CONTACT: ELLEN BATKIE (800) 262-6301
CHARTER ONE REPORTS 4th QTR EPS OF $.63, UP 13%
Highlights for the quarter ended 12/31/02:
- Net earnings of $.63 per share, up 13% over 4Q 2001 and 3% over 3Q 2002
- Net interest income up 7% over 4Q 2001 and 3% over 3Q 2002
- Efficiency ratio of 39.3%, down from 41.7% in 4Q 2001 and 39.9% in 3Q 2002
- Excluding custodial balances, core deposits up an annualized 18% in 4Q 2002; checking up 40% (annualized)
- Non-single family portfolio up an annualized 22% in 4Q 2002
- Reserve to loans strengthened to 1.24%, up from 1.13% at 9/30/02 and .98% at 12/31/01
- Net charge-offs in quarter were an annualized .38% of average loans and leases
- NPAs of .44% of assets; underperforming assets of .59% of assets
CLEVELAND, Ohio, January 17, 2003 -- Charter One Financial, Inc. (NYSE:CF), the holding company of Charter One Bank, N.A., today reported net income of $145.7 million for the three months ended December 31, 2002, or $.63 per diluted share. This was up 13% from $.56 in net earnings per diluted share reported in the year ago quarter and up 3% from $.61 in the third quarter of 2002. All per share data in this release have been restated for the 5% stock dividend issued on September 30, 2002.
Net income for the quarter generated annualized returns of 1.40% on average assets, 19.11% on average equity, and 22.18% on average tangible equity. In the year ago quarter the returns were 1.44% on average assets, 17.67% on average equity and 20.18% on average tangible equity.
For the 12 months ended December 31, 2002, the Company reported record net income of $577.7 million, or $2.45 per diluted share, which was up 17% from $2.10 per diluted share for 2001. Excluding the benefit of eliminating goodwill amortization in 2002, EPS was up 13%. Returns for the year ended December 31, 2002 were 1.47% on average assets, 19.38% on average equity, and 22.31% on average tangible equity. Comparable returns for 2001 were 1.41% on average assets, 18.17% on average equity, and 20.25% on average tangible equity.
"In an environment of significant uncertainty and challenge, it is particularly gratifying to report another outstanding quarter and entire year," commented Charles John Koch, Charter One's Chairman and Chief Executive Officer in announcing fourth quarter and full-year results. "The strength and maturity of our consumer-oriented retail franchise has produced top-tier financial results and concurrently strengthened our balance sheet. This balance sheet strength and flexibility, together with the operating momentum of our retail banking operation, provide us the confidence, based on the current operating environment, to reaffirm our previous earnings guidance of $2.66 to $2.72 per share in 2003."
Net interest income and net yield - Net interest income was $299 million for the three months ended December 31, 2002, up 7% from the year ago quarter and 3% from the linking quarter. The increase in net interest income was driven by a $2.2 billion increase in average interest-earning assets, partially offset by a decline in net yield. Net yield during the fourth quarter of 2002 was 3.07%, down 14 basis points from the fourth quarter of 2001 and down 10 basis points from the third quarter of 2002. The reduction during the quarter resulted from downward pressure on asset yields in the declining rate environment, offset in part by the benefits obtained from deposit repricing. It is important to note that the Company still has additional deposit repricing flexibility in the current interest rate environment.
Retail banking revenue- Retail banking revenue is the largest component of recurring noninterest income and totaled $89 million for the three months ended December 31, 2002, up 11% from the comparable 2001 quarter and 6% from the linking quarter. Retail banking revenue includes three separate components: deposit-related revenue ($78 million, up 14% over the year ago quarter), fees from retail brokerage activities ($8 million, down 5%), and other revenue related to retail operations ($3 million, up 11%).
Mortgage banking revenue - The mortgage banking category includes revenue associated with Charter One's mortgage banking operations, offset by the amortization and valuation adjustments related to its mortgage servicing rights asset ("MSR"). During the fourth quarter, the Company recorded an impairment adjustment of $5 million and added $15 million to the valuation allowance. The addition increased the valuation allowance to $104 million at year end. The total mortgage banking revenue, excluding these two items, was $17 million in the fourth quarter of 2002. In the year ago quarter, the revenue totaled $13 million, excluding a $16 million increase in the valuation allowance. Despite record levels of prepayments in the servicing portfolio, the extremely strong loan origination and securitization activity replenished the run-off, resulting in the portfolio serviced for others remaining at $16.9 billion, up 22% since the beginning of the year. The related MSR is now at .76% of the portfolio at $129 million. With an average servicing spread of 35 basis points, that translates into an MSR valuation of 2.17 times the servicing spread.
Net gains - During the fourth quarter of 2002, the Company reported net gains of $62 million, which were net of $27 million in prepayment penalties for the early termination of debt. During the quarter, the Company sold $3.2 billion of securities and terminated $1.1 billion of FHLB advances (2003 maturities, 4.7% average cost). As of December 31, 2002, unrealized pretax gains in the mortgage-backed securities portfolio totaled $223 million.
Leasing operations - Other income from leasing operations was reflected as a loss of $4.6 million in the fourth quarter 2002, compared with income of $404,000 in the third quarter of 2002 and $252,000 in the fourth quarter of 2001. The loss in the current quarter resulted primarily from $4.0 million in residual adjustments related to turboprop aircraft.
Operating expenses-Administrative expenses totaled $177 million in the three months ended December 31, 2002, up 3% from the previous quarter and up 0.5% from the year ago quarter (3% excluding the benefit of eliminating goodwill amortization). The efficiency ratio was 39.3% for the fourth quarter of 2002, compared to 39.9% for the third quarter of 2002, and 41.7% for the fourth
quarter of 2001. Excluding gains on sale and the MSR-related adjustments results in an efficiency ratio of 43.3% for the fourth quarter of 2002, compared to 42.7% for the third quarter of 2002 and 46.0% for the fourth quarter of 2001.
Lending production and portfolio growth - Loan and lease originations increased to $6.5 billion during the fourth quarter of 2002, from $5.3 billion during the third quarter of 2002 and $4.9 billion in the fourth quarter of 2001. Non-single family loan originations totaled a record $3.1 billion, or 47% of the total. The previous record was established just in the third quarter of 2002 at $2.8 billion.
Loans and leases before reserves totaled $26.5 billion at December 31, 2002, up 2% over the past 12 months, and an annualized 9% from September 30, 2002. These growth rates were reduced by $6.7 billion in agency loan securitizations during the year, including $1.6 billion during the fourth quarter. Charter One retains essentially no credit risk in connection with these securitizations and does not utilize any special-purpose entities for the sale of mortgage-backed securities. At the end of December, non-single family loans totaled $17.8 billion, increasing an annualized 22% in the quarter and 13% in the past 12 months. The total loan portfolio continues to be primarily consumer based, with 78% in consumer-oriented products and 22% in commercial lending.
