Exhibit 99.1
Commercial Federal Reports Second Quarter Net Income of $14.0 Million
OMAHA, Neb.--(BUSINESS WIRE)--July 26, 2005--Commercial Federal Corporation
(NYSE:CFB), today announced net income of $14.0 million, or $0.36 per diluted
share, for the quarter ended June 30, 2005. This compares to reported net income
of $18.7 million, or $0.45 per diluted share, for the same quarter one year
earlier. Income for the current quarter was materially impacted due to a Bank
Owned Life Insurance (BOLI) contract provision triggered by the Company's
pending acquisition by Bank of the West, decreasing after-tax income by $6.6
million, or $0.17 per diluted share.
Merger-Related Adjustments to Income
As indicated, merger costs for the second quarter of 2005 included
the write-off of an asset related to one of the Company's BOLI
policies. Per the language in the BOLI policy, when the Company's
board of directors approved the agreement and plan of merger with Bank
of the West on June 13, 2005, it triggered a provision whereby the
Claims Stabilization Reserve (CSR) for one of the BOLI policies could
no longer be accounted for as an asset. This provision resulted in a
$6.6 million non-tax deductible write-off, reducing reported earnings
by $0.17 per diluted share. This component of the BOLI policy may be
recorded as an asset again in the future after a certain conditions
are met.
"The recording of this BOLI adjustment resulted from application
of a legal interpretation and accounting rule that is fully apart from
the objective of the parties to the BOLI transaction. This non-cash
charge has no bearing on the planned acquisition of the Company by
Bank of the West," said David S. Fisher, executive vice president and
chief financial officer.
Also recorded in this caption for the current quarter were
advisor-related merger costs associated with the pending acquisition
of $1.0 million.
Results for the Quarter
"In anticipation of the merger later this year, I am very pleased
to see that our core business is operating at a level that would have
met or exceeded external earnings estimates for the Company. Absent
merger-related charges, the mortgage servicing sale and related
balance sheet actions completed in the first quarter have put us in a
position to outperform analyst expectations for our margins and
earnings," reported William A. Fitzgerald, chairman of the board and
chief executive officer.
Net Interest Income
Net interest income totaled $67.1 million for the second quarter,
compared with $71.4 million for the quarter ended June 30, 2004. Net
interest margin improved year-over-year by 22 basis points, to 2.95%.
While margin increased, actions taken in the first quarter of 2005
related to the sale of the mortgage servicing business shrank the
absolute size of both interest earnings assets and liabilities to a
point where the total dollar of net interest income declined.
Noninterest Income
Noninterest income increased 17% from the same quarter a year
earlier to total $29.5 million for the quarter ended June 30, 2005.
Retail fees were up a strong 12% over last year's second quarter. And,
as is evident, mortgage banking results are no longer a material
component of this income statement category.
Operating Expenses
For the quarter ended June 30, 2005, general and administrative
expenses increased by $3.7 million to $70.9 million compared to $67.2
million for the same quarter a year earlier. Increases in compensation
and benefits expenses were more than offset by decreases in other
non-merger related items. Also included in this category for the
current quarter were merger-related costs associated with the pending
acquisition of the Company by Bank of the West of $7.6 million and
trailing exit costs associated with the sale of mortgage servicing of
$864,000.
Credit Risk Management
At the end of the second quarter, total nonperforming assets rose
to $67.5 million from $61.9 million in the previous quarter. Despite
the increase, overall credit quality remains strong with only 0.65% of
total assets being considered nonperforming.
Net loan charge-offs for the second quarter declined to $4.8
million, compared to $8.2 million in the previous quarter. The
allowance for loan losses totaled $89.3 million at June 30, 2005, or
1.14% of loans outstanding versus $90.0 million, or 1.15%, at March
31, 2005.
Balance Sheet and Capital Ratios
Total assets as of June 30, 2005 were $10.3 billion, compared with
$10.4 billion and $11.7 billion as of March 31, 2005 and June 30,
2004, respectively. The size of the balance sheet declined as
expected, primarily driven by the Company's exit from the mortgage
servicing business.
