Exhibit 99.1
Commercial Federal Reports Net Income of $89.0 Million for 2003
Adjusts accounting treatment for Bank Owned Life Insurance and
Announces $5.6 million award in Goodwill Lawsuit
OMAHA, Neb.--(BUSINESS WIRE)--Jan. 29, 2004--
Commercial Federal Corporation (NYSE:CFB), one of the largest
financial institutions in the Midwest, today announced net income of
$89.0 million, or $2.02 per diluted share, for the year ended December
31, 2003. Fourth quarter net income totaled $22.2 million, or $0.52
per diluted share.
"In spite of the unprecedented environment, we accomplished a
great deal. Interest rates that fell to levels not seen in over 40
years, created a challenging operating environment that drove earning
asset yields and margins well below forecasted levels this past year.
The Company's core banking operation produced solid results including
double-digit growth in deposits and commercial operating loans,"
stated William A. Fitzgerald, chairman of the board and chief
executive officer.
"We also significantly strengthened the long-term value and growth
potential of Commercial Federal's franchise by adding new branches in
our fast-growing markets, increasing automation of processes,
upgrading technology, expanding our sales force, strengthening our
management team and repurchasing shares of our common stock."
"I would like to thank our employees for their efforts in
producing another good year for our shareholders. As we enter 2004
with signs of an improving economy, Commercial Federal remains focused
on growing our core banking business and building long-term value for
our investors. Our continuing objective is to expand share in our
vibrant Midwest markets by growing deposits and expanding our
commercial and consumer loan portfolios," Mr. Fitzgerald concluded.
Key Growth Indicators:
-- Core deposits, excluding custodial escrows, grew $412.5
million during the year. This is a 13% increase year-over-year
consisting mainly of strong growth in checking and money
market savings deposits.
-- Commercial operating average outstanding loan balances
increased 61% for the year, as we continue to successfully
grow our commercial banking relationships.
-- Home equity outstanding balances were up 5% year-over-year.
-- Retail checking accounts growth for the year was 5%, while
commercial checking accounts were up 16%. Growth in the number
of checking accounts continues to be one of our key strategies
to build our customer base and enhance revenue.
Results for the Year
Net Interest Income
Net interest income totaled $69.4 million for the fourth quarter,
compared with $60.3 million for the quarter ended September 30, 2003.
For the year, net interest income totaled $275.6 million, compared
with $327.7 million for 2002. The net interest spread for the quarter
increased 39 basis points to 2.54% for the quarter, compared with
2.15% for the third quarter. For the full year, net interest spread
was 2.43% compared with 2.76% in 2002.
The improvement in net interest spread for the quarter was in part
due to a slowdown in prepayments on loans and investments and certain
debt restructuring transactions that resulted in a lower cost of
funds. It is expected that the spread will continue to improve during
future quarters, if interest rates and the slope of the yield curve
remain at or near current levels.
Noninterest Income
Commercial Federal's retail banking operations continued to
generate strong results in the fourth quarter. Retail fees and charges
totaled $14.5 million, compared with $14.8 million for the quarter
ended September 30, 2003, and $14.3 million for the same period a year
ago. For the year, retail fees and charges totaled $57.8 million,
compared with $55.3 million for the previous year, a 5% increase
year-over-year.
Noninterest income in the third and fourth quarters of 2003
included the impact of reduced revenue from interchange fees for debit
card purchases that resulted from a third-party settlement of debit
card litigation with VISA Inc. earlier in 2003. The industry-wide
settlement, which went into effect August 1, 2003, reduced the
Company's 2003 revenue by approximately $1.6 million.
The Company's commercial banking unit also continued to generate
solid gains in its loan portfolio as well as commercial and small
business deposits. We finished the year with a 60% increase in the
commercial operating loan portfolio and a 16% increase in commercial
and small business checking accounts. Growth in these higher-margin
products will continue to enhance revenues and net interest spread
going forward.
The mortgage banking operations include activities associated with
the Company's mortgage servicing and secondary marketing operations.
Revenues from these operations are impacted by the amortization of and
valuation adjustments related to its mortgage servicing rights asset.
