Exhibit 99.2
Quaker City Bancorp, Inc. Reports
Earnings for Fourth Quarter and Fiscal Year 2003
WHITTIER, Calif.--(BUSINESS WIRE)--July 22, 2003--Quaker City
Bancorp, Inc. ("Company") (Nasdaq:QCBC), the holding company for
Quaker City Bank ("Bank"), reported net earnings of $22.6 million,
$3.43 per share, for the fiscal year ended June 30, 2003, compared to
$21.2 million, $3.17 per share, for the fiscal year ended June 30,
2002, an 8.2% increase in earnings per share. Net earnings for the
quarter ended June 30, 2003 were $5.5 million, $0.86 per share,
compared to $6.0 million, $0.88 per share, for the quarter ended June
30, 2002, a 2.3% decrease in earnings per share compared to the prior
fiscal year. All per share earnings are presented on a fully diluted
basis.
Net earnings for the quarter ended June 30, 2003 were less than
the same quarter last year primarily due to an increase in general and
administrative ("G & A") expenses of $1.2 million, a reduction in net
interest income of $0.5 million or 3.2%, partially offset by an
increase in non-interest income of $1.0 million, a 54.1% increase.
The net interest margin for the fiscal year decreased to 3.83%
compared to 3.99% for fiscal 2002, as the yield on interest earning
assets decreased more quickly than the cost of interest bearing
liabilities. The net interest margin for the quarter ended June 30,
2003 decreased to 3.70% compared to 4.16% for the same period last
year.
Return on average assets ("ROAA") for the year ended June 30, 2003
was 1.46% compared to 1.51% for the year ended June 30, 2003. ROAA for
the quarter ended June 30, 2003 was 1.39% compared to 1.64% for the
same period last year. The Company's return on average equity ("ROAE")
for fiscal 2003 was 17.01%, compared to 18.05% for fiscal 2002. ROAE
for the quarter ended June 30, 2003 was 16.13% compared to 18.80% for
the same period last year.
Average earning assets for fiscal 2003 increased to $1.51 billion
compared to $1.37 billion for the same period last year, a 10.8%
increase. Average earning assets for the quarter ended June 30, 2003
increased to $1.55 billion compared to $1.42 billion for the same
quarter one year ago, an 8.8% increase. Total assets for the fiscal
year ended June 30, 2003, were $1.62 billion, compared to $1.49
billion for the fiscal year ended June 30, 2002, a 9.1% increase.
Net interest income before provision for loan losses for the year
ended June 30, 2003 increased to $58.1 million from $54.5 million for
fiscal 2002, a 6.6% increase. Net interest income before provision for
loan losses for the quarter ended June 30, 2003 decreased to $14.3
million compared to $14.8 million for the same period last year, a
3.2% decrease.
Total other income for fiscal year June 30, 2003 increased to
$10.3 million from $7.2 million for fiscal 2002, an increase of 43.6%.
This increase for fiscal 2003 was primarily the result of an increase
in gain on sale of loans, which was $2.3 million compared to $0.6
million for fiscal 2002. This was due to high loan refinancing
activity to fixed rate loans that were subsequently sold. Total other
income for the quarter ended June 30, 2003 increased to $2.9 million
compared to $1.9 million for the same period last year. The increase
during the quarter was also primarily due to an increase in gain on
sale of loans to $0.8 million at June 30, 2003 compared to $83,000 for
the quarter ended June 30, 2002. Retail deposit fees increased to $5.1
million for fiscal 2003, compared to $3.6 million for fiscal 2002, a
43.0% increase, due to a continued emphasis on increasing
transaction-based deposit accounts and an increase in the number of
the Bank's retail branches. Retail deposit fees for the quarter ended
June 30, 2003 increased to $1.4 million compared to $1.0 million for
the same period last year.
Nonperforming loans at June 30, 2003 were $3.3 million, 0.25% 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 June 30, 2003, compared to $18,000 as of June 30, 2002.