For the second quarter, core deposits, including checking, money
market and savings accounts (excluding custodial escrows) were up 9.7%
or $348 million from a year prior. Total gross loans receivable held
steady at $7.8 billion.
As of June 30, 2005, stockholders' equity was $755.4 million,
compared with $765.1 million at March 31, 2005 and $751.3 million at
June 30, 2004. The capital ratios of the Company's banking subsidiary
continued to exceed regulatory requirements for classification as
"well-capitalized," the highest regulatory standard.
Commercial Federal Corporation (NYSE:CFB) (the "Corporation") is
the parent company of Commercial Federal Bank, a $10.3 billion federal
savings bank with branches located in Nebraska, Iowa, Colorado,
Kansas, Oklahoma, Missouri and Arizona. The Corporation's 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.
The Corporation's website, http://www.comfedbank.com, 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 the Corporation's actual results or financial
condition to differ materially from those expressed in or implied by
such statements. Factors of particular importance to the Corporation
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 Except Par Value)
- ----------------------------------------------------------------------
June 30, March 31, June 30,
ASSETS 2005 2005 2004
- ----------------------------------------------------------------------
Cash (including short-term
investments of $30,874, $2,592
and $1,841) $212,696 $163,793 $156,229
Investment securities available
for sale, at fair value 522,403 519,964 1,031,111
Mortgage-backed securities
available for sale, at fair value 608,906 702,984 1,133,434
Loans held for sale, net 198,570 211,154 444,774
Loans receivable, net of
allowances of $89,268, $90,000
and $97,082 7,758,037 7,733,977 7,691,306
Federal Home Loan Bank stock 157,700 173,614 247,580
Foreclosed real estate 11,316 11,207 15,548
Premises and equipment, net 176,083 174,720 153,137
Bank owned life insurance 250,875 254,477 245,157
Other assets 250,317 268,701 418,451
Core value of deposits, net of
accumulated amortization of
$70,566, $69,596 and $66,652 10,483 11,453 14,397
Goodwill 159,229 159,229 162,717
- ----------------------------------------------------------------------
Total Assets $10,316,615 $10,385,273 $11,713,841
- ----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
- ----------------------------------------------------------------------
Liabilities:
Deposits $6,354,932 $6,545,720 $6,242,747
Advances from Federal Home Loan
Bank 2,798,108 2,575,466 4,061,840
Other borrowings 306,848 327,587 427,274
Other liabilities 101,334 171,445 230,658
- ----------------------------------------------------------------------
Total Liabilities 9,561,222 9,620,218 10,962,519
- ----------------------------------------------------------------------
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;
38,213,347, 39,019,557 and
39,870,919 shares issued and
outstanding 382 390 399
Retained earnings 746,748 759,891 816,138
Accumulated other comprehensive
income (loss), net 8,263 4,774 (65,215)
- ----------------------------------------------------------------------
Total Stockholders' Equity 755,393 765,055 751,322
- ----------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $10,316,615 $10,385,273 $11,713,841
- ----------------------------------------------------------------------
COMMERCIAL FEDERAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
- ----------------------------------------------------------------------
Three Months Ended
June 30, March 31, June 30,
---------------------------------
2005 2005 2004
- ----------------------------------------------------------------------
Interest Income:
Investment securities $8,199 $14,486 $13,616
Mortgage-backed securities 7,711 9,996 11,651
Loans receivable 120,585 114,539 119,750
- ----------------------------------------------------------------------
Total interest income 136,495 139,021 145,017
Interest Expense:
Deposits 33,359 31,931 26,901
Advances from Federal Home Loan Bank 30,035 40,271 43,384
Other borrowings 6,038 10,562 3,310
- ----------------------------------------------------------------------
Total interest expense 69,432 82,764 73,595
Net Interest Income 67,063 56,257 71,422
