Exhibit 99
[Commonwealth Bancorp, Inc. Logo]
For release: IMMEDIATELY
Contact: Charles M. Johnston, Chief Financial Officer (610) 313-2189
COMMONWEALTH BANCORP, INC. REPORTS RECORD EARNINGS PER SHARE FOR THIRD QUARTER
2000
NORRISTOWN, PA, OCTOBER 17, 2000 - Commonwealth Bancorp, Inc. (NASDAQ: CMSB),
today reported net income of $4.0 million, or $0.37 per common share on a
diluted basis, for the third quarter of 2000, compared to net income of $4.4
million, or $0.36 per common share on a diluted basis, for the third quarter
of 1999. The third quarter 1999 financial results reflected a $1.2 million
(after-tax) net gain on the sale of mortgage servicing rights. This gain was
offset, in part, by a $0.4 million (after-tax) charge primarily relating to
computer hardware and software upgrades and a $0.2 million (after-tax) loss on
the sale of securities. Exclusive of these items, net income would have been
$3.8 million, or $0.32 per share on a diluted basis, for the quarter ended
September 30, 1999.
For the nine months ended September 30, 2000, net income was $11.2 million, or
$1.02 per common share on a diluted basis, compared to net income of $12.8
million, or $0.99 per common share on a diluted basis, for the nine months
ended September 30, 1999. In addition to the above factors affecting the
third quarter 1999 results, net income for the nine months of 1999 included a
$0.7 million (after-tax) gain on the sale of two branches in Lebanon County,
Pennsylvania. This gain was offset, in part, by a $0.3 million (after-tax)
charge relating to certain assets acquired in the 1996 acquisition of 12
branches in Lebanon and Berks Counties, Pennsylvania. Exclusive of these
items, net income would have been $11.9 million, or $0.91 per share on a
diluted basis, for the nine months ended September 30, 1999.
On a business segment basis, net income from Community Banking, exclusive of
the above items, increased from $3.3 million, or $0.27 per common share, in
the third quarter of 1999, to $4.0 million, or $0.37 per common share, in the
third quarter of 2000. Exclusive of the $1.2 million (after-tax) net gain on
the sale of mortgage servicing rights, net income from Mortgage Banking
decreased from $0.5 million, or $0.04 per common share, in the third quarter
of 1999, to essentially breakeven in the third quarter of 2000.
Net income from Community Banking, exclusive of the above items, increased
from $8.8 million, or $0.68 per common share, for the nine months ended
September 30, 1999, to $11.7 million, or $1.06 per common share, for the nine
months ended September 30, 2000. Net income from Mortgage Banking, exclusive
of the $1.2 million (after-tax) net gain on the sale of mortgage servicing
rights, decreased from $3.0 million, or $0.23 per common share, for the nine
months ended September 30, 1999, to a loss of $0.4 million, or $0.04 per
common share, for the nine months ended September 30, 2000.
"Commonwealth continued to achieve outstanding results in Community Banking,"
stated Charles H. Meacham, Commonwealth's Chairman and Chief Executive
Officer. He added, "Compared to the third quarter of 1999, average consumer
loans increased 25% to $361 million and average commercial loans increased 31%
to $218 million. This contributed to the strong improvement in Commonwealth's
net interest margin, which was 4.29% in the third quarter of 2000, compared to
3.73% in the third quarter of 1999." He continued, "We are also pleased that
Mortgage Banking achieved breakeven results in the third quarter despite a
generally unfavorable interest rate environment for mortgage originations."
COMMONWEALTH BANCORP, INC.
Mailing Address: P.O. Box 2100, Valley Forge, PA 19482-2100
Shipping Address: 2 West Lafayette Street, Norristown, PA 19401-4758
610-313-1600
Net interest income was $18.4 million in the third quarter of 2000, compared
to $17.6 million in the third quarter of 1999. For the nine months ended
September 30, 2000, net interest income was $54.9 million, versus $53.0
million for the comparable period in 1999. These increases were primarily
attributable to a higher net interest margin, which was partially offset by a
decrease in average interest earning assets.
The net interest margin on a fully taxable equivalent basis was 4.29% in the
third quarter of 2000, compared to 3.73% in the third quarter of 1999. The
increase was primarily attributable to a 0.60% increase in the yield on
interest-earning assets, which was primarily attributable to higher market
interest rates and a favorable change in investment mix, involving an increase
in higher yielding consumer and commercial loans, and a decrease in lower
yielding mortgage loans and securities.
