Exhibit 99.1
Quaker City Bancorp, Inc. 7021 Greenleaf Avenue Whittier, California 90602 (562) 907-2200 | NASDAQ: QCBC |
| For | QUAKER CITY BANCORP, INC. | ||
Contact: | Rick McGill President/CEO (562) 907-2275
OR
Dwight L. Wilson Senior Vice President/CFO (562) 907-2241 |
PRESS RELEASE
QUAKER CITY BANCORP, INC.
REPORTS EARNINGSFOR THIRD QUARTER FISCAL 2003
Whittier, California, April 22, 2003
Quaker City Bancorp, Inc. (“Company”) (NASDAQ: QCBC), the holding company for Quaker City Bank (“Bank”), reported net earnings of $5.8 million, $0.90 per share, for the quarter ended March 31, 2003, compared to $5.4 million, $0.80 per share, for the quarter ended March 31, 2002, a 12.5% increase in earnings per share. Net earnings for the nine month period ended March 31, 2003 were $17.1 million, $2.58 per share, compared to $15.2 million, $2.28 per share, for the same nine month period last year, a 13.2% increase in earnings per share. The trailing twelve months earnings per share at March 31, 2003 was $3.46 per share. All per share earnings are presented on a fully diluted basis.
The net interest margin for the current quarter was 3.82% compared to 4.10% for the same period last year. For comparative purposes, the net interest margin for the quarter ended December 31, 2002 was 3.88%. Due to a change in the mix of loan types outstanding and modest growth in the real estate loan portfolio during the current quarter, the Company added $114,000 to the allowance for loan losses for the quarter ended March 31, 2003 as compared to $200,000 for the quarter ended December 31, 2002.
Return on average assets (“ROAA”) was 1.48% for the current quarter compared to 1.51% for the quarter ended March 31, 2002. ROAA for the nine month period ending March 31, 2003 was 1.48% compared to 1.47% for the same period last year. The Company’s return on average equity (“ROAE”) for the current quarter was 17.38%, compared to 17.93% for the quarter ended March 31, 2002. ROAE for the nine month period ended March 31, 2003 was 17.32% compared to 17.77% for the same period last year.
Average earning assets for the current quarter increased to $1.53 billion compared to $1.40 billion for the same period last year, a 9.9% increase. Net interest income before provision for loan losses for the quarter increased to $14.6 million from $14.3 million for the same quarter last year, a 2.3% increase. Net interest income before provision for loan losses for the nine month period ended March 31, 2003 increased to $43.7 million compared to $39.7 million for the same period last year, a 10.2% increase.
Noninterest income for the quarter ended March 31, 2003 increased to $2.8 million from $1.8 million for the same period last year, an increase of 57.3%. This increase was primarily the result of increased deposit fee income, up 54.5% from the same period last year, due to a continued emphasis on increasing transaction based deposit accounts and an increase in the number of retail branches. Gain on sale of loans held-for-sale increased to $844,000 in the current quarter compared to $256,000 for the same period last year. This was due to both high loan refinancing activity to fixed rate loans that were subsequently sold and the sale of a
package of single family second trust deed loans purchased at a significant discount in the second quarter of fiscal 2003 and subsequently sold in the third quarter of fiscal 2003. The Company recognized an after tax gain of $129,000 ($0.02 per share), in the third quarter of fiscal 2003, on this loan sale.
Nonperforming loans at March 31, 2003 were $3.9 million, 0.30% of gross loans, compared to $4.3 million, 0.35% of gross loans, at June 30, 2002. There was no real estate acquired through foreclosure (“REO”) as of March 31, 2003, compared to $18,000 at June 30, 2002. Total nonperforming assets decreased to $3.9 million, or 0.25% of assets, at March 31, 2003, compared to $4.3 million, 0.29% of total assets as of June 30, 2002. The Company includes as nonperforming assets nonaccrual loans 60 or more days past due, troubled debt restructured loans and REO.
