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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))
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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 October 26, 2011
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CFS BANCORP, INC.
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Date: October 26, 2011
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By:
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/s/ Joyce M. Fabisiak
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Joyce M. Fabisiak
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Vice President
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707 Ridge Road l Munster, Indiana 46321
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u
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Other real estate owned decreased $4.0 million, or 18.8%, during the quarter to $17.2 million compared to $21.2 million at June 30, 2011;
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u
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Non-performing assets decreased to $76.5 million compared to $78.4 million at June 30, 2011;
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u
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Provision for loan losses increased to $2.7 million from $1.0 million for the second quarter of 2011 and $525,000 for the third quarter of 2010 due to a higher level of net charge-offs in the current quarter;
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u
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Core deposits increased to $596.8 million, to 60.5% of total deposits, compared to $570.6 million, or 59.2% of total deposits, at June 30, 2011;
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u
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Net interest margin decreased to 3.39% in the third quarter of 2011 from 3.59% in the second quarter of 2011 and 3.54% in the third quarter of 2010; and
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u
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The Bank’s risk-based capital ratio increased to 13.57% from 13.29% at June 30, 2011.
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Three Months Ended
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||||||||||||
9/30/11
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6/30/11
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9/30/10
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||||||||||
(Dollars in thousands)
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||||||||||||
Net interest margin
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3.39 | % | 3.59 | % | 3.54 | % | ||||||
Interest rate spread
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3.30 | 3.49 | 3.42 | |||||||||
Net interest income
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$ | 8,859 | $ | 9,187 | $ | 8,886 | ||||||
Average assets:
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||||||||||||
Yield on interest-earning assets
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4.12 | % | 4.38 | % | 4.56 | % | ||||||
Yield on loans receivable
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4.82 | 4.94 | 4.90 | |||||||||
Yield on investment securities
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2.93 | 3.01 | 3.93 | |||||||||
Average interest-earning assets
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$ | 1,036,064 | $ | 1,026,940 | $ | 997,279 | ||||||
Average liabilities:
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||||||||||||
Cost of interest-bearing liabilities
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.82 | % | .89 | % | 1.14 | % | ||||||
Cost of interest-bearing deposits
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.73 | .81 | 1.02 | |||||||||
Cost of borrowed funds
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2.28 | 2.64 | 2.45 | |||||||||
Average interest-bearing liabilities
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$ | 922,049 | $ | 915,785 | $ | 899,682 |
9/30/11
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6/30/11
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9/30/10
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||||||||||
(Dollars in thousands)
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||||||||||||
Non-performing loans (NPLs)
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$ | 59,335 | $ | 57,217 | $ | 56,098 | ||||||
Other real estate owned
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17,195 | 21,164 | 24,211 | |||||||||
Non-performing assets (NPAs)
