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CFS Bancorp, Inc. Announces Second Quarter 2009 Net Income and Operating Results
Marketwire
Jul 27, 2009
MUNSTER, IN -- (Marketwire) -- 07/27/09 -- CFS Bancorp, Inc. (NASDAQ: CITZ) (the Company), the parent of Citizens Financial Bank (the Bank), today reported net income of $670,000 for the second quarter of 2009 with diluted earnings per share of $0.06. During the second quarter of 2008, the Company reported a net loss of $2.3 million, or $(0.22) per share.
The Company's net income for the six months ended June 30, 2009 improved to $2.1 million, or $0.20 per diluted share, compared to a net loss of $516,000, or $(0.05) per share, for the six months ended June 30, 2008.
The Company's highlights for the second quarter of 2009 included:
-- tangible common equity improved to $115.5 million, or 10.55% of
tangible assets at June 30, 2009 from $110.8 million or 9.96% at March 31,
2009;
-- risk-based capital of 13.21% remains above the Federal Deposit
Insurance Corporation (FDIC) guidelines of 10.0% to be considered "well-
capitalized;"
-- net interest margin increased to 3.69% for the second quarter of 2009
from 3.61% for the first quarter of 2009 and 3.26% for the second quarter
of 2008; and
-- core deposits increased $15.6 million or 3.81%.
Chairman's Comments
"While positive, reported earnings were impacted by increased costs attributable to higher FDIC insurance premiums which included a special FDIC assessment on all banks, incentive compensation accruals, and credit quality related costs. Earnings benefited during the quarter from modestly higher margins, but our growth and diversification efforts have not yet resulted in sufficient earning asset growth to overcome the higher cost structure associated with executing our strategy," said Thomas F. Prisby, Chairman & CEO. "To be clear, while some might be satisfied in the current environment with achieving profitability, we do not view the reported level of earnings as adequate."
"In the current economic environment, it is challenging to find sufficient high quality credit opportunities to drive strong net loan growth, and we will not forsake quality to achieve growth. As a result, reported financial results do not yet fully reflect the progress that we have made in implementing our growth and diversification plan. As an example of the progress made during the quarter, we benefited from strong core-deposit growth as a result of both an increase in the number of business customer accounts as well as expanding the number of business owner/operator customers with whom we maintain personal deposit relationships. Notwithstanding the challenging economic environment in our core market areas, our strategic efforts to improve asset quality resulted in a modest increase in our non-performing assets," added Prisby.
"We continue to benefit from a solid capital base and ample liquidity," Prisby noted. "Despite the challenges posed by the national, regional and local economies, we remain focused on retaining capital strength, identifying and mitigating problem credits and investing in our franchise while continuing to execute our stated strategy."
Progress on Strategic Growth and Diversification Plan
The Company's Strategic Growth and Diversification Plan is built around four core objectives: decreasing non-performing loans; ensuring costs are appropriate given the Company's targeted future asset base; growing while diversifying by targeting small and mid-sized business owners for relationship-based banking opportunities; and expanding and deepening the Company's relationships with its customers by meeting a higher percentage of the customers' financial service needs.
While progress was made towards all core objectives, management is not satisfied with the rate of progress towards certain objectives. Although the ability to limit increases in non-performing assets during a period of significant economic duress is encouraging, management remains committed to the goal of aligning non-performing asset ratios with peer levels. In addition, operating costs remain relatively high, and it is increasingly clear that the Company's ability to achieve targeted earning asset levels will be hampered by current economic and regulatory conditions. As a result, management continues to focus on opportunistically cutting costs.
The Company's success in attracting new business banking clients, although not yet reflected in higher earning asset levels, played a significant role in its ability to grow deposits during 2009. Utilizing cross functional teams of business and retail calling officers, the Bank launched a dedicated effort to sell personal deposit and loan accounts to the owner/operators of its business clients, which resulted not only in strong deposit growth, but also in significant increases in the depth of the Company's relationships with this important customer segment. These achievements lead management to believe the Company is better positioned to achieve quality, relationship-based loan growth as the economy recovers.
Net Interest Income
The net interest margin increased eight basis points to 3.69% for the second quarter of 2009 from 3.61% for the first quarter of 2009 and increased 43 basis points from 3.26% for the second quarter of 2008. Net interest income increased to $9.3 million compared to $9.2 million for the first quarter of 2009 and $8.7 million for the second quarter of 2008. Net interest income for the second quarter of 2009 was positively affected by lower interest rates on interest-bearing deposits and borrowed money due to lower market rates coupled with a decrease in the amortization of the premium on the early extinguishment of Federal Home Loan Bank (FHLB) debt.