The ratio of general and administrative (“G&A”) expenses to average assets decreased to 1.78% for the current quarter compared to 1.85% for the same quarter last year. For the quarter ended March 31, 2002, and the nine months ended March 31, 2002, G&A expenses included a $536,000 pretax expense for the prepayment of high rate FHLB advances. The efficiency ratio for the current quarter increased to 40.38% compared to 37.93% for the quarter ended March 31, 2002. The efficiency ratio is the measurement of G&A expenses as a percentage of net interest income before provision for loan losses and noninterest income, excluding nonrecurring items. The Company considered the prepayment of the high rate FHLB advances to be a nonrecurring item and therefore it was not included in the efficiency ratio calculation for the quarter ended March 31, 2002 and the nine months ended March 31, 2002. G&A expenses for the quarter ended March 31, 2003 compared to the quarter ended March 31, 2002, excluding the prepayment of high rate FHLB advances, increased as a result of costs related to retirement plan contributions including compensation costs for the Employee Stock Ownership Plan, and planned branch network expansion expenses.
The Company had $1.57 billion in total assets at March 31, 2003, and operates twenty-four retail banking branches in the Los Angeles, Orange, Riverside and San Bernardino counties in southern California. Two additional Wal-Mart in-store branches are scheduled to open during fiscal 2004, located in the communities of Temecula and Rancho Cucamonga. At March 31, 2003, consolidated stockholders’ equity of the Company was $134.8 million, representing 8.60% of total assets. The Bank was founded in 1920 and its regulatory capital levels continue to exceed the levels necessary to be considered “Well Capitalized.”
Pursuant to previously announced plans to repurchase Company stock, during the quarter ended March 31, 2003, the Company acquired in the open market 100,900 shares of its common stock at an average price per share of $34.56. Up to 154,270 additional shares can be repurchased in the future under the current Board authorization.
President and Chief Executive Officer Rick McGill will be hosting a telephone conference call to discuss the results of the third quarter and to answer questions of callers today, April 22, 2003, at 4:00 pm Eastern Time (1:00 pm Pacific). The teleconference dial-in number is (888) 273-9891. Please phone in no later than 3:55 pm Eastern Time today to participate. There will be a replay of the call available beginning at 5:45 pm Eastern Time on the 22nd and ending at 2:59 am Eastern Time on April 29, 2003. The replay dial-in number is (800) 475-6701, access code 681988.
This news release contains certain forward-looking statements that are subject to various factors which could cause actual results to differ materially from such statements. Such factors include, but are not limited to, general business environment, interest rate fluctuations that may affect operating margin, the California real estate market, competitive conditions in the business and geographic areas in which the Company conducts its business and regulatory actions.
Tables Follow
