Exhibit 99.1
Commercial Federal Reports First Quarter 2005 Results
OMAHA, Neb.--(BUSINESS WIRE)--April 26, 2005--As anticipated, Commercial
Federal Corporation (NYSE:CFB) today announced a net loss for the
quarter ended March 31, 2005. The Company reported a net loss of $53.2
million, or $1.36 per diluted share, for the quarter.
Previously, the Company had announced it was exiting its mortgage
servicing and wholesale mortgage origination business activities. As a
result, the Company anticipated reporting a net loss for the first
quarter required by certain related and necessary balance sheet
actions taken to realign and sustain the Company's interest rate risk
profile.
"The strategic decision to exit our mortgage banking operation is
another key step in our evolution to a commercial banking model. This
model traditionally produces greater margins, leading to enhanced
profitability and shareholder value," said William A. Fitzgerald,
chairman of the board and chief executive officer.
"We are now positioned for enhanced levels of success. By focusing
solely on our core businesses of retail and commercial banking, we
will be better able to produce a consistent and stable earnings stream
going forward," concluded Mr. Fitzgerald.
"Focusing our complete attention on those business activities that
have the greatest potential for sustainable, profitable earnings
growth, we have simplified our business model to one that is now more
easily understood, managed and controlled. Our model is now basic
commercial banking and is significantly less influenced by external
factors, such as mortgage prepayment speeds," stated Frederick R.
Kulikowski, president and chief operating officer.
"We will continue to offer mortgage lending products and services
to clients within our defined markets and consider this an important
part of the continued growth of the Company," Mr. Kulikowski
continued.
During the quarter ended March 31, 2005, Commercial Federal
continued to show quarter-over-quarter positive gains in the following
highly targeted core business drivers:
-- Average commercial operating loan outstanding balances grew at
a 24.9% annualized rate,
-- Average home equity loan outstanding balances expanded at a
7.5% annualized pace,
-- Average core deposit balances, excluding custodial escrows,
increased at an 11.5% annualized rate, and
-- The number of period-end retail, commercial, and small
business checking accounts increased 9.2% annualized.
In the quarter, the Company also announced the appointment of two
new executive officers in Pat Corrigan and Bob Rivers to lead its
efforts in commercial and retail banking, respectively. Mr. Kulikowski
commented, "These executives are responsible for accelerating the
sales-driven culture throughout the organization."
Sale of Mortgage Servicing
During the quarter the Company sold the majority of its national
third party mortgage servicing portfolio and its entire broker and
correspondent mortgage origination network. In conjunction with the
decision to exit the mortgage servicing business, the Company recorded
net losses of $101.4 million (or $67.1 million, after-tax) related to
transactions needed to realign the balance sheet and to record the
sale of mortgage servicing rights (MSR) and the wholesale origination
network. Specifically, the Company incurred a loss on the termination
of interest rate swap agreements no longer needed ($42.5 million,
before-tax), a prepayment penalty and carrying value write-offs
associated with the early extinguishment of FHLB borrowings ($40.7
million, before-tax), a loss on the sale of mortgage-backed securities
($12.7 million, before-tax), and prepayment penalties on the
termination of reverse repurchase agreements ($4.6 million,
before-tax). Also, exit costs ($2.8 million, before-tax), impairment
of goodwill ($3.5 million, before-tax) and a gain on the MSR sale and
wholesale mortgage origination network ($5.4 million, before-tax) were
recognized.
Results for the Quarter
Net Interest Income
Net interest income totaled $56.3 million for the first quarter,
which included the effect of the aforementioned reverse repurchase
agreement prepayment penalties of $4.6 million. This compares to $65.8
million for the quarter ended December 31, 2004. The decline was
driven largely by the Company carrying fewer residential mortgage
loans and more savings deposits quarter-over-quarter.
Credit Risk Management
At the end of the first quarter, total nonperforming assets
remained relatively flat from the previous quarter increasing slightly
from $60.6 million to $61.9 million. The ratio of nonperforming assets
to total assets increased to 0.60% from 0.53%, primarily as a function
of the over 9% decline in total assets during the quarter.
After recording net loan charge-offs of $8.2 million in the
quarter, the total allowance for loan losses marginally increased to
$90.0 million at March 31, 2005 and represented 1.15% of loans
receivable.