Provision for Loan Losses (4,079) (8,320) (3,106)
- ----------------------------------------------------------------------
Net Interest Income After Provision
for Loan Losses 62,984 47,937 68,316
Other Income (Loss):
Retail fees and charges 18,853 16,102 16,881
Loan servicing fees 2,457 9,998 10,726
Amortization of mortgage servicing
rights (58) (8,829) (14,900)
Mortgage servicing rights valuation
adjustment, net (702) 8,302 38,866
Gain (loss) on sales of investment
securities 21 (5,676) (31,351)
Gain (loss) on sales of mortgage-
backed securities 1,717 (12,683) -
Changes in fair values of
derivatives, net (139) (1,147) (7,639)
Loss on termination of interest
rate swap agreements - (42,457) -
Loss on early extinguishment of debt - (40,731) -
Gain (loss) on sale of mortgage
servicing rights and wholesale
mortgage origination network (2,106) 5,412 -
Gain on sales of loans 885 2,405 2,516
Bank owned life insurance 2,976 2,896 3,015
Other operating income 5,625 6,508 7,145
- ----------------------------------------------------------------------
Total other income (loss) 29,529 (59,900) 25,259
Other Expense:
General and administrative expenses -
Compensation and benefits 34,226 33,130 31,537
Occupancy and equipment 9,673 9,566 9,994
Data processing 5,103 5,075 4,643
Advertising 1,802 2,688 3,940
Communication 3,104 2,954 3,332
Item processing 3,040 2,738 3,156
Outside services 2,474 3,414 3,872
Loan expenses 1,021 1,798 2,445
Foreclosed real estate, net 510 1,434 (1,217)
Other operating expenses 1,469 3,379 5,503
Merger costs 7,578 - -
Exit costs 864 2,792 -
- ----------------------------------------------------------------------
Total general and
administrative expenses 70,864 68,968 67,205
Amortization of core value of
deposits 970 977 1,218
Impairment of goodwill - 3,488 -
- ----------------------------------------------------------------------
Total other expense 71,834 73,433 68,423
- ----------------------------------------------------------------------
Income (Loss) Before Income Taxes 20,679 (85,396) 25,152
Income Tax Provision (Benefit) 6,712 (32,184) 6,450
- ----------------------------------------------------------------------
Net Income (Loss) $13,967 $(53,212) $18,702
- ----------------------------------------------------------------------
Net Income (Loss) Per Basic Share $.37 $(1.36) $.46
Net Income (Loss) Per Diluted Share $.36 $(1.36) $.45
- ----------------------------------------------------------------------
Dividends Declared Per Common Share $.145 $.135 $.135
- ----------------------------------------------------------------------
Weighted Average Shares Outstanding
Used in Basic EPS 38,124,743 39,009,537 40,527,096
Weighted Average Shares Outstanding
Used in Diluted EPS (1) 38,760,806 39,009,537 41,199,954
- ----------------------------------------------------------------------
(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
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
- ----------------------------------------------------------------------
Six Months Ended
June 30, June 30,
----------------------
2005 2004
- ----------------------------------------------------------------------
Interest Income:
Investment securities $22,685 $27,915
Mortgage-backed securities 17,707 24,013
Loans receivable 235,124 239,861
- ----------------------------------------------------------------------
Total interest income 275,516 291,789
Interest Expense:
Deposits 65,290 56,684
Advances from Federal Home Loan Bank 70,306 87,625
Other borrowings 16,600 5,087
- ----------------------------------------------------------------------
Total interest expense 152,196 149,396
Net Interest Income 123,320 142,393
Provision for Loan Losses (12,399) (7,959)
- ----------------------------------------------------------------------
Net Interest Income After Provision for Loan
Losses 110,921 134,434
Other Income (Loss):
Retail fees and charges 34,955 31,378
Loan servicing fees 12,455 21,934
Amortization of mortgage servicing rights (8,887) (27,285)
Mortgage servicing rights valuation
adjustment, net 7,600 19,973
Loss on sales of investment securities (5,655) (14,375)
Loss on sales of mortgage-backed securities (10,966) -
Changes in fair values of derivatives, net (1,286) (6,233)
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 3,306 -
