Exhibit 99.1
Quaker City Bancorp, Inc. Reports Earnings for Second Quarter Fiscal 2004
and Cash Dividend
WHITTIER, Calif.--(BUSINESS WIRE)--Jan. 27, 2004--Quaker City
Bancorp, Inc. ("Company") (NASDAQ: QCBC), the holding company for
Quaker City Bank ("Bank"), reported net earnings of $5.4 million,
$0.84 per share, for the quarter ended December 31, 2003, compared to
$5.6 million, $0.85 per share, for the quarter ended December 31,
2002. The trailing twelve months earnings per share at December 31,
2003 was $3.44 per share. All per share earnings are presented on a
fully diluted basis.
The Company also announced today that its Board of Directors, at
their meeting on January 22, 2004, declared a cash dividend of $0.20
per outstanding share of common stock of the Company payable on
February 27, 2004 to stockholders of record at the close of business
on February 13, 2004.
The net interest margin for the current reporting quarter was
3.46% compared to 3.88% for the same period last year, as the yield on
interest earning assets decreased more quickly than the cost of
interest bearing liabilities during the period. The net interest
margin was 3.67% for the quarter ended September 30, 2003. Loan
payoffs, although slightly less than loan payoffs during the quarter
ended September 30, 2003, continued to be substantial, with an
annualized loan payoff rate of 42.5% of average loan balances for the
current quarter.
Return on average assets (ROAA) decreased to 1.25% for the current
quarter, compared to 1.44% for the same quarter ended December 31,
2002 and 1.33% for the quarter ended September 30, 2003, as average
total assets grew 12.0% and net income decreased 3.4%, quarter over
quarter. The Company's return on average equity (ROAE) for the current
quarter decreased to 15.32%, compared to 17.34% for the quarter ended
December 31, 2002 and 15.57% for the quarter ended September 30, 2003,
as average total equity grew 9.4% and net income declined 3.4% quarter
over quarter. The book value per share at December 31, 2003 was
$22.86, compared to $20.48 at December 31, 2002, an 11.6% increase.
Average earning assets for the current quarter increased to $1.68
billion, compared to $1.50 billion at December 31, 2002, an 11.4%
increase. As a result of increased average earning assets offset by a
decrease in net interest margin, net interest income before provision
for loan losses for the quarter was $14.5 million for the current
quarter, compared to $14.6 million for the same quarter last year. The
Company added $100,000 to the allowance for loan losses due to growth
in the real estate loan portfolio during the current quarter.
Total assets at December 31, 2003 were $1.76 billion compared to
$1.64 billion at September 30, 2003, an increase of $112.5 million for
the quarter or an annualized increase of 27.4%, with loans increasing
$71.9 million and mortgage-backed securities and other investment
securities increasing $54.2 million from the previous quarter.
Total other income for the quarter ended December 31, 2003
increased to $3.1 million from $2.4 million for the same period last
year, an increase of 28.1%. The increase during the quarter was due to
an increase in retail deposit fees to $1.5 million for the current
quarter (compared to $1.2 million for the same period last year), an
increase in loan servicing charges and fees to $565,000 (compared to
$474,000 for the same period last year) and an increase in other
income to $339,000 (compared to $14,000 for the same period last year)
as a result of collections on loans purchased that the Company owned
with a zero basis. Gain on sale of loans held-for-sale of $443,000 for
the current quarter included a gain on the sale of loans purchased at
a discount and subsequently sold at a gain of $374,000 pretax. Gain on
sale of loans held-for-sale for the quarter ended December 31, 2002 of
$489,000 primarily included gains on the sale of loans originated by
the Company.
Nonperforming loans at December 31, 2003 increased to $3.9
million, 0.28% of gross loans, compared to $3.3 million, 0.25% of
gross loans at June 30, 2003. There was no real estate acquired
through foreclosure (REO) for the quarters ended December 31, 2003 and
June 30, 2003. Total nonperforming assets increased to $3.9 million,
or 0.22% of total assets at December 31, 2003, compared to $3.3
million, 0.20% of total assets, at June 30, 2003. 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 was 1.79% for the current reporting quarter compared to
1.77% for the same quarter last year. The increase, year over year,
was a result of costs related to planned branch network expansion,
branch computer technology upgrades, and increased marketing expense.
The G&A ratio for the current quarter was down from 1.88% for the
quarter ended September 30, 2003. The efficiency ratio for the current
quarter increased to 44.30%, compared to 40.55% for the quarter ended
December 31, 2002 and 44.19% for the quarter ended September 30, 2003.
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.
The Company operates twenty-five retail banking branches in Los
Angeles, Orange, Riverside, San Bernardino and San Diego Counties in
southern California. The bank is currently scheduled to open two
additional Wal-Mart in-store branches in the communities of San Marcos
(north San Diego area) in January 2004 and La Quinta (Palm Springs
area) in early March 2004. The La Quinta branch will be located in
what is scheduled to be Wal-Mart's first "super center" in California.