Quaker City Bancorp, Inc.
Consolidated Statements of Financial Condition
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except share data)
March 31, 2003 | June 30, 2002 | |||||||
Assets | ||||||||
Cash and due from banks | $ | 25,496 |
| $ | 14,128 |
| ||
Interest-bearing deposits |
| 443 |
|
| 762 |
| ||
Federal funds sold and other short-term investments |
| 8,000 |
|
| 3,500 |
| ||
Investment securities held-to-maturity |
| 17,209 |
|
| 14,273 |
| ||
Investment securities available-for-sale |
| 30,123 |
|
| 79,234 |
| ||
Loans receivable, net |
| 1,264,773 |
|
| 1,193,035 |
| ||
Loans receivable held-for-sale |
| 1,660 |
|
| 3,436 |
| ||
Mortgage-backed securities held-to-maturity |
| 96,982 |
|
| 117,827 |
| ||
Mortgage-backed securities available-for-sale |
| 85,584 |
|
| 26,449 |
| ||
Real estate held-for-sale |
| — |
|
| 18 |
| ||
Federal Home Loan Bank stock, at cost |
| 19,578 |
|
| 16,685 |
| ||
Office premises and equipment, net |
| 7,447 |
|
| 7,327 |
| ||
Deferred tax asset |
| 806 |
|
| 324 |
| ||
Accrued interest receivable and other assets |
| 10,314 |
|
| 10,436 |
| ||
Total assets | $ | 1,568,415 |
| $ | 1,487,434 |
| ||
Liabilities and Stockholders’ Equity | ||||||||
Deposits | $ | 1,064,424 |
| $ | 1,009,725 |
| ||
Federal Home Loan Bank advances |
| 354,500 |
|
| 330,700 |
| ||
Accounts payable and accrued expenses |
| 7,790 |
|
| 8,605 |
| ||
Other liabilities |
| 6,883 |
|
| 9,893 |
| ||
Total liabilities |
| 1,433,597 |
|
| 1,358,923 |
| ||
Stockholders’ Equity: | ||||||||
Common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 6,359,682 shares and 6,610,017 at March 31, 2003 and June 30, 2002, respectively |
| 64 |
|
| 66 |
| ||
Additional paid-in capital |
| 127,335 |
|
| 124,428 |
| ||
Accumulated other comprehensive loss |
| (471 | ) |
| (244 | ) | ||
Retained earnings, substantially restricted |
| 8,274 |
|
| 4,818 |
| ||
Deferred compensation |
| (384 | ) |
| (557 | ) | ||
Total stockholders’ equity |
| 134,818 |
|
| 128,511 |
| ||
Total liabilities and stockholders’ equity | $ | 1,568,415 |
| $ | 1,487,434 |
| ||
Quaker City Bancorp, Inc.
Consolidated Statements of Operations
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except per share data)
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
Interest income: | |||||||||||||
Loans receivable | $ | 21,770 |
| $ | 22,473 | $ | 65,975 | $ | 68,252 | ||||
Mortgage-backed securities |
| 1,920 |
|
| 2,129 |
| 5,809 |
| 6,243 | ||||
Investment securities |
| 527 |
|
| 640 |
| 1,854 |
| 1,745 | ||||
Other |
| 256 |
|
| 417 |
| 761 |
| 957 | ||||
Total interest income |
| 24,473 |
|
| 25,659 |
| 74,399 |
| 77,197 | ||||
Interest expense: | |||||||||||||
Deposits |
| 5,964 |
|
| 7,386 |
| 19,012 |
| 25,717 | ||||
Federal Home Loan Bank advances |
| 3,873 |
|
| 3,968 |
| 11,663 |
| 11,803 | ||||
Total interest expense |
| 9,837 |
|
| 11,354 |
| 30,675 |
| 37,520 | ||||
Net interest income before provision for loan losses |
| 14,636 |
|
| 14,305 |
| 43,724 |
| 39,677 | ||||
Provision for loan losses |
| 114 |
|
| — |
| 514 |
| 200 | ||||
Net interest income after provision for loan losses |
| 14,522 |
|
| 14,305 |
| 43,210 |
| 39,477 | ||||
Other income: | |||||||||||||
Deposit fees |
| 1,315 |
|