Deposits - Deposits totaled $27.5 billion at December 31, 2002, up an impressive 7% (annualized) in the quarter and 10% since the beginning of the year. Even more impressive was the growth posted in core deposits (checking, money market and savings accounts). Excluding the growth in custodial balances, core deposits were up 18% (annualized) in the fourth quarter of 2002 and 21% in the past 12 months. Checking account deposit growth was particularly strong in the fourth quarter, coming in at an annualized 40% increase after excluding the growth in custodial balances. Custodial balances totaled $721 million at December 31, 2002, $506 million at September 30, 2002, and $496 million at December 31, 2001. It is important to note that the number of banking centers throughout 2002 was substantially the same as in 2001.
Checking accounts remain the primary focus of Charter One's retail banking sales force. The Company opened 138,000 new checking accounts during the quarter, moving the average banking center to 1,300 accounts in 2002, up from 1,000 in 2001. During the year, the number of active accounts increased by 5% to 1,332,400.
Credit qualityand allowance for loan losses - Being mindful of an economy that continues to exhibit weakness, Charter One continued to strengthen its level of loan loss reserves. The provision for loan and lease losses exceeded net charge-offs by $35 million during the quarter and the ratio of the allowance to total loans and leases increased to 1.24% from 1.13% at September 30, 2002 and .98% at December 31, 2001.
Net charge-offs during the fourth quarter of 2002 totaled $25.1 million, or .38% of average loans and leases. As a reminder, during the second quarter of 2002, Charter One changed its charge-off policy to conform Charter One to its regional bank peers, resulting in additional net charge-offs of $27.3 million in that quarter. Excluding the policy change, net charge-offs for the 12 months ended December 31, 2002 were .37% of average loans and leases. The allowance for loan and lease losses
increased to $328 million at December 31, 2002, equivalent to 3.4 years of net charge-offs (excluding the impact of the policy change).
At December 31, 2002, the ratio of underperforming assets (including troubled debt restructuring and loans delinquent 90 days and still accruing) to total assets declined to .59% from .62% at September 30, 2002 and .64% at December 31, 2001. Given the performance of the portfolio and the collateralized nature of these assets, management continues to believe credit losses remain manageable.
Stock repurchase update- On April 23, 2002, the Company authorized a new repurchase program that permits the repurchase of 10% of its outstanding shares, or approximately 22 million shares. The Company repurchased 1.9 million shares under the authorization during the fourth quarter at an average cost of $29.29 per share. This brought the total repurchased during 2002 to 13.3 million shares at an average cost of $29.84 per share.
Company profile - Charter One has $42 billion in total assets, making it one of the 25 largest bank holding companies in the country. The Bank has 461 branch locations in Ohio, Michigan, New York, Illinois, Massachusetts, and Vermont. The Company's diverse product set includes: consumer banking, indirect auto finance, commercial leasing, business lending, commercial real estate lending, mortgage banking, and retail investment products. For additional information, including press releases and investor presentations, investors are directed to Charter One's web site: www.charterone.com.
The Company has scheduled a conference call to discuss quarterly results for 10:00 a.m. eastern time on Friday, January 17, 2003. To participate in the call, dial (888) 428-4473 and ask for the Charter One 4th quarter earnings call. The call is available on a replay basis until January 27, 2003 by dialing (320) 365-3844, access code 666036. Alternatively, the call will be available through Charter One's website, both on a live and a replay basis.
Forward-Looking Information
This release contains certain estimates of future operating trends for Charter One Financial, Inc., as well as estimates of financial condition and earnings, operating efficiencies, revenue creation, lending origination, loan sale volumes, charge-offs and loan loss provisions. These estimates constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) revenue growth is lower than expected; (2) competitive pressures among depository institutions increase significantly; (3) changes in the interest rate environment reduce interest margins; (4) general economic conditions, either nationally or in the states in which the Company does business, are less favorable than expected; and (5) legislation or regulatory changes adversely affect the businesses in which the Company is engaged. Other factors that may affect these statements are identified in previous filings with the Securities and Exchange Commission.
CHARTER ONE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended | ||||||||||
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands, except per share data) | ||||||||||
Interest income: | ||||||||||
Loans and leases | $418,711 | $410,237 | $415,057 | $427,838 | $462,055 | |||||
Mortgage-backed securities: | ||||||||||
Available for sale | 131,821 | 135,099 | 141,773 | 111,128 | 109,319 | |||||
Held to maturity | 9,991 | 10,695 | 12,261 | 14,800 | 17,241 | |||||
Investment securities: | ||||||||||
Available for sale | 2,969 | 2,939 | 2,625 | 2,962 | 2,741 | |||||
Held to maturity | 60 | 61 | 60 | 71 | 85 | |||||
Other interest-earning assets | 8,184 | 9,729 | 9,478 | 7,912 | 8,605 | |||||
Total interest income | 571,736 | 568,760 | 581,254 | 564,711 | 600,046 | |||||
Interest expense: | ||||||||||
Deposits | 154,018 | 160,821 | 169,576 | 170,401 | 199,688 | |||||
FHLB advances | 105,492 | 103,729 | 103,927 | 103,716 | 112,297 | |||||
Other borrowings | 13,627 | 13,943 | 9,884 | 7,497 | 8,121 | |||||
Total interest expense | 273,137 | 278,493 | 283,387 | 281,614 | 320,106 | |||||
Net interest income | 298,599 | 290,267 | 297,867 | 283,097 | 279,940 | |||||
Provision for loan and lease losses | 60,314 | 47,695 | 55,277 | 28,717 | 38,853 | |||||
Net interest income after provision for loan and lease losses | 238,285 | 242,572 | 242,590 | 254,380 | 241,087 | |||||
Other income: | ||||||||||
Retail banking | 89,261 | 84,175 | 83,543 | 73,756 | 80,108 | |||||
Mortgage banking | (1,992 | ) | (36,961 | ) | 9,168 | 11,290 | (3,069 | ) | ||
Leasing operations | (4,566 | ) | 404 | 317 | 270 | 252 | ||||
Net gains | 61,585 | 83,881 | 37,840 | 21,727 | 46,336 | |||||
Bank owned life insurance and other | 7,834 | 7,582 | 8,924 | 9,508 | 9,197 | |||||
Total other income | 152,122 | 139,081 | 139,792 | 116,551 | 132,824 | |||||
Administrative expenses: | ||||||||||
Compensation and employee benefits | 81,827 | 81,443 | 80,645 | 77,252 | 72,412 | |||||
Net occupancy and equipment | 30,360 | 30,288 | 27,634 | 28,563 | 29,162 | |||||
Marketing expenses | 9,843 | 11,788 | 10,012 | 8,829 | 9,462 | |||||
Federal deposit insurance premiums | 1,142 | 1,104 | 1,106 | 1,211 | 1,044 | |||||
Amortization of goodwill | - | - | - | - | 4,039 | |||||
Other administrative expenses | 53,716 | 46,683 | 49,219 | 46,307 | 59,884 | |||||
Total administrative expenses | 176,888 | 171,306 | 168,616 | 162,162 | 176,003 | |||||
Income before income taxes | 213,519 | 210,347 | 213,766 | 208,769 | 197,908 | |||||
Income taxes | 67,793 | 66,785 | 67,871 | 66,284 | 62,829 | |||||
Net income | $145,726 | $143,562 | $145,895 | $142,485 | $135,079 | |||||
Basic earnings per share(1) | $.65 | $.63 | $.63 | $.61 | $.57 | |||||
Diluted earnings per share(1) | $.63 | $.61 | $.61 | $.60 | $.56 | |||||
Average common shares outstanding(1): | ||||||||||
Basic | 225,561,551 | 228,765,954 | 231,197,406 | 231,684,629 | 235,750,648 | |||||
Diluted | 231,502,688 | 235,615,457 | 239,123,292 | 238,221,934 | 241,418,749 | |||||
Cash dividends declared per share(1) | $.22 | $.21 | $.21 | $.19 | $.19 |
(1) Restated to reflect the 5% stock dividend issued September 30, 2002.