Gain on sales of loans 3,290 2,714
Bank owned life insurance 5,872 11,046
Other operating income 12,133 13,764
- ----------------------------------------------------------------------
Total other income (loss) (30,371) 52,916
Other Expense:
General and administrative expenses -
Compensation and benefits 67,356 64,423
Occupancy and equipment 19,239 20,158
Data processing 10,178 9,264
Advertising 4,490 7,495
Communication 6,058 6,478
Item processing 5,778 6,186
Outside services 5,888 7,744
Loan expenses 2,819 3,950
Foreclosed real estate, net 1,944 708
Other operating expenses 4,848 9,458
Merger costs 7,578 -
Exit costs 3,656 -
- ----------------------------------------------------------------------
Total general and administrative
expenses 139,832 135,864
Amortization of core value of deposits 1,947 2,435
Impairment of goodwill 3,488 -
- ----------------------------------------------------------------------
Total other expense 145,267 138,299
- ----------------------------------------------------------------------
Income (Loss) Before Income Taxes (64,717) 49,051
Income Tax Provision (Benefit) (25,472) 12,431
- ----------------------------------------------------------------------
Net Income (Loss) $(39,245) $36,620
- ----------------------------------------------------------------------
Net Income (Loss) Per Basic Share $(1.02) $.90
Net Income (Loss) Per Diluted Share (1) $(1.02) $.88
- ----------------------------------------------------------------------
Dividends Declared Per Common Share $.28 $.26
- ----------------------------------------------------------------------
Weighted Average Shares Outstanding Used in
Basic EPS 38,567,140 40,750,584
Weighted Average Shares Outstanding Used in
Diluted EPS (1) 38,567,140 41,478,014
- ----------------------------------------------------------------------
(1) The conversion of stock options for the six months ended June 30,
2005 is not assumed since the Corporation incurred a loss from
operations. As a result, the diluted loss per share for the six
months ended June 30, 2005 is computed the same as the basic loss
per share.
COMMERCIAL FEDERAL CORPORATION
DEPOSITS AND LOANS
(In Thousands)
- ----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
- ----------------------------------------------------------------------
Deposits by State:
Colorado $2,111,075 $2,123,105 $2,015,803
Nebraska 1,554,526 1,623,505 1,487,175
Iowa 1,035,106 1,085,039 1,043,580
Kansas 605,929 612,334 610,981
Oklahoma 499,300 537,901 548,469
Missouri 279,998 286,589 305,925
Arizona 268,998 277,247 230,814
----------- ----------- -----------
Total deposits $6,354,932 $6,545,720 $6,242,747
=========== =========== ===========
Deposits by Type:
Checking accounts -
Interest-bearing $565,449 $617,954 $581,571
Noninterest-bearing 723,647 724,188 607,790
----------- ----------- -----------
Total checking excluding
escrow accounts 1,289,096 1,342,142 1,189,361
Money market accounts 604,032 812,561 1,203,268
Savings accounts 2,059,182 1,855,227 1,211,344
----------- ----------- -----------
Total core deposits 3,952,310 4,009,930 3,603,973
Custodial escrow accounts 263,468 260,576 285,667
Certificates of deposit 2,139,154 2,275,214 2,353,107
----------- ----------- -----------
Total deposits $6,354,932 $6,545,720 $6,242,747
=========== =========== ===========
- ----------------------------------------------------------------------
Loans Receivable, before allowance
for losses:
Commercial real estate $2,096,033 $2,056,774 $1,976,705
Commercial operating and other(1) 641,697 644,348 614,017
Construction, net of loans-in-
process 797,297 759,777 543,719
Consumer home equity 1,057,477 1,020,662 914,967
Consumer other 881,063 835,583 760,898
----------- ----------- -----------
Total commercial, construction
and consumer loans 5,473,567 5,317,144 4,810,306
Residential real estate 2,373,738 2,506,833 2,978,082
----------- ----------- -----------
Total loans receivable, before
allowance for losses $7,847,305 $7,823,977 $7,788,388
=========== =========== ===========
- ----------------------------------------------------------------------
(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)
- ----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
- ----------------------------------------------------------------------
