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CFS BANCORP, INC.
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(Exact Name of Registrant as Specified in Its Charter)
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INDIANA
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(State or Other Jurisdiction of Incorporation)
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000-24611
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35-2042093
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(Commission File Number)
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(IRS Employer Identification No.)
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707 Ridge Road, Munster, Indiana
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46321
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(Address of Principal Executive Offices)
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(Zip Code)
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(219) 836-5500
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(Registrant’s Telephone Number, Including Area Code)
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit Number
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Description
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Press release dated July 27, 2011
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CFS BANCORP, INC.
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||
Date: July 27, 2011
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By:
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/s/ Joyce M. Fabisiak
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Joyce M. Fabisiak
|
||
Vice President
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707 Ridge Road l Munster, Indiana 46321
|
u
|
Total loans, net of deferred fees, grew $13.3 million, or 1.8%, since March 31, 2011;
|
u
|
Non-performing assets decreased to $78.4 million from $83.2 million at March 31, 2011;
|
u
|
Net interest margin increased to 3.59% in the second quarter of 2011 from 3.55% in the first quarter of 2011 and decreased from 3.79% from the second quarter of 2010;
|
u
|
Non-interest income included a $2.2 million gain on the sale of other real estate owned;
|
u
|
Non-interest expense included valuation reserves totaling $1.8 million on two other real estate owned properties; and
|
u
|
The Bank’s risk-based capital ratio improved to 13.29% from 13.22% at March 31, 2011.
|
Three Months Ended
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||||||||||||
6/30/11
|
3/31/11
|
6/30/10
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Net interest margin
|
3.59 | % | 3.55 | % | 3.79 | % | ||||||
Interest rate spread
|
3.49 | 3.45 | 3.66 | |||||||||
Net interest income
|
$ | 9,187 | $ | 8,857 | $ | 9,329 | ||||||
Average assets:
|
||||||||||||
Yield on interest-earning assets
|
4.38 | % | 4.41 | % | 4.84 | % | ||||||
Yield on loans receivable
|
4.94 | 4.91 | 5.10 | |||||||||
Yield on investment securities
|
3.01 | 3.42 | 4.24 | |||||||||
Average interest-earning assets
|
$ | 1,026,940 | $ | 1,012,431 | $ | 987,801 | ||||||
Average liabilities:
|
||||||||||||
Cost of interest-bearing liabilities
|
.89 | % | .96 | % | 1.18 | % | ||||||
Cost of interest-bearing deposits
|
.81 | .88 | 1.07 | |||||||||
Cost of borrowed funds
|
2.64 | 2.63 | 2.34 | |||||||||
Average interest-bearing liabilities
|
$ | 915,785 | $ | 909,640 | $ | 878,660 |
6/30/11
|
3/31/11
|
6/30/10
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Non-performing loans (NPLs)
|
$ | 57,217 | $ | 59,661 | $ | 56,482 | ||||||
