==================================================================
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 earliest event reported) July 22, 1996
-------------
Statewide Financial Corp.
-------------------------
(Exact name of registrant as specified in its charter)
New Jersey 0-26546 22-3397900
-------------------------------- ------------ -------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
70 Sip Avenue, Jersey City, New Jersey 07306
-------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 795-4000
--------------
==================================================================
Item 1. Changes in Control of Registrant.
---------------------------------
Not applicable.
Item 2. Acquisition or Disposition of Assets.
-------------------------------------
Not applicable.
Item 3. Bankruptcy or Receivership.
---------------------------
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
----------------------------------------------
Not applicable.
Item 5. Other Events.
-------------
The Registrant issued a press release on Monday, July 22,
1996 announcing its second quarter earnings.
Item 6. Resignations of Registrant's Directors.
---------------------------------------
Not applicable.
Item 7. Exhibits and Financial Statements.
----------------------------------
Exhibit No. Description
----------- -----------
99 Press Release dated July 22,
1996 announcing the
Registrant's second quarter
earnings.
Item 8. Change in fiscal year.
----------------------
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Statewide Financial Corp. has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
STATEWIDE FINANCIAL CORP.
-------------------------
(Registrant)
Dated: August 1, 1996 By: BERNARD F. LENIHAN
-------------------------
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
-------------
CURRENT REPORT ON FORM 8-K
--------------------------
Exhibit No. Description
----------- -----------
99 Press Release dated July 22, 1996 announcing the
Registrant's second quarter earnings.
FOR IMMEDIATE RELEASE CONTACT: Augustine F. Jehle
(201 795-4000
Anthony S. Cicatiello
(908) 382-1066
STATEWIDE FINANCIAL CORP REPORTS 94% INCREASE
IN NET INCOME FOR SECOND QUARTER 1996
JERSEY CITY, N.J., (July 22, 1996) -- Statewide Financial Corp
(NASDAQ: SFIN), the holding company for Statewide Savings Bank S.L.A.,
today reported net income of $1,154,000, or $0.24 per share, for the
quarter ended June 30,1996. This represents a 94% increase from the
$595,000 earned for the same period last year. Six month earnings to
date totalled $2,359,000 or $.49 per share, compared to $1,518,000 for
the six months ended June 30,1995. The Company completed its initial
public offering on September 29, 1995. Per share data therefore did
not exist for the prior periods.
Commenting on the Company's second-quarter results, Victor M. Richel,
Chairman, President and Chief Executive Officer, said, "We have
continued to successfully implement our strategy of originating and
purchasing one-to-four family residential mortgage loans, while
expanding our consumer loan business. This strategy enabled us to
strengthen our portfolio while at the same time providing a value-
added service to our customers in the urban centers of northern New
Jersey."
"In addition, our marketing strategy and new branch offices have
successfully developed new core deposit business, while enabling us to
keep our cost of money low, despite the recent increase in interest
rates," Richel said. "The success of these efforts are complemented
by significant increases in our commercial loan business."
The Company's total assets were $678 million at June 30, 1996,
compared to $634 million at March 31, 1996, and $559 million at
December 31,1995. The growth during the quarter was primarily in the
Company's net loan portfolio, which increased $45.6 million, or 20%,
to $268.8 million at June 30,1996 compared to $223.2 million at March
31, 1996. Of this growth, one to four family residential mortgages
increased 21% over the March 31,1996 balance, or $37.6 million,
primarily in adjustable rate mortgages with five to seven year initial
reset periods. In addition, commercial loans increased $1.6 million,
or 159%, and loans for non-residential properties increased $2.6
million, or 71% compared to their March 31,1996 balances. Yields for
the current quarter from the loan portfolio averaged 7.93%.
The asset increases, experienced both in the quarter and for the six
month period, were funded through short-term borrowings, which
increased $45.3 million and $114.9 million over amounts outstanding at
March 31, 1996, and December 31, 1995, respectively. The Company's
borrowings at June 30, 1996, amounted to $159.6 million, and will
mature before September 30, 1996. Richel indicated that it is the
Company's intention to keep its borrowing maturities short term,
subject to prevailing market interest rates, at least into the fourth
quarter of 1996. Costs for these borrowings approximated 5.43% at
June 30,1996.
Deposits totaled $446.4 million at June 30, 1996, representing an
increase of .4% from March 31, 1996, and 1.9% from December 31, 1995.
However, core deposits grew $5.4 million, or 2.4%, during this quarter
and $16.5 million, or 7.6%, during the last six months. This growth
was as a result of marketing efforts by the Company, especially with
respect to its newest branches and affinity groups with whom it has
established relationships.
Shareholders' equity decreased $3.2 million and $5.1 million during
the quarter and six month periods, respectively, to $67.2 million at
June 30, 1996. The decrease from the preceding quarter was caused
primarily by four factors. During the quarter, the Company purchased
211,600 shares of its stock on the open market for $2.6 million, which
it expects to re-issue under management recognition and retention
plans. The Company also incurred a $2.2 million (net of tax) decrease
in the market value of its investment portfolios, all of which it
classifies as available for sale. Partially offsetting these
decreases were income of $1.2 million and allocation of ESOP shares of
$.4 million.
The result of operations for the three and six months ended June 30,
1996 reflect increases in net interest incomes, after provisions for
loan losses, of $1.2 million and $2.1 million, respectively, from the
same periods a year ago. These increases in income were partially
offset by increases of $0.6 million and $1.2 million in other non-
interest expenses as the Company continued to position itself for
future growth. These expense increases reflect, among other factors,
the increased staffing and support requirement necessary to position
the Company to achieve its marketing and operational objectives,
including staffing of the Company's three new branches opened during
the period since March 31,1995. Additionally, the increased expense
reflects normal salary increases and refurbishing of existing
facilities.