CHARTER ONE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Twelve Months Ended | ||||
12/31/02 | 12/31/01 | |||
(Dollars in thousands, except per share data) | ||||
Interest income: | ||||
Loans and leases | $1,671,843 | $1,872,270 | ||
Mortgage-backed securities: | ||||
Available for sale | 519,821 | 366,475 | ||
Held to maturity | 47,747 | 86,952 | ||
Investment securities: | ||||
Available for sale | 11,495 | 11,180 | ||
Held to maturity | 252 | 409 | ||
Other interest-earning assets | 35,303 | 40,960 | ||
Total interest income | 2,286,461 | 2,378,246 | ||
Interest expense: | ||||
Deposits | 654,816 | 855,283 | ||
FHLB advances | 416,864 | 498,444 | ||
Other borrowings | 44,951 | 34,103 | ||
Total interest expense | 1,116,631 | 1,387,830 | ||
Net interest income | 1,169,830 | 990,416 | ||
Provision for loan and lease losses | 192,003 | 100,766 | ||
Net interest income after provision for loan and lease losses | 977,827 | 889,650 | ||
Other income: | ||||
Retail banking | 330,735 | 291,892 | ||
Mortgage banking | (18,495 | ) | 24,878 | |
Leasing operations | (3,575 | ) | 4,020 | |
Net gains | 205,033 | 114,312 | ||
Bank owned life insurance and other | 33,848 | 38,522 | ||
Total other income | 547,546 | 473,624 | ||
Administrative expenses: | ||||
Compensation and employee benefits | 321,167 | 279,900 | ||
Net occupancy and equipment | 116,845 | 109,388 | ||
Marketing expenses | 40,472 | 31,708 | ||
Federal deposit insurance premiums | 4,563 | 3,918 | ||
Amortization of goodwill | - | 16,156 | ||
Other administrative expenses | 195,925 | 188,592 | ||
Total administrative expenses | 678,972 | 629,662 | ||
Income before income taxes | 846,401 | 733,612 | ||
Income taxes | 268,733 | 232,898 | ||
Net income | $577,668 | $500,714 | ||
Basic earnings per share(1) | $2.52 | $2.15 | ||
Diluted earnings per share(1) | $2.45 | $2.10 | ||
Average common shares outstanding(1): | ||||
Basic | 229,302,385 | 232,547,418 | ||
Diluted | 236,115,843 | 238,383,474 | ||
Cash dividends declared per share(1) | $.83 | $.71 |
(1) Restated to reflect the 5% stock dividend issued September 30, 2002
CHARTER ONE FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands, except per share data) | ||||||||||
ASSETS | ||||||||||
Cash and deposits with banks | $446,701 | $525,049 | $592,571 | $539,846 | $481,013 | |||||
Federal funds sold and other | 512 | 1,105,511 | 800,509 | 815,509 | 35,507 | |||||
Total cash and cash equivalents | 447,213 | 1,630,560 | 1,393,080 | 1,355,355 | 516,520 | |||||
Investments securities: | ||||||||||
Available for sale | 210,095 | 213,684 | 169,203 | 133,509 | 129,312 | |||||
Held to maturity | 3,973 | 4,642 | 4,381 | 5,043 | 6,274 | |||||
Mortgage-backed securities: | ||||||||||
Available for sale | 11,536,608 | 8,805,687 | 9,634,674 | 8,067,946 | 8,030,512 | |||||
Held to maturity | 540,781 | 648,153 | 728,003 | 830,032 | 983,904 | |||||
Loans and leases, net | 25,852,846 | 25,351,352 | 24,382,986 | 24,355,261 | 25,396,071 | |||||
Loans held for sale | 351,892 | 287,891 | 161,438 | 160,805 | 332,629 | |||||
Bank owned life insurance | 829,043 | 819,664 | 814,429 | 809,356 | 808,231 | |||||
Federal Home Loan Bank and Federal Reserve Bank stock | 681,923 | 676,927 | 668,905 | 618,969 | 617,836 | |||||
Premises and equipment | 353,730 | 348,675 | 362,909 | 357,915 | 352,235 | |||||
Accrued interest receivable | 154,962 | 155,543 | 165,262 | 155,479 | 162,065 | |||||
Real estate and other collateral owned | 42,980 | 42,988 | 44,511 | 57,417 | 54,351 | |||||
Loan servicing assets | 128,564 | 126,646 | 175,650 | 164,789 | 139,840 | |||||
Goodwill | 386,372 | 386,372 | 385,808 | 351,040 | 350,839 | |||||
Other assets | 375,090 | 351,682 | 299,303 | 285,366 | 293,897 | |||||
Total assets | $41,896,072 | $39,850,466 | $39,390,542 | $37,708,282 | $38,174,516 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Deposits: | ||||||||||
Checking accounts | $9,650,433 | $8,619,130 | $7,737,558 | $7,934,769 | $7,830,026 | |||||
Money market and savings accounts | 8,157,534 | 8,248,750 | 8,893,253 | 7,644,542 | 6,737,160 | |||||
Certificates of deposit | 9,719,876 | 10,218,625 | 9,926,504 | 10,057,421 | 10,556,123 | |||||
Total deposits | 27,527,843 | 27,086,505 | 26,557,315 | 25,636,732 | 25,123,309 | |||||
Federal Home Loan Bank advances | 9,037,925 | 7,574,583 | 7,841,524 | 7,830,065 | 8,657,238 | |||||
Federal funds purchased and repurchase agreements | 283,912 | 54,347 | 53,089 | 57,228 | 203,259 | |||||
Other borrowings | 708,853 | 710,282 | 720,133 | 325,505 | 304,410 | |||||
Advance payments by borrowers for taxes and insurance | 23,595 | 47,578 | 51,822 | 44,693 | 54,103 | |||||