Interest income decreased 2.0% to $13.0 million for the second quarter of 2009 compared to $13.2 million for the first quarter of 2009 and 13.8% from $15.0 million for the second quarter of 2008. Interest income was negatively affected during the second quarter of 2009 due to an increase in non-performing assets. The decrease from the second quarter of 2008 was due to lower market rates of interest during the second quarter of 2009 coupled with higher non-performing assets during the period.
Interest expense decreased 10.5% to $3.6 million for the second quarter of 2009 from $4.1 million for the first quarter of 2009 and 42.7% from $6.3 million for the second quarter of 2008. Interest expense on deposits was positively affected by disciplined pricing on deposits, including certificates of deposit, as current market interest rates remain lower than during 2008. As a result, the cost of interest-bearing deposits decreased 87 basis points to 1.41%. In addition, the amortization of the premium on the early extinguishment of FHLB debt decreased $388,000 from the second quarter of 2008.
The cost of borrowed money was 2.72% for the second quarter of 2009 compared to 2.33% for the first quarter of 2009 and 4.88% for the second quarter of 2008. The increase in the cost of borrowed money from the first quarter of 2009 was a result of higher rates on FHLB borrowed money during the second quarter of 2009. The decrease from the second quarter of 2008 was a result of lower rates on FHLB borrowed money combined with decreased premium amortization which is included in total interest expense on borrowed money. The premium amortization reduced the net interest margin by three basis points for both the first and second quarters of 2009 and 17 basis points for the second quarter of 2008. The remaining premium amortization totaling $42,000 will be fully recognized as of December 31, 2009. Interest expense on borrowed money is detailed in the table below for the periods indicated.
Change from
Three Months Ended June 30, 2008
-------------------------------- to June 30, 2009
June 30, March 31, June 30, -------------------
2009 2009 2008 $ %
---------- ---------- ---------- --------- --------
(Dollars in thousands)
Interest expense on
short-term borrowed
money at
contractual rates $ 20 $ 33 $ 124 $ (104) (83.9)%
Interest expense on
FHLB borrowed
money at
contractual rates 799 855 1,208 (409) (33.9)
Amortization of
deferred premium 61 72 449 (388) (86.4)
---------- ---------- ---------- ---------
Total interest
expense on borrowed
money $ 880 $ 960 $ 1,781 $ (901) (50.6)
========== ========== ========== =========
Non-Interest Income and Non-Interest Expense
Excluding available-for-sale security gains and losses, non-interest income decreased $106,000 or 4.8% from the first quarter of 2009 primarily as a result of the first quarter of 2009 increase in viatical income. Service charges and card based fee income increased $121,000 or 7.2% resulting from increased volumes.
Non-interest income increased 9.0% to $2.1 million for the second quarter of 2009 from $2.0 million for the second quarter of 2008. Non-interest income excluding available-for-sale security gains and losses decreased $407,000, or 16.1%, from the second quarter of 2008 resulting from lower income on the Company's bank-owned life insurance policy due to lower interest crediting rates and reduced service charges and other fees due to lower activity when compared to the second quarter of 2008.
Non-interest expense for the second quarter of 2009 increased 5.5% to $9.9 million compared to $9.4 million for the first quarter of 2009 primarily due to FDIC insurance premiums. The Company's overall FDIC insurance premiums increased $659,000 from the first quarter of 2009. Of this increase, $495,000, or $0.03 per diluted share, net of tax, relates to the special assessment imposed on all insured depository institutions on June 30, 2009 with the remainder attributed to changes in assessment rates industry-wide. The FDIC has advised the banking industry that it may levy another special assessment during the second half of 2009. Partially offsetting these increases, the Company's net occupancy expense decreased $147,000 resulting from lower utility costs and snow removal expenses.
Non-interest expense for the second quarter of 2009 increased $2.3 million, or 29.4%, from $7.7 million for the second quarter of 2008. FDIC insurance premiums increased $923,000 during the second quarter of 2009 from the 2008 period as a result of increased regular assessments, the aforementioned special assessment and the 2008 utilization of FDIC insurance premium credits. Compensation and employee benefits increased primarily due to higher incentive compensation accruals during the 2009 period compared to the 2008 period. In addition, retirement and stock related compensation during the second quarter of 2009 increased due to the absence of a $343,000 reduction in expense during the 2008 period related to the revaluation of the Rabbi Trust shares from the change in the Company's stock price. Professional fees also increased during the second quarter of 2009 due to increased legal and consulting fees related to a shareholder derivative demand made late in the first quarter of 2009.