Total nonperforming assets decreased to $3.3 million, or 0.20% of
assets, as of June 30, 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 G&A expenses to average assets increased to 1.82% for
fiscal 2003, compared to 1.74% for fiscal 2002. G&A for the quarter
ended June 30, 2003, increased to 1.88% compared to 1.73% for the same
quarter last year. The ratio of G&A to average assets increased, both
for the fiscal year and the fourth quarter 2003, primarily due to the
expansion of the retail banking branches, mark-to-market expense of
the Employee Stock Ownership Plan as the share price of the Company's
stock increased during the past year, and costs related to increases
in loan origination volume. The efficiency ratio for fiscal 2003
increased to 41.33% compared to 39.56% for fiscal 2002. The efficiency
ratio for the quarter ended June 30, 2003 increased to 43.21% compared
to 37.67% for the quarter ended June 30, 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. For the year ended June 30, 2002, G&A expenses
included a $536,000 pretax expense for the prepayment of high rate
Federal Home Loan Bank ("FHLB") advances. Management considers the
expense incurred in prepayment of the high rate FHLB advances to be a
nonrecurring item, not likely to recur within two years of the
prepayment and there being no similar expense in the two years
preceding the prepayment. Due to the nonrecurring nature of such
prepayment, management believes that it is useful to investors to
identify the efficiency ratio excluding the $536,000 pretax expense
for the FHLB prepayment because management believes that the non-GAAP
measure, when considered in conjunction with the GAAP efficiency
ratio, provides useful information to investors concerning the
Company's expense and expense trends. This non-GAAP financial measure
should be viewed as a supplement to, and not a substitute for or
superior to, the Company's results of operations presented on a GAAP
basis. For the year ended June 30, 2003, the efficiency ratio
excluding the FHLB prepayment remained 41.33% compared to 38.69% for
fiscal 2002. The FHLB prepayment was made in the third quarter of
fiscal 2002 and is not reflected in the performance ratios for the
quarters ended June 30, 2003 and 2002. A reconciliation of this
non-GAAP financial measure to the corresponding GAAP efficiency ratio
is provided under the heading "Reconciliation of Non-GAAP Financial
Measures" in the tables attached to this release.
President and Chief Executive Officer Rick McGill commented, "We
are very pleased with the performance of the Company during fiscal
2003. We were able to increase our asset size by 9.1% during a year of
extremely high loan prepayments by increasing our loan origination
volume by 31.0% and loan purchases by 42.2%. The challenge going
forward will be to continue our asset growth with quality loans at
acceptable yields."
Pursuant to previously announced plans to repurchase Company
stock, during the quarter ended June 30, 2003, the Company acquired in
the open market 49,500 shares of its common stock at an average price
per share of $36.57. Up to 104,770 additional shares can be
repurchased in the future under the current Board authorization.
On July 17, 2003, the Company announced that its Board of
Directors, at their meeting on July 16, 2003, declared its first cash
dividend of $0.20 per outstanding share of common stock of the Company
payable on August 29, 2003 to the shareholders of record at the close
of business on August 15, 2003.
The Company had $1.62 billion in total assets at June 30, 2003,
and operates twenty-four retail banking branches in the Los Angeles,
Orange, Riverside and San Bernardino counties in southern California.
One additional Wal-Mart in-store branch is currently scheduled to open
during fiscal 2004, located in the community of Temecula. At June 30,
2003, consolidated stockholders' equity of the Company was $139.1
million, representing 8.58% 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."
President and Chief Executive Officer Rick McGill will be hosting
a telephone conference call to discuss the results of the fourth
quarter, fiscal 2003, the recently announced cash dividend program,
and to answer questions of callers today, July 22, 2003, at 4:00 p.m.
Eastern Time (1:00 p.m. Pacific). The teleconference dial-in number is
800-450-0788. Please phone in no later than 3:55 p.m. Eastern Time
today to participate. There will be a replay of the call available
beginning at 6:15 p.m. Eastern Time on the 22nd and ending at 2:59
a.m. Eastern Time on July 30, 2003. The replay dial-in number is
800-475-6701, access code 690427.
Statements used in this press release that relate to future plans,
events, financial results, prospects or performance are
forward-looking statements as defined under the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially
from those anticipated as a result of certain risks and uncertainties,
including but 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,
regulatory actions and other factors that may affect the Company
detailed from time to time in the Company's reports on Forms 10-K,
10-Q, 8-K and other filings made with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
The Company undertakes no obligation to update or revise any
forward-looking statements to reflect new information, changed
circumstances or unanticipated events.