Other real estate owned
|
21,164 | 23,567 | 11,825 | |||||||||
Non-performing assets (NPAs)
|
$ | 78,381 | $ | 83,228 | $ | 68,307 | ||||||
NPLs / total loans
|
7.76 | % | 8.24 | % | 7.47 | % | ||||||
NPAs / total assets
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6.95 | 7.27 | 6.24 | |||||||||
Allowance for loan losses (ALL)
|
$ | 17,039 | $ | 17,095 | $ | 17,608 | ||||||
ALL / total loans
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2.31 | % | 2.36 | % | 2.33 | % | ||||||
ALL / NPLs
|
29.78 | 28.65 | 31.17 | |||||||||
Provision for loan losses for the quarter ended
|
$ | 996 | $ | 903 | $ | 817 | ||||||
Net charge-offs for the quarter ended
|
1,052 | 987 | 3,611 |
6/30/11
|
3/31/11
|
6/30/10
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Assets:
|
||||||||||||
Total assets
|
$ | 1,128,019 | $ | 1,144,041 | $ | 1,095,280 | ||||||
Loans receivable, net of unearned fees
|
737,516 | 724,223 | 756,052 | |||||||||
Investment securities
|
248,958 | 255,776 | 203,099 | |||||||||
Liabilities and Equity:
|
||||||||||||
Total liabilities
|
1,011,853 | 1,030,277 | 982,507 | |||||||||
Deposits
|
964,527 | 980,517 | 899,482 | |||||||||
Borrowed funds
|
38,835 | 40,658 | 73,106 | |||||||||
Shareholders’ equity
|
116,166 | 113,764 | 112,773 |
6/30/11
|
3/31/11
|
6/30/10
|
||||||||||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
Amount
|
% of Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Commercial loans:
|
||||||||||||||||||||||||
Commercial and industrial
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$ | 83,082 | 11.3 | % | $ | 68,381 | 9.5 | % | $ | 69,733 | 9.2 | % | ||||||||||||
Commercial real estate – owner occupied
|
102,315 | 13.8 | 102,053 | 14.1 | 95,892 | 12.7 | ||||||||||||||||||
Commercial real estate – non-owner occupied
|
187,380 | 25.4 | 191,443 | 26.4 | 194,592 | 25.8 | ||||||||||||||||||
Commercial real estate – multifamily
|
77,562 | 10.5 | 74,552 | 10.3 | 74,238 | 9.8 | ||||||||||||||||||
Commercial construction and land development
|
23,424 | 3.2 | 21,130 | 2.9 | 29,560 | 3.9 | ||||||||||||||||||
Commercial participations
|
21,194 | 2.9 | 22,419 | 3.1 | 46,762 | 6.2 | ||||||||||||||||||
Total commercial loans
|
494,957 | 67.0 | 479,978 | 66.3 | 510,777 | 67.6 | ||||||||||||||||||
Retail loans:
|
||||||||||||||||||||||||
One-to-four family residential
|
183,269 | 24.8 | 183,623 | 25.3 | 184,537 | 24.4 | ||||||||||||||||||
Home equity lines of credit
|
54,975 | 7.5 | 55,649 | 7.7 | 55,987 | 7.4 | ||||||||||||||||||
Retail construction and land development
|
2,095 | .3 | 3,328 | .5 | 3,519 | .5 | ||||||||||||||||||
Other
|
2,670 | .4 | 2,192 | .3 | 1,718 | .2 | ||||||||||||||||||
Total retail loans
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243,009 | 33.0 | 244,792 | 33.8 | 245,761 | 32.5 | ||||||||||||||||||
Total loans receivable
|
737,966 | 100.1 | 724,770 | 100.1 | 756,538 | 100.1 | ||||||||||||||||||
Net deferred loan fees
|
(450 | ) | (.1 | ) | (547 | ) | (.1 | ) | (486 | ) | (.1 | ) | ||||||||||||
Total loans receivable, net of unearned fees
|
$ | 737,516 | 100.0 | % | $ | 724,223 | 100.0 | % | $ | 756,052 | 100.0 | % |
6/30/11
|
3/31/11
|
6/30/10
|
||||||||||||||||||||||
Amount
|
% of Total
|
Amount
|
% of Total
|
Amount
|
% of Total
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
Checking accounts:
|
||||||||||||||||||||||||
Non-interest bearing
|
$ | 98,377 | 10.2 | % | $ | 101,126 | 10.3 | % | $ | 84,347 | 9.3 | % | ||||||||||||
Interest-bearing
|
154,401 | 16.0 | 158,473 | 16.2 | 130,893 | 14.6 | ||||||||||||||||||
Money market accounts