During the fourth quarter 2003, the Company recorded a recovery of the
valuation allowance of $20.2 million, and amortization expense of
$22.5 million related to its mortgage servicing rights asset. Gain on
the sale of loans declined to $601,000 in the fourth quarter, compared
with $9.3 million in the previous quarter. The decline is due to two
factors that impacted mortgage lenders in the second half of 2003;
namely, the significant decline in mortgage loan production as
interest rates stabilized and pricing pressures on loans originated.
Operating Expenses
For the quarter ended December 31, 2003, general and
administrative expenses totaled $66.6 million, compared with $67.1
million for the previous quarter. For the year 2003, expenses totaled
$271.4 million, a 4% increase over 2002. The increase was primarily
due to costs associated with new branch expansion, higher level of
commissions and incentives related to the higher level of mortgage
loan production and increased loan expenses associated with higher
levels of loan prepayments.
Credit Risk Management
Credit quality remained strong during the fourth quarter with
total nonperforming loans declining to $55.9 million from $57.1
million for the quarter ended September 30, 2003. Total nonperforming
loans represented 0.69% of total loans at December 31, 2003, compared
with 0.71% for the previous quarter and 0.93% for the quarter ended
December 31, 2002.
Net loan charge-offs for the fourth quarter were $5.1 million,
compared with $5.5 million for the previous quarter. For the year, net
charge-offs declined 28% totaling $19.5 million, compared with $27.0
million for the year ended December 31, 2002.
Total allowance for losses on loans totaled $108.2 million at
December 31, 2003, compared with $106.3 million at December 31, 2002.
The allowance for losses to total nonperforming loans at December 31,
2003 was 193.4%, compared with 189.2% at September 30, 2003 and 146.8%
at December 31, 2002.
Balance Sheet and Capital Ratios
Total assets as of December 31, 2003 were $12.2 billion, compared
to $12.5 billion and $13.1 billion as of September 30, 2003 and
December 31, 2002, respectively. The size of the balance sheet has
been managed downward during the quarter and over the year primarily
as the size of the mortgage pipeline has declined as reflected in the
decrease in the balance of loans held for sale.
For the fourth quarter, core deposits, including checking, money
market and savings accounts (excluding custodial escrows) remained
stable at $3.6 billion, compared with the same number at September 30,
2003 and were up $412.5 million from the year ended December 31, 2002.
This represents a 13% increase in core deposits for the year.
During the fourth quarter, the Company repurchased 1,003,400
shares under its buyback program. For the year 2003, a total of
3,992,100 shares were repurchased. As of December 31, 2003, the
Company had 4,248,700 shares remaining in repurchase authorizations.
As of December 31, 2003, shares outstanding totaled 41,452,691.
As of December 31, 2003, stockholders' equity was $755.4 million,
compared with $753.5 million at September 30, 2003 and $750.1 million
at December 31, 2002. The capital ratios of the Company's banking
subsidiary continued to exceed regulatory requirements for
classification as "well-capitalized," the highest regulatory standard.
Earnings Restatement
Commercial Federal Corporation also filed today a Form 8-K with
the Securities and Exchange Commission, which included an adjustment
to its previously reported financial statements for the accounting
related to certain components of a Bank Owned Life Insurance (BOLI)
policy.
The Company said the accounting adjustment involved no longer
recognizing deferred acquisition costs and a claims stabilization
reserve in the cash surrender value of the BOLI policy. Commercial
Federal reviewed its previously adopted accounting treatment for its
BOLI policy in light of similar reviews recently undertaken by a
number of financial institutions with similar BOLI assets. As a result
of this review, the Company determined that restatement of its
financial statements for periods in which it included BOLI as an asset
was appropriate. Commercial Federal's approach is consistent with
restatements of other BOLI holders.
Since the BOLI contracts were signed in the year 2000, the
accounting industry has refined its approach in accounting for
deferred acquisition costs and the claims stabilization reserve for
the policy in question. This approach has resulted in some
restatements of the financial statements among BOLI holders.
