SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earlier event reported) July 14, 1999
COVEST BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-20160 36-3820609
(State or other (Commission File No.) (IRS Employer
jurisdiction of Number)
Incorporation)
749 Lee Street, Des Plaines, Illinois 60016
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 847-294-6500
Item 5. Other Events
On July 14, 1999, the Company issued a press release pertaining to
Second Quarter 1999 results. The text of the press release is attached
hereto as Exhibit 99.1.
Item 7. Exhibit 99.1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: July 14, 1999
COVEST BANCSHARES, INC.
By: /s/ James L. Roberts
James L. Roberts
President and
Chief Executive Officer
By: /s/ Paul A. Larsen
Paul A. Larsen
Executive Vice President and
Chief Financial Officer
Exhibit 99.1
CoVest Bancshares, Inc. Announces Second Quarter Results
DES PLAINES, IL July 14, 1999 - CoVest Bancshares, Inc. (Nasdaq/COVB),
the holding company for CoVest Banc N.A., Des Plaines, Illinois,
announced today results for the second quarter ended June 30, 1999. Net
income totaled $1,039,000, or $0.25 (basic) and $0.24 (diluted) earnings
per share, versus net income for the three months ended June 30, 1998 of
$972,000, or $0.23 (basic) and $0.21 (diluted) earnings per share.
For the first six months of 1999, the Company earned $1,825,000 versus
$1,982,000 for the like period in 1998. This represents $0.44 (basic)
and $0.42 (diluted) earnings per share versus $0.47 (basic) and $0.44
(diluted) earnings per share for the first six months of 1998.
Return on average assets and return on average equity during the second
quarter were 0.77% and 8.96% respectively during 1999 compared to 0.68%
and 8.12% in 1998. Return on average assets and average equity for the
first six months of 1999 was 0.68% and 7.81% respectively compared to
0.68% and 8.24% in 1998.
Net interest income increased by $18,000 for the second quarter of 1999
compared to the second quarter of 1998, even though the Company had a
$32 million decrease in average earning assets for the second quarter
of 1999 versus the second quarter of 1998. During the fourth quarter of
1997, the Company entered into an arbitrage transaction and purchased
mortgage backed securities utilizing $50 million in FHLB borrowings. The
borrowings matured in November, 1998 and the securities were sold to
repay the borrowings. The Company's net interest rate spread and margin
averaged 2.69% and 3.08% respectively during the second quarter of 1999,
a 19 and 15 basis point increase from 2.50% and 2.93% respectively
during the second quarter of 1998. This represents increases of 8% in
interest rate spread and 5% in net interest margin growth.
The provision for possible loan losses was $288,000 for the second
quarter of 1999 versus $769,000 for the like period in 1998. This
decrease, as well as the year to date decrease in the provision, is the
result of the sale of the credit card portfolio late in 1998. During
1998, the Company experienced net loan losses from the credit card
portfolio of $1.1 million out of total net chargeoffs of $1.2 million.
Non interest income decreased $368,000, or 23%, to $1,210,000 from the
comparable quarter last year. The Company had no securities gains during
the second quarter of 1999, but recognized $463,000 in securities gains
during the second quarter of 1998. Without the effect of securities gains,
non interest income increased $95,000 for the quarter ending June 30,
1999 versus 1998. Mortgage Center income increased by $26,000 to
$495,000 in the second quarter of 1999 compared to $469,000 in the
similar quarter in 1998. Other income increased by $108,000 during the
second quarter of 1999 versus 1998. Of this total, $84,000 is due to
reversal of contingency expenses associated with the sale of the credit
card portfolio in the last quarter of 1998. Brokerage income decreased
by $30,000 during the second quarter of 1999 compared to the second
quarter of 1998.
Non-interest expense increased $40,000, or 1% for the second quarter of
1999 from the comparable quarter in 1998. Total compensation,
commission, and benefit costs decreased $105,000 for the quarter ended
June 30, 1999 versus 1998. During the first quarter of 1999, certain
employee positions were eliminated to bring operating costs more in line
with the revenues of the Bank. Loan related expenses increased by $28,000
in the second quarter of 1999 as compared to the second quarter of 1998.
Deposit related expenses declined by $34,000 in the second quarter of
1999 versus the second quarter of 1998 as a result of the implementation of
additional controls to stem chargeback losses. In the second quarter of
1999, the Company recorded $40,000 in non recurring professional service
fees. Increases in building occupancy expenses of $26,000 were offset
by a similar decline in data processing expenses for the second quarter
of 1999 compared to the second quarter of 1998.