Accrued interest payable | 38,372 | 66,193 | 38,029 | 59,813 | 57,704 | |||||
Accrued expenses and other liabilities | 1,191,747 | 1,295,185 | 1,089,899 | 894,327 | 845,993 | |||||
Total liabilities | 38,812,247 | 36,834,673 | 36,351,811 | 34,848,363 | 35,246,016 | |||||
Shareholders' equity: | ||||||||||
Preferred stock - $.01 par value per share; 20,000,000 shares authorized and unissued | - | - | - | - | - | |||||
Common stock - $.01 par value per share; 360,000,000 shares authorized; 227,571,468, 227,577,813, 224,853,682, 224,854,600, and 224,855,827 shares issued | 2,276 | 2,276 | 2,249 | 2,249 | 2,249 | |||||
Additional paid-in capital | 2,193,095 | 2,192,186 | 2,104,361 | 2,097,473 | 2,091,767 | |||||
Retained earnings | 824,564 | 732,731 | 976,380 | 893,200 | 811,093 | |||||
Less 2,781,151, 1,158,700, 4,662,584, 4,836,968, and 516,082 shares of common stock held in treasury at cost | (82,610 | ) | (35,087 | ) | (135,378 | ) | (136,429 | ) | (14,586 | ) |
Accumulated other comprehensive income | 146,500 | 123,687 | 91,119 | 3,426 | 37,977 | |||||
Total shareholders' equity | 3,083,825 | 3,015,793 | 3,038,731 | 2,859,919 | 2,928,500 | |||||
Total liabilities and shareholders' equity | $41,896,072 | $39,850,466 | $39,390,542 | $37,708,282 | $38,174,516 |
CHARTER ONE FINANCIAL, INC.
SELECTED STATISTICAL DATA
(unaudited)
Three Months Ended | ||||||||||
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
Annualized returns and ratios based on net income: | ||||||||||
Return on average assets | 1.40 | % | 1.46 | % | 1.51 | % | 1.52 | % | 1.44 | % |
Return on average equity | 19.11 | 18.89 | 19.85 | 19.71 | 17.67 | |||||
Average equity to average assets | 7.35 | 7.72 | 7.60 | 7.71 | 8.15 | |||||
Net interest income to administrative expenses | 1.69 | x | 1.69 | x | 1.77 | x | 1.75 | x | 1.59 | x |
Administrative expenses to average assets | 1.70 | % | 1.74 | % | 1.74 | % | 1.73 | % | 1.88 | % |
Efficiency ratio | 39.25 | 39.90 | 38.53 | 40.58 | 41.66 | |||||
Annualized return on average tangible equity(1) | 22.18 | 21.70 | 22.84 | 22.50 | 20.18 |
(1) Computed as the ratio of net income, excluding the amortization of goodwill and other intangible assets, to average tangible equity.
Twelve Months Ended | ||||
12/31/02 | 12/31/01 | |||
Returns and ratios based on net income: | ||||
Return on average assets | 1.47 | % | 1.41 | % |
Return on average equity | 19.38 | 18.17 | ||
Average equity to average assets | 7.59 | 7.76 | ||
Net interest income to administrative expenses | 1.72 | x | 1.57 | x |
Administrative expenses to average assets | 1.73 | % | 1.77 | % |
Efficiency ratio | 39.54 | 41.91 | ||
Return on average tangible equity(1) | 22.31 | 20.25 |
(2) Computed as the ratio of net income, excluding the amortization of goodwill and other intangible assets, to average tangible equity.
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
End of period capitalization: | ||||||||||
Equity to assets | 7.36 | % | 7.57 | % | 7.71 | % | 7.58 | % | 7.67 | % |
Tangible equity to assets | 6.36 | 6.52 | 6.65 | 6.64 | 6.74 | |||||
Book value per share(1) | $13.72 | $13.32 | $13.14 | $12.38 | $12.43 | |||||
Tangible book value per share(1) | 11.86 | 11.47 | 11.33 | 10.84 | 10.92 | |||||
Miscellaneous end-of-period data: | ||||||||||
Number of employees (full-time equivalents) | 6,997 | 6,837 | 6,914 | 6,874 | 6,850 | |||||
Number of full-service branches | 461 | 459 | 461 | 450 | 456 | |||||
Number of loan production offices | 26 | 26 | 27 | 27 | 29 | |||||
Number of ATMs | 913 | 920 | 928 | 913 | 919 |
(1) Restated to reflect the 5% stock dividend issued September 30, 2002.
COMPOSITION OF DEPOSITS
(unaudited)
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | |
(Dollars in thousands) | |||||
Checking accounts: | |||||
Interest-bearing | $7,460,530 | $6,588,045 | $5,917,228 | $6,121,320 | $5,973,545 |
Noninterest-bearing | 2,189,903 | 2,031,085 | 1,820,330 | 1,813,449 | 1,856,481 |
Total checking accounts | 9,650,433 | 8,619,130 | 7,737,558 | 7,934,769 | 7,830,026 |
Money market and savings accounts | 8,157,534 | 8,248,750 | 8,893,253 | 7,644,542 | 6,737,160 |
Total transaction accounts | 17,807,967 | 16,867,880 | 16,630,811 | 15,579,311 | 14,567,186 |
Certificates of deposit: | |||||
Retail | 9,719,876 | 10,198,753 | 9,886,732 | 10,017,629 | 10,465,071 |
Brokered | - | 19,872 | 39,772 | 39,792 | 91,052 |
Total certificates of deposit | 9,719,876 | 10,218,625 | 9,926,504 | 10,057,421 | 10,556,123 |
Total deposits | $27,527,843 | $27,086,505 | $26,557,315 | $25,636,732 | $25,123,309 |
CHARTER ONE FINANCIAL, INC.