|
188,942 | 19.6 | 189,034 | 19.3 | 159,743 | 17.8 | ||||||||||||||||||
Savings accounts
|
128,902 | 13.4 | 127,902 | 13.0 | 119,029 | 13.2 | ||||||||||||||||||
Core deposits
|
570,622 | 59.2 | 576,535 | 58.8 | 494,012 | 54.9 | ||||||||||||||||||
Certificates of deposit accounts
|
393,905 | 40.8 | 403,982 | 41.2 | 405,470 | 45.1 | ||||||||||||||||||
Total deposits
|
$ | 964,527 | 100.0 | % | $ | 980,517 | 100.0 | % | $ | 899,482 | 100.0 | % |
6/30/11
|
3/31/11
|
6/30/10
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Short-term variable-rate borrowed funds
and repurchase agreements
|
$ | 13,730 | $ | 15,510 | $ | 13,684 | ||||||
FHLB advances
|
25,105 | 25,148 | 59,422 | |||||||||
Total borrowed funds
|
$ | 38,835 | $ | 40,658 | $ | 73,106 |
CFS BANCORP, INC. | ||||||||||||||||||||
Consolidated Statements of Income (Unaudited)
|
||||||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
June 30, 2011
|
March 31, 2011
|
June 30, 2010
|
June 30, 2011
|
June 30, 2010
|
||||||||||||||||
Interest income:
|
||||||||||||||||||||
Loans
|
$ | 9,016 | $ | 8,811 | $ | 9,626 | $ | 17,827 | $ | 19,304 | ||||||||||
Investment securities
|
2,040 | 2,045 | 2,163 | 4,085 | 4,376 | |||||||||||||||
Other interest-earning assets
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164 | 157 | 123 | 321 | 247 | |||||||||||||||
Total interest income
|
11,220 | 11,013 | 11,912 | 22,233 | 23,927 | |||||||||||||||
Interest expense:
|
||||||||||||||||||||
Deposits
|
1,777 | 1,894 | 2,146 | 3,670 | 4,199 | |||||||||||||||
Borrowed funds
|
256 | 262 | 437 | 519 | 956 | |||||||||||||||
Total interest expense
|
2,033 | 2,156 | 2,583 | 4,189 | 5,155 | |||||||||||||||
Net interest income
|
9,187 | 8,857 | 9,329 | 18,044 | 18,772 | |||||||||||||||
Provision for loan losses
|
996 | 903 | 817 | 1,899 | 2,527 | |||||||||||||||
Net interest income after provision for loan losses
|
8,191 | 7,954 | 8,512 | 16,145 | 16,245 | |||||||||||||||
Non-interest income:
|
||||||||||||||||||||
Service charges and other fees
|
1,174 | 1,076 | 1,320 | 2,250 | 2,540 | |||||||||||||||
Card-based fees
|
520 | 475 | 486 | 995 | 923 | |||||||||||||||
Commission income
|
78 | 45 | 46 | 123 | 100 | |||||||||||||||
Net gain (loss) on sale of:
|
||||||||||||||||||||
Investment securities
|
173 | 519 | – | 692 | 456 | |||||||||||||||
Loans receivable
|
26 | 32 | – | 58 | – | |||||||||||||||
Other real estate owned
|
2,238 | (5 | ) | 11 | 2,233 | 12 | ||||||||||||||
Income from bank-owned life insurance
|
210 | 206 | 262 | 416 | 485 | |||||||||||||||
Other income
|
119 | 103 | 118 | 222 | 268 | |||||||||||||||
Total non-interest income
|
4,538 | 2,451 | 2,243 | 6,989 | 4,784 | |||||||||||||||
Non-interest expense:
|
||||||||||||||||||||
Compensation and employee benefits
|
5,047 | 5,239 | 4,550 | 10,286 | 9,219 | |||||||||||||||
Net occupancy expense
|
670 | 765 | 651 | 1,435 | 1,406 | |||||||||||||||
FDIC insurance premiums and OTS assessments
|
504 | 653 | 669 | 1,157 | 1,269 | |||||||||||||||
Professional fees
|
334 | 388 | 744 | 722 | 1,337 | |||||||||||||||
Furniture and equipment expense
|
454 | 463 | 526 | 917 | 1,059 | |||||||||||||||
Data processing
|
441 | 442 | 443 | 883 | 873 | |||||||||||||||
Marketing
|
270 | 187 | 216 | 457 | 330 | |||||||||||||||
Other real estate owned related expense
|
2,011 | 592 | 255 | 2,603 | 886 | |||||||||||||||
Loan collection expense
|
233 | 120 | 153 | 353 | 322 | |||||||||||||||
Severance and early retirement costs
|
– | – | 437 | – | 440 | |||||||||||||||
Other
|
1,107 | 1,118 | 952 | 2,225 | 1,922 | |||||||||||||||