At December 31, 2003, consolidated stockholders' equity was $143.1
million, representing 8.15% 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, the Company acquired in the open market 80,250 shares of common
stock at an average price per share of $42.68 during the quarter and
146,750 shares of common stock at an average price per share of $41.37
for the six months ended December 31, 2003. Up to an additional
276,317 shares may be repurchased under the current Board of Directors
authorization.
As previously announced, President and Chief Executive Officer
Rick McGill will be hosting a telephone conference call to discuss the
results of the second quarter and to answer questions of callers
today, January 27, 2004 at 4:00 p.m. Eastern Time (1:00 p.m. Pacific).
The teleconference dial-in number is (888) 273-9889. 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 5:45 p.m. Eastern Time
on January 27, 2004 and ending at 2:59 a.m. Eastern Time on February
3, 2004. The replay dial-in number is (800) 475-6701 (USA) or (320)
365-3844 (International), access code 717664.
This news release contains forward-looking statements that are
subject to a number of risks and uncertainties, many of which are
beyond the control of the Company, including, but not limited to, (i)
general economic, market or business conditions in the U.S. and
southern California, including changes in market interest rates; (ii)
real estate market conditions, particularly in southern California;
(iii) the opportunities (or lack thereof) that may be presented to and
pursued by the Company; (iv) competitive actions by other financial
institutions; (v) changes in federal, state, and local laws,
regulations and policies affecting the Company's business; and (vi)
other factors. Actual results could differ materially from those
contemplated by these forward-looking statements. Consequently, all of
the forward-looking statements made in this report are qualified by
these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the
expected consequences to or effects on the Company and its business or
operations. Forward-looking statements made in this report speak as of
the date hereof. The Company undertakes no obligation to update or
revise any forward-looking statement made in this report.
Quaker City Bancorp, Inc.
Consolidated Statements of Financial Condition
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except share data)
December 31, June 30,
2003 2003
Assets
Cash and due from banks $32,498 $31,275
Interest-bearing deposits 930 943
Federal funds sold and other
short-term investments -- --
Investment securities
held-to-maturity 7,101 12,178
Investment securities
available-for-sale 47,893 48,137
Loans receivable, net 1,366,741 1,323,268
Loans receivable held-for-sale 392 2,997
Mortgage-backed securities
held-to-maturity 156,310 90,014
Mortgage-backed securities
available-for-sale 98,911 73,683
Real estate held-for-sale -- --
Federal Home Loan Bank stock,
at cost 24,075 19,807
Office premises and equipment, net 7,410 7,275
Accrued interest receivable and
other assets 12,801 12,534
Total assets $1,755,062 $1,622,111
Liabilities and Stockholders' Equity
Deposits $1,114,245 $1,084,117
Federal Home Loan Bank advances 476,000 381,500
Accounts payable and accrued
expenses 9,817 7,269
Other liabilities 11,898 10,088
Total liabilities 1,611,960 1,482,974
Stockholders' Equity:
Common stock, $.01 par value.
Authorized 20,000,000 shares;
issued and outstanding 6,258,927
shares and 6,365,943 at December
31, 2003 and June 30, 2003,
respectively 63 64
Additional paid-in capital 130,201 128,581
Accumulated other comprehensive
loss (2,004) (1,377)
Retained earnings, substantially
restricted 15,058 12,197
Deferred compensation (216) (328)
Total stockholders' equity 143,102 139,137
Total liabilities and
stockholders' equity $1,755,062 $1,622,111
Quaker City Bancorp, Inc.
Consolidated Statements of Operations
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
2003 2002 2003 2002
Interest income:
Loans receivable $20,246 $22,195 $41,313 $44,205
Mortgage-backed
securities 2,181 1,936 3,612 3,889
Investment securities 453 544 934 1,327
Other 232 239 481 505
Total interest income 23,112 24,914 46,340 49,926
Interest expense:
Deposits 4,919 6,337 10,094 13,048
Federal Home Loan
Bank advances 3,689 4,000 7,289 7,790
Total interest expense 8,608 10,337 17,383 20,838
Net interest income
before provision for
loan losses 14,504 14,577 28,957 29,088
Provision for loan
losses 100 200 100 400
Net interest income
after provision for
loan losses 14,404 14,377 28,857 28,688
Other income:
Deposit fees 1,519 1,231 2,978 2,392
Loan servicing
charges and fees 565 474 1,227 1,092
Gain on sale of loans
held-for-sale 443 489 893 601
Commissions 188 170 415 354
Gain on sale of
securities
available-for-sale -- 6 -- 47
Other 339 14 439 151
Total other income 3,054 2,384 5,952 4,637
Other expense:
Compensation and
employee benefits 4,337 3,701 8,584 7,515
Occupancy, net 892 839 1,807 1,644
Federal deposit
insurance premiums 110 108 221 216
Data processing 540 396 1,064 765
Advertising and
promotional 399 330 890 682
Consulting fees 321 197 544 439
Other general and
administrative
expense 1,179 1,306 2,336 2,520
Total general and
administrative
expense 7,778 6,877 15,446 13,781
Real estate operations,
net 1 1 1 1
Amortization of core
deposit intangible 28 28 57 57
Total other expense 7,807 6,906 15,504 13,839
Earnings before
income taxes 9,651 9,855 19,305 19,486
Income taxes 4,236 4,251 8,456 8,247
Net earnings $5,415 $5,604 $10,849 $11,239
Average common shares
outstanding 6,220,383 6,289,638 6,242,142 6,369,189
Shares outstanding
and equivalents 6,419,721 6,593,982 6,439,150 6,678,950
Basic earnings per
share $0.87 $0.89 $1.74 $1.76
Diluted earnings per
share $0.84 $0.85 $1.68 $1.68
Quaker City Bancorp, Inc.