Noninterest Income
Noninterest income for the quarter was impacted greatly by the
balance sheet transactions associated with the sale of mortgage
servicing and reflected a net loss of $59.9 million. After adjusting
this amount for the aforementioned loss on the termination of interest
rate swap agreements ($42.5 million, before-tax), loss on the early
extinguishment of debt ($40.7 million, before-tax), loss on the sales
of mortgage-backed securities ($12.7 million, before-tax) and gain on
the sale of mortgage servicing rights and wholesale origination
network ($5.4 million, before-tax), noninterest income would have been
$30.6 million for the quarter ended March 31, 2005. This compares to
$28.0 million for the previous quarter. This improvement was driven by
the recognition of a MSR valuation recovery, net of offsetting losses
to hedge the change in MSR valuation, prior to the sale of the
mortgage servicing portfolio and a lower period run-rate of MSR
amortization, partially offset by a seasonal decline in retail fees
and charges.
"The sale of the mortgage servicing portfolio immediately removed
over 85% of the carrying value of the MSR from our balance sheet at
quarter-end, and we are in final negotiations to complete the sale of
the remainder. The volatility in the value of the MSR asset, as
experienced by any institution that carries a large book of mortgage
loan servicing, was a key factor in our decision to exit the mortgage
servicing business," said David S. Fisher, executive vice president
and chief financial officer.
Operating Expenses
For the quarter ended March 31, 2005, general and administrative
(G&A) expenses were $69.0 million. After excluding exit costs
associated with the sale of mortgage servicing of $2.8 million, G&A
expenses totaled $66.2 million. Comparatively, these expenses
increased 2.1% versus the December 31, 2004 quarter. However, as
compared to the same quarter a year ago, G&A expenses declined 3.6%.
"We continue to watch expenses and expense growth closely.
Expenses in 2005 will generally only grow when they will be favorably
offset with top line revenue growth. We will be adding to our sales
force in certain key areas and key markets to augment our already
strong momentum," reported Mr. Fisher.
Balance Sheet and Capital Ratios
The Company continues to make notable progress in its evolution to
a balance sheet more reflective of a commercial bank.
Total assets as of March 31, 2005, were at $10.4 billion, compared
to $11.5 billion as of December 31, 2004. This decline was
precipitated by the realignment of the balance sheet to sustain an
acceptable interest rate risk profile as a result of the sale of
mortgage servicing. Absent that, total gross loans and total deposits
grew during the quarter. Specifically, commercial, construction and
consumer loans and core deposits grew at 14% and 20% annualized rates,
respectively. Commercial, construction and consumer loans now
represent 68% of the total gross loans versus 66% at December 31, 2004
and 59% at March 31, 2004. As well, core deposits, representing all
deposits other than custodial escrows and certificates of deposit,
comprise 64% of total non-escrow deposits versus 62% at December 31,
2004 and 59% at March 31, 2004.
Importantly, FHLB advances declined substantially to comprise only
27% of the Company's funding mix versus 35% at December 31, 2004 and
39% at March 31, 2004.
During the first quarter 2005, the Company repurchased 609,700
shares of common stock under its stock buyback program. As of March
31, 2005, the Company had 857,100 shares remaining in the repurchase
authorization set to expire June 30, 2005. At quarter end, the Company
had 39,019,557 shares outstanding.
As of March 31, 2005, stockholders' equity was $765.1 million,
compared with $789.3 million at December 31, 2004. The capital ratios
for the Company's banking subsidiary continued to exceed regulatory
requirement for classification as being "well-capitalized," the
highest regulatory standard.
"Although we did recognize a loss during the quarter resulting
from these strategic actions, our tangible, core and risk-based
capital percentages all improved. The Company capitalization remains
very strong," concluded Mr. Fisher.
Commercial Federal Corporation (NYSE:CFB) is the parent company of
Commercial Federal Bank, a $10.4 billion federal savings bank with
branches located in Nebraska, Iowa, Colorado, Kansas, Oklahoma,
Missouri and Arizona. Commercial Federal operations include consumer
and commercial banking services, including retail banking, commercial
and industrial lending, small business banking, construction lending,
cash management, and insurance and investment services.