Total non-interest expense
|
11,071 | 9,967 | 9,596 | 21,038 | 19,063 | |||||||||||||||
Income before income taxes
|
1,658 | 438 | 1,159 | 2,096 | 1,966 | |||||||||||||||
Income tax expense
|
425 | (34 | ) | 178 | 391 | 287 | ||||||||||||||
Net income
|
$ | 1,233 | $ | 472 | $ | 981 | $ | 1,705 | $ | 1,679 | ||||||||||
Basic earnings per share
|
$ | .12 | $ | .04 | $ | .09 | $ | .16 | $ | .16 | ||||||||||
Diluted earnings per share
|
$ | .11 | $ | .04 | $ | .09 | $ | .16 | $ | .16 | ||||||||||
Weighted-average common and common share
|
||||||||||||||||||||
equivalents outstanding:
|
||||||||||||||||||||
Basic
|
10,691,424 | 10,650,743 | 10,640,347 | 10,671,196 | 10,611,220 | |||||||||||||||
Diluted
|
10,759,332 | 10,706,677 | 10,721,909 | 10,733,149 | 10,697,976 |
CFS BANCORP, INC. | ||||||||||||||||
Consolidated Statements of Condition (Unaudited)
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
June 30,
2011
|
March 31,
2011
|
December 31,
2010
|
June 30,
2010
|
|||||||||||||
ASSETS
|
||||||||||||||||
Cash and amounts due from depository institutions
|
$ | 33,075 | $ | 19,211 | $ | 24,624 | $ | 22,232 | ||||||||
Interest-bearing deposits
|
14,423 | 38,757 | 37,130 | 9,411 | ||||||||||||
Cash and cash equivalents
|
47,498 | 57,968 | 61,754 | 31,643 | ||||||||||||
Investment securities available-for-sale, at fair value
|
234,121 | 239,012 | 197,101 | 190,893 | ||||||||||||
Investment securities held-to-maturity, at cost
|
14,837 | 16,764 | 17,201 | 12,206 | ||||||||||||
Investment in Federal Home Loan Bank stock, at cost
|
8,638 | 10,282 | 20,282 | 23,944 | ||||||||||||
Loans receivable, net of unearned fees
|
737,516 | 724,223 | 732,584 | 756,052 | ||||||||||||
Allowance for loan losses
|
(17,039 | ) | (17,095 | ) | (17,179 | ) | (17,608 | ) | ||||||||
Net loans
|
720,477 | 707,128 | 715,405 | 738,444 | ||||||||||||
Loans held for sale
|
211 | – | – | – | ||||||||||||
Investment in bank-owned life insurance
|
35,880 | 35,669 | 35,463 | 35,060 | ||||||||||||
Accrued interest receivable
|
3,148 | 3,265 | 3,162 | 3,486 | ||||||||||||
Other real estate owned
|
21,164 | 23,567 | 22,324 | 11,825 | ||||||||||||
Office properties and equipment
|
18,163 | 18,514 | 20,464 | 20,383 | ||||||||||||
Net deferred tax assets
|
16,714 | 17,146 | 17,883 | 17,568 | ||||||||||||
Prepaid expenses and other assets
|
7,168 | 14,726 | 10,637 | 9,828 | ||||||||||||
Total assets
|
$ | 1,128,019 | $ | 1,144,041 | $ | 1,121,676 | $ | 1,095,280 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||
Deposits
|
$ | 964,527 | $ | 980,517 | $ | 945,884 | $ | 899,482 | ||||||||
Borrowed funds
|
38,835 | 40,658 | 53,550 | 73,106 | ||||||||||||
Advance payments by borrowers for taxes and insurance
|
4,387 | 4,785 | 4,618 | 4,186 | ||||||||||||
Other liabilities
|
4,104 | 4,317 | 4,696 | 5,733 | ||||||||||||
Total liabilities
|
1,011,853 | 1,030,277 | 1,008,748 | 982,507 | ||||||||||||
Shareholders' Equity:
|
||||||||||||||||
Preferred stock, $0.01 par value; 15,000,000 shares authorized
|
– | – | – | – | ||||||||||||
Common stock, $0.01 par value; 85,000,000 shares authorized;
|
||||||||||||||||
23,423,306 shares issued; 10,867,802, 10,869,236, 10,850,040,
|
||||||||||||||||
and 10,846,650 shares outstanding
|
234 | 234 | 234 | 234 | ||||||||||||
Additional paid-in capital
|
187,133 | 186,929 | 187,164 | 187,221 | ||||||||||||
Retained earnings
|
85,080 | 83,957 | 83,592 | 82,028 | ||||||||||||
Treasury stock, at cost; 12,555,504, 12,554,070, and 12,573,266, shares
|
||||||||||||||||
and 12,576,656 shares
|
(154,877 | ) | (154,877 | ) | (155,112 | ) | (155,168 | ) | ||||||||