| 851 |
| 3,707 |
| 2,526 | ||||
Loan servicing charges and fees |
| 410 |
|
| 470 |
| 1,503 |
| 1,548 | ||||
Gain on sale of loans held-for-sale |
| 844 |
|
| 256 |
| 1,445 |
| 530 | ||||
Commissions |
| 125 |
|
| 167 |
| 484 |
| 649 | ||||
Gain on sale of securities available-for-sale |
| — |
|
| — |
| 47 |
| — | ||||
Other |
| 61 |
|
| 7 |
| 208 |
| 32 | ||||
Total other income |
| 2,755 |
|
| 1,751 |
| 7,394 |
| 5,285 | ||||
Other expense: | |||||||||||||
Compensation and employee benefits |
| 4,043 |
|
| 3,480 |
| 11,558 |
| 9,870 | ||||
Occupancy, net |
| 805 |
|
| 723 |
| 2,450 |
| 2,169 | ||||
Federal deposit insurance premiums |
| 110 |
|
| 104 |
| 326 |
| 304 | ||||
Data processing |
| 400 |
|
| 299 |
| 1,166 |
| 906 | ||||
Advertising and promotional |
| 364 |
|
| 252 |
| 1,046 |
| 945 | ||||
Consulting fees |
| 202 |
|
| 136 |
| 641 |
| 491 | ||||
Prepayment penalty — Federal Home Loan Bank Advances |
| — |
|
| 536 |
| — |
| 536 | ||||
Other general and administrative expense |
| 1,099 |
|
| 1,096 |
| 3,619 |
| 2,884 | ||||
Total general and administrative expense |
| 7,023 |
|
| 6,626 |
| 20,806 |
| 18,105 | ||||
Real estate operations, net |
| (1 | ) |
| — |
| — |
| — | ||||
Amortization of core deposit intangible |
| 29 |
|
| 29 |
| 86 |
| 86 | ||||
Total other expense |
| 7,051 |
|
| 6,655 |
| 20,892 |
| 18,191 | ||||
Earnings before income taxes |
| 10,226 |
|
| 9,401 |
| 29,712 |
| 26,571 | ||||
Income taxes |
| 4,403 |
|
| 4,003 |
| 12,650 |
| 11,331 | ||||
Net earnings | $ | 5,823 |
| $ | 5,398 | $ | 17,062 | $ | 15,240 | ||||
Basic earnings per share | $ | 0.93 |
| $ | 0.85 | $ | 2.69 | $ | 2.41 | ||||
Diluted earnings per share | $ | 0.90 |
| $ | 0.80 | $ | 2.58 | $ | 2.28 | ||||
Quaker City Bancorp, Inc.
Consolidated Financial Highlights, Page 1
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except share and per share data)
At March 31, 2003 | At June 30, 2002 | |||||
Selected Financial Data | ||||||
Total assets | $ | 1,568,415 | $ | 1,487,434 | ||
Total liabilities | $ | 1,433,597 | $ | 1,358,923 | ||
Loans receivable (1) | $ | 1,266,433 | $ | 1,196,471 | ||
Allowance for loan losses | $ | 11,606 | $ | 11,131 | ||
Investment securities (1) | $ | 47,332 | $ | 93,507 | ||
Mortgage-backed securities (1) | $ | 182,566 | $ | 144,276 | ||
Real estate held-for-sale |
| — | $ | 18 | ||
Deposits | $ | 1,064,424 | $ | 1,009,725 | ||
Federal Home Loan Bank advances | $ | 354,500 | $ | 330,700 | ||
Total stockholders’ equity | $ | 134,818 | $ | 128,511 | ||
Total common shares outstanding |
| 6,359,682 |
| 6,610,017 | ||
Trailing twelve month diluted earnings per share | $ | 3.46 | $ | 3.17 | ||
Book value per common share | $ | 21.20 | $ | 19.44 | ||
Stock price at end of period | $ | 33.94 | $ | 33.14 | ||
| (1) | Includes assets held or available-for-sale. |
At or for the Three Months Ended March 31, | At or for the Nine Months Ended March 31, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
Selected Operating Data | ||||||||||||||||
Net interest income before provision for loan losses | $ | 14,636 |
| $ | 14,305 |
| $ | 43,724 |
| $ | 39,677 |
| ||||
Provision for loan losses |
| 114 |
|
| — |
|
| 514 |
|
| 200 |
| ||||
Net interest income after provision for loan losses |