Commercial Federal's website, http://www.comfedbank.com, will host
a live webcast of the investor conference call to discuss first
quarter results on Tuesday, April 26, 2005 at 10:00 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. As a matter of course, Commercial
Federal does not take actions to update any future-looking statements.
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Dollars in Thousands Except Par Value)
- ----------------------------------------------------------------------
March 31, December 31, March 31,
ASSETS 2005 2004 2004
- ----------------------------------------------------------------------
Cash (including short-term
investments of $2,592, $35,334
and $18,552) $163,793 $189,179 $179,028
Investment securities available
for sale, at fair value 519,964 1,071,223 1,063,558
Mortgage-backed securities
available for sale, at fair
value 702,984 996,844 1,267,483
Loans held for sale, net 211,154 276,772 449,830
Loans receivable, net of
allowances of $90,000, $89,841
and $97,765 7,733,977 7,698,970 7,810,613
Federal Home Loan Bank stock 173,614 204,409 245,447
Foreclosed real estate 11,207 17,835 44,800
Premises and equipment, net 174,720 174,394 150,504
Bank owned life insurance 254,477 251,581 242,142
Other assets 268,701 395,099 625,954
Core value of deposits, net of
accumulated amortization of
$69,596, $68,619 and $65,434 11,453 12,430 15,615
Goodwill 159,229 162,717 162,717
- ----------------------------------------------------------------------
Total Assets $10,385,273 $11,451,453 $12,257,691
- ----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
- ----------------------------------------------------------------------
Liabilities:
Deposits $6,545,720 $6,422,783 $6,479,634
Advances from Federal Home
Loan Bank 2,575,466 3,685,630 4,290,100
Other borrowings 327,587 310,958 290,968
Other liabilities 171,445 242,752 439,980
- ----------------------------------------------------------------------
Total Liabilities 9,620,218 10,662,123 11,500,682
- ----------------------------------------------------------------------
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; 39,019,557,
39,254,139 and 40,870,272
shares issued and
outstanding 390 393 409
Retained earnings 759,891 826,169 829,182
Accumulated other
comprehensive income (loss),
net 4,774 (37,232) (72,582)
- ----------------------------------------------------------------------
Total Stockholders' Equity 765,055 789,330 757,009
- ----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $10,385,273 $11,451,453 $12,257,691
- ----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
- ----------------------------------------------------------------------
Three Months Ended
March 31, December 31, March 31,
--------------------------------------
2005 2004 2004
- ----------------------------------------------------------------------
Interest Income:
Investment securities $14,486 $14,667 $14,299
Mortgage-backed securities 9,996 10,295 12,362
Loans receivable 114,539 116,769 120,111
- ----------------------------------------------------------------------
Total interest income 139,021 141,731 146,772
Interest Expense:
Deposits 31,931 29,537 29,783
Advances from Federal Home
Loan Bank 40,271 41,413 44,241
Other borrowings 10,562 4,982 1,777
- ----------------------------------------------------------------------
Total interest expense 82,764 75,932 75,801
Net Interest Income 56,257 65,799 70,971
Provision for Loan Losses (8,320) (3,174) (4,853)
- ----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 47,937 62,625 66,118
Other Income (Loss):
Retail fees and charges 16,102 17,178 14,497
Loan servicing fees 9,998 10,841 11,208
Amortization of mortgage
servicing rights (8,829) (10,545) (12,385)
Mortgage servicing rights
valuation adjustment, net 8,302 5,984 (18,893)
Gain (loss) on sales of
investment securities (5,676) (5,000) 16,976
Loss on sales of mortgage-
backed securities (12,683) - -
Changes in fair values of
derivatives, net (1,147) (1,864) 1,406
Loss on termination of
interest rate swap
agreements (42,457) - -
Loss on early extinguishment
of debt (40,731) - -
Gain on sale of mortgage
servicing rights and
wholesale mortgage
origination network 5,412 - -
Gain on sales of loans 2,405 932 198
Bank owned life insurance 2,896 3,524 8,031
Other operating income 6,508 6,921 6,619