AVERAGE BALANCE SHEET, YIELDS AND COSTS
(unaudited)
Three Months Ended | ||||||||||
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands) | ||||||||||
Average balance sheet data: | ||||||||||
Interest-earning assets: | ||||||||||
Loans and leases | $26,690,752 | $25,460,404 | $24,838,010 | $25,530,842 | $25,992,199 | |||||
Mortgage-backed securities | 11,218,473 | 10,041,928 | 10,127,245 | 8,257,013 | 8,125,218 | |||||
Investment securities | 212,698 | 186,249 | 156,998 | 150,619 | 139,714 | |||||
Other interest-earning assets | 725,937 | 979,454 | 1,028,371 | 846,552 | 627,381 | |||||
Total interest-earning assets | 38,847,860 | 36,668,035 | 36,150,624 | 34,785,026 | 34,884,512 | |||||
Allowance for loan and lease losses | (292,981 | ) | (267,486 | ) | (257,591 | ) | (255,109 | ) | (235,087 | ) |
Noninterest-earning assets(1) | 2,946,801 | 2,968,951 | 2,767,624 | 2,954,656 | 2,867,450 | |||||
Total assets | $41,501,680 | $39,369,500 | $38,660,657 | $37,484,573 | $37,516,875 | |||||
Interest-bearing liabilities: | ||||||||||
Checking accounts | $6,801,571 | $6,283,029 | $5,883,423 | $6,137,213 | $5,371,034 | |||||
Money market and savings accounts | 8,579,110 | 8,378,267 | 8,519,541 | 6,780,737 | 6,705,579 | |||||
Certificates of deposit | 9,898,021 | 9,831,050 | 10,093,412 | 10,448,328 | 10,449,348 | |||||
Total interest-bearing deposits | 25,278,702 | 24,492,346 | 24,496,376 | 23,366,278 | 22,525,961 | |||||
FHLB advances | 9,026,637 | 7,944,811 | 7,878,506 | 8,071,957 | 8,866,648 | |||||
Other borrowings | 945,945 | 929,957 | 584,882 | 460,700 | 553,116 | |||||
Total interest-bearing liabilities | 35,251,284 | 33,367,114 | 32,959,764 | 31,898,935 | 31,945,725 | |||||
Noninterest-bearing liabilities: | ||||||||||
Demand deposit accounts | 2,024,854 | 1,789,713 | 1,743,736 | 1,695,741 | 1,600,497 | |||||
Other noninterest-bearing liabilities | 1,175,213 | 1,173,108 | 1,017,623 | 997,966 | 912,290 | |||||
Total noninterest-bearing liabilities | 3,200,067 | 2,962,821 | 2,761,359 | 2,693,707 | 2,512,787 | |||||
Total liabilities | 38,451,351 | 36,329,935 | 35,721,123 | 34,592,642 | 34,458,512 | |||||
Shareholders' equity | 3,050,329 | 3,039,565 | 2,939,534 | 2,891,931 | 3,058,363 | |||||
Total liabilities and shareholders' equity | $41,501,680 | $39,369,500 | $38,660,657 | $37,484,573 | $37,516,875 | |||||
Yields and costs during period: | ||||||||||
Weighted average yield: | ||||||||||
Loans and leases(2) | 6.26 | % | 6.43 | % | 6.69 | % | 6.73 | % | 7.10 | % |
Mortgage-backed securities | 5.06 | 5.81 | 6.08 | 6.10 | 6.23 | |||||
Investment securities | 5.70 | 6.44 | 6.84 | 8.05 | 8.09 | |||||
Other interest-earning assets | 4.41 | 3.89 | 3.65 | 3.74 | 5.37 | |||||
Total interest-earning assets | 5.88 | 6.19 | 6.43 | 6.51 | 6.87 | |||||
Weighted average cost(3): | ||||||||||
Checking accounts | 1.92 | 2.13 | 2.08 | 2.40 | 2.91 | |||||
Money market and savings accounts | 1.93 | 2.12 | 2.37 | 2.23 | 2.61 | |||||
Certificates of deposit | 3.19 | 3.32 | 3.53 | 3.76 | 4.41 | |||||
Total interest-bearing deposits | 2.42 | 2.61 | 2.78 | 2.96 | 3.52 | |||||
FHLB advances | 4.64 | 5.18 | 5.29 | 5.21 | 5.02 | |||||
Other borrowings | 5.74 | 5.97 | 6.74 | 6.51 | 5.82 | |||||
Total interest-bearing liabilities | 3.07 | 3.31 | 3.45 | 3.58 | 3.98 | |||||
Interest rate spread | 2.81 | 2.88 | 2.98 | 2.93 | 2.89 | |||||
Net yield on interest-earning assets | 3.07 | 3.17 | 3.30 | 3.26 | 3.21 |
(1) Includes mark-to-market adjustments on securities available for sale.
(2) Excludes impact of related tax benefits.
(3) Includes the annualized effect of interest rate risk management instruments.
CHARTER ONE FINANCIAL, INC.
AVERAGE BALANCE SHEET, YIELDS AND COSTS
(unaudited)
Twelve Months Ended | ||||
12/31/02 | 12/31/01 | |||
(Dollars in thousands) | ||||
Average balance sheet data: | ||||
Interest-earning assets: | ||||
Loans and leases | $25,647,597 | $25,463,666 | ||
Mortgage-backed securities | 9,919,641 | 6,818,807 | ||
Investment securities | 177,498 | 146,664 | ||
Other interest-earning assets | 894,898 | 628,560 | ||
Total interest-earning assets | 36,639,634 | 33,057,697 | ||
Allowance for loan and lease losses | (268,654 | ) | (211,859 | ) |
Noninterest-earning assets(1) | 2,877,215 | 2,651,957 | ||
Total assets | $39,248,195 | $35,497,795 | ||
Interest-bearing liabilities: | ||||
Checking accounts | $6,278,844 | $3,867,767 | ||
Money market and savings accounts | 8,084,926 | 6,433,557 | ||
Certificates of deposit | 10,054,727 | 10,230,112 | ||
Total interest-bearing deposits | 24,418,497 | 20,531,436 | ||
FHLB advances | 8,233,376 | 9,361,225 | ||
Other borrowings | 732,466 | 515,345 | ||
Total interest-bearing liabilities | 33,384,339 | 30,408,006 | ||
Noninterest-bearing liabilities: | ||||
Demand deposit accounts | 1,816,036 | 1,477,294 | ||
Other noninterest-bearing liabilities | 1,066,934 | 856,906 | ||
Total noninterest-bearing liabilities | 2,882,970 | 2,334,200 | ||
Total liabilities | 36,267,309 | 32,742,206 | ||
Shareholders' equity | 2,980,886 | 2,755,589 | ||
Total liabilities and shareholders' equity | $39,248,195 | $35,497,795 | ||
Yields and costs during period: | ||||
Weighted average yield: | ||||
Loans and leases(2) | 6.52 | % | 7.35 | % |
Mortgage-backed securities | 5.72 | 6.65 | ||
Investment securities | 6.62 | 7.90 | ||
Other interest-earning assets | 3.89 | 6.43 | ||
Total interest-earning assets | 6.24 | 7.19 | ||
Weighted average cost(3): | ||||
Checking accounts | 2.12 | 3.07 | ||
Money market and savings accounts | 2.15 | 3.23 | ||
Certificates of deposit | 3.46 | 5.17 | ||
Total interest-bearing deposits | 2.68 | 4.17 | ||
FHLB advances | 5.06 | 5.32 | ||
Other borrowings | 6.12 | 6.58 | ||
Total interest-bearing liabilities | 3.34 | 4.56 | ||
Interest rate spread | 2.90 | 2.63 | ||
Net yield on interest-earning assets | 3.19 | 3.00 |
(1) Includes mark-to-market adjustments on securities available for sale.