THREE MONTHS ENDED:
- -------------------
Beginning balance $90,000 $89,841 $97,765
Provision for loan losses charged to
operations 4,079 8,320 3,106
Charge-offs:
Residential real estate (107) (262) (111)
Commercial real estate (111) (2,142) (902)
Construction (302) (567) (28)
Commercial operating, small business
and agricultural (302) (1,027) (57)
Consumer (6,307) (5,533) (4,613)
--------- --------- ---------
Charge-offs (7,129) (9,531) (5,711)
--------- --------- ---------
Recoveries:
Residential real estate 1 - -
Commercial real estate 548 1 1
Construction 33 - 2
Commercial operating, small business
and agricultural 23 76 111
Consumer 1,713 1,293 1,808
--------- --------- ---------
Recoveries 2,318 1,370 1,922
- ----------------------------------------------------------------------
Ending balance $89,268 $90,000 $97,082
- ----------------------------------------------------------------------
SIX MONTHS ENDED:
- -----------------
Beginning balance $89,841 $108,154
Provision for loan losses charged to
operations 12,399 7,959
Charge-offs:
Residential real estate (369) (202)
Commercial real estate (2,253) (10,074)
Construction (869) (61)
Commercial operating, small business
and agricultural (1,329) (1,484)
Consumer (11,840) (10,702)
--------- ---------
Charge-offs (16,660) (22,523)
--------- ---------
Recoveries:
Residential real estate 1 133
Commercial real estate 549 28
Construction 33 2
Commercial operating, small business
and agricultural 99 195
Consumer 3,006 3,134
--------- ---------
Recoveries 3,688 3,492
- ----------------------------------------------------------------------
Ending balance $89,268 $97,082
- ----------------------------------------------------------------------
Summary of charge-offs, net of recoveries:
- ------------------------------------------
Three months ended $(4,811) $(8,161) $(3,789)
========= ========= =========
Six months ended $(12,972) $(19,031)
========= =========
- ----------------------------------------------------------------------
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES:
- ----------------------------------------------------------------------
Specific $8,889 $8,783 $4,613
Nonspecific 63,939 60,422 69,056
Unallocated 16,440 20,795 23,413
--------- --------- ---------
Allowance for loan losses $89,268 $90,000 $97,082
========= ========= =========
COMMERCIAL FEDERAL CORPORATION
ASSET QUALITY
(Dollars in Thousands)
- ----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
- ----------------------------------------------------------------------
Nonperforming Assets:
Nonperforming loans:
Residential real estate $8,963 $7,803 $7,381
Residential construction 10,245 8,524 3,020
Commercial real estate 18,062 17,845 9,922
Commercial construction 1,155 731 842
Consumer 6,559 7,797 3,409
Commercial operating, small
business and agricultural 5,327 2,142 4,002
------------ ------------ ------------
Total nonperforming loans 50,311 44,842 28,576
------------ ------------ ------------
Foreclosed real estate:
Residential 6,908 7,162 12,315
Residential construction 1,384 516 1,009
Commercial 1,248 1,753 448
Commercial construction 1,776 1,776 1,776
------------ ------------ ------------
Total foreclosed real
estate 11,316 11,207 15,548
------------ ------------ ------------
Troubled debt restructurings -
commercial 5,846 5,846 4,690
------------ ------------ ------------
Total nonperforming assets $67,473 $61,895 $48,814
============ ============ ============
Total assets $10,316,615 $10,385,273 $11,713,841
============ ============ ============
Nonperforming assets to total
assets .65% .60% .42%
============ ============ ============
Summary of Nonperforming Assets:
Residential $27,500 $24,005 $23,725
Nonresidential 39,973 37,890 25,089
------------ ------------ ------------
$67,473 $61,895 $48,814
============ ============ ============
- ----------------------------------------------------------------------
Nonperforming loans to loans
receivable (1) .64% .57% .37%
Nonperforming assets to total
assets .65% .60% .42%
Allowance for loan losses to:
Loans receivable (1) 1.14% 1.15% 1.25%
Total nonperforming loans 177.43% 200.70% 339.73%
- ----------------------------------------------------------------------
Accruing loans 90 days or more
past due:
Residential real estate $16,235 $16,246 $20,443
============ ============ ============
- ----------------------------------------------------------------------
(1) 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)
- ----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
- ----------------------------------------------------------------------
Cash, investment securities and
FHLB stock $892,799 $857,371 $1,434,920
Mortgage-backed securities 608,906 702,984 1,133,434
Loans held for sale, net 198,570 211,154 444,774
Loans receivable, net 7,758,037 7,733,977 7,691,306
Core value of deposits, net 10,483 11,453 14,397
Goodwill 159,229 159,229 162,717
Other assets 688,591 709,105 832,293
Total assets 10,316,615 10,385,273 11,713,841
- ----------------------------------------------------------------------
Deposits 6,354,932 6,545,720 6,242,747
Advances from Federal Home Loan
Bank 2,798,108 2,575,466 4,061,840
Other borrowings 306,848 327,587 427,274
Other liabilities 101,334 171,445 230,658
Stockholders' equity 755,393 765,055 751,322
Total liabilities and
stockholders' equity 10,316,615 10,385,273 11,713,841
- ----------------------------------------------------------------------
Book value per common share $19.77 $19.61 $18.84
Stock price $33.68 $27.65 $27.10
Common shares outstanding 38,213,347 39,019,557 39,870,919
Weighted average shares
outstanding per basic EPS 38,124,743 39,009,537 40,527,096
Weighted average shares
outstanding per diluted EPS 38,760,806 39,009,537 41,199,954
- ----------------------------------------------------------------------
Nonperforming assets $67,473 $61,895 $48,814
Nonperforming assets to total
assets .65% .60% .42%
Quarterly weighted average
interest rates on a taxable-
equivalent basis:
Yield on interest-earning assets 5.91% 5.54% 5.46%
Rate on deposits and interest-
bearing liabilities 2.92% 3.21% 2.68%
Net interest rate spread 2.99% 2.33%(1) 2.78%
Net interest margin 2.95% 2.28%(1) 2.73%
- ----------------------------------------------------------------------
Three months ended:
- -------------------
Return on average assets .54% (1.87)% .63%
Return on average equity 7.46% (27.40)% 10.16%
Average equity to average assets 7.26% 6.83% 6.20%
G & A expenses to average assets 2.75% 2.43% 2.26%
Operating efficiency ratio 73.36% N/M 69.51%
- ----------------------------------------------------------------------
Six months ended:
- -----------------
Return on average assets (.72)% n/a .61%
Return on average equity (10.29)% n/a 9.82%
Average equity to average assets 7.03% n/a 6.21%
G & A expenses to average assets 2.58% n/a 2.26%
Operating efficiency ratio 150.44% n/a 69.56%
- ----------------------------------------------------------------------
(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)
- ----------------------------------------------------------------------
June 30, March 31, December 31,
2005 2005 2004
- ----------------------------------------------------------------------
Three Months Ended:
- -------------------
Average Balances:
Total assets $10,316,781 $11,375,436 $11,416,319
Total loans, net 7,978,386 7,943,735 7,971,943
Total loans, before allowances
for loan losses 8,067,971 8,033,507 8,066,058
Total mortgage-backed securities 648,626 946,715 1,021,536
Total deposits 6,474,440 6,440,077 6,407,960
Total stockholders' equity 748,618 776,767 769,737
Total interest-earning assets 9,325,324 10,183,505 10,281,148
Total deposits and interest-
bearing liabilities 9,458,768 10,359,946 10,460,482
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
September 30, June 30,
2004 2004
- ----------------------------------------------------------------------
Three Months Ended:
- -------------------
Average Balances:
Total assets $11,559,998 $11,878,729
Total loans, net 8,062,478 8,256,840
Total loans, before allowances
for loan losses 8,159,234 8,354,536
Total mortgage-backed securities 1,086,720 1,181,297
Total deposits 6,254,687 6,409,826
Total stockholders' equity 764,614 736,133
Total interest-earning assets 10,406,515 10,726,414
Total deposits and interest-
bearing liabilities 10,609,351 10,936,846
- ----------------------------------------------------------------------
June 30, December 31,
------------------------------------
2005 2004 2003