- ----------------------------------------------------------------------
Total other income (loss) (59,900) 27,971 27,657
Other Expense:
General and administrative
expenses -
Compensation and benefits 33,130 32,400 32,886
Occupancy and equipment 9,566 10,094 10,164
Data processing 5,075 4,764 4,621
Advertising 2,688 2,714 3,555
Communication 2,954 3,486 3,146
Item processing 2,738 3,162 3,030
Outside services 3,414 2,783 3,872
Loan expenses 1,798 1,621 1,505
Foreclosed real estate, net 1,434 1,135 1,925
Other operating expenses 3,379 2,677 3,955
Exit costs 2,792 - -
- ----------------------------------------------------------------------
Total general and
administrative expenses 68,968 64,836 68,659
Amortization of core value
of deposits 977 983 1,217
Impairment of goodwill 3,488 - -
- ----------------------------------------------------------------------
Total other expense 73,433 65,819 69,876
- ----------------------------------------------------------------------
Income (Loss) Before Income
Taxes (85,396) 24,777 23,899
Income Tax Provision (Benefit) (32,184) 5,267 5,981
- ----------------------------------------------------------------------
Net Income (Loss) $(53,212) $19,510 $17,918
- ----------------------------------------------------------------------
Net Income Per Basic Share $(1.36) $.50 $.44
Net Income Per Diluted Share (1) $(1.36) $.49 $.43
- ----------------------------------------------------------------------
Dividends Declared Per Common
Share $.135 $.135 $.125
- ----------------------------------------------------------------------
Weighted Average Shares
Outstanding Used in Basic EPS 39,009,537 39,340,189 40,974,071
Weighted Average Shares
Outstanding Used in Diluted
EPS (1) 39,009,537 40,143,182 41,756,072
- ----------------------------------------------------------------------
(1) The conversion of stock options for the three months ended March
31, 2005 is not assumed since the Corporation incurred a loss from
operations. As a result, the diluted loss per share for the three
months ended March 31, 2005 is computed the same as the basic loss
per share.
COMMERCIAL FEDERAL CORPORATION
DEPOSITS AND LOANS
(In Thousands)
- ----------------------------------------------------------------------
March 31, December 31, March 31,
2005 2004 2004
- ----------------------------------------------------------------------
Deposits by State:
Colorado $2,123,105 $2,101,674 $2,053,666
Nebraska 1,623,505 1,553,549 1,584,158
Iowa 1,085,039 1,091,210 1,099,947
Kansas 612,334 607,034 631,692
Oklahoma 537,901 526,783 557,084
Missouri 286,589 291,775 318,421
Arizona 277,247 250,758 234,666
------------ ------------ ------------
Total deposits $6,545,720 $6,422,783 $6,479,634
============ ============ ============
Deposits by Type:
Checking accounts -
Interest-bearing $617,954 $615,868 $586,461
Noninterest-bearing 724,188 675,967 636,014
------------ ------------ ------------
Total checking excluding
escrow accounts 1,342,142 1,291,835 1,222,475
Money market accounts 812,561 1,080,486 1,184,435
Savings accounts 1,855,227 1,442,706 1,214,358
------------ ------------ ------------
Total core deposits 4,009,930 3,815,027 3,621,268
Custodial escrow accounts 260,576 268,392 348,814
Certificates of deposit 2,275,214 2,339,364 2,509,552
------------ ------------ ------------
Total deposits $6,545,720 $6,422,783 $6,479,634
============ ============ ============
- ----------------------------------------------------------------------
Loans Receivable, before
allowance for losses:
Commercial real estate $2,056,774 $1,996,729 $1,971,927
Commercial operating and
other (1) 644,348 650,784 521,814
Construction, net of loans-
in-process 759,777 670,302 525,950
Consumer home equity 1,020,662 1,001,333 881,135
Consumer other 835,583 816,131 762,989
------------ ------------ ------------
Total commercial,
construction and consumer
loans 5,317,144 5,135,279 4,663,815
Residential real estate 2,506,833 2,653,532 3,244,563
------------ ------------ ------------
Total loans receivable,
before allowance for
losses $7,823,977 $7,788,811 $7,908,378
============ ============ ============
- ----------------------------------------------------------------------
(1) Includes small business, agricultural and Nebraska Investment
Finance Authority loans in addition to commercial operating loans.
