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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) January 28, 1997
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Statewide Financial Corp.
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(Exact name of registrant as specified in its charter)
New Jersey 0-26546 22-3397900
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(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
70 Sip Avenue, Jersey City, New Jersey 07306
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 795-4000
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Item 1. Changes in Control of Registrant.
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Not Applicable.
Item 2. Acquisition or Disposition of Assets.
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Not Applicable.
Item 3. Bankruptcy or Receivership.
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Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant.
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Not Applicable.
Item 5. Other Events.
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Registrant issued a Press Release on Tuesday,
January 28, 1997 announcing its fourth quarter
and full year earnings.
Item 6. Resignations of Registrant's Directors.
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Not Applicable.
Item 7. Exhibits and Financial Statements.
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Exhibit No. Description
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99 Press Release dated January 28,
1997 announcing Registrant's
fourth quarter and full year
earnings.
Item 8. Change in fiscal year
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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.
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(Registrant)
Dated: January 29, 1997 By: Bernard F. Lenihan
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Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
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CURRENT REPORT ON FORM 8-K
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Exhibit No. Description
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99 Press Release dated January 28, 1997
announcing Registrant's fourth quarter
and full year earnings.
FOR IMMEDIATE RELEASE CONTACT: Augustine F. Jehle
January 28, 1997 201-795-4000
Anthony S. Cicatiello
908-382-1066
STATEWIDE REPORTS INCREASES IN FOURTH QUARTER
AND YEAR-END RESULTS
* 196% Increase Over Prior Year Net Income
* 11% Increase Over Prior Quarter Earnings Per Share
* Griffin Appointed Savings Bank President
Jersey City, N.J. (January 28,1997). . . Statewide Financial Corp
(Nasdaq: SFIN), the holding company for Statewide Savings Bank,
S.L.A., today reported net income of $1,305,000, or $0.29 per share,
for the quarter ended December 31, 1996, as compared to $471,000 for
the same quarter last year, and compared to a net loss of $492,000, or
$0.11 per share, for the quarter ended September 30, 1996. The
quarter ended September 30, 1996 included a pre-tax charge of
$2,651,000 representing the Company's portion of an industry-wide
assessment on thrift institutions to recapitalize the Savings
Association Insurance Fund (SAIF). The assessment reduced net income
for that quarter by $1,697,000, or $0.37 per share. Exclusive of the
SAIF assessment, the net income of the Company for the preceding
quarter was $1,205,000, or $0.26 per share.
Earnings for the full year ended December 31, 1996 were $3,172,000, or
$0.68 per share. Exclusive of the SAIF assessment, the net income of
the Company for the full year of 1996 was $4,869,000, or $1.05 per
share, compared to $2,489,000 for the same period ending December 31,
1995. Statewide completed its initial public offering on September
29, 1995. Accordingly, per share data did not exist for the prior
periods.
Commenting on the Company's performance, Victor M. Richel, Chairman,
President and Chief Executive Officer, said, "We have grown the
business substantially this year, and are well poised to serve our
current and future customers. We have met our first-year goals while
establishing the framework for continued growth in the coming year."
Richel continued, "Our loan portfolio has grown 66% this year,
including commercial loans, which increased more than three-fold from
last year end. In addition, we closed an under-performing branch
office and opened two new branches in burgeoning markets, including
our most recent in October 1996 at Port Liberte in Jersey City. Core
deposits were increased 14.1% at substantially the same cost; and we
increased our infrastructure to market and service our growing
commercial base. Non-performing loans were reduced 51.3% and,
exclusive of the SAIF assessment in September 1996, we have
demonstrated quarterly earnings growth over the last two quarters
which we expect to continue into next year. We have further increased
shareholder value through declaration of a $0.40 per year dividend
policy, completion of a 5% stock repurchase plan and implementation of
an additional 10% stock repurchase plan."
At December 31, 1996, the Company's total assets were $636 million,
compared to $559 million at December 31, 1995 and $662 million at
September 30, 1996. The reduction in total assets during the quarter
was the result of sales of debt and equity and mortgage-backed
securities, with proceeds used to repay borrowings and to fund growth
in the Company's net loan portfolio, which increased $10.0 million, or
3.2%, to $325.5 million at December 31, 1996. This balance represents
a $129.7 million increase over the prior year-end net loan portfolio.
While the increase primarily resulted from the origination and
purchase of one- to four-family residential mortgages, it also
reflects the Company's emphasis toward commercial lending. At
December 31, 1996, commercial loans and mortgages were $18.5 million,
compared to $4.1 million a year earlier, representing an increase of
$14.4 million, or 351%. The Company also had $19.5 million of
approved commercial loans committed, but not yet disbursed, as of
December 31, 1996. Richel stated that he was "pleased that our
marketing and service efforts are starting to bear fruit."
Richel added, "We're pleased that Mike Griffin has joined us as
President and Chief Operating Officer of our principal subsidiary,
Statewide Savings Bank. Mike brings more than 30 years experience in
commercial banking to the company. His primary responsibilities will
include generating new loans in the small- and medium-size business
sectors, and enhancing existing products and services. With Mike's
addition to our executive team, we're in a stronger position to
realize our goal of becoming the premier community bank in New
Jersey."