The Company's efficiency ratio for the second quarter of 2009 was 86.8% compared to 77.8% for the first quarter of 2009 and 72.2% for the second quarter of 2008. The Company's core efficiency ratios were 82.0%, 82.1%, and 65.8% for the same periods. The increases from the prior two periods are primarily the result of increased non-interest expense as discussed above.
Management has historically used an efficiency ratio that is a non-GAAP financial measure of operating expense control and operating efficiency. The efficiency ratio is typically defined as the ratio of non-interest expense to the sum of non-interest income and net interest income. Many financial institutions, in calculating the efficiency ratio, adjust non-interest income (as calculated under GAAP) to exclude certain component elements, such as gains or losses on sales of securities and assets. Management follows this practice to calculate our core efficiency ratio and utilizes this non-GAAP measure in its analysis of the Company's performance. The core efficiency ratio is different from the GAAP-based efficiency ratio. The GAAP-based measure is calculated using non-interest expense, net interest income and non-interest income as presented on the consolidated statements of income.
The Company's core efficiency ratio is calculated as non-interest expense less the FDIC special assessment divided by the sum of net interest income, excluding the deferred premium amortization related to the early extinguishment of debt, and non-interest income, adjusted for gains or losses on the sale of securities and other assets. Management believes that, when presented along with the GAAP efficiency ratio, the core efficiency ratio enhances investors' understanding of the Company's business and performance. The measure is also believed to be useful in understanding the Company's performance trends and to facilitate comparisons with the performance of others in the financial services industry. Management further believes the presentation of the core efficiency ratio provides useful supplemental information, a clearer understanding of the Company's financial performance, and better reflects the Company's core operating activities.
The risks associated with utilizing operating measures (such as the efficiency ratio) are that various persons might disagree as to the appropriateness of items included or excluded in these measures and that other companies might calculate these measures differently. Management of the Company compensates for these limitations by providing detailed reconciliations between GAAP information and its core efficiency ratio within the last table of this press release; however, these disclosures should not be considered as an alternative to GAAP.
Asset Quality
The provision for losses on loans for the second quarter of 2009 increased to $713,000 from $624,000 for the first quarter of 2009 and decreased from $7.2 million for the second quarter of 2008. Net charge-offs for the second quarter of 2009 totaled $1.3 million compared to $710,000 for the first quarter of 2009 and $5.1 million for the second quarter of 2008. The allowance for losses on loans totaled $14.9 million at June 30, 2009 compared to $15.6 million at December 31, 2008. In the second quarter, the Company's non-performing loans decreased by $2.4 million as the migration of loans to other real estate owned more than offset increases in non-performing commercial construction and land development loans and HELOCs.
The ratio of allowance for losses on loans to total loans was 1.99% at June 30, 2009 compared to 2.07% at December 31, 2008. When management determines a non-performing collateral dependent loan has a collateral shortfall, management will immediately charge-off the collateral shortfall. As a result, the Company is not required to maintain an allowance for losses on loans on these loans as the loan balance has already been written down to its net realizable value (fair value less estimated costs to sell the collateral).
The Company maintains the allowance for losses on loans at a level that management believes is sufficient to absorb credit losses inherent in the loan portfolio and represents management's estimate of inherent losses existing in the loan portfolio that are both probable and reasonable to estimate at each balance sheet date and is based on its review of available and relevant information. Management believes that at June 30, 2009 the allowance for losses on loans was adequate based on its review of historical loss experience, levels of delinquencies, economic conditions and the review of relevant and available information for specific loans.
Balance Sheet
At June 30, 2009, the Company's total assets were $1.09 billion compared to $1.12 billion at December 31, 2008.
The Company's loans receivable were relatively stable at $750.9 million at June 30, 2009 compared to $750.0 million at December 31, 2008. Securities available-for-sale totaled $220.3 million at June 30, 2009 compared to $251.3 million at December 31, 2008. The decrease in securities is primarily due to maturities and paydowns coupled with sales activity during the first quarter of 2009.