COMMERCIAL FEDERAL CORPORATION
ALLOWANCE FOR LOAN LOSSES
(In Thousands)
- ----------------------------------------------------------------------
March 31, December 31, March 31,
2005 2004 2004
- ----------------------------------------------------------------------
THREE MONTHS ENDED:
- -------------------
Beginning balance $89,841 $94,857 $108,154
Provision for loan losses
charged to operations 8,320 3,174 4,853
Charge-offs:
Residential real estate (262) (117) (91)
Commercial real estate (2,142) (107) (9,172)
Construction, net of loans-
in-process (567) (883) (33)
Commercial operating, small
business and agricultural (1,027) (744) (1,427)
Consumer (5,533) (4,835) (6,089)
------------ ------------ ------------
Charge-offs (9,531) (6,686) (16,812)
------------ ------------ ------------
Recoveries:
Residential real estate - 11 133
Commercial real estate 1 55 27
Construction, net of loans-
in-process - - -
Commercial operating, small
business and agricultural 76 19 84
Consumer 1,293 1,070 1,326
------------ ------------ ------------
Recoveries 1,370 1,155 1,570
------------ ------------ ------------
Transfer of allowance for
unfunded loan commitments and
letters of credit - (2,659) -
- ----------------------------------------------------------------------
Ending balance $90,000 $89,841 $97,765
- ----------------------------------------------------------------------
Summary of charge-offs, net of
recoveries:
- ------------------------------
Three months ended $(8,161) $(5,531) $(15,242)
============ ============ ============
- ----------------------------------------------------------------------
ALLOCATION OF ALLOWANCE FOR
LOAN LOSSES:
- ----------------------------------------------------------------------
Specific $8,783 $9,639 $4,126
Nonspecific 60,422 59,466 68,196
Unallocated 20,795 20,736 25,443
------------ ------------ ------------
Allowance for loan losses $90,000 $89,841 $97,765
============ ============ ============
- ----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
ASSET QUALITY
(Dollars in Thousands)
- ----------------------------------------------------------------------
March 31, December 31, March 31,
2005 2004 2004
- ----------------------------------------------------------------------
Nonperforming Assets:
Nonperforming loans (1):
Residential real estate (1) $7,803 $7,296 $29,656
Residential construction 8,524 2,302 2,542
Commercial real estate 17,845 18,997 16,462
Commercial construction 731 1,209 1,077
Consumer 7,797 4,194 4,049
Commercial operating, small
business and agricultural 2,142 2,925 2,993
------------ ------------ ------------
Total nonperforming loans 44,842 36,923 56,779
------------ ------------ ------------
Foreclosed real estate:
Residential 7,162 14,117 13,700
Residential construction 516 647 638
Commercial 1,753 1,295 1,365
Commercial construction 1,776 1,776 29,097
------------ ------------ ------------
Total foreclosed real
estate 11,207 17,835 44,800
------------ ------------ ------------
Troubled debt restructurings
- commercial 5,846 5,846 4,700
------------ ------------ ------------
Total nonperforming assets $61,895 $60,604 $106,279
============ ============ ============
Total assets $10,385,273 $11,451,453 $12,257,691
============ ============ ============
Nonperforming assets to total
assets (1) .60% .53% .87%
============ ============ ============
Summary of Nonperforming
Assets:
Residential (1) $24,005 $24,362 $46,536
Nonresidential 37,890 36,242 59,743
------------ ------------ ------------
$61,895 $60,604 $106,279
============ ============ ============
- ----------------------------------------------------------------------
Nonperforming loans to loans
receivable (1)(2) .57% .47% .72%
Nonperforming assets to total
assets (1) .60% .53% .87%
Allowance for loan losses to:
Loans receivable (2) 1.15% 1.15% 1.24%
Total nonperforming loans (1) 200.70% 243.32% 172.19%
- ----------------------------------------------------------------------
Accruing loans 90 days or more
past due (1):
Residential real estate $16,246 $17,849 $-
============ ============ ============
- ----------------------------------------------------------------------
(1) Effective June 30, 2004, management of the Corporation changed its
estimate of determining when the collection of residential first
mortgage loans becomes doubtful and when the loans are therefore
placed on nonaccrual status.
(2) Ratios are calculated based on the net book value of loans
receivable before deducting allowance for loan losses.