At June 30, 1999, total non-performing assets amounted to $2 million, or
0.36% of total assets compared to $1 million, or 0.19% of total assets
at December 31, 1998. Non performing assets as of June 30, 1999 included
one commercial loan with a balance of $874,000. The remainder of the non
performing assets are first mortgage loans in various stages of foreclosure
and one parcel of other real estate owned.
At June 30, 1999, the allowance for loan losses was $4.5 million, or
264% of non-performing loans as compared to 422% coverage at December
31, 1998.
The Company's assets decreased 1% to $542 million as of June 30, 1999,
from $549 million at December 31, 1998. Loans receivable declined 2% or
$9 million to $393 million as of June 30, 1999 versus $402 million
outstanding as of December 31, 1998. Mortgage loans declined $25
million as a result of continued refinancing activity, especially during
the first quarter of 1999. This reduction was offset by a $24 million
increase in multifamily loans outstanding. Deposits decreased 2% to $356
million as of June 30, 1999 compared to $365 million as of December 31,
1998.
Stockholders' equity in CoVest Bancshares, Inc. totaled $46.3 million at
June 30, 1999. The number of common shares outstanding was 4,191,045
and the book value per common share outstanding was $11.05. The Company
completed its 16th stock repurchase program on June 25, 1999; a total of
101,000 shares were repurchased at an average price of $14.42. The
Company announced its 17th stock repurchase program on June 28, 1999,
enabling the Company to repurchase 100,000 shares of its outstanding
stock. No shares have been purchased yet as part of this latest program.
This release may contain forward looking statements. Forward looking
statements are identifiable by the inclusion of such qualifications as
expects, intends, believes, may, likely, or other indications that the
particular statements are not based on facts but are rather based upon the
Company's beliefs as of the date of this release. Actual events and
results may differ significantly from those described in such forward
looking statements.
COVEST BANCSHARES, INC.
FINANCIAL HIGHLIGHTS
financials in thousands, except per share
June 30, 1999 Dec 31, 1998 Change
Selected Financial Condition Data: (unaudited)
TOTAL ASSETS $ 542,432 $ 548,697 -1%
Investment Securities 108,880 88,017 24%
Loans Receivable, net 393,015 402,329 -2%
Deposits 355,524 364,535 -2%
Stockholders' Equity 46,317 46,951 -1%
Selected Asset Quality Ratios:
Total non-performing loans 1,722 1,021 69%
Non-performing loans to Loans
Receivable, Net 0.44% 0.25% 73%
Total non-performing assets 1,952 1,021 91%
Non-performing assets to
Total Assets 0.36% 0.19% 93%
Total Allowance for Loan Losses 4,545 4,312 5%
Allowance for Loan Losses to
non-performing loans 2.64x 4.22x -37%
Three Months Ended June 30 1999 1998
Selected Income Data: (unaudited) (unaudited)
Net Interest Income $ 3,990 $ 3,972 0%
Provision for loan losses 288 769 -63%
Net Interest Income after
provision for loan losses 3,702 3,203 16%
Non-interest income 1,210 1,578 -23%
Non-interest expense 3,344 3,304 1%
Income before income taxes 1,568 1,477 6%
Income tax expense 529 505 5%
Net income $ 1,039 $ 972 7%
Earnings per share:
Basic $0.25 $0.23 9%
Diluted $0.24 $0.21 14%
Selected Operating Ratios:
Return on Average Assets 0.77% 0.68% 13%
Return on Average Equity 8.96% 8.12% 10%
Operating expenses to
average assets 2.48% 2.31% 7%
Net interest rate spread 2.69% 2.50% 8%
Net interest rate margin 3.08% 2.93% 5%
Six Months Ended June 30 1999 1998
Selected Income Data: (unaudited) (unaudited)
Net Interest Income $ 7,905 $ 8,016 -1%
Provision for loan losses 387 1,168 -67%
Net Interest Income after
provision for loan losses 7,518 6,848 10%
Non-interest income 2,256 2,765 -18%
Non-interest expense 7,017 6,596 6%
Income before income taxes 2,757 3,017 -9%
Income tax expense 932 1,035 -10%
Net income $ 1,825 $ 1,982 -8%
Earnings per share:
Basic $0.44 $0.47 -6%
Diluted $0.42 $0.44 -5%
Selected Operating Ratios:
Return on Average Assets 0.68% 0.68% 0%
Return on Average Equity 7.81% 8.24% -5%
Operating expenses to
average assets 2.61% 2.27% 15%
Net interest rate spread 2.68% 2.48% 8%
Net interest rate margin 3.06% 2.90% 6%