(2) Excludes impact of related tax benefits.
(3) Includes the annualized effect of interest rate risk management instruments.
CHARTER ONE FINANCIAL, INC.
LOAN AND LEASE ACTIVITY
(unaudited)
Three Months Ended | ||||||||||
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands) | ||||||||||
Originations: | ||||||||||
Real estate: | ||||||||||
Permanent: | ||||||||||
One-to-four family | $3,440,287 | $2,481,022 | $1,974,839 | $2,657,994 | $2,831,833 | |||||
Multifamily | 48,281 | 49,187 | 23,979 | 35,719 | 1,774 | |||||
Commercial | 62,335 | 48,601 | 34,686 | 92,088 | 9,070 | |||||
Total permanent loans | 3,550,903 | 2,578,810 | 2,033,504 | 2,785,801 | 2,842,677 | |||||
Construction: | ||||||||||
One-to-four family | 7,996 | 5,748 | 7,941 | 14,031 | 7,288 | |||||
Multifamily | 40,408 | 13,950 | - | 24,988 | 7,841 | |||||
Commercial | 53,469 | 29,385 | 15,489 | 66,234 | 21,947 | |||||
Total construction loans | 101,873 | 49,083 | 23,430 | 105,253 | 37,076 | |||||
Total real estate loans originated | 3,652,776 | 2,627,893 | 2,056,934 | 2,891,054 | 2,879,753 | |||||
Retail consumer | 1,205,611 | 948,632 | 938,328 | 998,727 | 867,979 | |||||
Automobile | 916,539 | 1,012,926 | 781,763 | 684,045 | 636,021 | |||||
Consumer finance | 100,568 | 73,931 | 55,338 | 56,083 | 63,935 | |||||
Leases | 200,083 | 110,428 | 117,544 | 93,041 | 104,562 | |||||
Corporate banking | 451,915 | 512,600 | 399,173 | 353,640 | 396,426 | |||||
Total loans and leases originated | 6,527,492 | 5,286,410 | 4,349,080 | 5,076,590 | 4,948,676 | |||||
Acquired through business combinations and purchases | 4,316 | 2,637 | 206,640 | 4,715 | 7,244 | |||||
Sales and principal reductions: | ||||||||||
Loans sold | 742,255 | 527,011 | 481,161 | 644,097 | 476,089 | |||||
Loans exchanged for mortgage-backed securities | 1,600,962 | 809,167 | 1,539,682 | 2,717,271 | 1,259,205 | |||||
Principal reductions | 3,554,745 | 2,894,793 | 2,447,093 | 2,921,080 | 2,982,202 | |||||
Total sales and principal reductions | 5,897,962 | 4,230,971 | 4,467,936 | 6,282,448 | 4,717,496 | |||||
Increase (decrease) before net items | $633,846 | $1,058,076 | $87,784 | $(1,201,143 | ) | $238,424 |
Twelve Months Ended | ||||
12/31/02 | 12/31/01 | |||
(Dollars in thousands) | ||||
Originations: | ||||
Real estate: | ||||
Permanent: | ||||
One-to-four family | $10,554,142 | $8,814,430 | ||
Multifamily | 157,166 | 42,453 | ||
Commercial | 237,710 | 155,604 | ||
Total permanent loans | 10,949,018 | 9,012,487 | ||
Construction: | ||||
One-to-four family | 35,716 | 349,510 | ||
Multifamily | 79,346 | 138,861 | ||
Commercial | 164,577 | 195,896 | ||
Total construction loans | 279,639 | 684,267 | ||
Total real estate loans originated | 11,228,657 | 9,696,754 | ||
Retail consumer | 4,091,298 | 3,536,687 | ||
Automobile | 3,395,273 | 2,715,921 | ||
Consumer finance | 285,920 | 259,458 | ||
Leases | 521,096 | 502,073 | ||
Corporate banking | 1,717,328 | 1,138,496 | ||
Total loans and leases originated | 21,239,572 | 17,849,389 | ||
Acquired through business combinations and purchases | 218,308 | 1,425,549 | ||
Sales and principal reductions: | ||||
Loans sold | 2,394,524 | 1,635,903 | ||
Loans exchanged for mortgage-backed securities | 6,667,082 | 6,708,253 | ||
Principal reductions | 11,817,711 | 9,111,479 | ||
Total sales and principal reductions | 20,879,317 | 17,455,635 | ||
Increase before net items | $578,563 | $1,819,303 |
CHARTER ONE FINANCIAL, INC.