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$ | 76,530 | $ | 78,381 | $ | 80,309 | ||||||
NPLs / total loans
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8.18 | % | 7.76 | % | 7.75 | % | ||||||
NPAs / total assets
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6.55 | 6.95 | 7.17 | |||||||||
Allowance for loan losses (ALL)
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$ | 17,186 | $ | 17,039 | $ | 17,485 | ||||||
ALL / total loans
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2.37 | % | 2.31 | % | 2.41 | % | ||||||
ALL / NPLs
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28.96 | 29.78 | 31.17 | |||||||||
Provision for loan losses for the quarter ended
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$ | 2,673 | $ | 996 | $ | 525 | ||||||
Net charge-offs for the quarter ended
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2,526 | 1,052 | 648 |
9/30/11
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6/30/11
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9/30/10
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||||||||||
(Dollars in thousands)
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||||||||||||
Assets:
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||||||||||||
Total assets
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$ | 1,168,481 | $ | 1,128,019 | $ | 1,119,479 | ||||||
Loans receivable, net of unearned fees
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725,467 | 737,516 | 724,137 | |||||||||
Investment securities
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232,804 | 248,958 | 222,548 | |||||||||
Liabilities and Equity:
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||||||||||||
Total liabilities
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1,053,726 | 1,011,853 | 1,005,599 | |||||||||
Deposits
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986,441 | 964,527 | 929,856 | |||||||||
Borrowed funds
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56,115 | 38,835 | 64,199 | |||||||||
Shareholders’ equity
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114,755 | 116,166 | 113,880 |
9/30/11
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6/30/11
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9/30/10
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||||||||||||||||||||||
Amount
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% of Total
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Amount
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% of Total
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Amount
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% of Total
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|||||||||||||||||||
(Dollars in thousands)
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||||||||||||||||||||||||
Commercial loans:
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||||||||||||||||||||||||
Commercial and industrial
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$ | 83,569 | 11.5 | % | $ | 83,082 | 11.3 | % | $ | 70,916 | 9.8 | % | ||||||||||||
Commercial real estate – owner occupied
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100,244 | 13.8 | 102,315 | 13.8 | 98,337 | 13.6 | ||||||||||||||||||
Commercial real estate – non-owner occupied
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193,267 | 26.7 | 187,380 | 25.4 | 190,706 | 26.3 | ||||||||||||||||||
Commercial real estate – multifamily
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70,129 | 9.7 | 77,562 | 10.5 | 70,259 | 9.7 | ||||||||||||||||||
Commercial construction and land development
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22,635 | 3.1 | 23,424 | 3.2 | 26,868 | 3.7 | ||||||||||||||||||
Commercial participations
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16,739 | 2.3 | 21,194 | 2.9 | 26,488 | 3.7 | ||||||||||||||||||
Total commercial loans
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486,583 | 67.1 | 494,957 | 67.1 | 483,574 | 66.8 | ||||||||||||||||||
Retail loans:
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||||||||||||||||||||||||
One-to-four family residential
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181,025 | 25.0 | 183,269 | 24.8 | 179,512 | 24.8 | ||||||||||||||||||
Home equity lines of credit
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53,953 | 7.4 | 54,975 | 7.5 | 55,808 | 7.7 | ||||||||||||||||||
Retail construction and land development
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1,299 | .2 | 2,095 | .3 | 4,092 | .6 | ||||||||||||||||||
Other
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3,007 | .4 | 2,670 | .4 | 1,606 | .2 | ||||||||||||||||||