Deposits increased to $831.1 million at June 30, 2009 from $824.1 million at December 31, 2008 as a $15.6 million increase in non-municipal core deposit accounts more than offset a $5.4 million decline in municipal deposits and a $3.1 million decline in non-municipal certificates of deposit. Investments in the Company's branch network, technological infrastructure, human capital, and brand have enhanced its ability to translate existing and new customer relationships into deposit balances in the current environment. The decline in municipal deposits during the quarter was attributable primarily to seasonal factors. While the Company maintains strong relationships with its municipal customers, and municipal deposits continue to comprise an important funding source, management is lowering its reliance on such funds in anticipation that the recession's impact on municipalities and other government-related entities will result in lower municipal deposit levels. The Company's deposits consisted of the following as of the dates indicated:
June 30, December 31,
2009 2008
------------ ------------
(Dollars in thousands)
Core deposits $ 424,765 $ 409,184
Certificates of deposit 353,085 356,227
------------ ------------
Subtotal - non-municipal deposits 777,850 765,411
------------ ------------
Municipal core deposits 40,641 39,221
Municipal certificates of deposit 12,613 19,465
------------ ------------
Subtotal municipal deposits 53,254 58,686
------------ ------------
Total deposits $ 831,104 $ 824,097
============ ============
The Company's borrowed money decreased to $132.3 million at June 30, 2009 from $172.9 million at December 31, 2008 as the Company utilized proceeds from its available-for-sale securities portfolio to de-leverage its balance sheet during the first quarter of 2009. The Company's borrowed money consisted of the following as of the dates indicated:
June 30, December 31,
2009 2008
----------- -----------
(Dollars in thousands)
Short-term variable-rate borrowed money and
repurchase agreements $ 10,625 $ 28,312
Gross FHLB borrowed money 121,719 144,800
Unamortized deferred premium (42) (175)
----------- -----------
Total borrowed money $ 132,302 $ 172,937
=========== ===========
Shareholders' equity at June 30, 2009 increased $3.6 million to $115.5 million from $111.8 million at December 31, 2008 as a result of the following:
-- net income for the six months ended June 30, 2009 totaling $2.1
million;
-- an increase in accumulated other comprehensive income of $1.1 million;
-- a decrease of $832,000 in the unallocated common stock held by the
Company's Employee Stock Ownership Plan due to the release of the remaining
shares during the first quarter of 2009; and
-- a decrease of $515,000 in Treasury Stock - Rabbi Trust, due to a
distribution in the second quarter of 2009.
The regulatory capital ratios of the Bank continue to exceed all regulatory requirements. At June 30, 2009, the Bank remained "well-capitalized" under the Office of Thrift Supervision's regulatory capital guidelines with total capital to risk-weighted assets equal to 13.21%. The Company's tangible common equity increased to $115.5 million, or 10.55% of tangible assets at June 30, 2009.
CFS Bancorp, Inc., is the parent of Citizens Financial Bank, a $1.1 billion asset federal savings bank. Citizens Financial Bank is an independent bank focusing its people, products and services on helping individuals, businesses and communities be successful. The Bank has 22 offices throughout adjoining markets in Chicago's Southland and Northwest Indiana. The Company' website can be found at www.citz.com.
This press release contains certain forward-looking statements and information relating to the Company that is based on the beliefs of management as well as assumptions made by and information currently available to management. These forward-looking statements include but are not limited to statements regarding current regulatory capital and equity ratios, general economic conditions, state of the banking industry, successful execution of the Company's strategy and its Strategic Growth and Diversification Plan, levels of provision for the allowance for losses on loans and charge-offs, loan and deposit growth, diversification of the loan portfolio, non-performing asset levels, interest on loans, asset yields and cost of funds, net interest income, net interest margin, non-interest income, non-interest expense, interest rate environment, bank-owned life insurance interest rates, the expected effect of amortization of deferred premium on the FHLB debt and other risk factors identified in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as amended, and other filings with the Securities and Exchange Commission. In addition, the words "anticipate," "believe," "estimate," "expect," "indicate," "intend," "should," and similar expressions, or the negative thereof, as they relate to the Company or the Company's management, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties, assumptions and changes in circumstances. Forward-looking statements are not guarantees of future performance or outcomes, and actual results or events may differ materially from those included in these statements. The Company does not intend to update these forward-looking statements.
SELECTED CONSOLIDATED FINANCIALS AND OTHER DATA FOLLOW
CFS BANCORP, INC.