The effects of implementing this adjustment to the financial
statements were spread over a 12-quarter period. The impact to net
income for the nine-month period ended September 30, 2003 was $1.3
million, or $0.03 per diluted share. Reported net income for fiscal
years 2002, 2001 and 2000 was reduced by $1.5 million, $0.9 million
and $4.0 million respectively. The total cumulative effect to
stockholders' equity of the restatement was a decrease of $7.7
million. The Company will now recognize this cumulative $7.7 million
in income in future periods.
For additional information about the restatement see the Form 8-K
filed today.
Goodwill Lawsuit Award
The Company also announced today the award of $5.6 million in lost
profits damages resulting from a supervisory goodwill/breach of
contract claim against the United States of America filed in the
United States Court of Federal Claims by the former Mid-Continent
Federal Savings Bank, which was acquired by Commercial Federal in
1998. It is not yet known whether the government will appeal the
court's decision.
"Commercial Federal and its shareholders are extremely pleased
with the court's decision. Throughout this long-struggle we have
maintained our position that through the passage and implementation of
FIRREA, the government took advantage of and breached its contracts
with Mid-Continent and others in our industry. The court's recognition
that the government violated the Company's rights and caused major
damage to the Bank is both meaningful and rewarding," stated William
A. Fitzgerald, chairman and chief executive officer.
Commercial Federal Corporation (NYSE:CFB) is the parent company
of Commercial Federal Bank, a $12.2 billion federal savings bank that
currently operates branches located in Nebraska, Iowa, Colorado,
Kansas, Oklahoma, Missouri and Arizona. Commercial Federal operations
include consumer and commercial banking services including mortgage
origination and servicing, commercial and industrial lending, small
business banking, construction lending, cash management, insurance and
investment services, and Internet banking.
Commercial Federal's Web site, http://www.comfedbank.com, will
host a live webcast of the investor conference call to discuss fourth
quarter and full year results on Thursday, January 29, 2004 at 10:30
a.m. Central Time. The site also includes access to company news
releases, annual reports, quarterly financial statements, and SEC
filings.
Certain statements contained in this release are forward-looking
in nature. These statements are subject to risks and uncertainties
that could cause Commercial Federal's actual results or financial
condition to differ materially from those expressed in or implied by
such statements. Factors of particular importance to Commercial
Federal include, but are not limited to, changes in general economic
conditions, changes in interest rates, changes in regulations or
accounting methods, and price levels and conditions in the public
securities markets generally.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in Thousands)
- ----------------------------------------------------------------------
December 31, September 30, December 31,
ASSETS 2003 2003 2002
- ----------------------------------------------------------------------
(Restated) (Restated)
Cash (including short-term
investments of $1,334, $1,137
and $505) $158,133 $168,111 $200,581
Investment securities available
for sale, at fair value 1,055,055 1,050,040 1,296,050
Mortgage-backed securities
available for sale, at fair
value 1,337,805 1,130,463 1,632,622
Loans held for sale, net 351,539 732,494 914,474
Loans receivable, net of
allowances of $108,154,
$107,995 and $106,148 7,956,743 7,894,337 7,703,016
Federal Home Loan Bank stock 243,332 241,206 283,193
Foreclosed real estate 49,744 48,350 40,008
Premises and equipment, net 147,365 144,170 148,374
Bank owned life insurance 234,111 230,981 222,537
Other assets 475,483 696,367 466,995
Core value of deposits, net of
accumulated amortization of
$64,217, $62,999 and $58,684 16,832 18,050 22,365
Goodwill 162,717 162,717 162,717
- ----------------------------------------------------------------------