Deposits totaled $457.1 million at December 31, 1996, increases of
$14.7 million, or 3.3%, and $19.0 million, or 4.3%, from September 30,
1996 and December 31, 1995, respectively. Core deposits grew $11.3
million, or 4.8%, during the quarter and $30.6 million, or 14.1%, as
compared to December 31, 1995. During both the quarter and the full
year, interest rates paid to retail depositors have been rising within
the Company's market area. In response, the Company developed
products which emphasized customer relationships rather than matching
the most aggressively priced certificate of deposit offerings by its
competition. As a result, there has been runoff in certificates of
deposit since December 31, 1995, primarily from depositors who do not
have other accounts with the Company. Yet there has been an increase
in core deposits as a result of this product development, and 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.
Borrowings at December 31, 1996 were $107.2 million, or $39.6 million
less than September 30, 1996. Early in the fourth quarter of 1996,
the Company used proceeds from security sales to reduce outstanding
borrowings, and at the end of the quarter the Company increased its
borrowings to purchase $32.5 million of mortgage-backed securities.
The current year-end balance is $62.5 million more than the $44.7
mil-lion balance outstanding at December 31, 1995. During 1996, the
Company used these increased funds, together with increased deposits
and sales of securities, to fund its increase in its net loan
portfolio.
At year end, borrowed funds consist of short-term and long-term
borrowings from the Federal Home Loan Bank. During the fourth quarter
of 1996, the Company extended the maturity date of $60 million of its
short-term borrowings to a five-year term, callable at the lender's
option after three years, at a rate of 5.52%. At December 31, 1996,
the Company's remaining short-term borrowings, which mature within
ninety days, were $47.2 million. Subsequent to year end, the Company
increased its short-term borrowings to purchase $51.9 million of
mortgage-backed securities which have weighted average lives
consistent with five-year treasury instruments. The Company may seek
to extend up to $40.0 million of its short-term borrowings to longer
maturities, depending upon interest-rate market conditions.
Shareholders' equity increased $1.6 million from September 30, 1996,
and decreased $5.4 million from December 31, 1995. The increase from
the preceding quarter reflected the Company's quarterly net income, an
increase in the market value of the Company's debt and equity,
mortgage-backed securities of $1.4 million (net of tax), and an
allocation of ESOP shares and other employee benefit plans. These
were partially offset by reductions for the repurchase of 60,000
shares of the Company's stock, and the declaration of the quarterly
dividend.
The $5.4 million reduction in Shareholder's equity during 1996 was
principally the result of: 1) the purchase, and retirement, of
323,488 shares of the Company's common stock; 2) a decrease of $1.9
million (net of tax), in the December 31, 1996 market value of the
Company's debt and equity and mortgage-backed securities from year-ago
values; and 3) dividends declared during the year. Partially
offsetting these decreases were net income for the year ending
December 31, 1996 and allocations of ESOP shares and other employee
benefit plans during the year.
The results of operations for the three and twelve months ended
December 31, 1996 reflect increases in net interest income (after
provision for loan losses) of $0.8 million and $4.6 million,
respectively, as compared to the same periods a year ago. These
increases in income were partially offset by increases of $0.2 million
and $1.7 million in other non-interest expenses as the Company
continued to position itself for future growth. The increase in net
interest income between periods reflected increases in average
interest-earning assets, primarily comprised of loan growth, for both
the three- and twelve-month periods, and growth in mortgage-backed
securities during the twelve months ended December 31, 1996. The
expense increases reflect, among other factors, the increased staffing
and support requirements necessary to position the Company to achieve
its marketing and operational objectives, including staffing of the
Company's four new branches opened during the period since March 31,
1995. Additionally, the increased expense reflects normal salary
increases and refurbishing of existing facilities.
Non-interest income for the three and twelve months ended December 31,
1996 was $770,000 and $2,382,000. These amounts include income of
$352,000 and $917,000, respectively, from the collection of unaccrued
interest associated with loans whose principal had been repaid, as
compared to $545,000 and $932,000 in the prior year's three- and
twelve-month periods. The interest on all of these loans has been
completely repaid. The effect of this non-recurring income to
earnings per share for the three and twelve months ended December 31,
1996 was $0.05 and $0.12 respectively. Absent these credits,
non-interest income increased 8.0%, or $31,000, during the current
quarter from a year ago and decreased 5.7%, or $89,000, during the
twelve months ended December 31, 1996 when compared to the prior year.
The full-year decrease, as compared to the prior year, occurred during
the first quarter, primarily because of decreases in commissions from
annuity sales, as the Company focused its resources on developing its
new branches and marketing its core products rather than selling
annuities.
Other non-interest expense for the three- and twelve-month periods
ended December 31, 1996 increased $167,000 and $1,745,000,
respectively, from the same periods for the prior year. Expenses
incurred during the fourth quarter of 1996 include non-recurring costs
related to a branch closure and management restructure. The effect of
these charges to the earnings per share calculations for the three and
twelve months ended December 31, 1996 was a reduction of $0.03.