Total retail loans
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239,284 | 33.0 | 243,009 | 33.0 | 241,018 | 33.3 | ||||||||||||||||||
Total loans receivable
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725,867 | 100.1 | 737,966 | 100.1 | 724,592 | 100.1 | ||||||||||||||||||
Net deferred loan fees
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(400 | ) | (.1 | ) | (450 | ) | (.1 | ) | (455 | ) | (.1 | ) | ||||||||||||
Total loans receivable, net of unearned fees
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$ | 725,467 | 100.0 | % | $ | 737,516 | 100.0 | % | $ | 724,137 | 100.0 | % |
9/30/11
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6/30/11
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9/30/10
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||||||||||||||||||||||
Amount
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% of Total
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Amount
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% of Total
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Amount
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% of Total
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|||||||||||||||||||
(Dollars in thousands)
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||||||||||||||||||||||||
Checking accounts:
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||||||||||||||||||||||||
Non-interest bearing
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$ | 106,476 | 10.8 | % | $ | 98,377 | 10.2 | % | $ | 95,086 | 10.2 | % | ||||||||||||
Interest-bearing
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172,007 | 17.4 | 154,401 | 16.0 | 143,600 | 15.5 | ||||||||||||||||||
Money market accounts
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185,906 | 18.9 | 188,942 | 19.6 | 163,725 | 17.6 | ||||||||||||||||||
Savings accounts
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132,378 | 13.4 | 128,902 | 13.4 | 121,732 | 13.1 | ||||||||||||||||||
Core deposits
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596,767 | 60.5 | 570,622 | 59.2 | 524,143 | 56.4 | ||||||||||||||||||
Certificates of deposit accounts
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389,674 | 39.5 | 393,905 | 40.8 | 405,713 | 43.6 | ||||||||||||||||||
Total deposits
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$ | 986,441 | 100.0 | % | $ | 964,527 | 100.0 | % | $ | 929,856 | 100.0 | % |
9/30/11
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6/30/11
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9/30/10
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||||||||||
(Dollars in thousands)
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||||||||||||
Short-term variable-rate repurchase agreements
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$ | 16,175 | $ | 13,730 | $ | 13,931 | ||||||
FHLB advances
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39,940 | 25,105 | 50,268 | |||||||||
Total borrowed funds
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$ | 56,115 | $ | 38,835 | $ | 64,199 |
CFS BANCORP, INC. | ||||||||||||||||||||
Consolidated Statements of Income (Unaudited)
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(Dollars in thousands, except per share data)
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||||||||||||||||||||
Three Months Ended
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Nine Months Ended
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|||||||||||||||||||
September 30, 2011
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June 30, 2011
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September 30, 2010
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September 30, 2011
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September 30, 2010
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Interest income:
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Loans
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$ | 8,881 | $ | 9,016 | $ | 9,199 | $ | 26,708 | $ | 28,503 | ||||||||||
Investment securities
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1,794 | 2,040 | 2,176 | 5,879 | 6,552 | |||||||||||||||
Other interest-earning assets
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80 | 164 | 90 | 401 | 337 | |||||||||||||||
Total interest income
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10,755 | 11,220 | 11,465 | 32,988 | 35,392 | |||||||||||||||
Interest expense:
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||||||||||||||||||||
Deposits
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1,602 | 1,777 | 2,143 | 5,272 | 6,342 | |||||||||||||||