Total Assets $12,188,859 $12,517,286 $13,092,932
- ----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
- ----------------------------------------------------------------------
Liabilities:
Deposits $6,454,610 $6,592,859 $6,439,041
Advances from Federal Home
Loan Bank 4,484,708 3,959,906 4,848,997
Other borrowings 215,243 620,452 621,192
Other liabilities 278,945 590,607 433,602
- ----------------------------------------------------------------------
Total Liabilities 11,433,506 11,763,824 12,342,832
- ----------------------------------------------------------------------
Commitments and Contingencies - - -
- ----------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, $.01 par
value; 10,000,000 shares
authorized; none issued - - -
Common stock, $.01 par
value; 120,000,000 shares
authorized; 41,452,691,
42,381,367 and 45,270,360
shares issued and
outstanding 415 424 453
Additional paid-in capital - - 61,712
Retained earnings 833,638 841,391 791,357
Accumulated other
comprehensive loss, net (78,700) (88,353) (103,422)
- ----------------------------------------------------------------------
Total Stockholders' Equity 755,353 753,462 750,100
- ----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $12,188,859 $12,517,286 $13,092,932
- ----------------------------------------------------------------------
Certain amounts in prior periods have been reclassified for
comparative purposes to conform to the December 31, 2003 presentation.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
- ----------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
----------------------------------------
2003 2003 2002
- ----------------------------------------------------------------------
(Restated) (Restated)
Interest Income:
Investment securities $13,802 $16,233 $18,554
Mortgage-backed
securities 12,063 8,688 19,885
Loans receivable 125,408 128,291 151,573
- ----------------------------------------------------------------------
Total interest income 151,273 153,212 190,012
Interest Expense:
Deposits 31,955 36,547 42,043
Advances from Federal
Home Loan Bank 46,808 51,545 60,989
Other borrowings 3,160 4,830 6,597
- ----------------------------------------------------------------------
Total interest expense 81,923 92,922 109,629
Net Interest Income 69,350 60,290 80,383
Provision for Loan Losses (5,109) (5,475) (9,731)
- ----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 64,241 54,815 70,652
Other Income (Loss):
Retail fees and charges 14,481 14,805 14,344
Loan servicing fees 11,143 10,911 10,394
Amortization of mortgage
servicing rights (22,539) (21,989) (10,712)
Mortgage servicing rights
valuation adjustment 20,199 51,800 (9,585)
Gain (loss) on sales of
securities and changes
in fair values of
derivatives, net (70) (31,294) 12,268
Gain on sales of loans 601 9,329 14,537
Bank owned life insurance 3,131 2,771 3,296
Other operating income 7,262 7,398 4,593
- ----------------------------------------------------------------------
Total other income 34,208 43,731 39,135
Other Expense:
General and administrative
expenses -
Compensation and
benefits 30,960 30,233 28,116
Occupancy and
equipment 10,071 10,188 10,448
Data processing 4,418 4,460 4,614
Advertising 2,595 3,742 4,446
Communication 3,312 3,505 3,581
Item processing 3,202 3,210 3,560
Outside services 3,429 3,410 3,078
Loan expenses 1,979 3,909 1,621
Foreclosed real
estate, net 1,250 289 2,105
Other operating
expenses 5,413 4,141 11,090
- ----------------------------------------------------------------------
Total general and
administrative
expenses 66,629 67,087 72,659
Amortization of core
value of deposits 1,218 1,218 1,549
- ----------------------------------------------------------------------
Total other expense 67,847 68,305 74,208
- ----------------------------------------------------------------------
Income Before Income Taxes 30,602 30,241 35,579
Income Tax Provision 8,404 8,378 9,861
- ----------------------------------------------------------------------
Net Income $22,198 $21,863 $25,718
- ----------------------------------------------------------------------
Net Income Per Basic Share $.53 $.50 $.57