Consolidated Financial Highlights, Page 1
(NASDAQ: QCBC)
Unaudited
(Dollars in thousands, except share and per share data)
At December 31, At June 30,
Selected Financial Data 2003 2003
Total assets $1,755,062 $1,622,111
Total liabilities $1,611,960 $1,482,974
Loans receivable (1) $1,367,133 $1,326,265
Allowance for loan losses $11,705 $11,606
Investment securities (1) $54,994 $60,315
Mortgage-backed securities (1) $255,221 $163,697
Real estate held-for-sale -- --
Deposits $1,114,245 $1,084,117
Federal Home Loan Bank (FHLB)
advances $476,000 $381,500
Total stockholders' equity $143,102 $139,137
Total common shares outstanding 6,258,927 6,365,943
Trailing twelve month diluted
earnings per share $3.44 $3.43
Book value per common share $22.86 $21.86
Stock price at end of period $46.13 $41.59
(1) Includes assets held or available-for-sale.
At or for the At or for the
Three Months Ended Six Months Ended
December 31, December 31,
2003 2002 2003 2002
Selected Operating Data
Net interest income
before provision
for loan losses $14,504 $14,577 $28,957 $29,088
Provision for loan
losses 100 200 100 400
Net interest income
after provision
for loan losses 14,404 14,377 28,857 28,688
Total other income 3,054 2,384 5,952 4,637
Total other expense 7,807 6,906 15,504 13,839
Earnings before
income taxes 9,651 9,855 19,305 19,486
Income taxes 4,236 4,251 8,456 8,247
Net earnings $5,415 $5,604 $10,849 $11,239
Basic earnings per
share $0.87 $0.89 $1.74 $1.76
Diluted earnings
per share $0.84 $0.85 $1.68 $1.68
Average earning
assets $1,675,351 $1,504,567 $1,624,543 $1,487,234
Average loans
receivable $1,352,693 $1,258,145 $1,331,576 $1,240,692
Average
stockholders'
equity $141,379 $129,278 $140,487 $130,060
Weighted average
shares outstanding
and equivalents 6,419,721 6,593,982 6,439,150 6,678,950
Performance Ratios (2)
Return on average
assets 1.25% 1.44% 1.29% 1.48%
Return on average
equity 15.32% 17.34% 15.45% 17.28%
Average equity to
average assets 8.13% 8.33% 8.33% 8.54%
Interest rate spread
during the period 3.24% 3.56% 3.34% 3.58%
Net interest margin 3.46% 3.88% 3.57% 3.91%
General and
administrative expense
to average assets 1.79% 1.77% 1.83% 1.81%
Efficiency ratio 44.30% 40.55% 44.25% 40.86%
Other expense to
average assets 1.80% 1.78% 1.84% 1.82%
(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 December 31, At June 30,
Asset Quality Ratios and Data 2003 2003
Nonperforming loans as a percentage
of gross loans (3) 0.28% 0.25%
Nonperforming assets as a
percentage of total assets (4) 0.22% 0.20%
Total allowance for loan losses as
a percentage of gross loans 0.85% 0.86%
Total allowance for loan losses as
a percentage of total
nonperforming loans 298.06% 350.95%
Total allowance as a percentage of
total nonperforming assets (5) 298.06% 350.95%
Net charge-offs, quarter to date $1 $--
Nonaccrual loans (3) $3,927 $3,307
Troubled debt restructured loans -- --
Total nonperforming loans 3,927 3,307
Real estate acquired through
foreclosure -- --
Total nonperforming assets $3,927 $3,307
Number of:
Pass Book/Savings Accounts 20,420 19,231
Checking Accounts 40,318 37,478
Money Market Accounts 7,990 7,589
(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.
CONTACT: Quaker City Bancorp, Inc., Whittier
Rick McGill, 562-907-2275
Dwight L. Wilson, 562-907-2241