Highlights (Unaudited)
(Dollars in thousands, except per share data)
EARNINGS
HIGHLIGHTS
AND
PERFORMANCE
RATIOS (1) Three Months Ended Six Months Ended
------------------------------------ -----------------------
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
----------- ----------- ---------- ----------- ----------
Net
income/
(loss) $ 670 $ 1,461 $ (2,295) $ 2,131 $ (516)
Basic
earnings/
(loss)
per share 0.06 0.14 (0.22) 0.20 (0.05)
Diluted
earnings/
(loss)
per share 0.06 0.14 (0.22) 0.20 (0.05)
Cash
dividends
declared
per share 0.01 0.01 0.12 0.02 0.24
Return on
average
assets 0.24% 0.53% (0.80)% 0.39% (0.09)%
Return on
average
equity 2.41 5.27 (7.08) 3.84 (0.79)
Average
yield on
interest-
earning
assets 5.13 5.21 5.64 5.17 5.88
Average
cost on
interest-
bearing
liabilities 1.60 1.78 2.69 1.69 2.98
Interest
rate
spread 3.53 3.43 2.95 3.48 2.90
Net
interest
margin 3.69 3.61 3.26 3.65 3.24
Average
equity to
average
assets
(2) 10.15 10.09 11.29 10.12 11.34
Average
interest-
earning
assets
to
average
interest-
bearing
liabilities
(2) 111.48 111.39 113.17 111.43 112.92
Non-interest
expense to
average
assets 3.63 3.43 2.68 3.53 2.73
Efficiency
ratio (3) 86.76 77.75 72.17 82.13 72.35
Market
price per
share of
common
stock
for the
period
ended:
Closing $ 4.23 $ 3.90 $ 11.79 $ 4.23 $ 11.79
High 4.33 4.80 14.93 4.80 14.93
Low 3.50 1.75 11.42 1.75 11.42
STATEMENT
OF
CONDITION
HIGHLIGHTS
(at period June 30, March 31, December 31, June 30,
end) 2009 2009 2008 2008
----------- ---------- ----------- ----------
Total
assets $ 1,094,679 $1,111,908 $ 1,121,855 $1,102,773
Loans
receivable,
net of
unearned
fees 750,861 756,134 749,973 726,858
Total
deposits 831,104 863,884 824,097 848,439
Total
shareholders'
equity 115,450 110,751 111,809 124,776
Book value
per
common
share 10.73 10.33 10.47 11.70
Non-performing
loans 52,897 55,330 54,701 34,670
Non-performing
assets 60,268 58,629 57,943 35,742
Allowance
for
losses on
loans 14,934 15,472 15,558 10,403
Non-performing
loans to
total
loans 7.04% 7.32% 7.29% 4.77%
Non-performing
assets to
total
assets 5.51 5.27 5.16 3.24
Allowance
for
losses on
loans to
non-performing
loans 28.23 27.96 28.44 30.01
Allowance
for
losses on
loans to
total
loans 1.99 2.05 2.07 1.43
Employees
(FTE) 318 324 322 307
Branches
and
offices 22 22 22 22
Three Months Ended Six Months Ended
------------------------------------ -----------------------
AVERAGE
BALANCE June 30, March 31, June 30, June 30, June 30,
DATA 2009 2009 2008 2009 2008
----------- ----------- ---------- ----------- ----------
Total
assets $ 1,099,750 $ 1,114,507 $1,154,656 $ 1,107,087 $1,158,015
Loans
receivable,
net of
unearned
fees 750,861 751,910 743,097 751,383 764,986
Total
interest-
earning
assets 1,013,480 1,029,626 1,071,384 1,021,509 1,071,827
Total
liabilities 988,177 1,002,060 1,024,238 995,079 1,026,683
Total
deposits 845,617 823,483 863,865 834,611 861,163
Interest-
bearing
deposits 781,108 759,634 802,249 770,431 799,343
Non-interest
bearing
deposits 64,509 63,849 61,616 64,180 61,820
Total
interest-
bearing
liabilities 909,148 924,323 946,712 916,694 949,158
Shareholders'
equity 111,573 112,447 130,418 112,008 131,332
(1) Ratios are annualized where appropriate.
(2) Ratios calculated on average balances for the periods presented.
(3) See calculations in the last table of this press release.
CFS BANCORP, INC.