ALLOWANCE FOR LOAN AND LEASE LOSSES
(unaudited)
Three Months Ended | ||||||||||
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands) | ||||||||||
Allowance for loan and lease losses: | ||||||||||
Balance, beginning of period | $292,800 | $267,155 | $258,605 | $255,478 | $235,604 | |||||
Provision for loan and lease losses | 60,314 | 47,695 | 55,277 | 28,717 | 38,853 | |||||
Acquired through business combination | - | - | 3,184 | - | - | |||||
Loans and leases charged off: | ||||||||||
One-to-four family | (1,127 | ) | (643 | ) | (3,056 | ) | (976 | ) | (1,035 | ) |
Commercial real estate | (144 | ) | (290 | ) | (117 | ) | (801 | ) | (630 | ) |
Retail consumer | (3,004 | ) | (2,308 | ) | (5,530 | ) | (2,258 | ) | (1,841 | ) |
Automobile | (15,941 | ) | (16,429 | ) | (29,675 | ) | (16,920 | ) | (13,073 | ) |
Consumer finance | (5,785 | ) | (5,160 | ) | (11,628 | ) | (3,822 | ) | (2,890 | ) |
Leases | (88 | ) | (519 | ) | (1,801 | ) | (460 | ) | - | |
Corporate banking | (5,799 | ) | (4,776 | ) | (2,014 | ) | (4,023 | ) | (2,216 | ) |
Total charge-offs(1) | (31,888 | ) | (30,125 | ) | (53,821 | ) | (29,260 | ) | (21,685 | ) |
Recoveries: | ||||||||||
One-to-four family | 42 | 881 | 32 | 2 | 13 | |||||
Commercial real estate | 41 | 488 | 9 | 121 | 51 | |||||
Retail consumer | 588 | 484 | 359 | 403 | 650 | |||||
Automobile | 3,582 | 3,574 | 3,123 | 2,408 | 1,803 | |||||
Consumer finance | 191 | 238 | 32 | 63 | 26 | |||||
Leases | 1,897 | 430 | - | - | - | |||||
Corporate banking | 450 | 1,980 | 355 | 673 | 163 | |||||
Total recoveries | 6,791 | 8,075 | 3,910 | 3,670 | 2,706 | |||||
Net loan and lease charge-offs(1) | (25,097 | ) | (22,050 | ) | (49,911 | ) | (25,590 | ) | (18,979 | ) |
Balance, end of period | $328,017 | $292,800 | $267,155 | $258,605 | $255,478 | |||||
Net charge-offs to average loans and leases (annualized)(1) | .38 | % | .35 | % | .80 | % | .40 | % | .29 | % |
Twelve Months Ended | ||||
12/31/02 | 12/31/01 | |||
(Dollars in thousands) | ||||
Allowance for loan and lease losses: | ||||
Balance, beginning of period | $255,478 | $189,616 | ||
Provision for loan and lease losses | 192,003 | 100,766 | ||
Acquired through business combination | 3,184 | 33,782 | ||
Loans and leases charged off: | ||||
One-to-four family | (5,802 | ) | (3,196 | ) |
Commercial real estate | (1,352 | ) | (1,139 | ) |
Retail consumer | (13,100 | ) | (7,613 | ) |
Automobile | (78,965 | ) | (40,097 | ) |
Consumer finance | (26,395 | ) | (11,246 | ) |
Leases | (2,868 | ) | (7,496 | ) |
Corporate banking | (16,612 | ) | (7,672 | ) |
Total charge-offs(1) | (145,094 | ) | (78,459 | ) |
Recoveries: | ||||
One-to-four family | 957 | 132 | ||
Commercial real estate | 659 | 75 | ||
Retail consumer | 1,834 | 1,972 | ||
Automobile | 12,687 | 6,603 | ||
Consumer finance | 524 | 227 | ||
Leases | 2,327 | 220 | ||
Corporate banking | 3,458 | 544 | ||
Total recoveries | 22,446 | 9,773 | ||
Net loan and lease charge-offs(1) | (122,648 | ) | (68,686 | ) |
Balance, end of period | $328,017 | $255,478 | ||
Net charge-offs to average loans and leases (1) | .48 | % | .27 | % |
(1) Includes $27.3 million in charge-offs recorded in the second quarter of 2002 in conjunction with Charter One's adoption of a new loan charge-off policy in which consumer loans are charged off based upon delinquency, repossession and in certain cases, at the point of bankruptcy discharge. Previously, Charter One's policy was to record charge-offs of loans secured by one-to-four family real estate at the point of foreclosure and automobile loans at the point of repossessed collateral disposition. This new policy will neither increase nor decrease ultimate net loan charge-offs. It simply accelerates the timing of the recognition of the loss on these consumer loans. This new policy was implemented prospectively and as such, prior periods have not been restated. Management believes the changes to this policy conforms Charter One's charge-off methodology to that of its commercial banking peers.
CHARTER ONE FINANCIAL, INC.
NET CHARGE-OFFS TO AVERAGE LOANS AND LEASES
(unaudited)
Three Months Ended | ||||||||||
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands) | ||||||||||
Average loans and leases: | ||||||||||
Mortgage | $11,659,164 | $11,265,962 | $11,088,463 | $12,137,744 | $12,631,156 | |||||
Retail consumer | 5,264,728 | 4,969,219 | 4,827,223 | 4,817,681 | 4,991,673 | |||||
Automobile | 5,447,392 | 5,035,920 | 4,740,267 | 4,479,405 | 4,348,099 | |||||
Consumer finance | 980,524 | 972,843 | 1,002,306 | 1,024,748 | 1,052,824 | |||||
Leases | 2,085,474 | 2,029,779 | 2,036,604 | 2,011,255 | 1,991,111 | |||||
Corporate banking | 1,253,470 | 1,186,681 | 1,143,147 | 1,060,009 | 977,336 | |||||
Total average loans and leases | $26,690,752 | $25,460,404 | $24,838,010 | $25,530,842 | $25,992,199 | |||||
Net charge-offs to average loans and leases (annualized)(1): | ||||||||||
Mortgage | .04 | % | (.02 | )% | .11 | % | .05 | % | .05 | % |
Retail consumer | .18 | .15 | .43 | .15 | .10 | |||||
Automobile | .91 | 1.02 | 2.24 | 1.30 | 1.04 | |||||
Consumer finance | 2.28 | 2.02 | 4.63 | 1.47 | 1.09 | |||||
Leases | (.35 | ) | .02 | .35 | .09 | - | ||||
Corporate banking | 1.71 | .94 | .58 | 1.26 | .84 | |||||
Total | .38 | % | .35 | % | .80 | % | .40 | % | .29 | % |
(1) | Includes $27.3 million in net charge-offs recorded in the second quarter of 2002 in conjunction with Charter One's adoption of a new loan charge-off policy in which consumer loans are charged off based upon delinquency, repossession and in certain cases, at the point of bankruptcy discharge. Previously, Charter One's policy was to record charge-offs of loans secured by one-to-four family real estate at the point of foreclosure and automobile loans at the point of repossessed collateral disposition. This new policy will neither increase nor decrease ultimate net loan charge-offs. It simply accelerates the timing of the recognition of the loss on these consumer loans. This new policy was implemented prospectively and as such, prior periods have not been restated. Management believes the changes to this policy conforms Charter One's charge-off methodology to that of its commercial banking peers. |
LOAN AND LEASE PORTFOLIO
(unaudited)
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands) | ||||||||||
Loan and lease portfolio, net(1): | ||||||||||
One-to-four family: | ||||||||||
Permanent: | ||||||||||
Fixed rate | $5,869,554 | $5,942,919 | $5,556,239 | $5,695,007 | $6,419,819 | |||||
Adjustable rate | 2,437,166 | 2,694,956 | 2,584,413 | 2,816,726 | 3,350,370 | |||||
Construction | 427,729 | 427,871 | 414,716 | 397,838 | 409,369 | |||||
8,734,449 | 9,065,746 | 8,555,368 | 8,909,571 | 10,179,558 | ||||||
Commercial real estate: | ||||||||||
Multifamily | 953,688 | 1,017,393 | 1,036,049 | 1,119,565 | 1,189,777 | |||||
Commercial | 1,307,593 | 1,313,243 | 1,321,438 | 1,311,263 | 1,279,889 | |||||
2,261,281 | 2,330,636 | 2,357,487 | 2,430,828 | 2,469,666 | ||||||
Consumer: | ||||||||||
Retail | 5,494,453 | 5,008,393 | 4,855,164 | 4,747,254 | 4,857,473 | |||||
Automobile | 5,606,329 | 5,281,731 | 4,826,370 | 4,582,136 | 4,397,425 | |||||
Consumer finance | 984,772 | 973,981 | 976,446 | 1,012,168 | 1,042,522 | |||||
12,085,554 | 11,264,105 | 10,657,980 | 10,341,558 | 10,297,420 | ||||||
Business: | ||||||||||
Leases | 2,133,468 | 2,028,687 | 2,026,955 | 2,022,104 | 1,994,524 | |||||
Corporate banking | 1,318,003 | 1,242,869 | 1,213,789 | 1,070,610 | 1,043,010 | |||||
3,451,471 | 3,271,556 | 3,240,744 | 3,092,714 | 3,037,534 | ||||||
Loans and leases before allowance for loan and lease losses | 26,532,755 | 25,932,043 | 24,811,579 | 24,774,671 | 25,984,178 | |||||
Allowance for loan and lease losses | (328,017 | ) | (292,800 | ) | (267,155 | ) | (258,605 | ) | (255,478 | ) |
Loans and leases, net(1) | $26,204,738 | $25,639,243 | $24,544,424 | $24,516,066 | $25,728,700 | |||||
Portfolio of loans serviced for others | $16,893,609 | $16,840,025 | $16,889,298 | $15,855,010 | $13,846,807 |
(1) | Includes loans held for sale. |
CHARTER ONE FINANCIAL, INC.