The increase in net interest income between periods reflected
increases in interest earning assets, primarily comprised of loan
growth and growth in mortgage backed securities, from levels in place
during the same periods last year. Commenting on the results, Richel
stated, "This is important growth in a key facet of our earnings."
This growth occurred even though net interest margin decreased to
3.37% during the current quarter -- from 3.44% the preceding quarter
-- because of increases in borrowings used to fund the asset growth,
and because loans closed during this quarter were committed during a
period of lower interest rates as compared to preceding periods.
Non-interest income for the three and six months ended June 30, 1996
was $514,000 and $1,180,000. These amounts include income of $169,000
and $525,000, respectively, from the collection of unaccrued interest
associated with a loan whose principle had been repaid, as compared
with none in similar periods the prior year. The interest on this
loan has now been completely paid. The effect of this non-recurring
income to the earnings per share calculations for the three and six
months ended June 30,1996 was $.02 and $.07, respectively. Absent
these credits, non-interest income increased 8.5% or $27,000 during
the current quarter from a year ago and decreased 23.4% or $200,000
during the six months ended June 30,1996 when compared to the same
period a year ago. The year-to-date decrease as compared to the prior
year occurred during the first quarter, primarily because of decreases
in commissions from annuity sales, as the Company redirected its
resources toward developing its new branches and marketing its core
products rather than selling annuities.
Headquartered in Jersey City, New Jersey, Statewide Savings Bank is a
state chartered stock savings and loan association that conducts
business from 16 locations in Hudson, Union, Bergen and Passaic
counties. Statewide's deposits are insured by the Savings Association
Insurance Fund (SAIF) of the Federal Deposit Insurance Corporation
(FDIC).
SELECTED FINANCIAL CONDITION DATA June 30, December 31,
(dollars in thousands) 1996 1995
---- ----
Total Assets $678,406 $559,049
Loans, Net $268,800 $195,773
Debt and Equity Securities $65,572 $80,126
Mortgage-backed Securities $315,624 $260,107
Other Real Estate Owned, Net $560 $652
Total Deposits $446,404 $438,021
Borrowed Funds $159,578 $44,703
Shareholders' Equity $67,168 $72,315
Book Value per share $13.28 n/a
SELECTED OPERATING DATA For the Three For the Six
(dollars in thousands) Months Ended Months Ended
June 30, June 30,
-------- --------
1996 1995 1996 1995
---- ---- ---- ----
Interest Income $11,452 $8,566 $22,282 $16,973
Interest Expense 6,039 4,462 11,668 8,601
----- ----- ------ ------
Net Interest Income 5,413 4,104 10,614 8,372
Provision for Loan Losses 125 65 250 139
----- ----- ------ ------
Net Interest Income After Provision
for Loan Losses 5,288 4,039 10,364 8,233
Non-interest income 514 318 1,180 855
Foreclosed Real Estate Expense, Net (5) (25) 57 126
Other Non-Interest Expense 4,004 3,432 7,802 6,529
----- ----- ------ ------
Income Before Income Taxes 1,803 950 3,685 2,433
Income Taxes 649 355 1,326 915
----- ----- ----- -----
Net Income $1,154 $595 $2,359 $1,518
====== ==== ====== ======
Earnings per share $ .24 n/a $ .49 n/a
===== === ===== ===
SELECTED FINANCIAL RATIOS (1) At or For the At or For the
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
1996 1995 1996 1995
---- ---- ---- ----
Return on Average Assets .70% .50% .74% .64%
Return on Average Capital 6.79% 10.62% 6.74% 13.82%
Capital to Assets 9.90% 4.74% 9.90% 4.74%
Net Interest Rate Spread (2) 2.92% 3.50% 2.93% 3.56%
Net Interest Margin (3) 3.37% 3.57% 3.40% 3.67%
Non-Interest Income to Average Assets .31% .27% .37% .36%
Non-Interest Expense to Average Assets 2.43% 2.86% 2.46% 2.81%
Efficiency Ratio (4) 70.99% 78.20% 71.32% 73.23%
Average Interest Earning Assets to
Average Interest Earning Liabilities 112.07% 102.52% 112.69% 103.57%
REGULATORY CAPITAL RATIOS June 30, December 31,
1996 1995
---- ----
Tangible Capital Ratio 10.42% 10.28%
Core Capital Ratio 10.42% 10.28%
Risk-Based Capital Ratio 31.00% 32.88%
ASSET QUALITY RATIOS
Non-Performing Loans to Total Net Loans 2.63% 2.87%
Non-Performing Loans to Total Assets 1.04% 1.01%
Non-Performing Assets to Total Assets 1.13% 1.12%
Allowance for Loan Losses to Non-Performing
Loans 48.20% 57.66%
Allowance for Loan Losses to Total Net Loans 1.27% 1.66%
OTHER DATA
Number of Deposit Accounts 51,419 50,062
Number of Offices 16 15
Notes to Selected Financial Ratios
(1) Ratios are annualized where appropriate.
(2) Interest rate spread represents the difference between the
weighted average yield on average interest-earning assets
and the weighted average costs of average interest-bearing
liabilities.
(3) Net interest margin represents interest income as a percent of
average interest-earning assets.
(4) Total non-interest expense divided by the sum of net interest
income after provision for loan losses, and recurring
non-interest income.