For the nine months ended September 30, 2000, the net interest margin on a
fully taxable equivalent basis was 4.24%, versus 3.58% in the comparable 1999
period. The increase was primarily attributable to a 0.58% increase in the
yield on interest-earning assets, which was primarily attributable to the same
factors responsible for the increase in the third quarter of 2000. Also
contributing to the increase in net interest margin for the first nine months
of 2000 was a 0.12% decrease in the cost of interest-bearing liabilities
relative to the comparable period in 1999. The decrease in the cost of
interest-bearing liabilities was primarily related to a decrease in higher
costing certificates and wholesale borrowings.
Noninterest income totaled $6.0 million in the third quarter of 2000, compared
to $7.8 million in the third quarter of 1999. The decrease primarily
reflected a $1.6 million net gain on sale of mortgage servicing rights during
the third quarter of 1999, and a $0.7 million decrease in the net gain on sale
of mortgage loans. The latter was primarily attributable to a decrease in
mortgage originations due to generally higher market interest rates. Also
during the third quarter of 2000, servicing fees decreased by $0.7 million
relating to the sale of mortgage servicing rights during the third quarter of
1999. The above decreases were partially offset by a $0.5 million increase in
deposit fees and related income, a $0.4 million increase in Tyler Wealth
Counselors' revenue, and a $0.3 million increase in the net gain on sale of
securities. The increase in deposit fees was primarily attributable to an
increase in transaction accounts and the increase in Tyler Wealth Counselors'
revenue was related to the acquisition of certain business interests of Tyler
Consulting, Inc. during the first quarter of 2000.
Noninterest income was $16.4 million for the first nine months of 2000,
compared to $23.4 million for the same 1999 period. In addition to the
factors relating to the third quarter, the decrease was also attributable to a
$1.0 million gain on the sale of two branches in Lebanon County, Pennsylvania,
during the second quarter of 1999.
Noninterest expense was $17.7 million in the third quarter of 2000, compared
to $18.3 million in the third quarter of 1999. The decrease was primarily
attributable to a $0.6 million charge during the third quarter of 1999,
primarily relating to computer hardware and software upgrades, and a decrease
in mortgage banking expenses.
Noninterest expense was $52.4 million for the nine months ended September 30,
2000, compared to $55.4 million for the same period in 1999. The decrease was
primarily attributable to the same factors responsible for the decrease in the
third quarter of 2000. Also contributing to the decrease was a $0.5 million
nonrecurring charge in the second quarter of 1999 relating to certain assets
acquired in the 1996 acquisition of 12 branches in Lebanon and Berks Counties,
Pennsylvania, as well as lower expenses relating to certain stock benefit
plans.
Provision for loan losses totaled $1.3 million and $3.6 million in the third
quarter and nine months ended September 30, 2000, respectively. The provision
for loan losses totaled $1.0 million and $3.0 million in the third quarter and
nine months ended September 30, 1999, respectively. At September 30, 2000,
the allowance for loan losses totaled $10.9 million, or 0.76% of loans,
compared to $10.5 million, or 0.76% of loans, at December 31, 1999.
Net credit losses totaled $1.0 million, or 0.28% of average loans in the third
quarter of 2000. This compared to $0.8 million, or 0.24% of average loans in
the third quarter of 1999. For the nine months ended September 30, 2000, net
credit losses totaled $3.2 million, or 0.30% of average loans, compared to
$2.4 million, or 0.24%, in the same 1999 period. The increases were primarily
related to an increase in consumer net credit losses, which were $0.9 million
and $3.0 million in the third quarter and nine months ended September 30,
2000, compared to $0.5 million and $1.3 million in the third quarter and nine
months ended September 30, 1999.
Nonperforming assets totaled $10.9 million, or 0.59% of assets at September
30, 2000, compared to $10.4 million, or 0.54%, at December 31, 1999.
Provision for income taxes was $1.5 million, or 26.5% of income before income
taxes in the third quarter of 2000, compared to $1.8 million, or 29%, in the
third quarter of 1999. For the first nine months of 2000, provision for
income taxes was $4.1 million, or 26.5% of income before income taxes,
compared to $5.2 million, or 29%, in the first nine months of 1999. The
decrease in the effective tax rate in the third quarter and first nine months
of 2000, relative to the comparable periods in 1999, was primarily
attributable to lower pre-tax income, which resulted in a higher relative
percentage of tax-advantaged income to total income.