NONPERFORMING AND UNDERPERFORMING ASSETS
(unaudited)
12/31/02 | 9/30/02 | 6/30/02 | 3/31/02 | 12/31/01 | ||||||
(Dollars in thousands) | ||||||||||
Nonperforming assets(1) | ||||||||||
Nonaccrual loans and leases: | ||||||||||
Real estate mortgage loans: | ||||||||||
One-to-four family(2) | $27,904 | $31,528 | $34,641 | $82,721 | $79,394 | |||||
Multifamily and commercial | 5,369 | 6,621 | 4,640 | 15,178 | 13,552 | |||||
Construction and land | 9,885 | 10,598 | 11,273 | 12,713 | 10,276 | |||||
Total real estate mortgage loans | 43,158 | 48,747 | 50,554 | 110,612 | 103,222 | |||||
Retail consumer(2) | 13,937 | 14,128 | 12,092 | 17,323 | 16,592 | |||||
Automobile | - | - | - | - | - | |||||
Consumer finance(2) | 40,227 | 38,403 | 40,313 | 69,259 | 68,485 | |||||
Leases | 6,211 | 7,964 | 8,958 | 2,256 | 904 | |||||
Corporate banking | 39,098 | 37,230 | 19,807 | 21,548 | 10,551 | |||||
Total nonaccrual loans and leases | 142,631 | 146,472 | 131,724 | 220,998 | 199,754 | |||||
Less government guaranteed loans(1) | - | - | - | 21,789 | 19,630 | |||||
Total nonaccrual loans net of government guaranteed loans | 142,631 | 146,472 | 131,724 | 199,209 | 180,124 | |||||
Restructured real estate mortgage loans | 501 | 1,149 | 1,159 | 1,169 | 653 | |||||
Total nonperforming loans and leases | 143,132 | 147,621 | 132,883 | 200,378 | 180,777 | |||||
Real estate and other collateral owned(3) | 40,776 | 40,270 | 40,186 | 53,291 | 50,265 | |||||
Total nonperforming assets | $183,908 | $187,891 | $173,069 | $253,669 | $231,042 | |||||
Ratio of (excluding government guaranteed loans): | ||||||||||
Nonperforming loans and leases to total loans and leases | .55 | % | .58 | % | .54 | % | .82 | % | .70 | % |
Nonperforming assets to total assets | .44 | .47 | .44 | .67 | .61 | |||||
Nonperforming assets to total loans, leases and real estate and other collateral owned | .70 | .73 | .70 | 1.03 | .90 | |||||
Allowance for loan and lease losses to: | ||||||||||
Nonperforming loans and leases | 229.17 | 198.35 | 201.05 | 129.06 | 141.32 | |||||
Total loans and leases before allowance | 1.24 | 1.13 | 1.08 | 1.04 | .98 | |||||
Accruing loans and leases delinquent more than 90 days(1): | ||||||||||
Real estate mortgage loans: | ||||||||||
One-to-four family | $25,643 | $24,854 | $21,781 | $ - | $ - | |||||
Multifamily and commercial | - | - | 944 | - | - | |||||
Construction and land | - | - | - | - | - | |||||
Total real estate mortgage loans | 25,643 | 24,854 | 22,725 | - | - | |||||
Retail consumer | 4,758 | 5,630 | 4,362 | 3,734 | 4,519 | |||||
Automobile | 3,621 | 2,595 | 2,211 | 5,756 | 6,000 | |||||
Consumer finance | 26,739 | 25,269 | 19,470 | - | - | |||||
Leases | 19 | - | 219 | 716 | - | |||||
Corporate banking | 1,536 | 1,955 | 3,330 | 966 | 4,691 | |||||
Total accruing loans and leases delinquent more than 90 days | 62,316 | 60,303 | 52,317 | 11,172 | 15,210 | |||||
Less government guaranteed loans(1) | - | - | - | 1,600 | 1,876 | |||||
Total accruing loans and leases delinquent more than 90 days | $62,316 | $60,303 | $52,317 | $9,572 | $13,334 | |||||
Total underperforming assets | $246,224 | $248,194 | $225,386 | $263,241 | $244,376 | |||||
Ratio of (excluding government guaranteed loans): | ||||||||||
Underperforming assets to total assets | .59 | % | .62 | % | .57 | % | .70 | % | .64 | % |
Underperforming assets to total loans, leases and real estate and other collateral owned | .94 | .97 | .92 | 1.07 | .95 |
(1) | Effective June 30, 2002, amounts exclude loans guaranteed by the Federal Housing Administration or Veterans' Administration. Prior periods have not been restated. |
(2) | Effective June 30, 2002, Charter One adopted a new accrual policy in which consumer loans secured by residential real estate are placed on nonaccrual at six payments past due as long as the loan is well secured and in the process of collection. This new policy was implemented prospectively and as such, prior periods have not been restated. The change in the accrual policy did not have a material impact on interest income. Management believes the changes to this policy conforms Charter One's accrual methodology to that of its commercial banking peers. |
(3) | Effective for the period ended June 30, 2002, Charter One adopted a new loan charge-off policy in which automobile loans are charged off based upon repossession and in certain cases, at the point of bankruptcy discharge. Any automobile loan reaching 120 days delinquent will be charged off completely. Previously, Charter One's policy was to record charge-offs of loans secured by automobiles at the point of repossessed collateral disposition. This new policy was implemented prospectively and as such, prior periods have not been restated. Management believes the changes to this policy conforms Charter One's charge-off methodology to that of its commercial banking peers. |