Quaker City Bancorp, Inc.
Consolidated Statements of Financial Condition
(NASDAQ:QCBC)
Unaudited
(Dollars in thousands, except share data)
June 30, June 30,
2003 2002
------- -------
Assets
Cash and due from banks $31,275 $14,128
Interest-bearing deposits 943 762
Federal funds sold and other
short-term investments -- 3,500
Investment securities held-to-maturity 12,178 14,273
Investment securities available-for-sale 48,137 79,234
Loans receivable, net 1,323,268 1,193,035
Loans receivable held-for-sale 2,997 3,436
Mortgage-backed securities held-to-maturity 90,014 117,827
Mortgage-backed securities available-for-sale 73,683 26,449
Real estate held-for-sale -- 18
Federal Home Loan Bank stock, at cost 19,807 16,685
Office premises and equipment, net 7,275 7,327
Accrued interest receivable and other assets 12,534 10,760
Total assets $1,622,111 $1,487,434
Liabilities and Stockholders' Equity
Deposits $1,084,117 $1,009,725
Federal Home Loan Bank advances 381,500 330,700
Accounts payable and accrued expenses 7,269 8,605
Other liabilities 10,088 9,893
Total liabilities 1,482,974 1,358,923
Stockholders' Equity:
Common stock, $.01 par value. Authorized
20,000,000 shares; issued and outstanding
6,365,943 shares and 6,610,017 at June 30,
2003 and June 30, 2002, respectively 64 66
Additional paid-in capital 128,581 124,428
Accumulated other comprehensive loss (1,377) (244)
Retained earnings, substantially restricted 12,197 4,818
Deferred compensation (328) (557)
Total stockholders' equity 139,137 128,511
Total liabilities
and stockholders' equity $1,622,111 $1,487,434
Quaker City Bancorp, Inc.
Consolidated Statements of Operations
(NASDAQ:QCBC)
Unaudited
(Dollars in thousands, except per share data)
Three Months Twelve Months
Ended Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Interest income:
Loans receivable $21,367 $22,237 $87,342 $90,489
Mortgage-backed securities 1,609 2,063 7,418 8,306
Investment securities 550 904 2,404 2,649
Other 253 263 1,014 1,220
Total interest income 23,779 25,467 98,178 102,664
Interest expense:
Deposits 5,723 7,026 24,735 32,743
Federal Home Loan Bank advances 3,714 3,622 15,377 15,425
Total interest expense 9,437 10,648 40,112 48,168
Net interest income before
provision for loan losses 14,342 14,819 58,066 54,496
Provision for loan losses -- -- 514 200
Net interest income after
provision for loan losses 14,342 14,819 57,552 54,296
Other income:
Deposit fees 1,370 1,025 5,077 3,551
Loan servicing charges and fees 533 454 2,035 2,002
Gain on sale of loans held-for-sale 810 83 2,255 613
Commissions 165 237 648 886
Gain/(loss) on sale of
securities available-for-sale (1) -- 46 --
Other 69 113 277 145
Total other income 2,946 1,912 10,338 7,197
Other expense:
Compensation and employee
benefits 4,207 3,508 15,765 13,378
Occupancy, net 866 766 3,315 2,935
Federal deposit insurance premiums 108 103 434 407
Data processing 444 339 1,609 1,245
Advertising and promotional 463 347 1,509 1,292
Consulting fees 282 279 923 770
Prepayment penalty -- Federal
Home Loan Bank Advances -- -- -- 536
Other general and
administrative expense 1,100 961 4,719 3,845
Total general and
administrative expense 7,470 6,303 28,274 24,408
Amortization of core deposit
intangible 29 29 115 115
Total other expense 7,499 6,332 28,389 24,523
Earnings before income taxes 9,789 10,399 39,501 36,970
Income taxes 4,246 4,448 16,896 15,779
Net earnings $5,543 $5,951 $22,605 $21,191
Basic earnings per share $0.88 $0.92 $3.57 $3.34
Diluted earnings per share $0.86 $0.88 $3.43 $3.17
Quaker City Bancorp, Inc.