Net Income Per Diluted Share $.52 $.50 $.57
- ----------------------------------------------------------------------
Dividends Declared Per Common
Share $.125 $.100 $.090
- ----------------------------------------------------------------------
Weighted Average Shares
Outstanding Used in Basic EPS 42,007,052 43,523,639 45,184,720
Weighted Average Shares
Outstanding Used in Diluted
EPS 42,678,004 43,933,969 45,486,282
- ----------------------------------------------------------------------
Certain amounts in prior periods have been reclassified for
comparative purposes to conform to the December 31, 2003 presentation.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
- ----------------------------------------------------------------------
Year Ended
December 31,
-----------------------
2003 2002
- ----------------------------------------------------------------------
(Restated)
Interest Income:
Investment securities $64,457 $76,636
Mortgage-backed securities 49,836 93,047
Loans receivable 536,451 607,370
- ----------------------------------------------------------------------
Total interest income 650,744 777,053
Interest Expense:
Deposits 147,090 179,596
Advances from Federal Home Loan Bank 210,045 243,710
Other borrowings 18,039 26,019
- ----------------------------------------------------------------------
Total interest expense 375,174 449,325
Net Interest Income 275,570 327,728
Provision for Loan Losses (22,003) (31,002)
- ----------------------------------------------------------------------
Net Interest Income After Provision for Loan
Losses 253,567 296,726
Other Income (Loss):
Retail fees and charges 57,798 55,279
Loan servicing fees 45,049 39,124
Amortization of mortgage servicing rights (75,044) (31,025)
Mortgage servicing rights valuation
adjustment 28,678 (60,417)
Gain on sales of securities and changes
in fair values of derivatives, net 26,767 40,583
Gain on sales of loans 23,916 36,173
Bank owned life insurance 11,574 12,654
Other operating income 27,943 28,067
- ----------------------------------------------------------------------
Total other income 146,681 120,438
Other Expense:
General and administrative expenses -
Compensation and benefits 123,847 114,022
Occupancy and equipment 41,190 38,956
Data processing 18,157 17,861
Advertising 16,073 15,171
Communication 13,663 13,071
Item processing 13,718 14,225
Outside services 12,456 13,833
Loan expenses 10,981 5,236
Foreclosed real estate, net 3,924 6,805
Other operating expenses 17,400 20,890
- ----------------------------------------------------------------------
Total general and administrative
expenses 271,409 260,070
Amortization of core value of deposits 5,533 6,368
- ----------------------------------------------------------------------
Total other expense 276,942 266,438
- ----------------------------------------------------------------------
Income Before Income Taxes 123,306 150,726
Income Tax Provision 34,286 43,723
- ----------------------------------------------------------------------
Net Income $89,020 $107,003
- ----------------------------------------------------------------------
Net Income Per Basic Share $2.04 $2.36
Net Income Per Diluted Share $2.02 $2.33
- ----------------------------------------------------------------------
Dividends Declared Per Common Share $.415 $.350
- ----------------------------------------------------------------------
Weighted Average Shares Outstanding Used in
Basic EPS 43,731,410 45,289,967
Weighted Average Shares Outstanding Used in
Diluted EPS 44,153,890 45,850,204
- ----------------------------------------------------------------------
Certain amounts in prior periods have been reclassified for
comparative purposes to conform to the December 31, 2003 presentation.
COMMERCIAL FEDERAL CORPORATION
MORTGAGE SERVICING RIGHTS AND MORTGAGE BANKING OPERATIONS
(Dollars in Thousands)
- ----------------------------------------------------------------------
Three Months Ended
December 31, September 30, December 31,
---------------------------------------
2003 2003 2002
- ----------------------------------------------------------------------