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
For the Six Months
For the Three Months Ended Ended
---------------------------------- ----------------------
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
---------- ----------- ---------- ---------- ----------
Interest
income:
Loans $ 9,807 $ 9,945 $ 11,296 $ 19,752 $ 24,084
Securities 3,020 3,043 3,172 6,063 6,251
Other 137 243 564 380 1,011
---------- ----------- ---------- ---------- ----------
Total
interest
income 12,964 13,231 15,032 26,195 31,346
Interest
expense:
Deposits 2,749 3,096 4,554 5,845 10,242
Borrowed money 880 960 1,781 1,840 3,842
---------- ----------- ---------- ---------- ----------
Total
interest
expense 3,629 4,056 6,335 7,685 14,084
---------- ----------- ---------- ---------- ----------
Net interest
income 9,335 9,175 8,697 18,510 17,262
Provision for
losses on
loans 713 624 7,172 1,337 7,914
---------- ----------- ---------- ---------- ----------
Net interest
income after
provision for
losses on
loans 8,622 8,551 1,525 17,173 9,348
Non-interest
income:
Service
charges and
other fees 1,376 1,299 1,465 2,675 2,904
Card-based
fees 432 388 415 820 795
Commission
income 70 71 135 141 193
Available-for-
sale security
gains (losses),
net - 720 (582) 720 (513)
Other asset
losses, net (6) - (3) (6) (3)
Income from
bank-owned
life
insurance 156 178 371 334 780
Other income 97 295 149 392 321
---------- ----------- ---------- ---------- ----------
Total
non-interest
income 2,125 2,951 1,950 5,076 4,477
Non-interest
expense:
Compensation
and employee
benefits 5,078 5,175 4,179 10,253 8,515
Net occupancy
expense 750 897 708 1,647 1,541
Furniture and
equipment
expense 520 535 543 1,055 1,094
Data
processing 420 419 484 839 942
Professional
fees 604 350 212 954 486
FDIC insurance
premiums 963 304 40 1,267 80
Marketing 218 198 178 416 386
Other general
and
administrative
expenses 1,390 1,550 1,340 2,940 2,685
---------- ----------- ---------- ---------- ----------
Total
non-interest
expense 9,943 9,428 7,684 19,371 15,729
---------- ----------- ---------- ---------- ----------
Income/(loss)
before income
taxes 804 2,074 (4,209) 2,878 (1,904)
Income tax
expense/
(benefit) 134 613 (1,914) 747 (1,388)
---------- ----------- ---------- ---------- ----------
Net
income/(loss) $ 670 $ 1,461 $ (2,295) $ 2,131 $ (516)
========== =========== ========== ========== ==========
Per share data:
Basic
earnings/
(loss) per
share $ 0.06 $ 0.14 $ (0.22) $ 0.20 $ (0.05)
Diluted
earnings/
(loss) per
share $ 0.06 $ 0.14 $ (0.22) $ 0.20 $ (0.05)
Cash dividends
declared per
share $ 0.01 $ 0.01 $ 0.12 $ 0.02 $ 0.24
Weighted-average
shares
outstanding 10,590,591 10,495,835 10,290,965 10,543,475 10,339,129
Weighted-average
diluted
shares
outstanding 10,697,387 10,628,901 10,553,634 10,663,333 10,605,830
CFS BANCORP, INC.