Borrowed funds
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294 | 256 | 436 | 813 | 1,392 | |||||||||||||||
Total interest expense
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1,896 | 2,033 | 2,579 | 6,085 | 7,734 | |||||||||||||||
Net interest income
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8,859 | 9,187 | 8,886 | 26,903 | 27,658 | |||||||||||||||
Provision for loan losses
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2,673 | 996 | 525 | 4,572 | 3,052 | |||||||||||||||
Net interest income after provision for loan losses
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6,186 | 8,191 | 8,361 | 22,331 | 24,606 | |||||||||||||||
Non-interest income:
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||||||||||||||||||||
Service charges and other fees
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1,263 | 1,174 | 1,290 | 3,513 | 3,830 | |||||||||||||||
Card-based fees
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520 | 520 | 475 | 1,515 | 1,398 | |||||||||||||||
Commission income
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100 | 78 | 40 | 223 | 140 | |||||||||||||||
Net gain on sale of:
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||||||||||||||||||||
Investment securities
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758 | 173 | – | 1,450 | 456 | |||||||||||||||
Loans receivable
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66 | 26 | – | 124 | – | |||||||||||||||
Other real estate owned
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266 | 2,238 | 2 | 2,499 | 14 | |||||||||||||||
Income from bank-owned life insurance
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216 | 210 | 217 | 632 | 702 | |||||||||||||||
Other income
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121 | 119 | 103 | 343 | 371 | |||||||||||||||
Total non-interest income
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3,310 | 4,538 | 2,127 | 10,299 | 6,911 | |||||||||||||||
Non-interest expense:
|
||||||||||||||||||||
Compensation and employee benefits
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4,818 | 5,047 | 4,709 | 15,104 | 13,928 | |||||||||||||||
Net occupancy expense
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706 | 670 | 691 | 2,141 | 2,097 | |||||||||||||||
FDIC insurance premiums and regulatory assessments
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481 | 504 | 623 | 1,638 | 1,891 | |||||||||||||||
Professional fees
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309 | 334 | 512 | 1,031 | 1,850 | |||||||||||||||
Furniture and equipment expense
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436 | 454 | 488 | 1,353 | 1,547 | |||||||||||||||
Data processing
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424 | 441 | 443 | 1,307 | 1,316 | |||||||||||||||
Marketing
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213 | 270 | 189 | 670 | 519 | |||||||||||||||
Other real estate owned related expense
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614 | 2,011 | 470 | 3,217 | 1,356 | |||||||||||||||
Loan collection expense
|
117 | 233 | 156 | 470 | 478 | |||||||||||||||
Severance and early retirement costs
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– | – | 88 | – | 528 | |||||||||||||||
Other
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1,068 | 1,107 | 1,068 | 3,293 | 2,990 | |||||||||||||||
Total non-interest expense
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9,186 | 11,071 | 9,437 | 30,224 | 28,500 | |||||||||||||||
Income before income taxes
|
310 | 1,658 | 1,051 | 2,406 | 3,017 | |||||||||||||||
Income tax (benefit) expense
|
(84 | ) | 425 | 188 | 307 | 475 | ||||||||||||||
Net income
|
$ | 394 | $ | 1,233 | $ | 863 | $ | 2,099 | $ | 2,542 | ||||||||||
Basic earnings per share
|
$ | .04 | $ | .12 | $ | .08 | $ | .20 | $ | .24 | ||||||||||
Diluted earnings per share
|
$ | .04 | $ | .11 | $ | .08 | $ | .20 | $ | .24 | ||||||||||
Weighted-average common and common share
|
||||||||||||||||||||
equivalents outstanding:
|
||||||||||||||||||||
Basic
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10,693,724 | 10,691,424 | 10,657,719 | 10,678,788 | 10,626,890 | |||||||||||||||
Diluted
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10,753,386 | 10,759,332 | 10,707,163 | 10,739,969 | 10,701,072 |
CFS BANCORP, INC. | ||||||||||||||||
Consolidated Statements of Condition (Unaudited)
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||||||||||||||||
(Dollars in thousands)
|
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September 30, 2011
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June 30, 2011