Mortgage Servicing Rights:
Beginning balance $197,267 $190,398 $144,687
Mortgage servicing rights
retained through loan
sales 10,465 19,916 18,511
Purchases of mortgage
servicing rights 40 8,942 15,925
Amortization expense (22,539) (21,989) (10,712)
------------ ------------- ------------
Balance before valuation
allowance 185,233 197,267 168,411
------------ ------------- ------------
Valuation allowance
beginning balance 69,665 121,465 70,473
Amounts charged (credited)
to operations (20,199) (51,800) 9,585
Sale of mortgage servicing
rights (127) - -
------------ ------------- ------------
Valuation allowance ending
balance 49,339 69,665 80,058
------------ ------------- ------------
Mortgage servicing rights,
net of valuation
allowance $135,894 $127,602 $88,353
============ ============= ============
Fair value at the periods
ended $143,696 $129,136 $89,078
============ ============= ============
Mortgage servicing rights as a
percentage of servicing
portfolio 1.19% 1.13% 0.77%
============ ============= ============
Mortgage servicing rights as a
multiple of servicing fees 3.49x 3.42x 2.32x
============ ============= ============
- ----------------------------------------------------------------------
Loans Serviced for Other
Institutions:
Beginning balance $11,307,562 $11,864,111 $9,773,436
Additions to portfolio 910,302 1,562,189 1,412,803
Purchases - 529,639 1,776,291
Loan payments (775,601) (2,195,435) (1,427,804)
Sales, net - 8,054 -
Sub servicing released,
net of payments and other
adjustments - (457,012) -
Other items, net (3,076) (3,984) (2,971)
---------------------------------------
Ending balance $11,439,187 $11,307,562 $11,531,755
============ ============= ============
Weighted average servicing
fee 0.34% 0.33% 0.33%
============ ============= ============
Weighted average coupon
note rate 6.09% 6.18% 6.82%
============ ============= ============
- ----------------------------------------------------------------------
Certain Components of Mortgage
Banking and Treasury
Activities:
Loan servicing fees $11,143 $10,911 $10,394
Amortization of mortgage
servicing rights (22,539) (21,989) (10,712)
------------ ------------- ------------
Loan servicing fees,
net (11,396) (11,078) (318)
Mortgage servicing rights
valuation adjustment 20,199 51,800 (9,585)
Gain (loss) on sales of
securities and changes in
fair values of
derivatives, net (70) (31,294) 12,268
Gain on sales of loans 601 9,329 14,537
------------ ------------- ------------
Total of certain
components of mortgage
banking and treasury
activities $9,334 $18,757 $16,902
============ ============= ============
- ----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
DEPOSITS AND LOANS
(In Thousands)
- ----------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
- ----------------------------------------------------------------------
Deposits by State:
Colorado $2,060,336 $2,042,681 $2,015,845
Nebraska 1,552,135 1,776,262 1,740,421
Iowa 1,102,318 1,061,398 982,714
Kansas 645,752 639,769 659,671
Oklahoma 547,897 538,570 555,275
Missouri 321,396 314,335 287,587
Arizona 224,776 219,844 197,528
------------ ------------- ------------
Total deposits $6,454,610 $6,592,859 $6,439,041
============ ============= ============
Deposits by Type:
Checking accounts -
Interest bearing $546,110 $524,871 $494,847
Noninterest bearing 638,658 658,575 520,564
------------ ------------- ------------
Total checking
excluding
escrow accounts 1,184,768 1,183,446 1,015,411
Money market accounts 1,099,478 1,042,342 505,679
Savings accounts 1,267,916 1,334,492 1,618,593
------------ ------------- ------------
Total core
deposits 3,552,162 3,560,280 3,139,683
Custodial escrow accounts 299,249 443,132 453,919
Certificates of deposit 2,603,199 2,589,447 2,845,439
------------ ------------- ------------
Total deposits $6,454,610 $6,592,859 $6,439,041
============ ============= ============
- ----------------------------------------------------------------------
Loans Receivable, before
allowance for losses:
Residential real estate $3,441,138 $3,456,176 $3,686,755
Commercial real estate 1,962,834 1,943,384 1,828,063
Construction, net of