Accumulated other comprehensive loss, net of tax
|
(1,404 | ) | (2,479 | ) | (2,950 | ) | (1,542 | ) | ||||||||
Total shareholders' equity
|
116,166 | 113,764 | 112,928 | 112,773 | ||||||||||||
Total liabilities and shareholders' equity
|
$ | 1,128,019 | $ | 1,144,041 | $ | 1,121,676 | $ | 1,095,280 |
CFS BANCORP, INC. | ||||||||||||||||||||
Selected Financial Data (Unaudited)
|
||||||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
June 30,
2011
|
March 31,
2011
|
December 31,
2010
|
June 30,
2010
|
|||||||||||||||||
Book value per share
|
$ | 10.69 | $ | 10.47 | $ | 10.41 | $ | 10.40 | ||||||||||||
Tangible book value per share
|
10.69 | 10.47 | 10.41 | 10.40 | ||||||||||||||||
Shareholders' equity to total assets
|
10.30 | % | 9.94 | % | 10.07 | % | 10.30 | % | ||||||||||||
Tangible capital ratio (Bank only)
|
9.17 | 8.94 | 9.07 | 9.05 | ||||||||||||||||
Core capital ratio (Bank only)
|
9.17 | 8.94 | 9.07 | 9.05 | ||||||||||||||||
Risk-based capital ratio (Bank only)
|
13.29 | 13.22 | 13.32 | 12.81 | ||||||||||||||||
Common shares outstanding
|
10,867,802 | 10,869,236 | 10,850,040 | 10,846,650 | ||||||||||||||||
Employees (FTE)
|
315 | 320 | 322 | 316 | ||||||||||||||||
Number of full service banking centers
|
22 | 22 | ||||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
June 30, 2011
|
March 31, 2011
|
June 30, 2010
|
June 30, 2011
|
June 30, 2010
|
||||||||||||||||
Average Balance Data:
|
||||||||||||||||||||
Total assets
|
$ | 1,141,927 | $ | 1,130,077 | $ | 1,089,864 | $ | 1,136,034 | $ | 1,086,607 | ||||||||||
Loans receivable, net of unearned fees
|
732,746 | 727,422 | 757,478 | 730,099 | 759,141 | |||||||||||||||
Investment securities
|
267,984 | 239,070 | 201,735 | 253,607 | 198,292 | |||||||||||||||
Interest-earning assets
|
1,026,940 | 1,012,431 | 987,801 | 1,019,726 | 985,230 | |||||||||||||||
Deposits
|
977,236 | 965,380 | 893,790 | 971,341 | 879,400 | |||||||||||||||
Interest-bearing deposits
|
877,295 | 869,784 | 804,876 | 873,560 | 788,146 | |||||||||||||||
Non-interest bearing deposits
|
99,941 | 95,596 | 88,914 | 97,781 | 91,254 | |||||||||||||||
Interest-bearing liabilities
|
915,785 | 909,640 | 878,660 | 912,729 | 873,404 | |||||||||||||||
Shareholders' equity
|
115,767 | 113,390 | 111,844 | 114,585 | 111,514 | |||||||||||||||
Performance Ratios (annualized):
|
||||||||||||||||||||
Return on average assets
|
.43 | % | .17 | % | .36 | % | .30 | % | .31 | % | ||||||||||
Return on average equity
|
4.27 | 1.69 | 3.52 | 3.00 | 3.04 | |||||||||||||||
Average yield on interest-earning assets
|
4.38 | 4.41 | 4.84 | 4.40 | 4.90 | |||||||||||||||
Average cost of interest-bearing liabilities
|
.89 | .96 | 1.18 | .93 | 1.19 | |||||||||||||||
Interest rate spread
|
3.49 | 3.45 | 3.66 | 3.47 | 3.71 | |||||||||||||||
Net interest margin
|
3.59 | 3.55 | 3.79 | 3.57 | 3.84 | |||||||||||||||
Non-interest expense to average assets
|
3.89 | 3.58 | 3.53 | 3.73 | 3.54 | |||||||||||||||
Efficiency ratio (1)
|
81.69 | 92.38 | 82.93 | 86.43 | 82.53 | |||||||||||||||
Cash dividends declared per share
|
.01 | .01 | .01 | .02 | .02 | |||||||||||||||
Market price per share of common stock
|
||||||||||||||||||||
for the period ended:
|
||||||||||||||||||||
Close
|
$ | 5.37 | $ | 5.58 | $ | 4.88 | $ | 5.37 | $ | 4.88 | ||||||||||
High
|
5.90 | 5.80 | 6.24 | 5.90 | 6.24 | |||||||||||||||
Low
|
5.28 | 5.25 | 4.50 | 5.25 | 3.02 | |||||||||||||||
(1) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest
income and non-interest income, excluding net gain on sales of investment securities.