Consolidated Statements of Condition (Unaudited)
(Dollars in thousands)
June 30, March 31, December 31, June 30,
2009 2009 2008 2008
----------- ----------- ----------- -----------
ASSETS
Cash and amounts due
from depository
institutions $ 20,553 $ 14,937 $ 15,714 $ 15,824
Interest-bearing
deposits 36 16,767 3,133 4,527
Federal funds sold 234 433 259 492
----------- ----------- ----------- -----------
Cash and cash
equivalents 20,823 32,137 19,106 20,843
Securities
available-for-sale, at
fair value 220,324 222,080 251,270 261,985
Securities
held-to-maturity, at
cost 6,000 6,940 6,940 3,500
Investment in Federal
Home Loan Bank stock,
at cost 23,944 23,944 23,944 23,944
Loans receivable, net
of unearned fees 750,861 756,134 749,973 726,858
Allowance for losses
on loans (14,934) (15,472) (15,558) (10,403)
----------- ----------- ----------- -----------
Net loans 735,927 740,662 734,415 716,455
Interest receivable 3,902 4,045 4,325 4,660
Other real estate owned 7,371 3,299 3,242 1,072
Office properties and
equipment 19,703 19,697 19,790 19,822
Investment in
bank-owned life
insurance 36,449 36,784 36,606 36,090
Prepaid expenses and
other assets 20,236 22,320 22,217 14,402
----------- ----------- ----------- -----------
Total assets $ 1,094,679 $ 1,111,908 $ 1,121,855 $ 1,102,773
=========== =========== =========== ===========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits $ 831,104 $ 863,884 $ 824,097 $ 848,439
Borrowed money 132,302 124,770 172,937 113,129
Advance payments by
borrowers for taxes
and insurance 6,121 4,594 4,320 5,763
Other liabilities 9,702 7,909 8,692 10,666
----------- ----------- ----------- -----------
Total liabilities 979,229 1,001,157 1,010,046 977,997
Shareholders' Equity:
Preferred stock, $0.01
par value; 15,000,000
shares authorized - - - -
Common stock, $0.01
par value; 85,000,000
shares authorized;
23,423,306 shares
issued; 10,764,458,
10,723,903,
10,674,511 and
10,668,489 shares
outstanding 234 234 234 234
Additional paid-in
capital 189,004 189,367 189,211 190,093
Retained earnings 83,455 82,894 81,525 93,994
Treasury stock, at
cost; 12,566,255,
12,566,255,
12,616,572 and
12,625,785 shares (156,296) (156,296) (155,740) (155,843)
Treasury stock, Rabbi
Trust, at cost;
92,593, 133,148,
132,223 and
129,032 shares (1,212) (1,731) (1,726) (1,705)
Unallocated common
stock held by
Employee Stock
Ownership Plan - - (832) (2,970)
Accumulated other
comprehensive
income/(loss), net of
tax 265 (3,717) (863) 973
----------- ----------- ----------- -----------
Total shareholders'
equity 115,450 110,751 111,809 124,776
----------- ----------- ----------- -----------
Total liabilities
and shareholders'
equity $ 1,094,679 $ 1,111,908 $ 1,121,855 $ 1,102,773
=========== =========== =========== ===========
CFS BANCORP, INC.
Efficiency Ratio Calculations (Unaudited)
(Dollars in thousands)
Three Months Ended
-----------------------------------------
June 30, March 31, June 30,
2009 2009 2008
------------ ------------- ------------
Efficiency Ratio:
Non-interest expense $ 9,943 $ 9,428 $ 7,684
============ ============= ============
Net interest income plus
non-interest income $ 11,460 $ 12,126 $ 10,647
============ ============= ============
Efficiency ratio 86.76% 77.75% 72.17%
Core Efficiency Ratio:
Non-interest expense $ 9,943 $ 9,428 $ 7,684
Special assessment - FDIC
insurance (495) - -
------------ ------------- ------------
Non-interest expense - as
adjusted $ 9,448 $ 9,428 $ 7,684
============ ============= ============
Net interest income plus
non-interest income $ 11,460 $ 12,126 $ 10,647
Adjustments:
Net realized (gains)/losses on
sales of securities
available-for-sale - (720) 582
Net realized losses on sales of
assets 6 - 3
Amortization of deferred
premium 61 72 449
------------ ------------- ------------
Net interest income plus
non-interest income - as
adjusted $ 11,527 $ 11,478 $ 11,681
============ ============= ============
Core efficiency ratio 81.96% 82.14% 65.78%
Six Months Ended
---------------------------
June 30, June 30,
2009 2008
------------- ------------
Efficiency Ratio:
Non-interest expense $ 19,371 $ 15,729
============= ============
Net interest income plus
non-interest income $ 23,586 $ 21,739
============= ============
Efficiency ratio 82.13% 72.35%
Core Efficiency Ratio:
Non-interest expense $ 19,371 $ 15,729
Special assessment - FDIC
insurance (495) -
------------- ------------
Non-interest expense - as
adjusted $ 18,876 $ 15,729
============= ============
Net interest income plus
non-interest income $ 23,586 $ 21,739
Adjustments:
Net realized (gains)/losses on
sales of securities
available-for-sale (720) 513
Net realized losses on sales of
assets 6 3
Amortization of deferred
premium 133 976
------------- ------------
Net interest income plus
non-interest income - as
adjusted $ 23,005 $ 23,231
============= ============
Core efficiency ratio 82.05% 67.71%
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