loans-in-process 519,596 493,145 492,250
Commercial operating and
other 525,642 519,314 302,992
Consumer home equity 862,886 840,825 820,679
Consumer other 752,801 749,488 678,425
------------ ------------- ------------
Total loans receivable,
before allowance for
losses $8,064,897 $8,002,332 $7,809,164
============ ============= ============
- ----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
ALLOWANCE FOR LOSSES ON LOANS
(In Thousands)
- ----------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
- ----------------------------------------------------------------------
THREE MONTHS ENDED:
- -------------------
Beginning balance $108,008 $108,740 $109,724
Provision charged to
operations 5,109 5,475 9,731
Charge-offs (6,243) (6,787) (14,550)
Recoveries 1,119 1,295 1,430
Change in estimate of
allowance for bulk purchased
loans - (715) (44)
Other 161 - -
- ----------------------------------------------------------------------
Ending balance $108,154 $108,008 $106,291
- ----------------------------------------------------------------------
YEAR ENDED:
- -----------
Beginning balance $106,291 n/a $102,451
Provision charged to
operations 22,003 n/a 31,002
Charge-offs (26,328) n/a (32,693)
Recoveries 6,806 n/a 5,675
Change in estimate of
allowance for bulk purchased
loans (779) n/a (144)
Other 161 n/a -
- ----------------------------------------------------------------------
Ending balance $108,154 n/a $106,291
- ----------------------------------------------------------------------
Summary of charge-offs, net
of recoveries:
- ---------------------------
Three months ended $5,124 $5,492 $13,120
============ ============= ============
Year ended $19,522 n/a $27,018
============ ============
- ----------------------------------------------------------------------
Allocation of allowance:
- ------------------------
Specific $5,109 $5,659 $3,561
Special problem 32,195 32,749 35,766
Nonspecific 70,850 69,600 66,964
------------ ------------- ------------
$108,154 $108,008 $106,291
============ ============= ============
- ----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
NONPERFORMING ASSETS AND LOANS
(Dollars in Thousands)
- ---------------------------------------------------------------------
December 31, September 30, December 31,
2003 2003 2002
- ---------------------------------------------------------------------
Nonperforming Assets:
Nonperforming loans (1):
Residential real
estate $35,907 $33,802 $43,939
Residential
construction 4,158 3,556 2,455
Commercial real
estate 6,286 8,701 15,306
Commercial
construction 1,077 3,160 2,584
All other 8,491 7,861 8,130
------------ ------------- ------------
Total nonperforming
loans 55,919 57,080 72,414
------------ ------------- ------------
Real estate:
Residential 12,152 12,588 14,648
Residential
construction 33,097 30,798 22,810
Commercial 4,495 4,964 -
Commercial
construction - - 2,550
------------ ------------- ------------
Total real estate 49,744 48,350 40,008
------------ ------------- ------------
Troubled debt
restructurings -
commercial 4,712 4,933 1,547
------------ ------------- ------------
Total nonperforming assets $110,375 $110,363 $113,969
============ ============= ============
Total assets $12,188,859 $12,517,286 $13,092,932
============ ============= ============
Nonperforming assets to total
assets .91% .88% .87%
============ ============= ============
Summary of Nonperforming
Assets:
Residential $85,314 $80,744 $83,852
Nonresidential 25,061 29,619 30,117
------------ ------------- ------------
$110,375 $110,363 $113,969
============ ============= ============
- ---------------------------------------------------------------------
Nonperforming loans to loans
receivable (2) .69% .71% .93%
Nonperforming assets to total
assets .91% .88% .87%
Allowance for loan losses to:
Loans receivable (2) 1.34% 1.35% 1.36%
Total nonperforming
loans (1) 193.41% 189.22% 146.78%
- ---------------------------------------------------------------------
(1) Excludes loans held for sale.
(2) Ratios are calculated based on the net book value of loans
receivable before deducting allowance for loan losses and excludes
loans held for sale.