| 14,522 |
|
| 14,305 |
|
| 43,210 |
|
| 39,477 |
| ||||
Total other income |
| 2,755 |
|
| 1,751 |
|
| 7,394 |
|
| 5,285 |
| ||||
Total other expense |
| 7,051 |
|
| 6,655 |
|
| 20,892 |
|
| 18,191 |
| ||||
Earnings before income taxes |
| 10,226 |
|
| 9,401 |
|
| 29,712 |
|
| 26,571 |
| ||||
Income taxes |
| 4,403 |
|
| 4,003 |
|
| 12,650 |
|
| 11,331 |
| ||||
Net earnings | $ | 5,823 |
| $ | 5,398 |
| $ | 17,062 |
| $ | 15,240 |
| ||||
Basic earnings per share | $ | 0.93 |
| $ | 0.85 |
| $ | 2.69 |
| $ | 2.41 |
| ||||
Diluted earnings per share | $ | 0.90 |
| $ | 0.80 |
| $ | 2.58 |
| $ | 2.28 |
| ||||
Average earning assets | $ | 1,534,657 |
| $ | 1,395,898 |
| $ | 1,503,042 |
| $ | 1,348,392 |
| ||||
Weighted average shares outstanding and equivalents |
| 6,500,468 |
|
| 6,718,315 |
|
| 6,621,889 |
|
| 6,674,162 |
| ||||
Performance Ratios (2) | ||||||||||||||||
Return on average assets |
| 1.48 | % |
| 1.51 | % |
| 1.48 | % |
| 1.47 | % | ||||
Return on average equity |
| 17.38 | % |
| 17.93 | % |
| 17.32 | % |
| 17.77 | % | ||||
Average equity to average assets |
| 8.51 | % |
| 8.41 | % |
| 8.53 | % |
| 8.28 | % | ||||
Interest rate spread during the period |
| 3.54 | % |
| 3.78 | % |
| 3.56 | % |
| 3.54 | % | ||||
Net interest margin |
| 3.82 | % |
| 4.10 | % |
| 3.88 | % |
| 3.92 | % | ||||
General and administrative expense to average assets |
| 1.78 | % |
| 1.85 | % |
| 1.80 | % |
| 1.75 | % | ||||
Efficiency ratio |
| 40.38 | % |
| 37.93 | % |
| 40.70 | % |
| 39.08 | % | ||||
Other expense to average assets |
| 1.79 | % |
| 1.86 | % |
| 1.81 | % |
| 1.76 | % | ||||
| (2) | All applicable quarterly ratios reflect annualized figures. |
Quaker City Bancorp, Inc.
Consolidated Financial Highlights, Page 2
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except share and per share data)
At March 31, 2003 | At June 30, 2002 | |||||||
Asset Quality Ratios and Data | ||||||||
Nonperforming loans as a percentage of gross loans (3) |
| 0.30 | % |
| 0.35 | % | ||
Nonperforming assets as a percentage of total assets (4) |
| 0.25 | % |
| 0.29 | % | ||
Total allowance for loan losses as a percentage of gross loans |
| 0.91 | % |
| 0.92 | % | ||
Total allowance for loan losses as a percentage of total nonperforming loans |
| 297.97 | % |
| 260.62 | % | ||
Total allowance as a percentage of total nonperforming assets (5) |
| 297.97 | % |
| 259.52 | % | ||
Net charge-offs, quarter to date | $ | 39 |
| $ | 11 |
| ||
Nonaccrual loans (3) | $ | 3,895 |
| $ | 4,271 |
| ||
Troubled debt restructured loans. |
| — |
|
| — |
| ||
Total nonperforming loans |
| 3,895 |
|
| 4,271 |
| ||
Real estate acquired through foreclosure |
| — |
|
| 18 |
| ||
Total nonperforming assets | $ | 3,895 |
| $ | 4,289 |
| ||
Number of: | ||||||||
Pass Book/Savings Accounts |
| 18,013 |
|
| 16,041 |
| ||
Checking Accounts |
| 35,011 |
|
| 30,872 |
| ||
Money Market Accounts |
| 7,851 |
|
| 7,587 |
| ||
| (3) | Nonperforming loans are net of specific allowances and include nonaccrual and troubled debt restructured loans. Gross loans include loans held for sale. |
| (4) | Nonperforming assets include nonperforming loans and REO. |
| (5) | Total allowance includes loan and REO valuation allowances. |