The Bank's core and risk-based capital ratios were 6.9% and 11.2%,
respectively, at September 30, 2000, compared to 6.4% and 11.3%, respectively,
at December 31, 1999. As of September 30, 2000, the Bank was in full
compliance with all regulatory capital requirements.
Commonwealth Bancorp, Inc., with consolidated assets of $1.8 billion, is the
holding company for Commonwealth Bank, which has 60 branches throughout
southeast Pennsylvania. ComNet Mortgage Services, a division of Commonwealth
Bank, has offices in Pennsylvania, Maryland and New Jersey. ComNet also
operates under the trade name of Homestead Mortgage in Maryland.
Certain statements contained herein may not be based on historical facts and
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Act of
1934, as amended. Actual results could differ materially from those indicated
in such statements due to risks, uncertainties and changes with respect to a
variety of market and other factors.
Detailed supplemental information follows.
<TABLE>
Commonwealth Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except share and per share amounts)
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Interest income:
<S> <C> <C> <C> <C>
Interest on loans $29,149 $26,270 $84,871 $78,713
Interest and dividends on deposits
and money market investments 506 1,025 1,477 2,921
Interest on investment securities 262 1,616 1,757 5,478
Interest on mortgage-backed 4,191 5,719 13,518 20,208
securities ------- ------- ------- -------
Total interest income 34,108 34,630 101,623 107,320
Interest expense:
Interest on deposits 12,206 12,911 36,781 40,247
Interest on notes payable and
other borrowings 3,486 4,079 9,894 14,109
------- ------- ------- -------
Total interest expense 15,692 16,990 46,675 54,356
------- ------- ------- -------
Net interest income 18,416 17,640 54,948 52,964
Provision for loan losses 1,300 1,000 3,625 3,000
------- ------- ------- -------
Net interest income after
provision for loan losses 17,116 16,640 51,323 49,964
Noninterest income:
Deposit fees and related income 3,040 2,557 8,700 7,237
Servicing fees 181 873 601 2,818
Net gain on sale of mortgage loans 1,565 2,276 3,661 9,043
Net gain (loss) on sale of
securities 45 (250) 45 (250)
Other 1,186 2,379 3,365 4,601
------- ------- ------- -------
Total noninterest income 6,017 7,835 16,372 23,449
------- ------- ------- -------
Noninterest expense:
Compensation and employee benefits 8,960 9,212 26,401 28,028
Occupancy and office operations 2,747 3,170 8,158 8,675
Amortization of intangible assets 1,239 1,156 3,689 3,666
Other 4,704 4,799 14,144 14,982
------- ------- ------- -------
Total noninterest expense 17,650 18,337 52,392 55,351
------- ------- ------- -------
Income before income taxes 5,483 6,138 15,303 18,062
Income tax provision 1,453 1,780 4,055 5,238
------- ------- ------- -------
Net income $4,030 $4,358 $11,248 $12,824
========== ========== ========== ==========
Basic weighted average number of
shares outstanding 10,739,425 11,485,514 10,782,377 12,585,631
========== ========== ========== ==========
Basic earnings per share $0.38 $0.38 $1.04 $1.02
========== ========== ========== ==========
Diluted weighted average number of
shares outstanding 11,009,790 11,983,616 11,041,710 13,000,245
========== ========== ========== ==========
Diluted earnings per share $0.37 $0.36 $1.02 $0.99
========== ========== ========== ==========
</TABLE>
<TABLE>
Commonwealth Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
Assets:
<S> <C> <C>
Cash and due from banks $57,638 $54,677
Interest-bearing deposits - 3,499
Short-term investments available for sale 48 3,575
Mortgage loans held for sale 33,029 24,005
Investment securities
Securities available for sale (cost of $12,815
and $68,301, respectively), at market value 13,347 68,219
Mortgage-backed securities
Securities held to maturity (market value of