Consolidated Financial Highlights, Page 1
(NASDAQ:QCBC)
Unaudited
(Dollars in thousands, except share and per share data)
At June 30, At June 30,
2003 2002
---- ----
Selected Financial Data
Total assets $1,622,111 $1,487,434
Total liabilities $1,482,974 $1,358,923
Loans receivable (1) $1,326,265 $1,196,471
Allowance for loan losses $11,606 $11,131
Investment securities (1) $60,315 $93,507
Mortgage-backed securities (1) $163,697 $144,276
Real estate held-for-sale -- $18
Deposits $1,084,117 $1,009,725
Federal Home Loan Bank advances $381,500 $330,700
Total stockholders' equity $139,137 $128,511
Total common shares outstanding 6,365,943 6,610,017
Book value per common share $21.86 $19.44
Stock price at end of period $41.59 $33.14
(1) Includes assets held or available-for-sale.
At or for the At or for the
Three Months Ended Twelve Months Ended
June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
Selected Operating Data
Net interest income
before provision
for loan losses $14,342 $14,819 $58,066 $54,496
Provision for loan losses -- -- 514 200
Net interest income
after provision
for loan losses 14,342 14,819 57,552 54,296
Total other income 2,946 1,912 10,338 7,197
Total other expense 7,499 6,332 28,389 24,523
Earnings before
income taxes 9,789 10,399 39,501 36,970
Income taxes 4,246 4,448 16,896 15,779
Net earnings $5,543 $5,951 $22,605 $21,191
Basic earnings per share $0.88 $0.92 $3.57 $3.34
Diluted earnings per share $0.86 $0.88 $3.43 $3.17
Average earning
assets $1,549,995 $1,424,338 $1,514,780 $1,367,679
Weighted avg diluted
shares outstanding
and equivalents 6,467,792 6,769,767 6,593,582 6,693,092
Performance Ratios (2)
Return on average assets 1.39% 1.64% 1.46% 1.51%
Return on average equity 16.13% 18.80% 17.01% 18.05%
Average equity to average
assets 8.64% 8.70% 8.56% 8.39%
Interest rate spread during
the period 3.42% 3.81% 3.53% 3.61%
Net interest margin 3.70% 4.16% 3.83% 3.99%
General and administrative
expense to average assets 1.88% 1.73% 1.82% 1.74%
Efficiency ratio - GAAP based 43.21% 37.67% 41.33% 39.56%
Efficiency ratio - excluding
nonrecurring items 43.21% 37.67% 41.33% 38.69%
Other expense to average assets 1.89% 1.74% 1.83% 1.75%
(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 June 30, At June 30,
2003 2002
Asset Quality Ratios and Data ---- ----
Nonperforming loans as a percentage
of gross loans (3) 0.25% 0.35%
Nonperforming assets as a percentage
of total assets (4) 0.20% 0.29%
Total allowance for loan losses as a
percentage of gross loans 0.87% 0.92%
Total allowance for loan losses as a
percentage of total nonperforming loans 350.95% 260.62%
Total allowance as a percentage of
total nonperforming assets (5) 350.95% 259.52%
Net charge-offs, quarter to date -- $11
Nonaccrual loans (3) $3,307 $4,271
Troubled debt restructured loans -- --
Total nonperforming loans 3,307 4,271
Real estate acquired through foreclosure -- 18
Total nonperforming assets $3,307 $4,289
Number of:
Pass Book/Savings Accounts 19,231 16,041
Checking Accounts 37,478 30,872
Money Market Accounts 7,589 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.
Reconciliation of Non-GAAP Financial Measures
At or for the At or for the
Three Months Ended Twelve Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
(Dollars in thousands)
Net interest income before
provision for loan losses $14,342 $14,819 $58,066 $54,496
Total other income 2,946 1,912 10,338 7,197
Total income 17,288 16,731 68,404 61,693
Total general and
administrative expenses 7,470 6,303 28,274 24,408
Less nonrecurring FHLB
Prepayment penalty -- -- -- 536
Efficiency ratio - GAAP based 43.21% 37.67% 41.33% 39.56%
Efficiency ratio - excluding
nonrecurring items 43.21% 37.67% 41.33% 38.69%
For investor information, visit Quaker City's Corporate News on
the Net page at www.businesswire.com/cnn/qcbc.htm
CONTACT: Quaker City Bancorp, Inc.
Rick McGill, 562-907-2275
or
Dwight L. Wilson, 562-907-2241