assets.
(e) Reflects adjusted operating expense (net of amortization of
intangibles) as a percent of the aggregate of net interest income and
adjusted non-interest income (excluding gains and losses on the sales
of loans and securities).
(f) Reflects loans that are 90 days or more past maturity which continue
to make payments on a basis consistent with the original repayment
schedule.
(g) Cash earnings include net income adjusted for the amortization of
intangibles and certain charges related to the Company's stock related
benefit plans, net of tax. For fiscal 1998, cash earnings was also
adjusted for the one time non-recurring charge of $56.4 million
($37.2 million net of tax) for funding of the Independence Community
Foundation.
SOURCE Independence Community Bank Corp.
-0- 04/22/99
/CONTACT: Alan J. Cohen, First Vice President, Investor Relations,
718-722-5400, or John B. Zurell, Chief Financial Officer, 718-722-5420, both
of Independence Community Bank Corp./
(ICBC)
CO: Independence Community Bank Corp.
ST: New York
IN: FIN
SU: ERN |