$-- and $92,965, respectively), at cost - 93,674
Securities available for sale (cost of $213,808
and $202,076, respectively), at market value 211,838 197,280
Loans receivable, net 1,414,833 1,361,430
Accrued interest receivable, net 9,150 9,499
FHLB stock, at cost 18,400 18,400
Premises and equipment, net 15,456 15,535
Intangible assets 31,688 33,048
Other assets, including net deferred taxes of
$6,197 and $7,460, respectively 38,731 39,555
---------- ----------
Total assets $1,844,158 $1,922,396
========== ==========
Liabilities:
Deposits $1,432,651 $1,503,746
Notes payable and other borrowings:
Secured notes due to Federal Home Loan
Bank of Pittsburgh 173,256 127,000
Securities sold under agreements to
repurchase 25,000 100,000
Other borrowings 18,974 9,076
Advances from borrowers for taxes and
insurance 6,250 9,326
Accrued interest payable, accrued
expenses and other liabilities 30,857 20,883
---------- ----------
Total liabilities 1,686,988 1,770,031
---------- ----------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $0.10 par value;
5,000,000 shares authorized; none issued - -
Common stock, $0.10 par value; 30,000,000
shares authorized;
18,068,127 shares issued and 11,495,653
outstanding at September 30, 2000
18,068,127 shares issued and 11,934,695
outstanding at December 31, 1999 1,807 1,807
Additional paid-in capital 137,402 136,966
Retained earnings 143,258 135,780
Unearned stock benefit plan compensation (7,073) (8,504)
Accumulated other comprehensive loss (918) (3,171)
Treasury stock, at cost; 6,572,474 and
6,133,432 shares, respectively (117,306) (110,513)
---------- ----------
Total shareholders' equity 157,170 152,365
---------- ----------
Total liabilities and
shareholders' equity $1,844,158 $1,922,396
========== ==========
</TABLE>
<TABLE>
Commonwealth Bancorp, Inc. and Subsidiaries
Selected Financial Data
(in thousands, except per share data)
For the Quarter Ended For the Nine Months Ended
-------------------------- -------------------------
9/30/00 9/30/99 9/30/00 9/30/99
-------------------------- -------------------------
(Unaudited) (Unaudited)
BALANCE SHEET DATA:
<S> <C> <C> <C> <C>
Average Mortgage Loans $867,018 $907,437 $872,893 $956,210
Average Consumer Loans 361,219 287,957 344,306 267,501
Average Commercial Loans 217,800 166,830 204,897 150,937
Average Loans 1,446,037 1,362,224 1,422,096 1,374,648
Average Interest-Earning Assets 1,723,873 1,885,497 1,743,013 1,985,330
Average Assets 1,870,952 2,043,914 1,878,509 2,140,055
Average Core Deposits 951,915 966,150 946,642 959,353
Average Certificates of Deposit 504,436 580,739 526,518 623,788
Average Deposits 1,456,351 1,546,889 1,473,160 1,583,141
Average Interest-Bearing Liabilities 1,681,136 1,829,756 1,693,489 1,911,264
Average Shareholders' Equity 153,828 159,434 151,810 177,479
OPERATING DATA:
Annualized Return on Assets 0.86% 0.85% 0.80% 0.80%
Annualized Return on Equity 10.42% 10.84% 9.90% 9.66%
Mortgage Originations $105,335 $143,690 $291,905 $512,686
Average Yield on Mortgage Loans (a) 7.30% 7.15% 7.32% 7.19%
Average Yield on Consumer Loans (a) 9.24% 8.78% 9.13% 8.87%
Average Yield on Commercial Loans (a) 9.09% 8.62% 8.95% 8.57%
Average Yield on Loans (a) 8.05% 7.67% 7.99% 7.67%
Average Yield on Interest-Earning Assets (a) 7.91% 7.31% 7.82% 7.24%
Average Cost of Core Deposits 2.33% 2.29% 2.36% 2.30%
Average Cost of Certificates of Deposit 5.24% 5.01% 5.09% 5.08%
Average Cost of Deposits 3.33% 3.31% 3.34% 3.40%
Average Cost of Interest-Bearing Liabilities 3.71% 3.68% 3.68% 3.80%
Net Interest Margin (a) 4.29% 3.73% 4.24% 3.58%
Period End Book Value Per Share $13.67 $12.58 $13.67 $12.58
Period End Tangible Book Value Per Share 10.92 9.72 10.92 9.72
Period End Nonperforming Loans 8,040 7,470 8,040 7,470
Period End Nonperforming Assets 10,867 8,190 10,867 8,190
(a) Taxable equivalent basis
</TABLE>