Absent these charges, other non-interest expense decreased 1.9%, or
$70,000, during the current quarter from a year ago and increased
10.8%, or $1,509,000, when compared to the prior year's twelve months.
The year-over-year increase reflects staffing and support costs
incurred to achieve the marketing and operational success during this
past twelve months and to position the Company for continued success.
Such costs include those for new branches, a new operating system,
staff upgrades (especially in commercial services) and refurbishment
of existing facilities.
During the year ended December 31, 1996, the Company incurred a loss
of $1,093,000 on sales of securities, compared to a loss of $340,000
for the twelve months ended December 31, 1995. Proceeds from the
sales during 1996 approximated $110.8 million and were used, in
conjunction with additional borrowings and deposits, to fund loan
growth and for redeployment into higher yielding securities. The
effect of this loss was to reduce earnings per share by $0.15 for the
twelve months ended December 31, 1996.
Income tax expense for the full year 1996 reflects the reversal of a
$702,000 tax liability, previously established, which expired, and was
consequently reversed, during the third quarter of 1996. The effect
of this reversal was to increase earnings per share $0.15 for 1996.
Statewide Financial Corp, headquartered in Jersey City, N.J., is the
holding company for Statewide Savings Bank, which maintains 16
branches in Hudson, Union, Bergen and Passaic counties. Statewide
Savings Bank's deposits are insured by the Savings Association
Insurance Fund (SAIF) of the Federal Deposit Insurance Corporation
(FDIC).
SELECTED FINANCIAL CONDITION DATA
(dollars in thousands, except per share data)
December 31,
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1996 1995
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Total Assets $636,042 $559,049
Loans, Net $325,470 $195,773
Debt and Equity Securities $ 40,243 $ 80,126
Mortgage-Backed Securities $240,974 $260,107
Other Real Estate Owned $ 563 $ 652
Total Deposits $457,056 $438,021
Borrowed Funds $107,200 $ 44,703
Shareholders' Equity $ 66,935 $ 72,315
Book Value Per Share $ 13.63 n/a
SELECTED OPERATING DATA
(dollars in thousands, except per share data)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
1996 1995 1996 1995
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Interest Income $11,143 $9,718 $45,278 $35,260
Interest Expense 5,623 5,003 23,656 18,301
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Net Interest Income 5,520 4,715 21,622 16,959
Provision for Loan Losses 125 125 500 389
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Net Interest Income After
Provision for Loan Losses 5,395 4,590 21,122 16,570
Non-Interest Income 770 932 2,382 2,486
Net Gain (Loss) on Sales of
Securities 2 (340) (1,093) (340)
Foreclosed Real Estate
Expense, Net 31 37 105 161
FDIC SAIF Assessment 0 0 2,651 0
Other Non-Interest Expense 3,930 3,763 15,687 13,942
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Income Before Income Taxes
and Extraordinary Item 2,206 1,382 3,968 4,613
Income Tax Expense 901 499 796 1,712
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Income Before Extraordinary
Item 1,305 883 3,172 2,901
Extraordinary Item -
Penalties for Prepayment of
Debt, Net of Tax 0 412 0 412
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Net Income $ 1,305 $ 471 $ 3,172 $ 2,489
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Earnings Per Share $ .29 n/a $ .68 n/a
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SELECTED FINANCIAL RATIOS (1) At or For the At or For the
Three Months Twelve Months
Ended Ended
December 31, December 31,
1996 1995 1996 1995
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Return on Average Assets .84% .34% .49% .50%
Return on Average Shareholders'
Equity 7.71% 2.70% 4.67% 7.31%
Capital to Assets 10.52% 12.94% 10.52% 12.94%
Net Interest Rate Spread (2) 3.17% 2.96% 2.99% 3.23%
Net Interest Margin (3) 3.65% 3.51% 3.45% 3.52%
Non-Interest Income to Average
Assets .49% .68% .37% .50%
Non-Interest Expense to Average
Assets, Exclusive of SAIF
Assessment Charge 2.54% 2.75% 2.45% 2.84%
Efficiency Ratio, Exclusive of
SAIF Assessment Charge (4) 68.14% 76.35% 69.92% 78.50%
Ratio of Interest-Earning
Assets to Interest-Bearing
Liabilities 113.04%114.77% 112.32%107.51%
REGULATORY CAPITAL RATIOS December 31,
1996 1995
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Tangible Capital Ratio 9.41% 10.28%
Core Capital Ratio 9.41% 10.28%
ASSET QUALITY RATIOS
Non-Performing Loans to Total
Net Loans .84% 2.87%
Non-Performing Loans to Total
Assets .43% 1.01%
Non-Performing Assets to Total
Assets .52% 1.12%
Allowance for Loan Losses to
Non-Performing Loans 95.43% 57.66%
Allowance for Loan Losses to
Total Net Loans .80% 1.66%
OTHER DATA
Number of Deposit Accounts 53,695 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 net 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.