|
||||||||||||||||||||
CFS BANCORP, INC. | ||||||||||||
Reconciliation of Income Before Income Taxes to Pre-Tax, Pre-Provision Earnings from Core Operations
|
||||||||||||
(Unaudited)
|
||||||||||||
(Dollars in thousands)
|
||||||||||||
Three Months Ended
|
||||||||||||
June 30,
2011
|
March 31,
2011
|
June 30,
2010
|
||||||||||
Income before income taxes
|
$ | 1,658 | $ | 438 | $ | 1,159 | ||||||
Provision for loan losses
|
996 | 903 | 817 | |||||||||
Pre-tax, pre-provision earnings
|
2,654 | 1,341 | 1,976 | |||||||||
Add back (subtract):
|
||||||||||||
Net gain on sale of investment securities
|
(173 | ) | (519 | ) | – | |||||||
Net (gain) loss on sale of other real estate owned
|
(2,238 | ) | 5 | (11 | ) | |||||||
Other real estate owned related expense
|
2,011 | 592 | 255 | |||||||||
Loan collection expense
|
233 | 120 | 153 | |||||||||
Severance and early retirement expense
|
– | – | 437 | |||||||||
Pre-tax, pre-provision earnings from core operations
|
$ | 2,487 | $ | 1,539 | $ | 2,810 | ||||||
Pre-tax, pre-provision earnings from core operations
|
||||||||||||
to average assets
|
.87 | % | .55 | % | 1.03 | % | ||||||
Six Months Ended
|
||||||||||||
June 30,
2011
|
June 30,
2010
|
|||||||||||
Income before income taxes
|
$ | 2,096 | $ | 1,966 | ||||||||
Provision for loan losses
|
1,899 | 2,527 | ||||||||||
Pre-tax, pre-provision earnings
|
3,995 | 4,493 | ||||||||||
Add back (subtract):
|
||||||||||||
Net gain on sale of investment securities
|
(692 | ) | (456 | ) | ||||||||
Net gain on sale of other real estate owned
|
(2,233 | ) | (12 | ) | ||||||||
Other real estate owned related expense
|
2,603 | 886 | ||||||||||
Loan collection expense
|
353 | 322 | ||||||||||
Severance and early retirement expense
|
– | 440 | ||||||||||
Pre-tax, pre-provision earnings from core operations
|
$ | 4,026 | $ | 5,673 | ||||||||
Pre-tax, pre-provision earnings from core operations
|
||||||||||||
to average assets
|
.71 | % | 1.05 | % | ||||||||
The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles (GAAP) and general practice within the banking industry. Management uses certain non-GAAP financial measures to evaluate the Company's financial performance and has provided the non-GAAP financial measures of pre-tax, pre-provision earnings from core operations and pre-tax, pre-provision earnings from core operations to average assets. In these non-GAAP financial measures, the provision for loan losses, other real estate owned related expense, loan collection expense, and certain other items, such as gains and losses on sales of investment securities and other assets, severance and early retirement expense, and FDIC special insurance premium assessment are excluded from the determination of core operating results. Management believes that these measures are useful because they provide a more comparable basis for evaluating financial performance from core operations period to period and allows us and others to assess the Company's ability to generate earnings to cover credit costs. Although these non-GAAP financial measures are intended to enhance investors understanding of the Company's business performance, these operating measures should not be considered as an alternative to GAAP. |