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K-Fed Bancorp Announces 2nd Quarter Results

COVINA, Calif., Feb. 2, 2010 (GLOBE NEWSWIRE) -- K-Fed Bancorp (Nasdaq:KFED)  (the Company), the parent company of Kaiser Federal Bank (the Bank), reported a net loss of $1.2 million or $0.09 per diluted share for the quarter ended December 31, 2009 and net income of $204,000 or $0.02 per diluted share for the six months then ended. This compares to net income of $931,000 or $0.07 per diluted share for the quarter ended December 31, 2008 and $2.3 million or $0.18 per diluted share for the six months then ended. The net loss for the current quarter resulted from an increase in the provision for loan losses. 

As a result of the prolonged distressed economic environment, elevated unemployment levels and a depressed real estate market, the loan portfolio continues to show increased delinquency. Delinquent loans 60 days or more totaled $16.1 million or 2.10% of total loans and non-performing assets totaled $22.9 million or 2.61% of total assets at December 31, 2009. Delinquent loans 60 days or more totaled $8.5 million or 1.13% of total loans and non-performing assets totaled $9.4 million or 1.05% of total assets at June 30, 2009. The Bank continues to work with responsible borrowers to stay in their homes and as a result has restructured $5.1 million in mortgage loans that are performing according to their revised contractual terms at December 31, 2009. This compares to $2.1 million in restructured loans at June 30, 2009. All restructured loans are reported as non-accrual loans at December 31, 2009 and June 30, 2009.

Also included in non-accrual loans at December 31, 2009 were two multi-family loans totaling $2.8 million and one commercial real estate loan totaling $2.7 million. One of the multi-family loans totaling $1.8 million was over 90 days delinquent and in the process of foreclosure. The other multi-family loan totaling $1.0 million was less than 60 days delinquent and the borrower filed for bankruptcy. The commercial real estate loan was less than 60 days delinquent at December 31, 2009 but the borrower was experiencing cash flow issues. In January, the commercial real estate loan was paid current. There were no multi-family or commercial real estate loans on non-accrual at June 30, 2009.

Provision for loan losses increased to $5.7 million for the quarter ended December 31, 2009 from $1.0 million for the same quarter last year. Provision for loan losses increased to $6.5 million for the six months ended December 31, 2009 from $1.3 million for the same period last year. The increase in the provision for loan losses reflects management’s continuing assessment of the credit quality of the Bank’s loan portfolio, which is affected by various trends, including current economic conditions and expected credit losses. 

Net interest margin increased to 3.23% for the quarter ended December 31, 2009 from 2.56% for the same quarter last year. Net interest margin increased to 3.04% for the six months ended December 31, 2009 from 2.57% for the same period last year. The increase in the net interest margin reflects a significant reduction in the cost of funds as a result of the declining interest rate environment and repayment of $60.0 million in higher costing Federal Home Loan Bank (“FHLB”) advances during the past six months.

Total assets decreased to $877.5 million at December 31, 2009 from $895.1 million at June 30, 2009 while gross loans receivable increased to $768.7 million at December 31, 2009 from $751.5 million at June 30, 2009. The decrease in total assets was a result of the repayment of $60.0 million in FHLB advances that matured during the quarter ended September 30, 2009. The repayment of FHLB advances was funded with available liquidity due to strong deposit growth.

Total deposits increased $58.0 million to $624.2 million at December 31, 2009 as compared to $566.2 million at June 30, 2009. The change was comprised of $33.6 million in certificates of deposit, $13.1 million in checking and savings balances and $11.3 million in money market balances. The increase in certificate of deposit balances was a result of promotions for these types of accounts as well as an increase of $6.2 million in individual retirement account balances in the month of December. The increase in checking and savings balances was primarily a result of a third pay period experienced by a significant number of our customers on the last day of December. In addition, money market balances have steadily increased throughout the fiscal year. 

Noninterest expense increased to $4.3 million for the quarter ended December 31, 2009 as compared to $4.0 million for the quarter ended December 31, 2008. Noninterest expense increased to $8.6 million for the six months ended December 31, 2009 as compared to $7.9 million for the six months ended December 31, 2008. The increases were primarily a result of an increase in federal deposit insurance premiums of $148,000 and $313,000 for the three and six months ended December 31, 2009, respectively.

Total equity, represents 10.51% of total assets and decreased to $92.2 million at December 31, 2009 from $92.6 million at June 30, 2009. Currently, the Bank meets all regulatory capital requirements established by the Office of Thrift Supervision in order to be classified as a “well-capitalized” bank.