COMMERCIAL FEDERAL CORPORATION
SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS AND RATIOS
(Dollars in Thousands Except Per Share Data)
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December 31, September 30, December 31,
2003 2003 2002
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(Restated) (Restated)
Cash, investment securities and
FHLB stock $1,456,520 $1,459,357 $1,779,824
Mortgage-backed securities 1,337,805 1,130,463 1,632,622
Loans held for sale, net 351,539 732,494 914,474
Loans receivable, net 7,956,743 7,894,337 7,703,016
Intangible assets 179,549 180,767 185,082
Other assets 906,703 1,119,868 877,914
Total assets 12,188,859 12,517,286 13,092,932
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Deposits 6,454,610 6,592,859 6,439,041
Advances from Federal Home Loan
Bank 4,484,708 3,959,906 4,848,997
Other borrowings 215,243 620,452 621,192
Other liabilities 278,945 590,607 433,602
Stockholders' equity 755,353 753,462 750,100
Total liabilities and
stockholders' equity 12,188,859 12,517,286 13,092,932
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Book value per common share $18.22 $17.78 $16.57
Stock price $26.71 $24.35 $23.35
Common shares outstanding 41,452,691 42,381,367 45,270,360
Weighted average shares
outstanding per basic EPS 42,007,052 43,523,639 45,184,720
Weighted average shares
outstanding per diluted EPS 42,678,004 43,933,969 45,486,282
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Nonperforming assets $110,375 $110,363 $113,969
Nonperforming assets to total
assets .91% .88% .87%
Weighted average interest rates
(durings):
Yield on interest-earning
assets 5.46% 5.26% 6.20%
Rate on deposits and
interest-bearing
liabilities 2.91% 3.11% 3.55%
Net interest rate spread 2.54% 2.15% 2.65%
Net annualized yield on
interest-earning assets 2.50% 2.09% 2.63%
Loans serviced for other
institutions $11,439,187 $11,307,562 $11,531,755
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Three months ended:
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Return on average assets .73% .68% .77%
Return on average equity 12.18% 12.35% 13.97%
Average equity to average
assets 5.99% 5.53% 5.49%
G & A expenses to average
assets 2.19% 2.09% 2.17%
Operating efficiency ratio 64.34% 64.49% 60.79%
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Year ended:
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Return on average assets .70% n/a .81%
Return on average equity 12.01% n/a 14.10%
Average equity to average
assets 5.79% n/a 5.76%
G & A expenses to average
assets 2.12% n/a 1.97%
Operating efficiency ratio 64.28% n/a 58.03%
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COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
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December 31, September 30, June 30,
2003 2003 2003
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Three Months Ended: (Restated) (Restated)
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Average Balances:
Total assets $12,164,465 $12,811,205 $13,155,433
Total loans, net 8,410,129 8,847,035 8,949,160
Total loans, before
allowances for loan
losses 8,518,224 8,955,643 9,057,838
Total mortgage-backed
securities 1,293,949 1,160,610 1,414,739
Total deposits 6,496,315 6,821,942 6,730,636
Total stockholders' equity 729,062 708,267 763,666
Total interest-earning
assets 10,999,591 11,553,340 11,915,975
Total deposits and
interest-bearing
liabilities 11,187,875 11,770,123 12,049,811
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COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
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March 31, December 31,
2003 2002
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Three Months Ended: (Restated) (Restated)
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Average Balances:
Total assets $13,101,428 $13,408,194
Total loans, net 8,714,050 8,894,576
Total loans, before allowances for loan
losses 8,819,881 9,003,495
Total mortgage-backed securities 1,584,690 1,741,933
Total deposits 6,465,854 6,277,235
Total stockholders' equity 765,112 736,489
Total interest-earning assets 11,871,321 12,234,301
Total deposits and interest-bearing
liabilities 11,964,568 12,301,010
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December 31, December 31,
2003 2002
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Year Ended: (Restated)
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Average Balances:
Total assets $12,805,574 $13,175,562
Total loans, net 8,704,321 8,681,401
Total loans, before allowances for loan
losses 8,812,133 8,786,551
Total mortgage-backed securities 1,362,145 1,799,174
Total deposits 6,629,300 6,258,302
Total stockholders' equity 741,337 758,659
Total interest-earning assets 11,557,322 11,974,586
Total deposits and interest-bearing
liabilities 11,697,711 12,044,641
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December September June March December
31, 30, 30, 31, 31,
2003 2003 2003 2003 2002
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Regulatory (Restated) (Restated) (Restated) (Restated)
Capital:
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Tangible $710,670 $741,185 $777,031 $761,974 $736,627
Core 704,351 730,186 770,638 753,758 728,499
Total risk-
based 838,437 866,950 905,702 892,438 864,906
Tier 1
risk-based 704,351 730,186 770,638 753,758 728,449
Tangible % 5.93% 6.03% 6.11% 5.82% 5.75%
Core % 5.88% 5.95% 6.06% 5.77% 5.69%
Total risk-
based % 10.87% 10.81% 11.50% 10.95% 10.87%
Tier 1
risk-based % 9.13% 9.10% 9.78% 9.25% 9.15%
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CONTACT: Commercial Federal Corporation, Omaha
Investor Relations:
John J. Griffith, 402-514-5336