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December 31, 2010
|
September 30, 2010
|
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ASSETS
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Cash and amounts due from depository institutions
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$ | 33,421 | $ | 33,075 | $ | 24,624 | $ | 23,098 | ||||||||
Interest-bearing deposits
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84,344 | 14,423 | 37,130 | 29,120 | ||||||||||||
Cash and cash equivalents
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117,765 | 47,498 | 61,754 | 52,218 | ||||||||||||
Investment securities available-for-sale, at fair value
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218,417 | 234,121 | 197,101 | 210,717 | ||||||||||||
Investment securities held-to-maturity, at cost
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14,387 | 14,837 | 17,201 | 11,831 | ||||||||||||
Investment in Federal Home Loan Bank stock, at cost
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8,638 | 8,638 | 20,282 | 23,944 | ||||||||||||
Loans receivable, net of unearned fees
|
725,467 | 737,516 | 732,584 | 724,137 | ||||||||||||
Allowance for loan losses
|
(17,186 | ) | (17,039 | ) | (17,179 | ) | (17,485 | ) | ||||||||
Net loans
|
708,281 | 720,477 | 715,405 | 706,652 | ||||||||||||
Loans held for sale
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839 | 211 | – | 4,425 | ||||||||||||
Investment in bank-owned life insurance
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36,095 | 35,880 | 35,463 | 35,273 | ||||||||||||
Accrued interest receivable
|
2,908 | 3,148 | 3,162 | 3,315 | ||||||||||||
Other real estate owned
|
17,195 | 21,164 | 22,324 | 24,211 | ||||||||||||
Office properties and equipment
|
18,053 | 18,163 | 20,464 | 20,611 | ||||||||||||
Net deferred tax assets
|
17,708 | 16,714 | 17,923 | 17,130 | ||||||||||||
Prepaid expenses and other assets
|
8,195 | 7,168 | 10,597 | 9,152 | ||||||||||||
Total assets
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$ | 1,168,481 | $ | 1,128,019 | $ | 1,121,676 | $ | 1,119,479 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||||||
Deposits
|
$ | 986,441 | $ | 964,527 | $ | 945,884 | $ | 929,856 | ||||||||
Borrowed funds
|
56,115 | 38,835 | 53,550 | 64,199 | ||||||||||||
Advance payments by borrowers for taxes and insurance
|
5,868 | 4,387 | 4,618 | 5,952 | ||||||||||||
Other liabilities
|
5,302 | 4,104 | 4,696 | 5,592 | ||||||||||||
Total liabilities
|
1,053,726 | 1,011,853 | 1,008,748 | 1,005,599 | ||||||||||||
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; 10,877,015, 10,867,802, 10,850,040,
|
||||||||||||||||
and 10,851,724 shares outstanding
|
234 | 234 | 234 | 234 | ||||||||||||
Additional paid-in capital
|
187,023 | 187,133 | 187,164 | 187,075 | ||||||||||||
Retained earnings
|
85,365 | 85,080 | 83,592 | 82,783 | ||||||||||||
Treasury stock, at cost; 12,546,291, 12,555,504, and 12,573,266, shares
|
||||||||||||||||
and 12,571,582 shares
|
(154,766 | ) | (154,877 | ) | (155,112 | ) | (155,022 | ) | ||||||||
Accumulated other comprehensive loss, net of tax
|
(3,101 | ) | (1,404 | ) | (2,950 | ) | (1,190 | ) | ||||||||
Total shareholders' equity
|
114,755 | 116,166 | 112,928 | 113,880 | ||||||||||||
Total liabilities and shareholders' equity
|
$ | 1,168,481 | $ | 1,128,019 | $ | 1,121,676 | $ | 1,119,479 |
CFS BANCORP, INC. | ||||||||||||||||||||
Selected Financial Data (Unaudited)
|
||||||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
September 30, 2011
|
June 30, 2011
|
December 31, 2010
|
September 30, 2010
|
|||||||||||||||||
Book value per share
|
$ | 10.55 | $ | 10.69 | $ | 10.41 | $ | 10.49 | ||||||||||||
Tangible book value per share
|
10.55 | 10.69 | 10.41 | 10.49 | ||||||||||||||||
Shareholders' equity to total assets
|
9.82 | % | 10.30 | % | 10.07 | % | 10.17 | % | ||||||||||||
Tangible capital ratio (Bank only)
|
8.87 | 9.17 | 9.07 | 8.91 | ||||||||||||||||
Core capital ratio (Bank only)
|
8.87 | 9.17 | 9.07 | 8.91 | ||||||||||||||||
Risk-based capital ratio (Bank only)
|
13.57 | 13.29 | 13.32 | 13.21 | ||||||||||||||||
Common shares outstanding
|
10,877,015 | 10,867,802 | 10,850,040 | 10,851,724 | ||||||||||||||||
Employees (FTE)
|
311 | 315 | 322 | 315 | ||||||||||||||||
Number of full service banking centers | 22 | 22 | 22 | 22 | ||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||
September 30, 2011
|
June 30, 2011
|
September 30, 2010
|
September 30, 2011
|
September 30, 2010
|
||||||||||||||||
Average Balance Data:
|
||||||||||||||||||||
Total assets
|
$ | 1,150,149 | $ | 1,141,927 | $ | 1,111,642 | $ | 1,140,791 | $ | 1,095,045 | ||||||||||