This release contains certain forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of K-Fed Bancorp and Kaiser Federal Bank, and changes in the securities markets. We caution readers not to place undue reliance on forward-looking statements. The Company disclaims any obligation to revise or update any forward-looking statements contained in this release to reflect future events or developments. 

 

K-FED BANCORP
Selected Financial Data and Ratios (Unaudited)
December 31, 2009
(Dollars in thousands, except per share data)
 
Selected Financial Condition Data and Ratios: December 31
2009
June 30
2009
Total assets $877,531 $895,097
Gross loans receivable 768,703 751,461
Allowance for loan losses (10,740) (4,586)
Cash and cash equivalents 49,289 73,705
Total deposits 624,199 566,193
Federal Home Loan Bank advances 147,000 207,004
State of California time deposits 10,000 25,000
Total stockholders’ equity $92,236 $92,558

Asset Quality Ratios:
   
Equity to total assets 10.51% 10.34%
Delinquent loans 60 days or more to total loans 2.10% 1.13%
Non-performing loans to total loans 2.93% 1.18%
Non-performing assets to total assets 2.61% 1.05%
Net charge-offs to average loans outstanding (annualized) 0.09% 0.16%
Allowance for loan losses to total loans 1.40% 0.61%
Allowance for loan losses to non-performing loans 47.74% 51.69%

 

 

  Three Months Ended Six Months Ended
  December 31 December 31
Selected Operating Data and Ratios: 2009 2008 2009 2008
Interest income $11,217 $11,112 $22,537 $22,618
Interest expense (4,455) (5,945) (9,585) (12,175)
Net interest income 6,762 5,167 12,952 10,443
Provision for loan losses (5,650) (984) (6,515) (1,347)
Net interest income after provision for loan losses 1,112 4,183 6,437 9,096
Noninterest income 1,193 1,177 2,393 2,387
Noninterest expense (4,320) (3,965) (8,592) (7,901)
Income (loss) before income tax expense (2,015) 1,395 238 3,582
Income tax benefit (expense) 809 (464) (34) (1,242)
Net income (loss) ($1,206) $931 $204 $2,340
         
Net income (loss) per share – basic and diluted ($0.09) $0.07 $0.02 $0.18
Return (loss) on average assets (annualized) (0.55)% 0.44% 0.05% 0.55%
Return (loss) on average equity (annualized) (5.15)% 4.08% 0.44% 5.14%
Net interest margin (annualized) 3.23% 2.56% 3.04% 2.57%
Efficiency ratio 54.30% 62.51% 55.99% 61.59%

 

 

 

K-FED BANCORP
Selected Financial Data and Ratios (Unaudited)
December 31, 2009
(Dollars in thousands)
 
  At Dec. 31,   At June 30,  
Non-accrual loans: 2009   2009  
Real estate loans:        
One-to-four family $11,872   $6,766  
Multi-family 2,787    
Commercial 2,687    
Other loans:        
Automobile 55    
Home Equity    
Other 3   11  
Troubled debt restructurings:        
One-to-four family 4,859   1,859  
Multi-family 233   235  
Commercial    
Total non-accrual loans 22,496   8,871  
         
Other real estate owned and repossessed assets:        
Real estate:        
One-to-four family 403   496  
Multi-family    
Commercial    
Other:        
Automobile 16   3  
Home equity    
Other    
Total other real estate owned and repossessed assets 419   499  
Total non-performing assets $22,915   $9,370  

 

 

             
    Loans Delinquent :        
    60-89 Days   90 Days or More   Total Delinquent Loans
    Number of
Loans
  Amount   Number of
Loans
  Amount   Number of
Loans
  Amount
Delinquent Loans:    
At December 31, 2009                                    
Real estate loans:                                    
One-to-four family     9     $3,397     24     $10,842     33     $14,239
Multi-family     --     --     1     1,757     1     1,757
Commercial     --     --     --     --     --     --
Other loans:                                    
Automobile     4     46     4     55     8     101
Home equity     --     --     --     --     --     --
Other     6     3     4     3     10     6
Total loans     19     $3,446     33     $12,657     52     $16,103
                                     
At June 30, 2009                                    
Real estate loans:                                    
One-to-four family     6     $2,212     14     $6,220     20     $8,432
Multi-family     --     --     --     --     --     --
Commercial     --     --     --     --     --     --
Other loans:                                    
Automobile     3     16     --     --     3     16
Home equity     --     --     --     --     --     --
Other     11     16     6     11     17     27
Total loans     20     $2,244     20     $6,231     40     $8,475
CONTACT:  K-FED Bancorp
          K.M. Hoveland, President/CEO
          Dustin Luton, Chief Financial Officer
          (626) 339-9663
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