COMMERCIAL FEDERAL CORPORATION
SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS AND RATIOS
(Dollars in Thousands Except Per Share Data)
- ----------------------------------------------------------------------
March 31, December 31, March 31,
2005 2004 2004
- ----------------------------------------------------------------------
Cash, investment securities and
FHLB stock $857,371 $1,464,811 $1,488,033
Mortgage-backed securities 702,984 996,844 1,267,483
Loans held for sale, net 211,154 276,772 449,830
Loans receivable, net 7,733,977 7,698,970 7,810,613
Core value of deposits, net 11,453 12,430 15,615
Goodwill 159,229 162,717 162,717
Other assets 709,105 838,909 1,063,400
Total assets 10,385,273 11,451,453 12,257,691
- ----------------------------------------------------------------------
Deposits 6,545,720 6,422,783 6,479,634
Advances from Federal Home Loan
Bank 2,575,466 3,685,630 4,290,100
Other borrowings 327,587 310,958 290,968
Other liabilities 171,445 242,752 439,980
Stockholders' equity 765,055 789,330 757,009
Total liabilities and
stockholders' equity 10,385,273 11,451,453 12,257,691
- ----------------------------------------------------------------------
Book value per common share $19.61 $20.11 $18.52
Stock price $27.65 $29.71 $27.60
Common shares outstanding 39,019,557 39,254,139 40,870,272
Weighted average shares
outstanding per basic EPS 39,009,537 39,340,189 40,974,071
Weighted average shares
outstanding per diluted EPS 39,009,537 40,143,182 41,756,072
- ----------------------------------------------------------------------
Nonperforming assets $61,895 $60,604 $106,279
Nonperforming assets to total
assets .60% .53% .87%
Quarterly weighted average
interest rates on a taxable-
equivalent basis:
Yield on interest-earning
assets 5.54% 5.53% 5.45%
Rate on deposits and
interest-bearing liabilities 3.21% 2.86% 2.70%
Net interest rate spread 2.33%(1) 2.67% 2.75%
Net interest margin 2.28%(1) 2.63% 2.67%
- ----------------------------------------------------------------------
Three months ended:
- -------------------
Return on average assets (1.87)% .68% .59%
Return on average equity (27.40)% 10.14% 9.48%
Average equity to average
assets 6.83% 6.74% 6.22%
G & A expenses to average
assets 2.43% 2.27% 2.26%
Operating efficiency ratio N/M 69.14% 69.61%
- ----------------------------------------------------------------------
(1) Reflects the effects of prepayment penalties of $4.6 million on
the prepayment of reverse repurchase agreements. Excluding the
effects of the prepayment penalties, the net interest rate spread and
net interest margin would have been 2.51% and 2.46%, respectively.
N/M - Ratio not meaningful since the total of net interest income and
total other income is a loss.
COMMERCIAL FEDERAL CORPORATION
AVERAGE BALANCES AND REGULATORY CAPITAL
(Dollars in Thousands)
- ----------------------------------------------------------------------
March 31, December 31, September 30,
2005 2004 2004
- ----------------------------------------------------------------------
Three Months Ended:
- -------------------
Average Balances:
Total assets $11,375,436 $11,416,319 $11,559,998
Total loans, net 7,943,735 7,971,943 8,062,478
Total loans, before
allowances for loan
losses 8,033,507 8,066,058 8,159,234
Total mortgage-backed
securities 946,715 1,021,536 1,086,720
Total deposits 6,440,077 6,407,960 6,254,687
Total stockholders' equity 776,767 769,737 764,614
Total interest-earning
assets 10,183,505 10,281,148 10,406,515
Total deposits and
interest-bearing
liabilities 10,359,946 10,460,482 10,609,351
- ----------------------------------------------------------------------
June 30, March 31,
2004 2004
- ----------------------------------------------------------------------
Three Months Ended:
- -------------------
Average Balances:
Total assets $11,878,729 $12,158,982
Total loans, net 8,256,840 8,292,320
Total loans, before
allowances for loan
losses 8,354,536 8,400,194
Total mortgage-backed
securities 1,181,297 1,278,179
Total deposits 6,409,826 6,571,111
Total stockholders' equity 736,133 755,722
Total interest-earning
assets 10,726,414 10,878,284
Total deposits and
interest-bearing
liabilities 10,936,846 11,189,709
- ----------------------------------------------------------------------