Loans receivable, net of unearned fees
|
730,524 | 732,746 | 744,316 | 730,242 | 754,145 | |||||||||||||||
Investment securities
|
239,655 | 267,984 | 216,393 | 248,905 | 204,392 | |||||||||||||||
Interest-earning assets
|
1,036,064 | 1,026,940 | 997,279 | 1,025,231 | 989,290 | |||||||||||||||
Deposits
|
972,486 | 977,236 | 917,642 | 971,727 | 892,288 | |||||||||||||||
Interest-bearing deposits
|
871,637 | 877,295 | 829,988 | 872,912 | 802,247 | |||||||||||||||
Non-interest bearing deposits
|
100,849 | 99,941 | 87,654 | 98,815 | 90,041 | |||||||||||||||
Interest-bearing liabilities
|
922,049 | 915,785 | 899,682 | 915,870 | 882,260 | |||||||||||||||
Shareholders' equity
|
116,408 | 115,767 | 113,145 | 115,199 | 112,061 | |||||||||||||||
Performance Ratios (annualized):
|
||||||||||||||||||||
Return on average assets
|
.14 | % | .43 | % | .31 | % | .25 | % | .31 | % | ||||||||||
Return on average equity
|
1.34 | 4.27 | 3.03 | 2.44 | 3.03 | |||||||||||||||
Average yield on interest-earning assets
|
4.12 | 4.38 |
4.56
|
4.30 | 4.78 | |||||||||||||||
Average cost of interest-bearing liabilities
|
.82 | .89 | 1.14 | .89 | 1.17 | |||||||||||||||
Interest rate spread
|
3.30 | 3.49 | 3.42 | 3.41 | 3.61 | |||||||||||||||
Net interest margin
|
3.39 | 3.59 | 3.54 | 3.51 | 3.74 | |||||||||||||||
Non-interest expense to average assets
|
3.17 | 3.89 | 3.37 | 3.54 | 3.48 | |||||||||||||||
Efficiency ratio (1)
|
80.50 | 81.69 | 85.70 | 84.54 | 83.56 | |||||||||||||||
Cash dividends declared per share
|
.01 | .01 | .01 | .03 | .03 | |||||||||||||||
Market price per share of common stock
|
||||||||||||||||||||
for the period ended:
|
||||||||||||||||||||
Close
|
$ | 4.34 | $ | 5.37 | $ | 4.56 | $ | 4.34 | $ | 4.56 | ||||||||||
High
|
5.70 | 5.90 | 4.92 | 5.90 | 6.24 | |||||||||||||||
Low
|
4.34 | 5.28 | 4.18 | 4.34 | 3.02 | |||||||||||||||
(1) The efficiency ratio is calculated by dividing non-interest
|
||||||||||||||||||||
expense by the sum of net interest income and non-interest | ||||||||||||||||||||
income, exluding net gain on sales of investment securities. |
CFS BANCORP, INC. | |||||||||||
Reconciliation of Income Before Income Taxes to Pre-Tax, Pre-Provision Earnings, as adjusted
|
|||||||||||
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2011 | June 30, 2011 | September 30, 2010 | |||||||||
Income before income taxes
|
$ |
310
|
$ |
1,658
|
$ |
1,051
|
|||||
Provision for loan losses
|
2,673
|
996
|
525
|
||||||||
Pre-tax, pre-provision earnings
|
2,983
|
2,654
|
1,576
|
||||||||
Add back (subtract):
|
|||||||||||
Net gain on sale of investment securities
|
(758
|
) |
(173
|
) |
–
|
||||||
Net gain on sale of other real estate owned
|
(266
|
) |
(2,238
|
) |
(2
|
) | |||||
Other real estate owned related expense
|
614
|
2,011
|
470
|
||||||||
Loan collection expense
|
117
|
233
|
156
|
||||||||
Severance and early retirement expense
|
–
|
–
|
88
|
||||||||
Pre-tax, pre-provision earnings, as adjusted
|
$ |
2,690
|
$ |
2,487
|
$ |
2,288
|
|||||
Pre-tax, pre-provision earnings, as adjusted,
|
|||||||||||
to average assets
|
.93
|
% |
.87
|
% |
.82
|
% | |||||
Nine Months Ended | |||||||||||
September 30, 2011 | September 30, 2010 | ||||||||||
Income before income taxes
|
$ |
2,406
|
$ |
3,017
|
|||||||
Provision for loan losses
|
4,572
|
3,052
|
|||||||||
Pre-tax, pre-provision earnings
|
6,978
|
6,069
|
|||||||||
Add back (subtract):
|
|||||||||||
Net gain on sale of investment securities
|
(1,450
|
) |
(456
|
) | |||||||
Net gain on sale of other real estate owned
|
(2,499
|
) |
(14
|
) | |||||||
Other real estate owned related expense
|
3,217
|
1,356
|
|||||||||
Loan collection expense
|
470
|
478
|
|||||||||
Severance and early retirement expense
|
–
|
528
|
|||||||||
Pre-tax, pre-provision earnings, as adjusted
|
$ |
6,716
|
$ |
7,961
|
|||||||
Pre-tax, pre-provision earnings, as adjusted,
|
|||||||||||
to average assets
|
.79
|
% |
.97
|
% |
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, as adjusted, and pre-tax, pre-provision earnings, as adjusted, to average assets. In these non-GAAP financial measures, the provision for loan losses, other real estate owned related income and 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. Management believes that these measures are useful because they provide a more comparable basis for evaluating financial performance excluding certain credit-related costs and other non-recurring items period to period and allows management and others to assess the Company's ability to generate pre-tax earnings to cover the Company’s provision for loan losses and other credit-related 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. |