- ----------------------------------------------------------------------
Year to Date:
- -------------
Average Balances:
Total assets $10,843,184 $11,752,057 $12,805,465
Total loans, net 7,961,156 8,145,192 8,704,321
Total loans, before allowances
for loan losses 8,050,834 8,244,282 8,812,133
Total mortgage-backed securities 796,847 1,141,453 1,362,145
Total deposits 6,457,353 6,410,461 6,629,299
Total stockholders' equity 762,615 756,610 741,337
Total interest-earning assets 9,752,044 10,571,837 11,557,322
Total deposits and interest-
bearing liabilities 9,906,867 10,797,654 11,697,711
- ----------------------------------------------------------------------
June 30, March 31, Dec. 31, Sept. 30, June 30,
2005 2005 2004 2004 2004
- ----------------------------------------------------------------------
Regulatory Capital:
- -------------------
Tangible $689,957 $675,848 $695,213 $713,324 $727,684
Core 689,957 675,848 695,213 713,324 727,684
Total risk-based 808,157 794,963 812,259 833,679 855,225
Tier 1 risk-based 685,510 671,401 690,779 709,740 725,279
Tangible % 6.82% 6.63% 6.19% 6.37% 6.31%
Core % 6.82% 6.63% 6.19% 6.37% 6.31%
Total risk-based % 10.30% 10.49% 10.46% 10.78% 10.98%
Tier 1 risk-based % 8.74% 8.86% 8.79% 9.18% 9.32%
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COMMERCIAL FEDERAL CORPORATION
MORTGAGE SERVICING RIGHTS
(Dollars in Thousands)
- ----------------------------------------------------------------------
Three Months Ended
June 30, March 31, June 30,
-------------------------------------
2005 2005 2004
- ----------------------------------------------------------------------
Mortgage Servicing Rights (1):
Beginning balance before
valuation allowance $20,657 $162,423 $178,850
Mortgage servicing rights
retained through loan sales 1,796 4,512 11,316
Sale of mortgage servicing
rights (22,130) (137,449) -
Amortization expense (58) (8,829) (14,900)
----------- ------------ ------------
Ending balance before valuation
allowance 265 20,657 175,266
----------- ------------ ------------
Valuation allowance, beginning
balance 3,156 41,174 68,232
Amounts charged (credited) to
operations 702 (8,302) (38,866)
Sale of mortgage servicing
rights (3,857) (29,716) -
----------- ------------ ------------
Valuation allowance, ending
balance 1 3,156 29,366
----------- ------------ ------------
Mortgage servicing rights, net
of valuation allowance $264 $17,501 $145,900
=========== ============ ============
Fair value at the periods ended $352 $17,834 $157,955
=========== ============ ============
Mortgage servicing rights as a
percentage of servicing
portfolio (2) N/M 1.56% 1.32%
=========== ============ ============
Mortgage servicing rights as a
multiple of servicing fees (2) N/M 3.89x 3.88x
=========== ============ ============
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Loans Serviced for Other
Institutions (1):
Beginning balance $1,120,505 $10,640,028 $11,166,995
Additions to portfolio 117,026 305,760 870,423
Sale of loans serviced and loan
payments (1,183,183) (9,818,739) (976,213)
Other items, net 3,222 (6,544) (11,446)
----------- ------------ ------------
Ending balance $57,570 $1,120,505 $11,049,759
=========== ============ ============
Weighted average servicing fee N/M 0.33% 0.34%
=========== ============ ============
Weighted average coupon note
rate N/M 5.86% 5.94%
=========== ============ ============
Serviced loans sold with
servicing retained until
transfer $9,874,805 $9,289,733 $ -
=========== ============ ============
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(1) The Corporation sold $1.2 billion and $9.3 billion, respectively,
of its loans serviced for other institutions during the quarters
ended June 30, 2005 and March 31, 2005. The Corporation serviced
these loans until the servicing was transferred in July 2005. The
remaining balance of loans serviced for other institutions at June
30, 2005 is expected to be sold in the third quarter of 2005.
(2) Ratios are calculated based on the net book value of mortgage
servicing after deducting the valuation allowance.
N/M - Percents and multiples not meaningful given the residual
balances of loans serviced for other institutions and related
mortgage servicing rights.
CONTACT: Commercial Federal Corporation, Omaha
Investor Relations:
Hal A. Garyn, 402-514-5336