December 31,
--------------------------------------
2004 2003 2002
- ----------------------------------------------------------------------
Year Ended:
- -----------
Average Balances:
Total assets $11,752,057 $12,805,465 $13,175,562
Total loans, net 8,145,192 8,704,321 8,681,401
Total loans, before
allowances for loan losses 8,244,282 8,812,133 8,786,551
Total mortgage-backed
securities 1,141,453 1,362,145 1,799,174
Total deposits 6,410,461 6,629,299 6,258,302
Total stockholders' equity 756,610 741,337 758,659
Total interest-earning assets 10,571,837 11,557,322 11,974,586
Total deposits and interest-
bearing liabilities 10,797,654 11,697,711 12,044,641
- ----------------------------------------------------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31,
2005 2004 2004 2004 2004
- ----------------------------------------------------------------------
Regulatory
Capital:
- ----------
Tangible $675,848 $695,213 $713,324 $727,684 $721,410
Core 675,848 695,213 713,324 727,684 721,535
Total risk-
based 794,963 812,259 833,679 855,225 852,638
Tier 1 risk-
based 671,401 690,779 709,740 725,279 721,535
Tangible % 6.63% 6.19% 6.37% 6.31% 6.00%
Core % 6.63% 6.19% 6.37% 6.31% 6.00%
Total risk-
based % 10.77% 10.61% 11.06% 11.25% 11.02%
Tier 1 risk-
based % 9.09% 9.03% 9.42% 9.54% 9.31%
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COMMERCIAL FEDERAL CORPORATION
MORTGAGE SERVICING RIGHTS
(Dollars in Thousands)
- ----------------------------------------------------------------------
Three Months Ended
March 31, December 31, March 31,
--------------------------------------
2005 2004 2004
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Mortgage Servicing Rights (1):
Beginning balance before
valuation allowance $162,423 $171,616 $185,233
Mortgage servicing rights
retained through loan sales 4,512 5,204 6,002
Sale of mortgage servicing
rights (137,449) - -
Amortization expense (8,829) (10,545) (12,385)
Permanent impairment - (3,852) -
------------ ------------ ------------
Ending balance before
valuation allowance 20,657 162,423 178,850
------------ ------------ ------------
Valuation allowance,
beginning balance 41,174 51,010 49,339
Amounts charged (credited) to
operations (8,302) (5,984) 18,893
Sale of mortgage servicing
rights (29,716) - -
Permanent impairment - (3,852) -
------------ ------------ ------------
Valuation allowance, ending
balance 3,156 41,174 68,232
------------ ------------ ------------
Mortgage servicing rights,
net of valuation allowance $17,501 $121,249 $110,618
============ ============ ============
Fair value at the periods
ended $17,834 $122,770 $112,232
============ ============ ============
Mortgage servicing rights as a
percentage of servicing
portfolio (2) 1.56% 1.14% 0.99%
============ ============ ============
Mortgage servicing rights as a
multiple of servicing fees (2) 3.89x 3.35x 2.91x
============ ============ ============
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Loans Serviced for Other
Institutions (1):
Beginning balance $10,640,028 $10,902,957 $11,439,187
Additions to portfolio 305,760 366,940 507,839
Loan payments (529,006) (612,123) (775,537)
Sale of loans serviced (9,289,733) - -
Other items, net (6,544) (17,746) (4,494)
------------ ------------ ------------
Ending balance $1,120,505 $10,640,028 $11,166,995
============ ============ ============
Weighted average servicing
fee 0.33% 0.34% 0.34%
============ ============ ============
Weighted average coupon note
rate 5.86% 5.88% 6.04%
============ ============ ============
Serviced loans sold with
servicing retained until
transfer (1) $9,289,733 $- $-
============ ============ ============
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(1) The Corporation sold $9.3 billion of its loans serviced for other
institutions on March 31, 2005. The Corporation will service these
mortgage loans until the servicing is transferred (approximately 90
to 120 days from March 31, 2005). The remaining balance of loans
serviced for other institutions is expected to be sold before June
30, 2005.
(2) Ratios are calculated based on the net book value of mortgage
servicing after deducting the valuation allowance.
CONTACT: Commercial Federal Corporation, Omaha
Investor Relations:
Hal A. Garyn, 402-514-5336